What Then?

SUBHEAD: Does congress really want to play games with the only thing that supports the market for US Treasury paper.

By James Kunstler on 30 September 2013 for Kunstler.com -

Image above: Gunfight at the OK Corral on October 26, 1881, in Tombstone, Arizona between the Earp's and the Clantons. From (http://goodolewoody.me/2011/08/17/would-a-cowboy-president-promote-texas-justice/).

A theme in my 2005 book, The Long Emergency, was the counter-intuitive idea that the federal government, rather than becoming the omnipotent Big Brother Moloch so many feared, would instead spiral into impotence and become too incompetent and ineffectual to run everybody’s life. Another theme was that the USA was entering a political impasse comparable to the years that preceded the civil war, with many of the same old grudges playing out in disguise. 

What we’re seeing is an empire that had grown too quickly to even acknowledge it had become an empire, enter, just as quickly, the throes of contraction.

Hence, the great unacknowledged task before the leadership class is managing contraction. The radical Republicans, even in their Jeezus-driven transports of Dixieland retribution and John Bircher paranoia, come a little closer to recognizing the situation than the Democrats with their Leviathan problem — their nanny-state grandiosity. So, those red state radicals are gonna run that ole ‘possum up a gum stump now and see what happens.

What will happen is whole lot of uncertainty that will further undermine a faith-based economic system lurching on the fumes of legitimacy, especially where money and banking are concerned. The trouble with this kind of brinksmanship is that it is bound to produce unanticipated consequences. When the Carolina secessionists bombarded Fort Sumter in Charleston harbor, they didn’t have in mind the carnage-to-come of Spotsylvania and Chancellorsville. Similarly, the genteel spectators who rode carriages out of Washington to observe the doings at Bull Run as if it were the NFL season opener. 

In short, neither the Union or the Confederacy had a clue that they were entering upon the world’s first extravaganza of industrial mass slaughter. So, one wonders if their descendents today realize that are toying with the financial suicide of an advanced technocratic society.

The merits of the case for or against Obamacare are almost impossible for even well-informed and educated citizens to parse. You start with a law roughly 2,000 pages long, cobbled together largely by lobbyists for the insurance and medical industries, both of them hideous rackets, and move to a labyrinth of 50 different state’s systems for administering the darn thing, and then consider the supposed beneficiaries, namely young people so burdened by college loans in an economy that only offers minimum wage scut-jobs that, from one day to the next, they probably don’t know whether to shit or go blind. 

They don’t even have the scratch to pay the opt-out tax, let alone purchase an insurance policy.

Beyond that kind of uncertainty is the certainty that a whole lot of things are primed to shake loose. One that deserves the anxiety it is generating is the question of US debt, which translates directly into the question of US currency, i.e., the fate of the dollar. Does the legislative branch want to play games with the only thing that supports the market for US Treasury paper — the dollar’s proxy — which is the generally-held notion that the full faith and credit of the nation stands behind promises to pay? 

Two-hundred measly basis points in the ten-year note is all that stands between the pretense of economic stability and some pretty serious chaos in the government / banking matrix. The one-two punch of the continuing resolution for appropriations and the imminent debt ceiling crunch may rip the fabric of our constructed financial reality and open a black hole into which the wealth of nations disappears forever.

Some observers think a government shutdown would be salutary, the beginning of a wholesale house-cleaning of federal agencies and pain-in-the-ass public employees who get paid too much, enjoy too many benefits, and work strenuously to impede honest enterprise. There may be something to that. But the current actions in congress are more likely to produce a kind of epileptic seizure of all economic activity, public and private.

If congress is really hot to de-fund something, I suggest they start with defunding suburban sprawl, which enjoys more direct government subsidy than even the medical racket. 

I bet that would not go over so well in the big red Nascar states of Dixie, where driving in a car to do anything has been more-or-less mandatory for decades. This is the kind behavior that is truly killing American civilization, but it’s the last thing we will pay attention to.


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