... the “automatic” sequestration cuts would over the course of ten years reduce US public debt by only $153 billion. Which boils down to about a month’s worth of the current federal deficit.Not good.
Yet even slashing a pimple’s worth of borrowing out of the great oozing mountain of pustules will prove too much for Washington.
Another downgrade is now inevitable. After that, all that’s holding the joint up is the dollar’s status as global currency. If the world were looking around for a reserve currency today, I doubt it would pick that of a $15 trillion sinkhole. This week’s failure will hasten the urge of the Chinese and others to arrange a post-dollar order. I wrote earlier this year about America’s inclination to do everything big. And so it goes even with imperial eclipse: We are inviting nothing so genteel as “decline” but rather a sudden convulsive collapse.
Wednesday, November 23, 2011
economic melt down: