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article imageOp-Ed: US Default on Debt? What's the Problem?

By Robert G Cope     Jul 29, 2011 in Politics
Washington - While headlines about the U. S. default on August 2 tops all the reporting, I find no concrete statements about what the real consequences might be, concluding -- most likely -- this is a thin veil, a veneer, a front of little consequence on main street.
As I read about real estate investment, I see Brazilians are not blinking about prices on Miami Beach, nor do the Chinese say not receiving a timely interest payment from the United States Treasury on the trillions held will bankrupt China or add to or lower their inflation. I see Tokyo Electric, days ago, decided to contract for billions to invest in Australian natural gas reserves, thus, hedging on more or resumed nuclear power. There has been little change on stock markets across the globe and even though Greece has already effectively defaulted on its debts, the price of a Volkswagen in Berlin or a beer in Munich is unchanged.
The AAA bond rating of the US may be lowered, and, yes, the Treasury will have to pay higher interest rates on future borrowing just as those with poorer credit ratings will pay higher rates on home mortgages. The US will continue to borrow as it has and individuals will pay a little more for a mortgage.
On August 3 the US government may have to decide what it will pay that day and following days and what will have to be deferred until later. China may have to be patient.
The cost of visiting a national park may increase, and less-used camping grounds may be furloughed. Mail delivery may decline from six days too three. Every person flying may pay an additional five dollars for continued airport security.
Some -- I am among them -- receive social security. There is still a huge surplus of money in that account.
Some 'pork barrel' projects may have to await funding as those barrels require congressional handshakes.
As I recall hamburger advertising a few years back, "Where's the meat?"
This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of DigitalJournal.com
More about Debt, United states economy, World bank, American politics
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