I quoted this comparison of the USA with Greece:
the United States is in a similar mess. The same anachronistic, taxation-as-subjugation mentality exists among many and may lead to default on its debts in August.
(from here)
To which redsdisease responded:
Once past the debt ceiling the treasury won't have enough money to pay all of it's bills, which means that it would have to default on some loan payments. Officially they hit that limit last month, however, due to some financial wrangling (temporarily suspending investment into retirement funds) they managed to stave off default until August 2nd. This gives congress a little over a month to raise the ceiling, but their's been serious political deadlock: Democrats wanting to just raise the debt limit while Republicans refuse to do this without really serious spending cuts.
Personally, I'd be shocked if they didn't manage raise the ceiling, as the economic consequences of a default would be enormous, not to mention the political consequences
Now today I read:
World stock markets suffered another bout of heavy losses on Thursday, driven down by fears over the eurozone debt crisis and fresh evidence that global economic growth is faltering....
"Everyone is running away from any sort of risk today," explained David Jones, chief market strategist at IG Index. "The big cloud is Greece, but every day something else comes along [to knock confidence]."
Reports from America that talks to raise the US debt ceiling had collapsed also alarmed traders.
- here.
Given Mouvement Communiste's, admittedly drily economistic, assessment of Greece's economy - which ends
The outline of the important characteristics that we’ve set out shows that in the Greek zone capital is not doing too badly, at least as far as the big companies are concerned, and the impact of the crisis of 2008 didn’t hit it any harder than in the other countries of the euro zone. This is why it would be a mistake to attribute the present sovereign debt crisis to the industrial decline of the country.
....given this, my understanding is that the Greek debt crisis is more punishment for the class struggle, the margin of resistance to modern capitalist social relations of which December 2008 was the most public expression, than any purely economic assessment of the country's productivity or not. And given this, what would any possible US default mean? Although this is speaking a little too soon, since the US might very well not default given that, as redsdisease points out, "the economic consequences of a default would be enormous, not to mention the political consequences", I feel that anyone who wants the world to turn in a revolutionary direction (hopefully everyone reading this apart from the State & its paid thinkers) needs to get ready, at least intellectually, for such a possibility.
So my question - "What would happen if the US defaults?" - must inevitably be followed by another question - why would the US ruling class want to provoke the inevitable Great Leap Forward in crisis that would follow? The beginning of an answer to this last question would have to be "punishment" - ie an attempt to regain the initiative by creating chaos and intensifying social control through the chaos - but certainly not for anything happening within the US (though anticipation of a hotting up of social war within the US would be on their minds) but for all the social movements beginning to find their way globally.
There was a cartoon in the late 1960s that had 2 obviously bourgeois men talking to each other; one said "You know, they're saying that the final crisis of Western capitalism is at hand?", the other replies, "Really Charles? Well, how do we make some money out of it?". Clearly there's never a final crisis until the end of the world or the end of their world, but clearly the ruling scum are hoping to continue making cash from chaos, whether it be from a possible nuclear war, economic depression on an unprecedented scale, or the domino effect of environmental disasters - but, insofar as this is possible, we should follow the American boy scouts' motto - "Be Prepared!".
Comments
This is from almost 3 weeks
This is from almost 3 weeks ago:
And this is from way before (May 24th 2010) the tentative movements that have been springing up since the Tunisian uprising:
Samotnaf, I'd also like to
Samotnaf, I'd also like to know what's likely to happen. More specifically, I'd like to know how the real economy might be affected, and what we can do to plan for its future health. These articles are quite abstract it: "the economic consequences of a default would be enormous," "could destabilize the global economy," etc.
"For Americans to worry about a debt default is like the parent of a heroin addict fearing that his dealers will cease feeding the addiction."
I love that analogy. However, it's not necessarily true that symptoms of withdrawal are a sign of recovery. You don't unilateraly "cure" the addict by taking away his drugs. That might drive him to seek his fix through increasingly desperate measures. Kicking addiction requires commitment from the addict...
