"the realization that we no longer have that capability would come to the market at once".

That is when things will get ugly in a rapid fashion.

"This country does not have the national income to pay its' way as we go, neither does it have the heart to voluntarily accept the austerity needed to live within our means."

Europe is at least giving lip service to austerity measures to bring back living within their means. We will see how that goes for them. I really question if they can get the job done.

One thing to remember is that a default is not the end of the world. Life goes on. Once Zimbabwe currency completely collapsed the economy started rebuilding almost over night. If we had let the banks fail, let the bond holders take a hair cut and guaranteed deposits so there were no reasons for runs on the bank there would been a lot of people lost a lot of money and a lot of pain and suffering for some but we would already be on the road to recovery. As it is we are still in the muck and the mire with no end in sight. The banks and the moneyed interests were saved and the middle class will be destroyed paying for it. There were procedures already in place to do this from the earlier but smaller experience of the savings & loan crisis. The too big to fail banks could have been handled in the same manner............but then the owners of those banks tend to make much larger political contributions than the average middle class citizen.

John