The end of the world.

Obama has won. The man who plans to socialize medicine and make everyone equal through wealth redistribution. Who unabashedly wishes to tax "only rich people". It does seem a bit like an Ayn Rand dystopian novel and Stephen Colbert wasn't the only one I have heard suggesting "Going Galt". So what is the worst that can happen?

(1) We drive up debt so high that we can never pay back and we and our children become indentured servants
(2) We drive taxes so high and increase regulation to the point that no one in their right might would try to produce anything of value.


#1 Simply cannot happen. The U.S. has the nuclear option, which is to cancel all its debts via printing off cash. Its not a pretty option that will have side effects but this "mini-default" is how most government gets out of egregious debts. The "mini" option is to print off enough cash every year to provide high inflation that will diminish the debt to manageable levels. The big fear that Asians will screw America by holding all our debt and using it as leverage is really the reverse. America will inevitably screw them by devaluing the debt to the point of being easy to repay. In my opinion, this is the lessor of two evils. Repaying all the debt at current face value is too much of a millstone and will probably spiral into a depression. I pretty much say a gradual "default" through devaluation is inevitable although it many take many years of pain for people to realize it, hopefully sooner rather than later. Even with the rapid rate that the Fed is printing money (aka Quantitative Easing) right now, it is barely compensating for the other factors shrinking money supply, evidenced by the very low inflation. In other words, we printing just enough to stand still.

#2 is a more realistic fear, but unlikely to justify the terror in many people's hearts. The worst case of this at the moment is probably France which is considered one of the worst countries in Europe for new entrepreneurship. However, the French are not having a famine or giving up on healthcare or education. Higher than average unemployment (10%) is their current curse. The incredibly high cost of employee terminations in France terrify anyone to hire someone, and the culture of high regulation and perceived high level of strikes and entitlement scare of most international companies thinking of using France as a European base. If the worst thing that Obama can do in 4 years is turn the U.S. into France then I don't think you need to jump off a ledge. Ask anyone who has lived in France. There are many many many worse places. France recently instituted a 75% tax against the "very rich" which has driven some out of the country. Admittedly, the list of the largest 50 French companies haven't changed much in the last 20 years, unlike the U.S., and this is indeed a very high cost of European socialism. However, many feel compensated by long vacations and some security in healthcare and aging. Additionally, Obama, even if he wants to, would want to be 100 times more powerful than he seems to create a French type state in only 4 years. His own party would fight him and the Republican controlled House would fight him more. Additionally, his foray in this direction has been quite mild so far, looking only at one mild tax that still has most rich earning more than under Clinton.

Frankly, America is the way most Americans want it to be and most Americans do not want to live in a French state. If the American demographic alters that may change but so far it doesn't seem like that would happen for a long time.