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An 'Oh Please!' Moment: Is S&P Running Interference for the Right to Help Crush Social Security and Medicare?

How pathetic is that? How about a call for the SEC, or the Federal Reserve or the Attorney General to investigate whether S&P was improperly pressured to issue its absurd “negative warning”? How about a call in the Senate for hearings to look into any such possible improper political pressure?

I’m not suggesting that there are no consequences for the failure of the US political system to pay for the nation’s trillions of dollars in wars, or for its craven preference over the last 30 years to hand tax cuts to corporations and the rich while continuing to encourage corporations to shift their investments abroad, taking the nation’s jobs with them. There will surely come a reckoning. But it won’t be in the form of default.

As Prof. Galbraith notes, the US can continue to print money to repay its debts, because they are denominated in the same currency.

The problem will come when the dollar starts to seriously erode against other currencies because too much of the currency has been put into circulation. When that happens, there may be a shift away from the dollar as the world’s “reserve currency.” Looking further, one could then imagine the US being unable to issue debt to foreign investors, because they would no longer want to be left holding dollars, and the US would have to either drastically reduce its debt, or borrow in foreign-denominated debt--say Yen or Euros or Renminbi.

That future may come, but what S&P is talking about--a risk of default on current US debt--is simply absurd, and does raise questions about behind-the-scenes pressure from some nefarious actors on the right anxious to do away with Medicare and Social Security before today’s Baby Boomer population becomes the biggest retirement and Medicare-entitled voting bloc--both numerically and proportionally --in the nation’s history.



story | by Dr. Radut