Friday, July 29, 2011

Look Who's Bankrupt Now

A lot of folks are worried about the debt ceiling crisis. As in, what’s going to happen if the United States defaults on its debt?
Some commentators are predicting a doomsday scenario in which credit ratings plummet, interest rates skyrocket and the financial sky starts falling. Others say that failure to increase the debt limit will lead to a worldwide financial meltdown.
But is the situation actually that dire? Not really because, after all, the United States is in debt just like you and me. And we know what happens to us when our finances go south. That’s right; we declare bankruptcy.
And that’s all that’s going to happen to the United States of America on August 2nd if Congress and President Obama can’t get a deal done. America will simply declare bankruptcy.
At first, that will sound really scary and people will be predicting doom and gloom and pulling their hair out. But once everyone takes a couple of deep breaths and a Valium or two, it will quickly become apparent that declaring bankruptcy may be the best thing that ever happened to the country.
Bankruptcy means that you get to write off your debts against whatever assets you have left. In the case of the United States, that means eliminating all that monstrous debt held by China and others and eliminating it for about ten cents on the dollar.
Plus, usually in a bankruptcy proceeding, you get to protect basic family assets like your vehicle and your home. Thus, even if the U. S. goes Chapter 12, it can probably still hold on to Air Force One and The White House.
Even if America has to foreclose on The White House, is that really such a bad thing? After all, the place is two hundred years old, is really outdated and needs a heck of a lot of renovations. Letting the World Bank or the International Money Fund take possession might actually be a blessing in disguise.
Of course, some folks in Washington may lose their jobs because of this debt default thing. But chances are that won’t happen right away. In fact, many of those holding elected office likely won’t see a pink slip until November of next year.
And before we get to that point, remember who makes the laws in America. That’s right - Congress. So if they don’t like the consequences of a national bankruptcy, all they have to do is pass a couple of laws and change the rules to favor the bankrupt party.
So don’t sweat this latest so-called crisis. Every cloud has a silver lining although this particular one may well be lined with gold at upwards of $2000 an ounce.
As always though, in the end, this situation will work out just fine, at least for America’s bankers, politicians and power brokers. As for the rest of you? Not to worry. Now that the NFL lockout is over, there’ll be plenty of bread and circuses to go around for everyone.

1 comment:

TheMiserableRanter said...

Great post. "The bread and circuses", what would we do without them?