Wednesday, December 24, 2008
The larger and more complex a system, the more likely it is to break down. Something like a simple pendulum with few moving parts could last many years. But very large, complicated things like the Large Hadron Collider break down much more quickly.
And a lot is going wrong right now.
The U.S. military agrees that the chance of a break down in the system is real:
A new report from the U.S. Army War College [here is the report] discusses the use of American troops to quell civil unrest brought about by a worsening economic crisis.
The report from the War College’s Strategic Studies Institute warns that the U.S. military must prepare for a “violent, strategic dislocation inside the United States” that could be provoked by “unforeseen economic collapse” or “loss of functioning political and legal order.” [The report also warns of a possible "rapid dissolution of public order in all or significant parts of the US."]
International Monetary Fund Managing Director Dominique Strauss-Kahn warned last week of riots and unrest in global markets if the ongoing financial crisis is not addressed and lower-income households are beset with credit constraints and rising unemployment, the Phoenix Business Journal reported.
Sen. James Inhofe of Oklahoma and Rep. Brad Sherman of California disclosed that Treasury Secretary Henry Paulson discussed a worst-case scenario as he pushed the Wall Street bailout in September, and said that scenario might even require a declaration of martial law.***The Defense Department has made plans to deploy 20,000 troops nationwide by 2011 to help state and local officials respond to emergencies.
In other words, the government is predicting that systems will break down. But instead of doing anything to actually fix the underlying problems which are leading to the break down (like making sure that politicians follow the Constitution and making sure that America's manufacturing base is rebuilt, so that we can make something real, and our workers can make decent wages on a sustainable basis), the government is just planning on implementing police state measures to quell protests.
(Indeed, while most Americans don't realize it, this already started happening years ago).
Will that help keep the U.S. together?
Maybe in the short-run. But I believe that - especially now that the illusions that we're in an endless boom economy and that the U.S. is a true democracy following the wishes of its people have started to pop (see this and this) - within the next decade, America will break up, like the Soviet Union.
Note 1: One precipitating factor in the break up of the U.S. may be the bankruptcy of the states. California, Connecticut, Florida, Hawaii, Illinois, Massachusetts, Michigan, Nevada, New Jersey, Ohio and Wisconsin are all in really big trouble, and on the verge of defaulting. The rest of the states won't be that far behind as the financial crisis intensifies. If the federal government isn't helping them in their most dire crises since the founding of the country, and if the feds impose the heavy hand of martial law without any benefit to the states, they will have less incentive to remain a part of the union.
Note 2: What would the break up of America mean for the dollar and for gold? It would likely be very bad for the former and very good for the latter. But remember, the U.S. might not break up for some time.