burying ourselves

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Karma is such a bitch. Most of us have been skating—running around seeming to hold our positions, rather than actually fulfilling the functions of our positions—for way too long.

And here's the kicker. Last year, when Jefferson County, staggered by the weight of its penalties, was unable to make its swap payments to JP Morgan, the bank canceled the deal. That triggered one-time "termination fees" of — yes, you read this right — $647 million. That was money the county would owe no matter what happened with the rest of its debt, even if bondholders decided to forgive and forget every dime the county had borrowed. It was like the herpes simplex of loans — debt that does not go away, ever, for as long as you live. On a sewer project that was originally supposed to cost $250 million, the county now owed a total of $1.28 billion just in interest and fees on the debt. Imagine paying $250,000 a year on a car you purchased for $50,000, and that's roughly where Jefferson County stood at the end of last year.

Last November, the SEC charged JP Morgan with fraud and canceled the $647 million in termination fees. The bank agreed to pay a $25 million fine and fork over $50 million to assist displaced workers in Jefferson County. So far, the county has managed to avoid bankruptcy, but the sewer fiasco had downgraded its credit rating, triggering payments on other outstanding loans and pushing Birmingham toward the status of an African debtor state. For the next generation, the county will be in a constant fight to collect enough taxes just to pay off its debt, which now totals $4,800 per resident.

I don't think our whole history of abundance needed to come to this, but I'm very, very hard-pressed to see how we can escape complete ruin now. Many of the space lizard people feel that the whole crisis can turn on a dime, that the flap of a butterfly wing on the other side of the planet can create the force that turns it all around in a snap, but... well... this is pretty damn pervasive and seriously damn bad... so... I guess we're gonna see....
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