A Drunk Trying to Make the Next Lamp Post
The old Bobby Bare song, Detroit City, has a refrain that centered on the desire to “go home.” Unfortunately, everywhere else is turning into Detroit City. Pretty soon there will be no home to go to.
Detroit’s bankruptcy, announced yesterday, gives us an opportunity to go over a few fiscal realities, always a good idea if you are careening toward a whole series of fiscal reality checks.
The first thing we must grasp is that we are dealing with levels of municipal debt, state-level debt, and federal debt, that mean a necessary default is coming. If our problems are left untended, we will default. If we wake up in time, and address the pending problem, we will default. This is another way of saying that every genuine solution to the problems created by our fiscal irresponsibility will be a form of default. The only solutions now are defaulting solutions.
The only thing we don’t know is what kind of default it will be. The only thing we don’t know is who the unlucky victim of our defaulting will be.
Government does not make wealth.
