Wednesday, August 01, 2012

the check is not in the mail

In our world of ever-higher public spending, and ever-higher public and private debt, we are becoming accustomed to bankruptcy. First it was General Motors and Chrysler, two-thirds of what was once known as The Big Three. Then it was the sovereign nation called Greece. Then it was the American cities called Stockton CA and Scranton PA.

Now it's the United States Postal Service, which defaults today on a $5.5 billion payment to its employees' retirement fund. Congress could avert this embarrassment, but it must act in the next few hours. How likely is that?

And what comes next, the Social Security Trust Fund? The state of California? Medicare?

The president has so far bailed out auto companies, homeowners, and student borrowers, indemnifying bad decisions with taxpayer money. How long before there's no one left to do the bailing? How long before the last American realizes that it's folly to be prudent?

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