He's right. I'm not an expert, but I have an amazing financial advisor, and this has been his prediction for several years - that the dollar is going to collapse. Most people don't realize that the only reason it hasn't is because the Fed is printing money. Ultimately, this is going to make the dollar worthless. At which point, we'll probably try to escape our debt, as other collapsing countries have, by changing to a new currency - the "amero" or something.

People with cash - responsible people who have saved - will end up with pennies on the dollar (or non-dollar).

I've been advised to invest as much as possible in hard assets with intrinsic value, which is why I just dumped a bunch into a house.

It's coming. At least I see no positive signs that we can avoid it. Our debt is too high, and our credit is running out because we don't produce much of anything to trade. For a long time, we've been borrowing on the past strength of our trade, without actually manufacturing anything, like someone with good credit who no longer has an income.

Of course there is a way out - probably several. One saving grace is that so much of the future liabilities are made up of promises (or 'entitlements' as people like to call them). Promises can be broken, and these will be. With a lot more pain than if they had never been made, but it doesn't have to mean collapse.

LS, the US is still the third largest exporter in the world - $1.3 trillion - so there must be something getting made, or produced, or provided to someone. Still results in a trade deficit of course. That's not necessarily the end of the world unless you're a mercantilist.

The way out? War. Obama's already started with Libya. This keeps up, we'll be at war with every country in the middle east before he leaves office in 2013.

Here are a few excerpts from "Annie's Mailbox" that I saw this morning:

"My best friend, "Jamie," lives five hours away. She and her husband, "Bob," are both disabled. Jamie has several chronic illnesses that leave her in pain and exhausted most of the time. Bob weighs about 500 pounds and is immobile and bedridden. They have two teenaged children who are also obese.

I recently visited and was appalled to see their living conditions. What used to be messy has devolved into absolute filth — dirty clothes, papers, half-empty soda cans, candy wrappers, dirty dishes and spilled food, topped off with cat urine and feces. I was horrified and disgusted.

Jamie's husband and children treat her like an indentured servant. Bob has a caregiver during the day, but relies on Jamie at night. And he is impatient and surly. The kids whine for Mommy when they can't find things, and they claim to be too "exhausted" to lift a finger. The weekend I was there, the kids did nothing but eat, sleep, sulk, whine and play computer games. They are two of the laziest humans I have ever met and are totally self-involved."

These people seem to do a lot of eating, and I wonder where the grocery money comes from, since none of them work. Disability checks, I'm guessing. How do you suppose people like that will fare during the next ten or twenty years?

We're not done for. Social security and medicare and going to have to go. As will some military budget, and a lot of social programs at home. It's doable. Whether it's done or not, is anyone's guess.

"For a long time, we've been borrowing on the past strength of our trade, without actually manufacturing anything, like someone with good credit who no longer has an income."

LS, I was thinking something very similar. I actually think we can still pull this out, but one of the main things we have on our side is that the tremendous works of the generations who preceded us have given us financial cred that we don't really deserve at this point, but we have it anyway. And that may wind up being the thing that saves our bacon -- as long as we're moving in the right direction, lenders will (probably) have patience with us that they wouldn't have with, say, Greece. It's the very definition of the word grace -- we don't deserve it, but we have it anyway. I hope we're smart enough to put it to good use.

Do you think "doomer" Orlov is right or do we still have a way out?

Oh, I think there is still time to turn the ship of state.

I also don't think the legislatures of many states and Congress have the necessary fortitude to actually get it done. Paul Ryan has made a proposal, and has been excoriated for it.

But at least he has a plan. If you don't like it, provide an alternative. Doing nothing is not an option. Yes, I'm shouting at you, Nancy Pelosi, and you too, Harry Reid. And you too, Mr. President.

Meanwhile, I'll celebrate the coming DOOMpocalypse with hookers and blow. What? too soon?

This keeps up, we'll be at war with every country in the middle east before he leaves office in 2013.

Nah, next up we'll ally with EUrope, Turkey, Sryia, and Egypt and attack Israel.

I keep trying to come up with countries worth moving to in a worst-case scenario. I keep hoping the Cuban people toss the doddering Castro brothers into the sea and re-establish a democracy, but the Castros keep hanging on. I wonder how the Israelis would feel about a goyim like me moving there?

What was that line given to Davey Crockett in the remake of The Alamo? ah, yes, "Y'all can go to hell, I'm going to Texas."

