Looks Like the U.S. is Headed for Default

And not for lack of money, or 'being broke'. There's plenty of money, but the political system is damaged probably beyond repair. If there is no problem referring to the Social Security trust as 'IOU's' that are intrinsically worthless, if debt owed to the American public might be defaulted on, then certainly America's international creditors will receive far less deference if the U.S. ruling class is pushed against the wall.

Martin Wolf puts it better:

Finally, with one party indifferent to deficits, provided they are brought about by tax cuts, and the other party relatively fiscally responsible (well, everything is relative, after all), but opposed to spending cuts on core programmes, US fiscal policy is paralysed. I may think the policies of the UK government dangerously austere, but at least it can act.

This is extraordinarily dangerous. The danger does not arise from the fiscal deficits of today, but the attitudes to fiscal policy, over the long run, of one of the two main parties. Those radical conservatives (a small minority, I hope) who want to destroy the credit of the US federal government may succeed. If so, that would be the end of the US era of global dominance. The destruction of fiscal credibility could be the outcome of the policies of the party that considers itself the most patriotic.

In sum, a great deal of trouble lies ahead, for the US and the world.

1'The political genius of supply-side economics' - Martin Wolf