So your bank account’s wiped out

One of my favorite TV shows long cancelled was Dark Angel, James Cameron's noir, future tale starring a young, but still quite hot, Jessica Alba. Dark Angel was set in a future in which terrorists had set off a nuclear device high in the atmosphere, created an electromagnetic pulse and in one swift second, set the U.S. back about 70 years in the blick of an eye. Mark Steyn, brililant as usual, makes the case that it is not such a bad idea:

One Second After what? After an EMP attack. What’s EMP? “Electromagnetic pulse.” You’re on a ship hundreds of miles offshore floating around the ocean, and you fire a nuke. Don’t worry, it doesn’t hit Cleveland, or even Winnipeg. Instead, it detonates 300 miles up in the sky at a point roughly over the middle of the continent. No mushroom cloud, no fallout, you don’t even notice it. That’s the “second” in One Second After and what comes after is America (and presumably pretty much all of Canada south of Yellowknife) circa 1875—before Edison. The cars on the interstate stop because they all run on computers, except for Grandma’s 1959 Edsel. And so do the phones and fridges and pretty much everything else. If you were taking a hairpin bend when your Toyota Corolla conked out, don’t bet on the local emergency room: they’re computerized, too. And, if you’ve only got $27.43 in your purse, better make it last. The ATM won’t be working, and anyway whatever you had in your account just vanished with the computer screen.

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So it wipes out your bank accounts. What’s in there? I mean, really. The average American household is carrying $121,953 in personal debt. What would be so bad if something goofy happened and all the meters got reset to zero? And Joe Schmoe’s credit card debt is as nothing compared to what the government’s signed him up for: USA Today recently calculated that the average American household is on the hook for $546,668 in federal debt—i.e., not including state and municipal. The Atlantic crunched the numbers further and reckoned that, to pay off the federal/personal debt over half a century at three per cent, the average household would have to write an annual cheque for $25,971. U.S. median household income is 50 grand, before taxes—and that $26,000 cheque assumes no further increase in federal or personal liabilities.

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Besides, in a society that’s all but eliminated the concept of moral hazard, who isn’t entitled to government largesse? The North American auto industry pays its workers so much that it’s unable to make a car at a price anyone’s prepared to pay for it. So naturally it’s been delivered into the corporate control of the very same unions who demanded those salaries. Under the hilarious Canadian bailout, “social justice” requires that auto workers who make $70 per hour be subsidized by taxpayers making less than a third thereof. If it’s unreasonable to expect a guy on 70 bucks an hour to make provision for lean times, why should anyone else? The advanced Western democracy has, in effect, jumped the bounds of temporal and spatial reality: America lives beyond the means of its 300 million citizens to pay for it, so passes the check to its children and grandchildren. Most of the rest of the West does likewise, but demographically has no kids to stick it to.

Professor Glenn Reynolds, America’s Instapundit, noted that USA Today figure of $668,621 federal/personal debt per household and observed tersely: “Debts that can’t be repaid won’t be repaid.” Or to extend the old saw: if you owe the bank a thousand dollars, you have a problem. If you owe the bank a million dollars, the bank has a problem. If everyone owes a million dollars, civilizational survival has a problem. When I first heard about EMP a few years back, the big worry was that in a split-second it would vaporize trillions of dollars of wealth. From the perspective of 2009, vaporizing trillions of dollars of debt has something to commend it.

Go read the whole thing.