And on the subject: The old saying about a journey of a thousand miles may be hackneyed, but it's still true. And that first step is being considered now. The Treasury has identified August 2 as the date by which the national debt ceiling must be increased to prevent the federal government from going into default. So the debate is under way now on a bill to raise the debt ceiling. Not surprisingly, the Administration wants a large increase, without restrictions or conditions, that will take them past the 2012 election. The deficit hawks (a group that includes both Democrats and Republicans) have countered with a smaller increase and a demand for offsetting spending cuts.

This is crucial. We must allow the deficit hawks to take that first step, no matter how much it hurts us individually in the short term. For those of us of Generation X, this will be our legacy: do we want to be the generation at the helm when the ship runs aground, or do we want to go down in history as the crew that saved the ship from certain disaster? This is, in its own way, every bit as big as the Battle of Midway. John Boehner wants to wrap up the negotiations by July 4, and there will be pressure on the deficit hawks to get-along-go-along and not foul up the schedule. We have to let the deficit hawks know that we've got their backs.

I'm with Darth. Hookers and blow for the end of days.

There's actually pretty strong cases for states, like Texas, and perhaps Florida, to suceed from the union. States that would have pretty thriving economies otherwise if not burdened by the federal mandates and entitlement programs. I could see that happening, and I don't see what the government could do about it since they've supported the same state and provincial sucessions in other parts of the world.

At any rate, within a year or two, a lot of local and state governments are just going to run out of money, and the federal government can't keep bailing everyone out.

I hope Dave is right that we can keep borrowing on our good credit, but as Orlov says, it only takes a few of the "collapse stew" ingredients to make the difference. There's increasingly a lot of ways it can go south for us. Food and/or oil shortages, or just one major country (like China) realizing they hold all the cards, not us.

http://peterschiffonline.com/media/video/peter-schiff-was-right-2006-2007-2nd-edition

Peter Schiff is someone that my financial advisor follows closely. In the clips above he was dead on about the collapse and recession in 2007. Interesting the naysayers arguing with him at the time.

He has been predciting the collapse of the dollar for quite some time.

http://peterschiffonline.com/media/video/peter-schiff-americans-still-believe-in-santa-claus/

Americans believe in Santa Claus

Money has been worthless for a LOOOOOOOOONG time. It's nothing new. Every single dollar in circulation has debt attached to it. It is and always has been impossible to pay off national debt.

http://www.globalresearch.ca/index.php?context=va&aid=11600

I do not see this country surviving as it is. If not for economic reasons but over ideals. The country is too devided over its core values. You have either an almost fanatical far right or a left that verges on socialism. There is no middle ground for the rest of us in politics and we can not survive that way. The economy will be the trigger though. At best I see our military going unpaid and turning on DC. A military coup that will hopefully in time restore power back to the people once it cleans house. Second I see a civil war or revolution people choosing sides based on their ideals.

Either way it is going to be bloody and its going to be hard times. I fully expect to see it within the next decade or two. I am a peaceful man but if I have to take up arms to defend my home, my country and the principles that it was founded on I will do so even if it costs me my life.

@DH -

If it comes to civil war, remember who has all the guns, and who hates guns. The ones who hate guns will be the losing side. And they aren't the conservatives.

Orlov is not correct. While it's true that there are a number of serious issues, they are in our power to solve. This is an important way that our situation is different from that of Greece, which does not control its own currency and cannot monetize its debt (this is an issue likely to lead to the break-up of the Eurozone, since Greece is expected to default before too long and cannot take the steps that countries typically do in a default situation).

In their slow and somewhat unsatisfying way, our political institutions are grappling with our deficit and national debt. We were always going to have to do this, but the recession has adjusted the timetable. As momof4 notes, in the long run, Social Security and Medicare need to be on the table, as does defense.

I suspect that Republicans and Democrats are going to reach a deficit reduction agreement as part of the raising the debt ceiling. If they fail to raise the debt ceiling, all bets are off, of course. But at present, bond yields suggest that the market does not think this likely.

Most people don't realize that the only reason it hasn't is because the Fed is printing money. Ultimately, this is going to make the dollar worthless.

This seems contradictory: The dollar is propped up by the Fed printing money and is going to collapse because the Fed is printing money. How does that work?

As I understand it, the Fed has used its ability to create money to pump a lot more dollars into the system (QE I and QE II) as a means to encourage banks to lend more money and boost the economy. But this comes at a cost of more inflation.

I've been advised to invest as much as possible in hard assets with intrinsic value, which is why I just dumped a bunch into a house.

