There's really only one relevant issue to our government at the moment, and that is whether or not to raise the debt ceiling. At first glance to most people, this would be a no-brainer, since the immediate consequences of not raising the ceiling are quite severe, as government checks start bouncing sometime in march-April. However, what people do not talk about is that the day when government checks bounce is coming whether we raise the ceiling or not; it merely comes later if we decide to kick this can. This is for several reasons:

• The amount of current spending per annum is larger than tax receipts
• Tax receipts (revenue) will not be increased and spending will not decrease, as congress values incumbency above all other things
• State finances are on the brink of imminent collapse; we can expect a large and costly bailout in the immediate future
• The amount of debt outstanding is so large, that were interest rates to rise by just 2%, we could never even pay the interest even if the government confiscated 100% of income each year.

If we go ahead and keep borrowing despite the above factors, this has several interesting consequences:

• We can expect the fed funds rate to stay at zero, which will force commodity prices up until we have another collapse of the general market.
• As an additional consequence of such cheap money (and the obvious returns of bubbled markets), companies will invest rather than employ with this "stimulus", and unemployment will not improve.
• The resultant bailout of banks and large hedge funds and corporations will likely be of such magnitude as to significantly increase our debt load, further making us insensitive to interest rate hikes

Do you see where this is going? Eventually we get to the point where no rate above zero allows us to pay down our collateral, regardless of our attempts to grow revenue. The predictions differ on how long this will take, but most of the smart money is on about 2-3 years tops. Add the unemployment picture, and near the end the misery in this country will be close to what is described as "financial armageddon" by those who have analyzed what not raising the debt ceiling will do. And that's if "bond vigilantes" don't make us default first by refusing to lend without punitive interest!

As always, when given the choice to take our lickings now, or later (but with more lashings); we will opt for later and regret it in a big way when the reckoning day finally comes. The form it will take is still up for grabs; nobody knows whether it will be a zim-style printing, a simple shutdown of the government until it saves up enough revenues and reduces expenditures to function once more, or a bloody revolt when the government steals everything they can get their hands on to cover obligations.

I personally am leaning towards the latter; as riots will likely grip the country when people realize that their SSI, Medicare, Medicaid, Welfare, Unemployment Insurance, Food Stamps, and Social Security checks are going to bounce soon. Our government is well prepared to institute martial law in response (which is the only response governments have EVER had to such situations, anyways); this will be a good excuse to get away with any confiscatory scheme. As an added bonus, (what is left) of the USA has a high probability of escaping the situation with a dictator.

If the government does the hard (but right) thing, and shuts down, we can expect nearly all federal land to be sold in short order, and the old budget thrown away and replaced with something more sensible. Now congress is talking about bringing spending down to 08 (2008) levels; but when they get really serious here, they'll be thinking more along the lines of 1908 levels. Some states/territories (AK, HI, PR, Guam in particular) may be sold to other nations.

If we hyper-inflate, the USA is hosed. Expect the worst of both previous scenarios, but with famine added to the picture. Note that in all of these scenarios, we can expect secession from one or more states when they realize there is no benefit to being in the union any longer.

In short, this is how I learned to stopped worrying and love the congress. It does not matter what the government does anymore, really; we end up in roughly the same place anyways. The only thing personally to do is try and escape notice as hard as possible, whilst secreting away what you can. I must admit, that Thundering Mogambo Moron (TMM) was right all along.

Don't Belive me? Timothy Geithner has something to say about that - so do others.