Today the Emergency Economic Stabilization Act of 2008 became law. A few dozen Congresspersons changed their minds after getting panicked calls from constituents who think that the U.S. Government is responsible for supporting their retirement portfolios. In a big way, that responsibility is now in effect.
Generations of Americans now think of themselves as consumers rather than citizens, and look to their government as the ultimate provider of services and solutions. Entitlement programs like Social Security and Medicare have conditioned people to think this way. Citizenship requires some elements of sacrifice and self-denial, values which many Americans are now constitutionally (pun intended) incapable of rendering.
Americans decided today that future indebtedness to foreign creditors is more acceptable than the short-term pain of liquidating bad assets in a recession. This, my readers, is the essence of what I call the Sovereignty Crunch. Americans have decided to trade away control over their future for the illusion of material prosperity today.
