I wrote a long discussion yesterday about defaulting on the national debt. During the course of the article, I became depressed and threw it away. It was just too damn depressing.
But when I woke up this morning, I still came to the conclusion that we should do a partial default.
We know where the bonds are. We know who has them. Other countries are less important than we are. The math is plain. If another country or an entity in another country holds our debt, we default on those bonds. If a multinational company that moved overseas to avoid taxes holds our bonds, default on those.
If a tax-paying, social security number holding, real live American holds the bond, they get the money. If a US chartered bank holds the bond in its reserves, it gets the money. All pension funds get their money
In a word, if you ain't one of us, tough shit pal. When you owe the bank a thousand dollars, you have a problem. When you owe the bank 10,000,000 dollars the bank has a problem.
Defaulting on the big multinational banks would also clip those bastards wings. Fuck 'em. We would be able to bail out the US depositors with the money we save defaulting on the bonds. Some US banks would survive. We would get by.
The real end of the day take home message is that we got in wayyyy over our heads. There isn't any way we can get out. Sometimes the most honorable thing to do is admit that you are bankrupt and take the steps necessary to fix the problem.