I'm not sure a house would be the best way to do that. Unless your house is outside the U.S., you now own an illiquid dollar-denominated asset (in a market that still has a long way to fall and historically trails stocks significantly in returns) as a hedge against a weak dollar. I'm not an investment advisor, but I suspect that investing in commodities and non-U.S. stocks would be a better way to protect yourself.

There's actually pretty strong cases for states, like Texas, and perhaps Florida, to suceed from the union. States that would have pretty thriving economies otherwise if not burdened by the federal mandates and entitlement programs. I could see that happening, and I don't see what the government could do about it since they've supported the same state and provincial sucessions in other parts of the world.

Certain events in the 1860s settled the issue of whether states can secede rather definitively.

And of course Florida's economy is a complete wreck, since it was one of the places with the biggest real estate bubbles and not much else going on in its economy.

The way out? War. Obama's already started with Libya. This keeps up, we'll be at war with every country in the middle east before he leaves office in 2013.

How does war help get us out? Wars are really, really expensive, and add to the debt.

There's increasingly a lot of ways it can go south for us. Food and/or oil shortages, or just one major country (like China) realizing they hold all the cards, not us.

China doesn't hold all the cards. Their rapid economic growth is closely tied to our ability to buy their goods. We're codependents.

It is and always has been impossible to pay off national debt.

Wat?

You're all idiots. Nothing in this article is true. And this:

"Nah, next up we'll ally with EUrope, Turkey, Sryia, and Egypt and attack Israel"

Where did that come from? I laughed out loud when I read this. Again, you're all idiots.

Economic collapse does not cause nations to disappear. What it does do is prompt radical change.

What kind of change, I don't know, but it will be really really painful for the people who are dependent upon the current system.

If you are a government employee, forget about pay raises, forget about cost of living allowances, forget about flush retirements.

They may not like it, but the public will explode with rage soon or late, and drag those public workers kicking and screaming into financial solvency.

Right along side their corporate welfare counterparts, from big airlines to big banks to big agriculture.

If we sit on top of 200 years worth of natural gas and freeze to death, we deserve our fate.

this is stupid... what the rest of the world is betting on is that we will continue to pay on our debts... what happens if we default on all the debt to China? They gonna send Guido in to kneecap us? This kind of thinking doesn't work on the scale of a large country... meanwhile the debt percentage vs. GDP of the US is WAY, and I mean WAY down the list, so I'd guess it isn't anywhere near as straightforeward as presented...

That's not to say we don't need to fixit, but this is the same thinking that caused a massive buyout of GM and Chrysler... "Oh, we can't let them fail!!!!!1111. Ask yourself how many times United Airlines or Continental has gone bankrupt, and yet? Still Flying. Things don't simply dissappear...

Greece is not going to dissappear nor is Japan. That's not to say it won't be very ugly if defaults happen. It will be. But it isn't the end of the world.

"Peter Schiff is someone that my financial advisor follows closely. In the clips above he was dead on about the collapse and recession in 2007. Interesting the naysayers arguing with him at the time."

Under the assumption that you are not a billionaire as a result of 2008 market melt down, you should fire your financial adviser.

Had my financial adviser known about the impending melt down of financial market in 2008, he should have heavily invested in shorting the financial company stocks to make me filthy rich.

Many financial experts including, Peter Schiff, talked to death about the coming market crash but did not do a damn thing abut it to take advantage of the situation. Why?

They did not believe what they were selling. Peter Schiff got lucky one time. Don't expect hit a jackpot twice from the same gambling machine.

That's not to say it won't be very ugly if defaults happen. It will be. But it isn't the end of the world.

If Greece defaults, not a huge deal. If Japan defaults (which I think highly unlikely), it would be really bad for the world economy, and would probably trigger a global recession, and would certainly make it more difficult for other issuers of sovereign debt (like us). If the U.S. defaults, it would be utterly devastating to our economy and that of the world. It won't be the end of the world, but it sure will feel like it.

"As I understand it, the Fed has used its ability to create money to pump a lot more dollars into the system (QE I and QE II) as a means to encourage banks to lend more money and boost the economy."

What actually happened with the QE's was: the Fed printed money, which it used to buy Treasury securities. The last two auctions of Treasury bills were purchased almost entirely by the Fed. So the money isn't going to banks; it's going straight into the federal government.

