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Idiot of the day: David Levy and Srinivas Thiruvadanthai

October 28, 2010 – Comments (2)

David Levy and Srinivas Thiruvadanthai share the Idiot of the Day award for their article "Uncle Sam won't go broke". Trying to refute the popular view that the US is just a Greece with a printing press, they cite the fact that "unlike Greece, the U.S. has control of its currency, a long history of managing its public debt without default, a proven ability to collect taxes, and a deep and liquid market for its publicly traded debt."

To the reader with a triple-digit IQ, it is clear that control of currency can only help avoid default if you use that control to inflate away the debt, which is just another form of default. The history of managing debt without default has only seen one episode when a debt that large was managed successfully, and that was after the war when too many stars aligned the right way. As to the 'proven ability to collect taxes', just look at Obama's pathetic struggle to collect a fraction of the tax money given away by baby Bush. And the "deep and liquid market for its publicly-traded debt" has long been deserted by all the buyers except Ben Bernanke who is buying either on his own, or via a narrow circle of trusted bankers. To anyone who cares about the real purchasing power rather than some nominal amount of funny money, America's default is a certainty.