Mark Steyn -- The Sun Also Sets

Mark Steyn's column at the National Review doesn't hold out much hope for the U.S. escaping a financial collapse. (H/t Instapundit). He writes:

But these comparisons [with Greece and other European countries] tend to understate the insolvency of America, failing as they do to take into account state and municipal debts and public pension liabilities. When Morgan Stanley ran those numbers in 2009, the debt-to-revenue ratio in Greece was 312 percent; in the United States it was 358 percent. If Greece has been knocking back the ouzo, we’re face down in the vat. Michael Tanner of the Cato Institute calculates that, if you take into account unfunded liabilities of Social Security and Medicare versus their European equivalents, Greece owes 875 percent of GDP; the United States owes 911 percent — or getting on for twice as much as the second-most-insolvent Continental: France at 549 percent.

And if you’re thinking, Wow, all these percentages are making my head hurt, forget ’em: When you’re spending on the scale Washington does, what matters is the hard dollar numbers. Greece’s total debt is a few rinky-dink billions, a rounding error in the average Obama budget. Only America is spending trillions. The 2011 budget deficit, for example, is about the size of the entire Russian economy. By 2010, the Obama administration was issuing about a hundred billion dollars of treasury bonds every month — or, to put it another way, Washington is dependent on the bond markets being willing to absorb an increase of U.S. debt equivalent to the GDP of Canada or India — every year. And those numbers don’t take into account the huge levels of personal debt run up by Americans. College-debt alone is over a trillion dollars, or the equivalent of the entire South Korean economy — tied up just in one small boutique niche market of debt which barely exists in most other developed nations.

“We are headed for the most predictable economic crisis in history,” says Paul Ryan. And he’s right. But precisely because it’s so predictable the political class has already discounted it. Which is why a plan for pie now and spinach later, maybe even two decades later, is the only real menu on the table. There’s a famous exchange in Hemingway’s The Sun Also Rises. Someone asks Mike Campbell, “How did you go bankrupt?” “Two ways,” he replies. “Gradually, then suddenly.” We’ve been going through the gradual phase so long, we’re kinda used to it. But it’s coming to an end, and what happens next will be the second way: sudden, and very bad.

By the way, that decline in the U.S./Australian exchange isn’t the only one. Ten years ago the U.S. dollar was worth 1.6 Canadian; now it’s at par. A decade ago, the dollar was worth over ten Swedish Kroner, now 6.7; 1.8 Singapore dollars, now 1.2. I get asked with distressing frequency by Americans where I would recommend fleeing to. The reality is, given the dollar’s decline over the last decade, that most Americans can no longer afford to flee to any place worth fleeing to. What’s left is the non-flee option: taking a stand here, stopping the spendaholism, closing federal agencies, privatizing departments, block-granting to the states — not in 2040, but now. “Suddenly” is about to show up.

At the Instapundit link above, Glen Reynold's posts a warning from one of his readers that Canada is looking to economically disengage from the United States. Good luck with that--whether other nations want to acknowledge it or not, the United States is the economic engine that drives the planet. If the U.S. goes down, so will most every other nation on Earth, starting with China, and cascading around the globe.