"There was a $700 billion bank bailout, a $700 billion stimulus program, a couple of trillion in "quantitative easing," that is, in debt monetization or the printing of money to finance the government's expenditures. In addition the Federal Reserve's balance sheet had expanded by trillions of dollars as the Fed purchased troubled mortgage bonds and derivatives in its effort to keep the financial system solvent and functioning. According to the Government Accountability Office's audit of the Federal Reserve released by Senator Bernie Sanders, the Federal Reserve provided secret loans to US and foreign banks totaling $16.1 trillion, a sum larger than US Gross Domestic Product (GDP)." - Paul Craig Roberts
Cutting social programs and the increase reliance on privatized functions for government services was already in the cards from the get-go for the debt default deal. Social Security is PAID for and should remain so and not raided to fund other things. Obama's b.s. rhetoric/threat about cutting social security if a debt deal was based in lies. 54% of our taxes go to the military and the military-industrial complex depends on tacit Federal government expenditures to keep it going. The tea party was used as a pincer from the "right" to pressure more SOCIAL cuts while keeping the corporate welfare and military budgets relatively safe from harm(unless we are talking about Ron Paul who is the only consistent ideologue) - I don't think a default was necessarily in the cards as of NOW. The credit rating of the US was already going to be downgraded and you are right about the movement of $ out of the US(indeed our whole talk about what happened 9/11 and after is key to understanding this). And if a default happens in the future, I think that this indicates that the framework for a globalized structure is in the cards whereby the trans-national financial capital has "left the nest" and unhinges from the dollar(Will this be an IMF SDR?). RIght now the dollar still underpins the world economy and depends on perpetual debt created money via the Federal Reserve either issuing fake money or buying back crappy money or perpetual federal government expenditures on the instruments of imperialism to keep the whole world safe for democracy. The majority of the US debt is owed to itself(not China).
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