$130 trillion in total government debt. The mind can scarcely wrap itself around the monstrous size of that number. There aren’t adjectives sufficient to describe it. There isn’t a politician in America who isn’t in total denial about it. And there isn’t any way on God’s green Earth that any of it will ever get paid back.
Not even out there.
The sum is the equivalent of every dollar the U.S. economy would generate in GDP for the next eight years, presuming that people could live on absolutely nothing and government would do absolutely nothing except seize every last dollar to redeem bonds and transfer to the elderly and public employees as pension and health benefits. Since no one will accept being so enslaved this side of a North Korean prison camp, it stands to reason that the debt is inherently not payable.
There simply isn’t enough money in the entire universe to pay this off.
America and virtually all of her 50 states are insolvent – period. The fact that we haven’t quite yet hit the wall and reached the point where checks bounce and everything comes to a screeching halt changes nothing. Even if a miracle were to happen and delusional politicians were to stop spending this instant, there would still be $130 trillion in past borrowing and interest to pay back and future commitments to fund. No alteration of behavior now is going to undo that damage. That these nutcases continue to spend us into oblivion, even though we are in total free fall and approaching terminal velocity without a parachute a mere hundred feet above the ground, makes them either insane or traitors and probably both.
There is going to be a massive default on all this. It’s unavoidable. Most of that $130 trillion is going to become worthless pieces of paper, IOUs whose only value will be as kindling for fires. It’s not a matter of willingness to pay; there simply isn’t any money with which to do it. It’s all long gone, all looted and embezzled by politicians and spent to buy re-election votes in a crime far worse than anything the late Ken Lay and Enron ever contemplated.
If you doubt that, just consider the inherent utter absurdity of state governments that are $6.5 trillion in debt ($2.5 in general debt, $4 trillion in unfunded public employee pension and retiree health benefit liabilities) looking to be bailed out by a federal government that is itself $120 trillion in debt ($14 trillion in general debt, $106 trillion in Social Security and Medicare obligations).
So the only questions are: Which state will be the first to go? And what will the reaction be? Who will be the first to make like Greece and tell people expecting payments that they’re not going to get them, and watch the rioting commence as their anger at not getting what they really should never have been promised in the first place bubbles over? Something like post-Katrina New Orleans or post Rodney King south-central Los Angeles comes to mind. Specifics aside, I think we can be sure that it will not be at all pretty.
And that’s before factoring in what China might do when all the national debt it holds is defaulted on. About the only possible upside is that virtually every other nation, from the European Union to Japan, is just as bankrupt as we are. Perhaps they can all agree to forgive each others’ debts, wipe the slate clean, and start over again. But I seriously doubt it.
There is an irony in all this, for who elected the politicians that perpetrated this crime? Who happily receives all the payouts, at least until the money very soon runs out? We the people did. We have to look ourselves in the face and accept our measure of moral responsibility for having run this far off the fiscal rails. Without that, the rest is all academic and an exercise in futility.
Suffice it to say, a goodly portion of the American population does not and will not have the wherewithal to make this critical self-examination. They will instead look for a scapegoat, someone or something to blame and upon whom they can take out their frustration and anger if not extract a measure of retribution. This is where things start getting really unnerving, especially when you have the chief perpetrators in Obama and Pelosi already holding an all-consuming Captain Ahab obsession with President “Moby Dick” Bush. They won’t hesitate to take the rage of their mind-numbed rank-and-file supporters, focus it like a laser beam, and point it at the enemy du jour. It could be Big Oil, Big Pharma, or “the rich,” or Tea Partiers, or whatever other boogeyman they manufacture – it doesn’t really matter. Just so long as it’s away from Big Government and toward any entity they want to destroy.
That sounds conspiratorial, I realize, but when Obama can take a massive gulf oil spill largely of his own making and use it to try to terminate all domestic energy production (never mind that the enviro-wackos played a substantial role in causing this, by getting drilling banned in pretty much every other location from which it’s much easier to retrieve oil than 50 miles offshore and 5 miles down), is anything really beyond the realm of possibility, if not plausibility? BP is already a sitting duck in the crosshairs; it will take some pushing back to ensure Obama stops there. Remember, he always tries his best to “never let a crisis go to waste.”
And most of our lives aren’t impacted in the least by an oily gulf. Just wait until government, at all levels, ceases to operate unless they get a $130 trillion write-off. Do you honestly think the various public employee unions are going to quietly accept the drastic reductions in their ranks and the unilateral rewriting of their contracts in the face of the reality of insolvency? Do you think that Medicare and Social Security can just disappear without sparking rage amongst the massive retiring Baby Boomer cohort?
As much as I want to be optimistic, I have to believe that one thing is certain in all this: It will not end well. Indeed, it cannot. One way or another, whether by choice or by force, government is inevitably going on a massive crash diet very soon. A lot of promises have long since been broken and can no longer be redeemed. Only the form and severity of the reaction remains to be seen…