How to save the US

"Great is Bankruptcy: the great bottomless gulf into which all Falsehoods, public and private, do sink, disappearing; whither, from the first origin of them, they were all doomed."

– Thomas Carlyle

Instapundit poses a challenge to his readers: how do we save the US?

The US is broke. There is only one way to fix broke: bankruptcy.

Add up the government’s assets (dollars printed are not assets). Add up the government’s liabilities – all of them.

You’ll find that the latter number is larger than the former number. Much larger, I suspect.

Come up with a reasonably fair mechanism of paying liability-holders their share of the insufficient assets.

Start over. "Great is bankruptcy"

The pain will immense, but it will be short. The pain cannot be avoided, it can only be prolonged.

6 Responses to How to save the US

  1. Borepatch says:

    The US Government has enormous real estate holdings. Millions and millions of acres.

    Plus mineral rights for that Real Estate.

    If you’re going to look at Bankruptcy, you should look not just at cash flow, but at assets.

  2. The U.S. is not going to bankrupt. I’ve posted a response on my blog.

  3. Victor says:

    How can the US go bankrupt when all its debts are denominated in dollars? The US government, you will remember, can print dollars at will.

  4. ScottS says:

    Perhaps not bankrupt, but effectively the same thing as it devalues it’s currency into nothingness.

    • Foseti says:

      Exactly – which proves that dollars are not assets; they are equity.

      A company in trouble can issue more stock to raise capital. But if the company issues too much, any new stock issuances are worthless.

      The same is true for the government and dollars.

      That’s why you should think of dollars as equity.

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