Justin Raimondo

Everyone agrees the United States is in a crisis of momentous importance: we’re approaching bankruptcy [.pdf], millions are out of work, and the emotional leitmotif of our culture can be summed up in one word: demoralization.

Is there a way out?

Well, yes and no. Yes—if the solution comes from below: no, if we’re depending on our "leaders" to pull us out of the abyss.

Let me explain.

The problem is dramatically illustrated by our current debate over the "debt ceiling" crisis. In order to reassure themselves—and, more importantly, the public—that they aren’t just madmen, Congress imposed on itself a "debt ceiling" beyond which they are not supposed to go. In reality, however, they have raised the ceiling whenever they’ve felt like it. Now, however, as the imminence of America’s bankruptcy has impressed itself on increasing numbers of voters, there is some resistance to raising it—and, as a result, there is panic in Washington. Are the peons objecting to Washington’s assumption of absolute power, and actually challenging the elite’s ability to spend without limit? Horrors!

For months, the pundits and Washington think-tank know-it-alls have been in a tizzy: who do these unwashed peasants think they are? But of course we’ve got to raise the debt ceiling—after all, what about the "full faith and credit" of the United States? Don’t these denizens of flyover country realize they don’t have a choice in the matter? And now, with unmistakable finality, Wall Street has spoken in the form of Moody’s and S&P, the bonds rating agencies, which are threatening to downgrade US bonds if Congress fails to raise the limit.

This should give the ordinary American a clue as to what is at stake here, and who is on what side: it’s the Washington insiders and Wall Street versus the people of the United States—and the stakes are the fate of the nation.

Let’s recount a little history here: in the winter of 2008 the house of cards that is the American economy suddenly collapsed, and the Great Bubble of faux "prosperity" burst. A long orgy of malinvestment—spurred by bank credit expansion [.pdf] (i.e. the Federal Reserve printing gobs of "money") – came to an ignominious end. The housing market, already weak, imploded. It was a massive market correction, one that had to be endured before it could be cured – but the big boys weren’t going to take their medicine.