The bit everyone knows but no one wants to talk about is that the relationship between the federal government and the T-bills purchased by the Fed is the same as that between the government and the Social Security Trust Fund: the Fed will never get that money back. It's a backdoor means of inflating the money supply and funding the federal government. And it's just about the absolute worst way to do it, since it gives the government direct command and control over a significant piece of the economy. Plus, it's the sort of monetary shenanigans that the Fed was created to prevent.

Of course, there are two reasons the Fed and the Treasury are going down this path. One is the immediate problem that the Treasury can no longer find buyers for T-bills at an interest rate that the government can afford to pay. If no one buys T-bills, the federal government will go into default within weeks. The second one is the classic monetarization of the debt; by inflating the currency you make the outstanding debt worth less.

"It is and always has been impossible to pay off national debt.

Wat?"

The federal reserve prints money but doesn't just "pump" it into production. It loans it with interest. So every dollar has a debt attached to it. Look up the fractional reserve banking system and you will see how it works. Or watch the movie "Zeitgeist II" for easier to understand information (I think it's called Addendum). You can also find some specifics from the 1st movie on YouTube (this is not illegal - the movies are free on the official web site):

http://www.youtube.com/watch?v=_dmPchuXIXQ

@Cousin Dave - Very helpful comment. Did the Fed buy bonds directly from Treasury? My understanding is that in QE, the central bank purchases securities from banks with the idea that they will then have the money to lend. Inflating away some of the debt is a secondary effect.

"Under the assumption that you are not a billionaire as a result of 2008 market melt down, you should fire your financial adviser."

No, because he saw it coming, he had me invested properly. I didn't take the hit that most Americans did because I was invested in foreign currencies and commodities, and much less in US stocks (and no bonds). Of course, it's a global economy now, but the way I'm invested is the best possible way to be protected. My advisor doesn't engage in risky practices, like shorting stocks or whatever, to try to get rich quick. Besides, no one knew EXACTLY what was going to fail first or when, but Schiff was obviously right - he has an amazing track record - and he's most likely right now, but no one is listening.

Everyone should watch that link, "America Believes in Santa Claus" because he explains it far better than I could.

And I bought a home because I obviously need one, not just for investment purposes. It has a value as a roof over my head, if nothing else, but there is also the supposition that if the dollar loses value, hard assets will increase. Americans may not be the ones buying, but I live in a coastal town, on the water, which will probably never go out of style.

At any rate, I don't want to be holding much cash if/when the dollar collapes.

The federal reserve prints money but doesn't just "pump" it into production. It loans it with interest. So every dollar has a debt attached to it. Look up the fractional reserve banking system and you will see how it works

I understand what fractional reserve banking is, and how it functions. But you seem to be conflating the way money is created by a central bank with the sovereign debt. The Fed doesn't add to the U.S. government's debt when it creates money.

Theoretically, the U.S. government can pay off its debt if it starts taking in more money than it pays out. Fractional reserve banking does not prevent this.

"What actually happened with the QE's was: the Fed printed money, which it used to buy Treasury securities. The last two auctions of Treasury bills were purchased almost entirely by the Fed. So the money isn't going to banks; it's going straight into the federal government."

Exactly. This has got to devalue the currency at some point. What's actually suprising is that it's taken longer than most would assume. Our reputation, based on our past production, is still keeping the dollar strong somehow. Let's hope that this holds, but it's kind of a smoke and mirrors game.

"Certain events in the 1860s settled the issue of whether states can secede rather definitively."

This line and its variants always amuses me. If you believe the US civil war gives creedence (or legal status) to the idea that the "union is inviolate" you're destroying one of our founding documents, the Declaration of Independence.

Believe it or not, seceding may be all that can keep "a government of the people, by the people, for the people" perishing from the earth.

"Did the Fed buy bonds directly from Treasury? "

That's my understanding, yes.

If you believe the US civil war gives creedence (or legal status) to the idea that the "union is inviolate"

It doesn't give any legal precedent, no. But once you talk about seceding, you're past legalities anyway and into "who can enforce their will, wins". The South couldn't. Irrespective of the Declaration of Independence or the Constitution. They pretty much knew it at the time, but they could also see the writing on the wall that their position was only going to get worse as they got out-populated and out-developed. They took a gamble on getting sufficient international support to hold out, and lost.

The example of the Civil War doesn't 'prove' that states can't secede, sure. But it does show that it would be damn hard. If you think Texas is going to be able to write a letter saying "we out, sorry, see this clause in whatever legal document" and everyone else will say "ok, that's cool, nice knowing you", you're dreaming.

