Why Hasn’t The U.S. Declared Bankruptcy?
Aug 14th, 2012 | By Mike | Category: Economics, Financial, Today's Off The Grid News | Print This Article
Our whole economic system is waiting to implode … so why haven’t we just gone ahead and pulled the trigger already?
No one pretends everything is fine anymore. Our political leaders talk about “soft landings” and a “gradual recovery” for the economy. This isn’t the language of growth and optimism. It’s the language of a group of people in denial about how bad things really are on the ground for most Americans.
Forget the noise about the 99 percent. Forget the yammering about the budget. America has overspent, with unfunded liabilities hanging around like skeletons in the closet. We’re just as broke as any of the banana republics … as up to our noses in muck as all of Europe … and no closer to a solution than the Greeks. Yet if things are really so bad, what’s taking so long for the other shoe to drop?
One thing keeping the game going in America is that the ball is already rolling. We represent one of the world’s largest consumer economies, and our own domestic economic engine is 70 percent pure consumption. It’s a lot of bodies, products, and dollars in motion. And as Isaac Newton so aptly pointed out, objects in motion tend to remain in motion.
Even as you personally plan for a financial reckoning day, you’re contributing to the ongoing motion of the system. You spend your paper money like it represents something of real value. You operate inside the financial system of checks, credit cards, and bank transfers. Everything clicks right along out of habit, and until something drastic and dramatic happens to bring things screeching to a halt, sheer momentum could keep America hanging on for years.
In this country, pride is a major factor in keeping up appearances. It all boils down to angry platitudes and display of nationalistic attitude: This is America; we can’t be broke! We’re better than those other nations. We’re the US of A, land of the free, home of the brave.
As a result, you-know-where is going to freeze over before we admit we don’t have two spare cents to rub together as a nation. China will repossess California, and we’ll just pretend that was the plan all along. Anything to save our pride!
Another step in avoiding the humiliating bankruptcy situations faced by Argentina, Spain, or Russia is the frantic posturing by our nation’s politicians and PR people. It’s all about image and spin – we’re not collapsing economically, it’s just a mild recession. Celebrities get on TV remind us that this is just halftime, America, and there’s a whole second act ahead.
The goal is to kick the can on down the road long enough for all the guilty political crooks and liars to be good and retired before the proverbial you-know-what hits the fan blades. As a result, there is no sound bite too trite and no media event too shameless to pass up. America has an image to protect as a sound, trustworthy economy for our creditors and the rest of the world. Remember, our debts don’t matter. Our dollars are sound. That’s the script, and the nation’s talking heads will bend over backwards to “stay on message” for as long as they’re told.
Last but not least, America can’t declare bankruptcy and have its financial reckoning day because of flat denial of the facts. Inflation, unemployment, GDP growth, and the other numbers are manipulated beyond recognition so that the truth doesn’t get out. The fact that 77 percent of American businesses aren’t planning to hire anyone in the near future? Not acknowledged. A $15.8 trillion debt? Not looking at that! And if we all agree to deny there’s a problem, then everything will just be fine.
Call it shortsighted and stupid, but that’s the way a lot of people like it. People don’t want to see America slipping off the top of the heap to become just another broke country. We’re not Europe or South America. We’re the leader of the free world, and we don’t have the kinds of problems that would make bankruptcy necessary. Who dares to even suggest such a thing?
As they say, “Who are you going to believe, me or your own eyes?” The official message is that everything is fine. The mainstream masses want to believe that so badly, they block out hard facts and bad news. One day the collective weight of the difference between the truth and the lies will bury the nation … but the power of denial is such that our actual day of reckoning could be tomorrow or twenty years from now.
It adds up to a frustrating situation for informed souls, who know that the whole American economy is one giant house of cards. Yet as EverBank World Markets President Chuck Butler reminds us, “What appears to be evident may not be imminent.” Things should have fallen apart by now … but thanks to the power of momentum, pride, political posturing, and denial, everything just continues to hang on by a thread. Will you be ready when it finally break?
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