If GM declares bankruptcy, what happens? The UAW will lose a lot of power and chances are good that existing car dealerships and whole lines of cars will be eliminated from the GM brand. Components of the company will be sold off and new people will begin to manage them. The existing power players will be stripped of their power.
We've spent $10T stimulating the economy with borrowed money. Barack Obama wants massive stimulation with still more borrowed money. What happens if we don't do that? The government will not have goodies to hand out. People will have to rely on themselves rather than one political party or another. Power will leave Washington and move out to individuals. And what of the lobbyists after that?
On a smaller scale, this is happening in California as Governor Schwarzenegger declares a fiscal emergency. His proposal is not to obliterate whole sections of the budget, but instead to cut 10% across the board. If he cut out whole programs, then those program managers would no longer have cash to dole out.
We've leveraged and borrowed and spent in wild decades of partying. If you listen carefully, there is no plan for the distant future, there is only a series of short-term plans to continue the partying, to carry on with the existing culture and power structure.
In related news, Zimbabwe has cut off water supplies to the capital, Harare, because of a cholera outbreak. Soldiers are rioting in the streets because they can't get their (worthless) pay. Maybe driving the white farmers off their land a few years back wasn't such a good idea. Maybe hard work, skill and thrift meant something.
Driving all the white farmers off the land was bad, but then giving the land as political favors to people who weren't farmers was worse. If the land had gone back to the original surviving families of whom it was stolen from, things would still be bad, because they would have gone back to traditional subsistence farming, but it would not have led to the catastrophe that they have today.
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