Sunday, July 31, 2011

US Debt Crisis

Following piece published in HT, perfectly summarizes the crisis -
The US debt crisis is like a rich man who owns homes, yachts and gold but is suddenly finding it diffcult to pay off the installment on a plane he bought. Politics, however, keeps him from using his other assets to handle these payments.

6 comments:

Nikhil said...

US has not reached that stage yet. Obama has said they have ability to borrow more. and they have.
let senate approve it.

do u read HT? :P

Siddhesh said...

What stage? I hvnt said they hv defaulted!

Nikhil said...

the difference between rich man and USA is that USA can print money. rich man cant

Siddhesh said...

Printing money isnt exactly a "solution". Otherwise why would US have debt in the first place?

Nikhil said...

i was talking abt repayment.

Siddhesh said...

Even for repayment printing money is not a good option. It will only create new problem (read inflation/hyperinflation)
Also, if by just printing money u could repay ur loans, u would not hv credit rating agencies hving diff ratings for diff countries.