For starters, seceding states would need to take a significant proportion of the national armed forces with them. I don't see that happening in the near future.

I remember having this argument with someone about whether the UK could leave the EU (but on your side Sio! Different situation). I said, sure, they can just repudiate the treaties they've signed, declare themselves no longer in it, etc. Easy. Of course, this would cost them in international reputation, loss of trade from leaving the EEC, and so on. He seized on the cost bit and started quoting various provisions of EU treaties and laws, that they would have to pay x pounds/euros to get out, that they needed agreement of so many countries - that sort of stuff.

I never could convince him that no, sovereign nations can always just say "get lost" to that provided they can live with the consequences. And back it up with force if necessary. After all, what could France and Germany do? Mainland Europe simply doesn't have the military capability to enforce their will on the UK.

So he accused me of war-mongering. Sigh.

King Rick Perry, Overlord of the Republic of Texas, Right Hand of the Risen Jesus, now in charge of a sovereign nation.

Yeah, that sounds like a good idea.

"The example of the Civil War doesn't 'prove' that states can't secede, sure. But it does show that it would be damn hard. If you think Texas is going to be able to write a letter saying "we out, sorry, see this clause in whatever legal document" and everyone else will say "ok, that's cool, nice knowing you", you're dreaming."

The current American public, unlike that of the 1860s, is not going to stomach the idea of waging war against their fellow countrymen. It was agonizing then, which was the example, and it certainly wouldn't be supported now. The majority don't support the foreign wars we are waging now, much less a civil war.

After ridiculous federal intervention (checkpoints), the Florida Keys suceeded in jest about 20 years back, but there is actually a legitimate movement to do so now. They could become like the Cayman Islands - a banking haven with minimal or no taxes. And they don't need military might - they have a crucial military base (Key West) that could be LEASED back to the United States.

If the country starts collapsing, you'll see areas that can sustain themselves suceeding. Florida may be a mess now, but we have a global tourist economy that would keep us going. Everyone wants to retire where it's warm, especially if the state sheds the burden of big government and entitlement programs. We already have no income tax. The rich would come here in droves, and the welfare recipients would relocate.

Well the question is who owns our debt? China is dumping it like a fire sale.

So at this point it is a case of fish or cut bait on selling any more debt.

What really needs to happen is the House has to grow a pair and follow the Constitution. The House is the one who creates the budget bills and has the power of the purse. They need to write a budget that hacks back on the alphabet soup. If the Senate tries to change it -- send it back as it originally was, rinse and repeat, as needed. Tell the president to sign the damn thing or the government shuts down. Rinse and repeat again.

Until this is done -- we are so fucked.

Jim P, you might want to check the update at the end of that blog post. China isn't selling off its holdings of treasuries, but it did sell some short term bonds and buy long term bonds. As I wrote above, the US and China are codependent. They are unlikely to do take actions that would tank our economy; a massive sell off of our debt would do be likely do just that.

And they don't need military might - they have a crucial military base (Key West) that could be LEASED back to the United States.

LS, you do need it if the United States decides to dispute the Keys' independence. The powers that be might not take too kindly to leasing back a base the whole country paid for. What if they refuse to pay the bill?

I suppose if it was useful in some way - somewhere to relocate Gitmo perhaps? - it might get up. But the essence of any deal is to work out what what you have to offer and what relative power you have. As far as the Keys negotiating with the Feds goes, the answers are pretty much "nothing" and "zilch".

The current American public, unlike that of the 1860s, is not going to stomach the idea of waging war against their fellow countrymen.

If the productive parts of the country start leaving, you might be surprised at how fast that would change. I sort of agree with you - except I think that attitude would prevent states or regions leaving in the first place and risking war, not federal intervention if it happened. I doubt the groundswell to "just let them go" would be strong enough for seceding states to prevail. The Federal Govt would have no choice but to contest it, same as they had to last time, because if you let one go, where does it end?

No, military force is the only way any part of the US (except Puerto Rico!) can get out. And I just can't see that happening yet.

Holy mackerel. I thought you were all idiots before you started talking about states seceding and civil war. Wow. Just, wow.

While there are times when I'd like to see California divorce itself from the economic drag and unhelpful social policies that we are faced with as a result of the disproportionate influence of lesser entities in our Federal system (I'm being intentionally provocative here, but we are the largest state economy, have more agricultural production than any other state, are the seat of a vast proportion of our most innovate companies, pay a lot more into Federal taxes than we get in benefits, and yet we're still held hostage by policies favored by those in small, unproductive states), the idea of secession strikes me as absolute nonsense.

