Another update on the Debt Crisis of 2011.
An ominous Black Swan is circling Washington, D.C., like a vulture, watching and waiting as the wise men and women of Congress argue over whether to resolve the Debt Crisis of 2011. Or not.
This is the most dangerous situation in Washington since the Cuban Missile Crisis of 1962. I was in Washington on the weekend of the Cuban Missile Crisis, and I remember it well. We didn’t know how close we came to the brink, until it was all over.
This Debt Crisis is surreal. The Cuban Missile Crisis was loaded with live ammunition. The Debt Crisis is loaded with stocks and bonds and hundred-dollar bills. No one knows what will happen if we pile up a lot of stocks and bonds and bills, and set off an uncontrollable chain reaction of unpaid debt. Never been done before. But we are about to go there.
There are three major schools of thought regarding the resolution of this debt crisis. You have your big fix, valued at around $4 trillions, and your little fix, $1.5 trillions to $2 trillions, give or take. (Or is it billions? I can never remember.)
And defying all logic, there is the “no fix” option, supported by the gentlemen and gentleladies from the Tea Party. (What kind of tea are they smoking at that party? Can I get some?)
Translation: Some folks want to fix the debt crisis for the long-term, so Congress can get on to other business. Some folks will settle for a short-term solution. And some want to commit economic suicide on Aug. 2, rather than risk the chance of possibly serious complications down the road.
Hoo-boy! You think the rich and powerful are anxious about a little economic uncertainty? How are they going to respond to total economic chaos?
Remember the Black Swan? It’s a highly improbable disaster, resulting in unpredictable consequences of a catastrophic nature. Have a nice weekend.
— John Hayden