Is the US just postponing an eventual crisis?

Of course it seems that US is buying time. However, that aht differrentiates us from them is that they are truly transparent and so, the crisis come out as it happens unlike in India where many thing are hidden. The control in India is good but, manipulated control is dangerous. I have no doubt that US will spring back again because that country is till resilient where merit counts unlike in India where everything, including security of the country is a GAME!!!

If we as Indian think that we did a great job by having strict policies in our financial system and if we think the western countries let themselves loose on that front, then it's better to think again. As final receipient of any sound policies should the general public, if we look at general public then the common man in India is chewed beyond limits. The common man in western countries are having great living standards for very good reasons. Please let's not feel too proud in ourselves for any sound policies, if the common man had any strength left then we in India also could have gone for subprime mortgage (remember banks were running after the comon man to take any loan they want)..but common man couldn't dare as he had no strengh left and not to mention the confusing policies, forest land scams, builders defaulting and still scot-free...hundreds of reasons to "cheer" about for us Indians. We should really "Cheer", our inefficiencies saved us....
I still believe US is not in any danger of an debt defaults, they have lot of options and a very smart/bully nation to make themselves come out in any shape they want...

Moving from gold standard we have been persuaded to embrace Keynesian developmental monetary economics. But the fundamentals can not change. Money represents value created. Keynesian concept was based on today's money chasing tomorrow's value. But in the current circumstances cutting govt spending means contraction of jobs or stagnation of joblessness levels. Result double dip.

Demand stimulation is the key which in turns depends on expansion of consumption. Private industry will not invest unless it sees demand and income rising.

Unless govt makes it bold to spend on infrastructure projects and thus increase employment, put money back in the hands of the consumer who will go and buy stuff, the economy cannot be put back on rails. Some sharp pinpricks will be encountered but US govt must look to spending cuts but improve spending efficiency.

The article written on the US postponing its pain to a further date is completly correct. Also another problem of US consumers is the outstandings on credit cards, where in its nearing US 1 Tn. With more job looses and government hard on curtailing its expenditure in the months to come consumers would be hard pressed to pay or settle, meaning more writeoff on Bank's books. In the last meltdown there were atleast physical properties however in non secured consumer credit nothing is backed by security and its a huge risk that is likly to unfold as it happens. Every sneeze the US makes its going to rock the world economy very hard. All the talk about cutting down on expenditure can be forced upon countries like greece stating that for them to live they will have to take pay cuts and huge increase in taxes will US be able to do the same. A talk on downgrading the US debt just before the settlement was reached had stated that of reducing the "AAA" status of "D" equivalent to junk status which will have repurcussions in terms of corporate paper issued by US will have high interest rates thereby loosing out on the credibility part. Also US could risk the tag of Global Currency" in case if it happens. Presently US has ignored the Cancer problem, once it reaches the critical stage all will have to take a hit to treat them.

As you have already said, US economy is not safe at postponing the issue.If the ceiling is raised, there is more chance for more debts to pile up and more space for double recession.

Yes. Even if the deal is signed, the terms are very stringent and it will be difficult for the US economy to recover. At present all the US indices are trading in red. European idices are also down, particularly GErman (Dax) almost 2%. Early today morning with the news that the debt deal has been signed, the Dow and Nasdaq Furtures were almost 1.5% plus. As we get the details the markets have turned negative.
However things in India should be good. One possibility of funds flowing 'IN" can lead to a rally. Secondly Prannab Babu has been speaking very psoitively today evening. At last the Govt's think tank must have realised, the only way to get out of the great mess of corruption is to divert publics mind from a static govt. to a one which is eager on dev. and reforms.
At least on these points the markets can move up.
Keep minimum position. Investors should wait a couple of days more before putting in their funds.
BOLuck
Thanks Damani

It's no surprise that the opnly option is to buy time. But I don't believe US is any trouble at all, because in case USA wants to raise money then there are hundreds of ways to raise money and boost economy at the same time. e.g. allowing enterpreneurship to foreigners, I am sure there will be countless such enterpreneurs in India who would like to set-up business in USA I believe. I think there has been such proposals in past so during this period of next 3-4 years along with cutting the federal costs, there should be equal focus on releasing the FDI ways too....impagine if they ask for business worth 3 million dollar to be revived and generating at least 4 jobs in US, then if we have 10,000 such cases it's 300 billion of business and cutting the unemployments numbers in good extent......so I realy doubt if US is in any trouble, they have hundreds of options I believe....

The USA is still very much floating on the debt bubble and can therefore default yet again - unless its people and government are not living on tomfoolery and continue to enjoy the pleasures derived from the much maligned and affected Japanese economy. By helping Japan to come out of their war crisis, the US thought that by helping that country, they can shove off their manual work to third world countries and enjoy the pleasures of automation. By the influence of economic hegemony the US has been dominating the entire world, especially because of large scale brain drain from Asian countries. But their unbridled enjoyment of absolute freedom at the cost of the rest of the world has made the people lethargic and living on pleasures enjoyed through the economy sustained by arms and ammunition marketing in the third world countries! With the stoppage of US initiated wars spread across the third world coming to almost grinding halt, their economy boosted by armament manufacturing ans service industries, has come to a naught and they are perhaps facing the worst ever crisis in the entire world. hence thier recovery is not to be seen in the near future, if they continue the spending uncontrolled.

big mistake USA is doing in raising the ceiling and not addressing the issue.. this is the end of the great american dream if things are not solved quickly.. in any case bad times tome come for the economy for the next 10 yrs and transition of economic power to china

Mr. benjamin's mantra aptly defines the status of US...credit agencies r again doin wht they did in subprime crisis...same mistakes being repeated agn & agn...the alarm bells r ringing, but is any1 hearing?

chart of the day is highly surprising...i thought spice, karbon, micromax & 2-3 more were the only other major players but together they r eating 43% of the pie...funny sony ericsson doesn't appear...samsung's share is understandable with its unbelievably awesome galaxy SII