29.10.02

FULL FAITH AND CREDIT? "The occurrence of a chain of events leading the US to default on its own debt remains highly improbable, but it is no longer unthinkable," frets John Quiggin. It's a carefully reasoned post omitting only one thing: any default by the United States on any part of its debt owed to foreigners would knock the last props out from Social Security. It's much easier for the United States to default on that part of its debt owed to Social Security pensioners by means-testing, or raising the retirement age, or taxing benefits, or changing the cost of living formula. Why be obvious when you can be subtle?

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