Yellen's warning about the debt ceiling.

OK, so Janet Yellen warns that if the congress doesn't increase the debt ceiling by June, the US could default on it's $31 trillion national debt. The warning was dutifully reported on by the media in appropriately solemn tones. Janet descends like a goddess from on high and declares this epiphany.

Is anyone curious about the timing of this warning? Wy weren't we talking about this debt limit when Biden and his congress crammed through the $1.7 trillion spending debacle just one month prior in the lame duck democratic congress?

Is it best if we just default in 2023 and get it over with? Maybe it would be doing our children and grandchildren a huge favor! Or should we just wait until our debt is, say, $60 trillion?

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redredred · M

Default is not an option. If default occurred the US could never sell a bond (the mechanism for borrowing) again without paying an interest rate in the 20%-39% range, basically junk bonds.

If that happened home mortgage rates would soar to near loan shark levels of 50%.

The only reasonable way out is to limit government spending to tax revenue levels, basically spend no more than we take in. We need to stop selling bonds to foreign governments and pay existing bonds off over time.

The sleazy way to do it is to stop selling bonds and drive up inflation to the point where $30.6 trillion is chump change.