Well, we’re only a couple of weeks out until budgetary Armageddon. Total financial collapse. A world economic catastrophe unlike any ever seen.
Or not. It depends on who you ask.
We’re getting ominous warnings from the Congressional Democrats, the Federal Reserve, Treasury Secretary Timmy “TurboTax” Geithner, and the mega ratings agencies (Moody’s, S&P); which could give one pause.
However, that assumes that the brilliant financial minds that missed Enron, WorldCom, the internet bubble and collapse, Fannie Mae, Freddie Mac, the PIIGS meltdown, the housing bubble and collapse, the Countrywide scam, the Lehman collapse, Bernie Madoff, the Bear Sterns collapse, the AIG debacle, and the dollar bubble and impending collapse — in other words, every major financial event of the last decade — are going to get one right this time.
It could happen. Just the sheer odds would tend to predict they’ll stumble onto a correct answer some day. (And “missed” may not be entirely accurate. More like “unindicted co-conspirators.”)
The aforementioned experts are correct in one sense. Forcing the government to not spend money it doesn’t have and will never repay would cause economic havoc for all of the investment bankers, consultants, lobbyists, subsidized and bailed-out CEO’s, six-figure government bureaucrats, and the sundry non-profit and other organizations and special interests that serve as loyal conduits and money-launderers for these elites. And you can bet they’re intent on not letting that happen.
Realistically, though, with over $60 trillion in unfunded liabilities and annual revenue of about $2 trillion (against annual spending of $3.5 trillion plus a couple more trillion of added unfunded liabilities), we are far past the point where this could have been addressed in ways that won’t involve words like “default,” “hyperinflation,” and/or “collapse.”
So I’m betting that enough Republicans will be able to overcome their principles and find some way to reach a bipartisan compromise to kick the can down the road just one more time.
The bottom line is just what I’ve said all along:
The situation is hopeless, but not serious.