Thursday, July 14, 2011

Apocalypse Now

Obama walked out on Eric Cantor yesterday. Good for him.

Keeping the debt ceiling the same will not reduce the national debt. It will not create jobs or end welfare once and for all. The only thing it will do is cause the United States to lose it's position of power in the world, most likely permanently.

Why? Well, lets put it this way. Having debt is bad. Not paying your debts... that's worse.

Unless the debt ceiling is raised, the U.S. will not have enough cash to meet it's financial obligations. Which, yes, includes entitlements and checks for government workers (republicans don't really give a crap about that), but which also includes people who hold American bonds. Bonds are the things the United States sells when they need to borrow... they're like an IOU. People buy those IOUs because they know the United States is good for it. The U.S. is good for it because they can always issue more bonds to raise money to pay off those cashing in their bonds. Yes, the U.S. borrows money to pay it's debts. Maybe you've done the same thing, asking your parents for some money to pay off your credit card bill.

If the U.S. can no longer borrow money to pay its workers or impoverished people, the thinking goes, they will also not be able to pay bondholders. Those IOUs become worthless slips of paper. And that's when everybody stops buying U.S. bonds. And that's when the people who own U.S. bonds get mad that they're never getting their money back. And most of those bond holders are other countries with only friendly-because-its-financially-prudent ties to us.

Do you see where I'm going with this? We don't raise the debt ceiling, suddenly our government doesn't get paid. And while it's nice to pretend the people who help run this country would gladly work for free... that's not the case. Social services, protective services, everything we rely on to keep us safe begins to fall apart. The impoverished people of this country suddenly lose their homes. Families starve. Inevitable backlash ensues. Violence. Chaos.

Then the other countries who hold our bonds, China, Saudi Arabia, no longer have any financial incentive to help us in any way. Terrorism efforts fall by the wayside. Even our soldiers don't get paid.

America falls to pieces. And the pieces are so worthless nobody wants to pick them up.

Maybe anarchy sounds pretty good to Eric Cantor. But it sounds damn scary to me. Let's reduce the national debt... not destroy our nation.

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