America's Debt Ceiling Crisis, a Metaphor

How many of you out there have been thinking that America is a little bit like a consumer who's considering a 'strategic default' on his home mortgage? Think about it for a moment: a strategic default candidate is employed but looks at his mortgage debt and says, "The house is underwater by $200k, so why just not walk and pay rent across town?" (Only crazy people don't pay the mortgage, right?) America can pay its bills (our net worth – think of all the land and gold Uncle Sam owns – exceeds our debts) and has plenty of potential cash flow (taxes and choices about which bills to pay) but is having a leadership crisis in Washington. Stocks have been on a roller coaster ride Friday and the yield on the bench mark 10-year is dropping: 2.85%. Mr. Market still likes Uncle Sam's debt over, say Greece, Ireland, Italy, Portugal, and Spain. Of course, cash is king. If you think U.S. corporations are hoarding cash now, just wait until Monday. Meanwhile, Rep. Michele Bachmann, the Eva Perone of the Tea Party movement, recently took out a mortgage that (according to The Washington Post) will be bought by Fannie Mae/Freddie Mac. What, she couldn't find a bank to portfolio a private loan? Maybe, it's time to vote her out of office. Some of the faithful may think she has sinned against the cause.