Negotiations over increasing the federal debt ceiling continue in Washington

Negotiations over increasing the federal debt ceiling continue in Washington.

Republicans and Democrats are using the debt ceiling as a bargaining chip in negotiating how federal tax dollars will be spent.

Since the last time we endured a major debate over debt ceiling, the national debt has nearly doubled, soaring from $16.7 trillion ten years ago.

The US has absolutely, indisputably defaulted before.

This began in in the wake of the American Revolution when the US defaulted on domestic loans.

Franklin Roosevelt decided to default on the whole of the domestically-held debt by refusing to redeem in gold to Americans.

Any talk of default is sure to bring predictions of economic devastation.

A more honest and rational approach would be to explicitly default, says Ryan McMaken.

McMaken: A less deceptive federal government would admit that it can only afford to pay back its debt at some reduced amount, say 90 cents on the dollar, or less.

This method of turning debt into inflation is attractive to governments and their Wall Street enablers.