George Rebane
What’s good for General Motors is good for America. That was ground truth for decades. And it may still be, now that GM is preparing to announce that it has, with a nudge from the feds, entered Chapter 11 proceedings. Let’s think this out.
America is broke, it can’t meet its financial obligations without playing Ponzi (or should it now be called Madoff) with all holders of our national debt, and all dependents of future national payoffs. Today’s young people who faithfully pay into Social Security and other “trust funds” don’t have a prayer of being able to get back any semblance of the buying power that they're putting in. But we don’t have to tell them that, and better yet, they don’t seem to mind being ignorant of it.
But consider the benefits of the US following the ‘too big to fail’ GM into bankruptcy. If GM is too big to fail, isn’t Uncle Sam? In a stroke of the pen we could get rid of over $11 trillion (lots of zeros no one counts any more) worth of national debt, and over $80 trillion of promised payouts under all kinds of programs that the Sierra Bravos (that’s NATO alphabet for ‘sleaze bags’ for new RR readers) of Congress put in place. We’d be clean – out of debt and ready to face the world in a totally “reorganized” manner.
Reorganize? Well that’s what Chapter 11 is supposed to have the bankrupt entity do, so it can continue carrying on with its business. I know, the lawyers among you are shouting that governments don’t do Chapter 11, they do Chapter 9. OK, so let’s do a federal Chapter 9 – cities across the country will soon be doing it, followed by states that don’t get federalized first (see here). And take a look at Chapter 9, it’s a short read.
I know, you purists are going to point out that Chapter 9 today really covers only municipalities. But hey, work with me. If the feds can chuck contract law without a peep from the countryside, what’s a little extension of the wording for this small piece of US Code. There’s a lot to be gained, look at GM and all that’s now 'good for it'.
When our federal government does declare bankruptcy, and says ‘just kidding’ to all the holders of its ‘private debt’ Treasuries, there may be a little hell to pay. But what’re they going to do? Pass a Security Council resolution or something? Will the World Bank or IMF get pissed (pardon me, miffed) at us and say ‘Nope, we’re not going to take any more money from our largest contributor.’? You gotta be kidding.
If any third rate country like Russia can declare bankruptcy and come out of it smelling like a rose, so can we. Because our bankruptcy is going to be accompanied by the most sincere mea culpa that anyone has ever heard - ‘We really actually didn’t go bankrupt, and we’ll never do it again.’ Obama will deliver it personally.
There may be a little problem with China putting up a fuss; OK, so will the towel heads, pardon me, our Arab friends who have been playing both sides of the terrorist street for the last thirty years. Screw the EU, they’re already belly up as the next Islamic settlement. So when the dust settles, we won’t be able to borrow a lot of money from the suckers who have been funding our spending binge. But that’s the beauty of the whole scheme.
Once we’ve cleared our national debt and the half trillion a year to service it – forget about having to sell assets, those pilgrims are going to have come through twelve carrier task forces and seven amphibious expeditionary flotillas to get their assets – we can start out with a clean slate.
I can see now how Congress, that august body of wizened statesmen, will then settle back to reflect on a more sane policy of spending programs, programs which we can afford, funded by a tax rate that supports investment and a brisk GDP growth. A new relationship between state and citizen, free of the burdensome regulatory overhang; free of la-la land environmental diktaats, … A new and bright day will dawn for us and the whole world, because then we’ll be able to re-enter international markets with a strong balance sheet, free of toxic debt, and engage with our former trading partners who will soon forget that their dollar denominated national reserves were flushed down the toilet – bygones!
And then I hear the damn clock radio insist that it’s morning again.
[update] And speaking of Chapter 9 while we're all awake. Michelle Malkin published the table of some heady salaries sans benefits that certain city employees of San Francisco pull down. Cities like this are going down indeed - hang on to your municipal bonds, they'll make good wallpaper. Hat tips to two RR readers for this heads up.
Comments