No state would take that step absent the utter collapse of our nation. There is value in the union itself in economic, social and security terms. We have some short and long-term financial issues, a recession, and a polarized political system and electorate. But our nation has dealt with worse issues in the past. We need to get to work dealing with these problems. But pretending that running away from them (even if possible) is a solution seems utterly wrongheaded.

--

@Cousin Dave - I did some digging, and it looks like QE2 was as I wrote. The Fed bought treasuries from banks, not the dept. of treasury itself.

Hey, whistleDick, talk of secession is an old perennial in Oz. Western Australia and Queensland are the two states that regularly threaten it, on the grounds that they have all the mineral resources and get screwed over on the proceeds, while the rest of us just...supply the labour to work those mines, grow all their food, train their doctors, engineers, accountants, electricians, whatever. Only Tasmania never mentions it because quite frankly we'd let them go in a heartbeat :) 400k people with their own two senators, and most with two heads (think Deliverance here, and adapt the old joke "How do you tell if a girl is a virgin? She can run faster than her brothers).

Yeah it is nuts - today. But it's an interesting intellectual exercise. For all the talk of international law, treaties, and sovereign nations, just how do borders get drawn and who decides? If you look at my posts, I don't think it will happen in the US in the near future. Countries do break up under disparate pressures though. Yugoslavia for instance. For that matter, just how did Britain lose the empire on which the sun never set? When was that inevitable?

In the event of a hypothetical withdrawl from the union, threat of federal intervention might prove an initially powerful deterrent.

However, bear in mind that the people whom the government would be sending to these areas, are not foreign mercenaries with no ties to the people.

Rather they too are ordinary Americans with common everyday struggles, virtually every soldier is also an American citizen with a home somewhere in America.

Most of those soldiers come from the southern states. So that begs the question, how hard would said soldiers work against the apparent interests of their families and friends back home?

The United States, the Federal Government, these are ideas and ideals, loyalty to those institutions is important, and powerful, but the price of that loyalty is justice. If those entities begin to work against the interests of the populace as a whole, then that loyalty will be eroded at all levels, to include those who serve in the military. That is one of the things which makes civil war so horrific and so important to avoid.

Our Declaration of Independence is clear about when a population is just in its rebellion, indeed our founding fathers intended it to be possible to overthrow our own government should it prove necessary. Is it? I don't believe so.

But will it be in the future? In 10 years? In 50? In 100? I don't know. Nothing in this world lasts forever, so the when is the only question.

The United States, the Federal Government, these are ideas and ideals, loyalty to those institutions is important, and powerful, but the price of that loyalty is justice.

Precisely the question General Lee struggled with. In the end he sided with Virginia rather than the Union (who wanted him as a general too, and given the way he trounced Union generals before Grant, who can blame them). Which way would it go this time? I don't know either. But I don't think the loyalty to one's state is anywhere near as strong as it was then.

I don't think the glorification of war is as strong as it was then. Nor or we as geographically isolated. The kids in our military who would be expected to fight would probably have a zillion Facebook and Twitter friends in the area they're supposed to destroy. They've flown there, vacationed there, lived there.

So, it's very unlikely. A lot would depend on geography. Islands, like Hawaii, for instance, which hasn't even been a state that long, or the Keys (which has only one road and out) would be able to justify it more easily.

And the US has supported the very same type of sucession in other parts of the world, such as Yugoslavia, so it would be totally hypocritical to take the stand that here it's not allowed and we're going to kill our own citizens.

Not saying the government wouldn't try, but I just can't see the support of the populice or the military.

It's a last resort, of course, but it may come to that if the hard choices are not made now. And, in some ways, it might be beneficial for a smaller US to emerge.

If the dollar does totally collapse, very few of us are going to want to be "Americans". Our consumptive mentality and the lives we lead are all based on other countries wanting our dollar and exporting to us.

For those of us of Generation X, this will be our legacy: do we want to be the generation at the helm when the ship runs aground, or do we want to go down in history as the crew that saved the ship from certain disaster?

Unfortunately, Generation X is not at the helm yet, and remains hopelessly outnumbered by the Baby Boomers. There are enormous differences between the two generations. X'ers tend to be more conservative financially, have lower (more reasonable) expectations, and do not expect to receive any benefits from entitlement programs. Their pragmatism could go a long way toward solving some of these problems, but it's not going to happen with the Boomers still holding the reins.