This is a short question, not exactly a diary. I tried asking in a comment, but I did not get a response and I am really interested in understanding why this deal would be better than defaulting.
I am sure the result of defaulting is "unimaginable," but I do not see how any of the current deals are any better. As it stands, the American people will lose trillions of dollars. In exchange, rich people will save trillions of dollars and get to continue making trillions of dollars.
If we did default, the American people would lose trillions of dollars. I do not see how that is any different from the current situation. However, if we default the rich stand to lose trillions of dollars as well. At least the playing field would be evened a little.
Regardless, there will be a base line level of economic activity of people buying food and supplies they need to get through the day. I am pretty sure most of the pain in a default will come from the rich. I am pretty sure it is much more "unimaginable" for them. As it stands, the American people are already in a lot of pain and are about to lose trillions more.
So are reasonable economists actually saying that the average United States citizen would suffer so much more under default than they would under this plan, or is it just that we need to keep propping up giant financial institutions at the cost of everyone else?