Sunday, July 31, 2011

U.S. Civil Unrest?

The consequences of a U.S. debt default are not pretty. "Consequences for the private citizen always mean a dramatic devaluation of monetary wealth, because the private individual saver is often an important creditor of the state (eg. government bonds) ... The citizen feels the impact indirectly through higher unemployment and a decrease in state services and benefits."(Wiki)  Sounds innocuous enough - until you dig deeper to see exactly what "services and benefits" might be affected.  The elderly could see delays in their Social Security benefits.  Families who rely on Medicaid to care for chronically ill children could see disruptions.  Interest rates could skyrocket on car, house and student loans.  Small businesses might have a hard time getting credit.  In fact, the list of government services alone that could be affected is as long as your arm.  And don't forget higher unemployment.  The U.S is already at 9.2% officially, and that doesn't count those who have given up and aren't registered anymore, or those who are "under-employed".  Some estimates put the real unemployment rate at 23%.  (Scroll down to read Harry S. Truman's famous quote on unemployment in the column at left.)  And at what level does civil unrest emerge?  Civil unrest, are you crazy?  "People, you know, if it continues, we're going to start to see civil unrest in this country. I hate to say that, but I think it's imminently possible." (James Carville, Advisor to President Bill Clinton, July 2011.)  Over to you, Barack!

Today's Good News:  I'm sorry, James, but was that "eminently possible" or "possibly imminent"?