The effects would be gruesome, we agree. SOME degree of systemic pain like that, IMO is entirely unavoidable. The open questions are: Does it take the form of a violent collapse, or can it be drawn out into a long but more “orderly”, yet undoubtedly very painful episode; and how those alternatives play into midterm and ultimately 2012 elections. I don’t know, I am not a good predictor of the distant future; as well being generally pessimistic.
But honestly, I have little faith that out of such a morass, “cooler heads” will prevail. I find that question unpredictable and that is a seriously terrifying gamble, at least as far as I’m concerned. We get a sustained U6 print much over 20% (we’re at 16.4% now) and a commodity collapse and we will have much of America’s urbania lining up at soup kitchens. With the current Congressional cabal and the 0bama regime in charge of things, there can be no doubt that more and more onerous regulation and centralization would occur, be applauded, and they and their followers would play it for all it’s worth. At some point, EVEN IF a dramatic electoral turnaround occurs, tremendous amounts of that administrations’ efforts will have to be devoted simply to erasing the obscene graffiti and structural vandalism this bunch of street punks has scribbled all over everything.
I also have little faith that the mere election of the other party in either house of Congress or even the Pres would magically flip things around. (and I know you weren’t suggesting anything so pat) The debt that is the legacy of this era knows no party, the implied interest would be a considerable load for even a healthy economy to shoulder.
I personally worry less about the long term problems of the debt than I do over the short term problems of the deficit. With the economy in constant start stop, we can only hope that the Republicans see this as an opportunity to run as true fiscal conservatives and talk about tax cuts and cuts in government spending. That’s how they could ride electoral victory in November of 2010 and we can all only hope they follow through.
as of now.........there are NO Rats now standing up for the country...none....they are marching in lock step with the little tyrant...they are suppling their gangster and maifia connections with ample business and protecting their own multiple crooked congressmen....
I'll take my chances on the stupid party any day......