Bob, you put me to shame with your knowledge of American history.
I didn't learn that in high school. That was university and going to State/county historical sites (researching charts).
The fact that 80% of the Colonists in a particular colony-turned-State isn't exactly glamorous. Most of the States hide, romanticize and exaggerate their involvement in the War of Colonial Independence (for obvious reasons).
Do you think that we'll default?
It's really a moot point.
A recession is inevitable, it's only how you arrive there that is in doubt. If the debt ceiling is not raised, then budget cuts are forced and the US goes into a recession, and if the debt ceiling is raised, then interest on treasury bills, bonds and notes rises, the cost to service the debt increases, and forced budget cuts occur to service the debt.
The US has spent $12 TRILLION in the last 3 years and the result has been an increase in GDP of $500 Billion. Spending at ratio of 24:1 is unsustainable, but that spending
is the only reason the US is not in recession.
Once spending is cut, the recession starts in about 90-120 days.
Obama could order all federal departments, offices and agencies to cease spending, because they have not spent their entire budgets yet (and they don't until September) and that cover the rather small $29 Billion the US pays in interest each month on its outstanding treasury bills, notes and bonds.
Is there a chance that we'll end up ditching the Fed?
The Federal Reserve is a central bank, in fact,
the central bank, and it does the exact same thing every other central bank on Earth does.
It basically tries to fix the mistakes Congress makes when spends recklessly, which is something Congress has been doing for a few decades, while Americans looked the other way.
The US has about $200 TRILLION in liabilities though the year 2050, including Social Security, Medicare, Medicaid, Obamacare, federal employee pensions, State, county and city employee pensions, private pension plans, your badly-in-need-of-repair Interstate Highway and US Route System, and your electrical grid, and about a half-dozen other things that you have to pay.
You didn't have the money 20 years ago, you don't have it now, and you will never that much money. Americans have been writing checks they can't possibly cash.
Your global work-force cannot compete against the global work-forces of other [developing] countries in part because the average American wage is 125 times higher than the rest of the world and that is something that cannot be ameliorated in a matter of days, weeks, months or even years.
It will take 50-60 years for the wages of the rest of the world to catch up as the wages of the US [global] work-force decline to reach an equilibrium point, and that will result in a decline of the US domestic work-force (which is under no threat of competition from foreign global or domestic work-forces).
It will not be pretty.
Vince Cable MP expresses concern that America might default on its debts leading to a new world recession.
The default will not cause a world recession, but raising or not raising the debt ceiling makes no difference as the US will have a recession soon enough.
Will that trigger a world recession? I don't think so. What you are more likely to see is "rolling recessions."
If you want more on that, go back to the last Pluto transit of Capricorn. A rolling recession in India resulted in the collapse of the British East India Trading Company.
That caused a "credit crunch" which subsequently resulted in "rolling recessions" throughout Europe and Asia, but a major recession in the American Colonies (all of them -- British, French, Spanish, Portuguese, Dutch etc).
Some European countries were not affected. Russia and France were not. However, go back to the Pluto transit of Capricorn in the 1280s and France went bankrupt (but that chart no longer applies to France).
There was a drought in the American Mid-Atlantic Colonies that created near-famine conditions, but in Scandinavia, the Low Countries and the German principalities it was more severe. Without cash, they couldn't import food, so several million died.
Those rolling recessions didn't affect all countries at the same time, rather they rolled back and forth affecting different countries at different times, sometimes more than once, and again, not every country was affected.
In addition to France, Portugal and Spain got away unscathed and undamaged, but you can't say that now, because the country natal charts in effect for those countries at that time don't apply now.
The Italian City-States in existence at that time were only marginally affected, and the same for China and Japan.
