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15 May 2011

What happened to just printing more money?

The debt-laden US government's credit card will hit its limit tomorrow, creating a cash crunch that puts the country's credit standing at risk as politicians battle over its long-term deficit. However, reaching the $14.29 trillion ceiling set by Congress will not have an immediate impact on government finances, because the Treasury has found about ten weeks of wiggle-room in short-term adjustments and an unexpected April jump in tax revenues. But if they haven't sorted it out by August 2, the United States, which has always merited a top-grade credit rating, might be left with no choice but to default on its debt payments but instead of resorting to such an irresponsible course of action, they could bring in more tax revenue by legalising pot or crack and having a $50 tax on each ounce sold, or they could hold a massive nationwide telethon and hopefully raise billions and billions (if not trillions and trillions), or if all else fails, they could make a desperate attempt to remove the deficit entirely by printing however much more money is needed - Mugabe's regime had to survive the same way at one point.

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