The biggest threat to our economic wellbeing is our inability to deal with all the debt we're piling up. We can't just push "The Reckoning" farther down the road. We can't keep borrowing, thinking it'll get better if we just wait for inflation to catch up with us; or that the economy will "grow us out of trouble". We can't go on thinking we never have to worry about paying any of it back.
So Greece is settled down a bit, and now everybody seems to be worried about Portugal, but the real problem may be right here at home.
We dodged a bullet (for now anyway) by pouring massive amounts of dollars into the banks. We haven't fixed anything yet, but we're still standing - so far.
I've been mostly worried that the next shoe to drop will be Commercial Real Estate - one estimate is that by next year, half of all commercial real estate loans will be underwater. We'll see; and it'll be a big fuckin' problem if it comes to pass, but it's nothing compared with everything bad that can happen if there are many more stories like this one in Birmingham AL.
In 1996, the average monthly sewer bill for a family of four in Birmingham was only $14.71 — but that was before the county decided to build an elaborate new sewer system with the help of out-of-state financial wizards with names like Bear Stearns, Lehman Brothers, Goldman Sachs and JP Morgan Chase. The result was a monstrous pile of borrowed money that the county used to build, in essence, the world's grandest toilet — "the Taj Mahal of sewer-treatment plants" is how one county worker put it. What happened here in Jefferson County would turn out to be the perfect metaphor for the peculiar alchemy of modern oligarchical capitalism: A mob of corrupt local officials and morally absent financiers got together to build a giant device that converted human shit into billions of dollars of profit for Wall Street
As usual, I hope I'm wrong, but I fear I'm not.
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