Default Already!

We should have defaulted.

Regardless of the short-term pain – regardless of the financial destruction on Wall Street, the loss of faith in the dollar, the loss of face for America – a default would have served us well in the long run.

I don’t say that to be contrary or combative. I say it because it would have been the best outcome for our country. We are treading the wrong path financially. I know that. You know that. Every American who pays taxes and is continually disappointed by the spending priorities in Congress and the White House knows that. And, yet, the people who hold political power in Washington, D.C., don’t even attempt to rearrange the deck chairs while the Titanic sinks. All they can think to do is fight over which piece of the boat they want – as though there’s going to be any boat left to fight over.

Simply put: America is not the country we think she is, not anymore. She is a sinking ship … an empire in its death throes … a former supermodel wasted by too many cocaine-and-vodka benders who refuses to acknowledge that she’s no longer super – nor a model. To some, such criticism of America will seem impolitic; some might call me unpatriotic. But facts are facts, and the fact is that America is sick, and the sooner we default, the sooner the healing can begin.


If there’s a theme song to modern America, I’m convinced it’s Jimmy Buffett’s “A Pirate Looks at Forty,” a melancholy recognition that time passes you by, and that some of the choices you make in life lead you to the destination you find yourself at unexpectedly.

I made enough money to buy Miami, but I pissed it away so fast.

Never meant to last. Never meant to last.

Sad to think that for half a century we owned the world, but lost it all. We stopped fascism. We stopped communism. We gave the world a global currency. We built up the world’s largest currency reserves, and accumulated the world’s largest gold reserves.

And then, like that down-and-out, middle-aged pirate, we pissed it all away.

Now, we find ourselves one of history’s saddest tragedies, a fallen giant felled by his own recklessness and arrogance. We slough through life, burdened by more than $125 trillion in debt, the largest debtor the world has ever known. Our tax system is broken. Our education system is broken. Our welfare system is broken, and will drag us further into desperate straits in coming years. Our political system is broken. Our monetary system is broken.

We are broken.

We are a cancer patient, our collective corpus shot through with destructive cells. But aside from the occasional dustup in D.C. to remind us that we’re terminal, our politicians just pump more and more morphine into the system to keep the body happy for a while longer, never willing to accept the fact that the cancer is consuming us and that it will kill our country at some point. They haven’t the willpower necessary to confront the pain. Maybe they’re naïve enough to believe that the snake oil they peddle to us is real, that they really can reduce the debt over time, cut back wasteful and efficient spending, and return America to a path of fiscal prudence.

We know in our core that the politicians and presidents who tell us that are lying.

And, yet, we blithely pretend the lie is a truth. We have to believe it. We can’t construct the reality that we want to believe any other way. We can’t accept that the status quo we think we know – that America is the richest country on Earth and the greatest political system ever – might actually be a grand illusion.

It was true at one point. We were the richest country. And we did have the greatest political economy man has ever devised. And we can have it again. But the cancerous cocktail of debt and the politics of self-interest destroyed those strengths long ago. Now we survive, from one fiscal crisis to another, on borrowed money and borrowed time, like a terminally ill patient forever strapped to life support.

Like watching that terminal loved one suffer through the final stages of death, you reach a point where you just pray the oxygen runs out. It’s not for lack of love. It’s not a sense of heartlessness. You just know everyone is better off.

We’ve reached that point.

We Can be Better …

As it stands now, we sidestepped default – again. But, again, it’s only temporary. The Reid-McConnell compromise simply raises the debt ceiling for a few months and pushes the fight into 2014, when, once again, we will stand on the precipice of an abyss as Republicans and Democrats spar over extremist views of how to run and fund a country.

And the cycle will repeat, over and over again, until a financial crisis or, more likely, a currency crisis imperils our country, our dollar and our already-declining standard of living.

So why continue to delay the inevitable?

We should attack the cancer.

We should default already.

That would begin to clear the system. Like a company or a family emerging from bankruptcy, we would have a clean slate again. We could arrange our financial affairs more realistically. We could stop worrying about our role as a global currency and begin to focus on building a better America.

Certainly, that prescription is painful. Some – maybe all – politicians would lose their jobs to a population enraged by such a course of action. Stock and bond markets would heave and convulse, temporarily. Our cost of living would rise, in the short run. And America’s standing in the world would decline, for a while and for the better. But someone has to be an adult. Someone has to tell America that the pixie dust Congress continues to sprinkle on the nation is a placebo. We will never heal as an economy until we take the real and necessary medicine.

The people who honestly appraise our situation know in their guts that a default is the likeliest outcome for America, at some point. We’ve already crossed that Rubicon, though we like to pretend we’re still masters of our destiny. We’re not. We are, instead, slaves to our debt-addled balance sheet and the obligations we’ve piled onto our own backs. Through no action other than default can we begin to manage the financial strain we are under.

The sooner we purposefully choose to default, the sooner we can begin to rebuild what we’ve torn asunder over all these years and decades. We can be a better America. We can return to a position of power and strength. We can regain the respect we’ve lost and the financial security we destroyed with debt. We have the economy, the knowledge base and the entrepreneurial spirit to reclaim what we pissed away.

Yet, without a default to cleanse our fiscal sins, we are but a melancholy pirate, wistfully hoping for better days, but in moments of lucidity painfully aware of the sad truth:

I have been drunk now for over two weeks.

I passed out and I rallied and I sprung a few leaks.

But I've got to stop wishin', got to go fishin'.

I'm down to rock bottom again.

Just a few friends. Just a few friends …

Until next time, stay Sovereign …

Jeff D. Opdyke
Editor, Profit Seeker