"you can shake off your debts, but be prepared to spend the rest of your days picking stones out of your daily lentil ration before turning in on a bug-infested straw pallet next to the hog-pen, care of which is your new career."
James Kunstler has the narrative here:
These bundles of bonds of bundled mortgages are now so infected with impropriety that the bundlers themselves might just have to buy them back and eat the losses, and in so doing watch the value of their companies whirl down the drain, and then, after losing their jobs, their incomes, their private jets, and all the other blandishments of the high life, face prosecution and any number of years assigned to a steel slab bed and a ping-pong career in some correctional facility. That is, if we are even able to recover some fragment of the rule of law from the landfill of good intentions.XX
XX The trouble is, that the damage is so severe through every institution concerned with the operations of money (including the US government) that none of these fatal monkeyshines can be mitigated. Or, to put it as Barack Obama's predecessor did, so neatly, "...this sucker could go down." After all, what are the practical remedies for property the ownership of which can't be established? And upon which are claims and obligations that underlie the very value of money in this society? The rights of property form the basis of Anglo-American law. Subtract them and all bets are off. Literally.
XX Schemes akin to a debt jubilee are already being floated - which might sound dandy in theory, but would very neatly thrust the USA back to a standard of living equal to that in the year 1690. In other words, you can shake off your debts, but be prepared to spend the rest of your days picking stones out of your daily lentil ration before turning in on a bug-infested straw pallet next to the hog-pen, care of which is your new career.
XX Or perhaps your idealism runs along a different track and you would prefer to just let the government come in and take ownership of virtually everything and then decide who ends up getting what? While I am personally not tortured by nightmares of what the Tea-baggers imagine "socialism" to be (i.e. fears that the gubment will insert a computer chip in your gonads, confiscate your Go-Go Ultra X Electric Travel Scooter, and restrict your monthly admissions to the Talladega Superspeedway) I can easily see functional limitations on something like the old dictatorship of the proletariat - especially when said proletariat has been reduced in this country to some kind of a lumpen slobeteriat of methadrine-addled, tattooed psychopaths with axes to grind.
XX Or maybe you prefer the realm of anarchy, where a few plucky souls decide to stop playing ball with their creditors, on the grounds that they can probably get away with it due to all those slip-ups and oversights in contract review... and the idea goes viral across the nation that nobody has to make his or her payments on anything owed... and screw those bankers, anyway. "You want me? Come and get a piece of me!" Well, that route has its disadvantages, too, pretty much quickly resolving in the end-of-civilization-as-we-know-it, since after the first delirious weeks of non-payment everything based on money comes to a halt. Enjoy that one while you can.
XX In any event, meanwhile, property transfers will cease and the money bound up in them will not circulate, and interest not paid and - well, it's a chain of consequence leading to banks not functioning, businesses going down, people not getting paid, goods not being shipped, and something like a long emergency getting underway. The outcome is not any different from the anarchy option, except you must remember that a lot of the things that end up broken will never be put back together again.
The rest is here: