The Therapy Sessions
Wednesday, January 04, 2006
The coming default
El Borak's Myopia
I have no doubt that the US will not default, at least not this year and not voluntarily. Congress will bicker and strut, big-spending Democrats will criticize the big-spending president, and big-spending Republicans will talk about how all this new spending is absolutely necessary. And just think how be it would be if we had a Democrat, they will muse, as if the Democrats - who are less competent than the GOP in everything, including driving the ship of state onto the rocks - ever managed to accumulate so much debt so quickly. LBJ is a piker compared to Bush.
But while debt default is not coming quickly, it is coming. The American economy is an amazing beast. It can be beaten, starved, and abused, yet it rolls on. If there's a way for it to continue on, it will. But the only thing that can really destroy it is government, not by destroying incentives or by piling on regulations (these things may slow it, but like a bionic pack mule, it marches on) but by destroying the fuel that runs it: the dollar.