Answer -- The truth is . . . nobody knows . . . because it has never happened before . . .that the nation with the world's only reserve currency defaults!
However, I expect interest rates paid by taxpayers on all types of debt will rise. I expect banks will stop making loans. I expect unemployment will increase. I expect the dollar to fall, and the price of imports, including oil, to increase. I expect uncertainty to spike upwards and the stock market to fall hundreds of points quickly. This is a deathly serious situation.
This will also hasten the day when the Chinese Yuan becomes the other reserve currency, which is bad for America.
The Tea Party's simplistic assurance that everything will be fine is just plain wrong! They're wrong, but the American people will pay the price. They may not be re-elected, but real Americans will lose their jobs and homes.
If I were the president, I would continue to pay bond interest and stop paying Social Security payments and other entitlements. In the long run, that is the cheaper alternative. In the short run, it will be politically disastrous, and I'm not sure which party will pay the greater price. Frankly, I don't even care about the politics or who gets the blame. Any politician who thinks we should just default, so they can just blame it on the other side is either too stupid or too un-American to serve!
Will this destroy America? No, because nobody ever died from shooting off their own foot . . . it's just stupid and retard our economic recovery by years!