Rabbit: Sorry for the delayed
Rabbit: Sorry for the delayed response - wrote one then somehow it got knocked off and didn't have time/energy to re-write it.
Firstly that quote from John Tamny - he's a right-wing economist, and his desire for a default is a desire for even greater government spending cuts, the bulk of which would obviously fall on the working class. I wasn't quoting him positively.
As for abstractions - well, that partly necessarily follows any speculation about a future possible or even probable event (e.g.who, after Munich 1938, could give anything but an abstract outline of the course of the inevitable war "in our time"?). Personally, unless there's a massive upsurge of class struggle within the next few months, I doubt if the US ruling class would risk a default during election year, though a temporary default "to test the water" might happen (each party blaming the other if things go unpredictably wrong). After November 2012 almost anything is possible.
For us, global and local networks of solidarity (which should certainly not develop at the expense of the progress of very thorough mutual critiques) are about the only way we can "prepare" practically. On a theoretical level, preparation should perhaps concentrate on such questions as:
What would be the consequences of a massive economic trade war with China (the US's main creditor)?
What if this leads to global war, starting off say in the Middle East - the present conflicts between Turkey and Iran over Syria could be a catalyst - and there's a real possiblity of it going nuclear...and we should ask ourselves what would be the consequences on the consciousness of proletarians if it does?
What practical forms of resistance, past and present, could be applied to such things as : how to stop evictions, how to stop paying for vast increases in prices of utilities, how to get food given that shortages are likely? How have past and present movements around these questions been limited both in terms of numbers participating in them and in more "qualitative" terms (failure to confront those who pretend to be friends of these movements but in fact act as obstacles, lack of inventiveness in tactics...). What practical initiatives have been suggested but never been tried out? What ideological, and other, blocks prevent proletarians embarking on such adventures?
I suspect you could think of more questions - but the real question is to prepare with the people we know and with people we could get to know, and I don't think most of that can be answered online. Moreover, precise answers to some of these questions online can be picked up by our enemies and used to pre-empt any practical answers to them, so really when it comes to anything less abstract than what I've posed here, we should confine ourselves to those we trust and to forms of communication that are more secure than an online discussion forum.
Samotnaf could you explain
Samotnaf could you explain some of the reasoning behind this,
also one other thing, about the US, from the little I understand, the US's debt is in dollars so I think the government can always pay it back just by printing more dollars, which would make inflation increase but still they can avoid defaulting in a way that Greece can't. Is this right? Or are the debts not independent of inflation?
I said right at the start of
I said right at the start of this thread that "My knowledge of economics is pretty poor,"; but given that, according to Mouvement Communiste's article, which I linked to, the Greek economy has been pretty strong (certainly far stronger than the US's), I can't see any other interpretation for the IMF etc. imposing such austerity measures. Perhaps you, or someone else, can. In the age of our domination by finance/fictive capital, money is, above all, a method of social control.
As for printing dollars to pay foreign debts, I'd have thought that couldn't work - it'd work as some measure internally (say, to pay a public sector pay increase) but externally...? But, I repeat, "My knowledge of economics is pretty poor" - so again, if there's anybody out there reading this who can clarify the position, that'd save me a lot of research time, which today, and certainly at this time of the morning, I have neither time nor energy to do. This thread is as much an attempt to educate myself as it is to communicate my own understanding of things.
But maybe this begins to explain things:
http://www2.chinadaily.com.cn/world/2011-04/21/content_12369000.htm
Quote: The US faces the
http://www.guardian.co.uk/business/2011/jul/14/us-debt-ceiling-obama-default
Debt ceiling talks between
Debt ceiling talks between Obama and Republicans collapse
Any radical online articles about this that I've not noticed,?
I said earlier (June 26th):
Any further thoughts? Or are we all rabbits hypnotised by the oncoming headlights, somehow hoping they'll swerve away at the last moment?