The revolution will be on YouTube

US consumers (formerly citizens) have gotten very used to spending beyond their means. It's been encouraged from the highest levels of government, and become the conventional wisdom; buy a house you can't afford on a teaser rate. If the rate goes up, just refi! Want that 46" plasma TV? Finance it? Buy all the car you can afford and more! You deserve it!

As friends and relatives can relate, I've spent the last 3+ years telling people that stretching to buy real estate is probably a bad idea. (Somebody please back me up. You know who you are.)

I've spent a lot of time thinking about how the collapse of the credit bubble, real estate and the dollar will affect the social fabric of the US. The economic consequences are well covered here at iTulip, but it's a little technical for the layman.

How will we respond when over a million foreclosures occur next year? Two million voters directly affected. That makes, what, ten or twenty million close relatives to those foreclosed? What will the social outcome be? Political?

I got burned by the late 1980's real estate bubble in Massachusetts. It really rips your heart out and is completely degrading. We owed a few hundred thousand in credit card and other debt accrued trying to get my first software company off the ground..But then, when we went to the Judge about our Chapter 7 bankruptcy, he effectively said, "Your sins and debts are forgiven. Go forth and debt no more."

We left the Tip O'Neill federal building and Liz asked, "When do the men in hoods with sticks come to beat us?" And they didn't, because we had a thing called the "Second Chance Doctrine" that says every dog gets to bite once, and so we got a fresh start. Within 10 years, I had hired thousands of employees, started dozens of companies and created many, many millions of dollars of actual wealth for many people.

I'd say that was a great policy, that "Second Chance Doctrine".

Due to changes in the bankruptcy law a fear years back, a love note to the financial industry from Bush and the Republican Congress, the situation would be very different today.

Credit card debt is now NOT forgivable.
Car loans are now NOT forgivable.
Consumer debt is now NOT forgivable.

If I'd sought bankruptcy protection today, I would spend the next decade working it off.

NOT hiring thousands of people.
NOT starting dozens of companies.
NOT creating millions and millions of dollars of real wealth.

I think a lot of people like me, faced with turning into the Joads are going top be a force to be reckoned with. If I'd been saddled with decades of virtual debtors prison, I can tell you I sure would be radicalized. I'd spend every minute of spare time getting the word out that when the fatcats get too fat, they become food.

Historically, when too few have too much and too many have too little, you end up with situations like in Guatemala. But this time, we're not talking about peasants held down for centuries, we're talking homeless, garnished Americans who USED to drive new SUV's and USED to live in McMansions and USED to not have to think about which meal to eat out next.

I think they're going to be pissed. I think they're going to get violent. I think it's the best thing that could happen to the fat and happy citizenry of this spoiled rotten country and it's entitled, delusional wannabe imperial president.