Sovereign Default and the Dodgers
As the possibility of an US default on its sovereign debt draws agonizingly close, I’d like to try and put this in terms that baseball fans can understand. The USA, the greatest country in the history of the world, is about to become to world finance what the Dodgers are to MLB. Yeah, this is bad.
Basically the US is like a rich guy who can keep borrowing money as long as the bank keeps upping his credit limit. He has enough money to pay the interest on the debt and as long as that continues, the bank will keep lending. But when he misses a payment, the bank has to do something about it.
Think Frank McCourt. Dude had money, that’s for sure. But he mismanaged his cash flow and when he and Jamie went bust, the bank took notice when he couldn’t quite make the payments anymore. Pretty soon after that, although maybe not soon enough, MLB took notice, too. Now McCourt has no Jamie and no Dodgers.
The much publicized divorce between the tea fueled Republicans and the spineless Democrats has led the country to the brink of a similar epic failure. There are still a few days left but at this point they’re looking more Frank and Jamie than Nestor and Kristina.
So, for anyone out there who still isn’t convinced that a sovereign default is a bad idea, let me ask you this. Was allowing Frank McCourt to run the Dodgers into the ground a bad idea? If your answer is yes, than it’s time for you to call your congressional representatives. If no, well, you’re either a Giants fan or Michele Bachmann.