Way back in 1992, Murray Rothbard argued that the country’s best way out of debt was to repudiate it—simply stop paying it. Is that a valid option? What would happen if Uncle Sam just said, “Nope, not gonna pay”?
Back then the debt was a measly $3.5 trillion (less than half the GDP then) versus the $14.8 trillion today (almost exactly equal to the current GDP).
Back then, the entitlement guarantees and commitments numbered about $20 trillion in unfunded liabilities. Today it is over $100 trillion.
What Rothbard knew then, and what we know now, it that this—repudiating the debt—would eventually mean the end of the federal government as we know it. Therefore it seems very unlikely, but it could be an opening to the Free America that we've talked about in earlier episodes. It would force a radical reduction in the scope, cost, and power of the federal government.
And in other news: Is Occupy Wall Street just a preseason warmup for the demonstrations, strikes, and street battles to come in the runup to the 2012 election? What little book written by a Dartmouth professor, Gene Sharp, should you read to learn more about what's happening?
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