There's some odd similarities between the current credit crisis and Kurt Vonnegut's book "Hocus Pocus."
In 1990, near the end of his career, Kurt Vonnegut produced a book he titled "Hocus Pocus." Passed over by many but still considered an important work by his fans and scholars, the book focuses primarily on a professor named "Eugene Debs Hartke," and the hocus pocus of chance that moves him through his life. The novel revolves around time and luck, and is used to demonstrate how small chances and bits of luck become very important, even live changing, over great lengths of time.
While fascinating in and of itself, the book's premise is very similar to our current situation. In "Hocus Pocus," America's wealthy have borrowed huge sums of money to fund their lifestyle, and in doing so they racked up huge quantities of debt, using American companies and properties as collateral. Of course they never had any intention of paying off those loans, or racked up so much borrowing it wasn't possible, and so what was once American suddenly became foreign in short order as foreign companies and nations collected.
While it's not exactly the same, America has ended up borrowing huge amounts of money, and in the end that wealth has gone into wasted projects with little point which usually benefit only the wealthy and well connected. Only a handfull of contractors and oil men have made money off Iraq, yet it has cost the American citizenry trillions of dollars at this point. While the wealthy enjoy the luxury brought about by commissions, fees, and the profits of oil and gas investments, average persons are either unemploted or underemployed and struggling to keep up with the rate of inflation.
So that begs the question: at what point does excessive borrowing become a point of national security? The answer is simple: when we can no longer pay off our debts by earning more money. I know it's a stretch, but in the end, if we are unable to pay off these debts, what will we have to give up in order to keep the debt collectors away? We can't mortgage our future forever, and eventually lender nations will demand that we give them their money back, or give them something of value that they can flog.
Is America caught in the turmoil of Hocus Pocus? Are we going to enter a world of foreign capital and foreign ownership, where only the mega-rich are free?
Or are we already there?