Debt, dysfunction, and the end of the (financial) world
It's a dead man's party
Who could ask for more
Everybody's coming
Leave your body at the door
-Oingo Boingo
As I write this, the world is anxiously watching a standoff between Barack Obama and John Boehner over the US debt limit. Boehner wants to force an abandonment of America's new, badly designed health care system, dubbed "Obamacare", in exchange for raising the debt limit and reopening the federal government, which has been shut down since October 1. Obama is demanding a "clean" resolution, without conditions. Republicans are insisting that defaulting on the debt won't be so bad. Message boards insist that we need to walk away from our debt and "get it over with".
The world in general has been loaded up with debt, and eventually this debt will lead to nuclear war and the end. Nobody disputes that. The only question is, fast or slow? Do we default now, or do we drag it out, hopefully giving people more time to prepare? (Although I fail to see how you "prepare" for a total nuke war, but maybe it won't come to that. Conventional war is still bad-ask the Germans, who have huge mountains of rubble in their cities from WW2.) Right now, I'm not prepared. My mom won't let me grow a garden, or keep animals. She simply refuses to hurt any animal, even for food. I am working on paying down my dental bills, and hope to have them paid by December 2014. I hope to have my own land, all ready to go, by 2017. Defaulting now would mean that people who are aware but who can't prep the way they want will die.
Defaulting later means that maybe some will live. Even without war, a debt default means that currencies inflate heavenward, grocery stores run out of food, cities explode in riots. Eventually, crime becomes untenable as people with no future and no hope kill each other to survive. Argentina is probably the best example of this. In December 2001, the small middle class of that country found the banks closed one day. When they reopened, withdrawal limits were in place, dubbed "corralito" by locals. The same thing happened in Cyprus.
I have to believe that the politicians don't realize how bad it could get. Delaying the inevitable for one year, or five, or ten, won't help the majority, who will always be blind, stupid sheep. But maybe some will come to their senses, and prep. The game of chicken that is being played in Washington is already spooking the bankers. Last time that the politicians did this, interest rates for the undeveloped world stayed high for months, and buyers shied away from Treasuries for a while.
That brings me to another subject, the fact that Congress can't agree on anything except lining their own pockets. Democrats oppose everything Republicans do. Republicans oppose everything that Democrats do. Bipartisanship and compromise died unholy deaths in DC long ago, now each side wants the other to fail, just so they can point fingers and blame at each other. Republicans are so obsessed with destroying Obama that they're willing to play Russian Roulette with the human race just to achieve that goal. But hey, at election time each side can blame the other. Never mind that if one day they choose the chamber with the bullet, that there might not be a next election, or humans to vote in it.
