Good Sense, Full Faith, and Credit

Today we see attempts to confirm the philosophy that governs the risk.

The U.S. Senate is busy working on a non-binding, Sense of the Senate resolution. It resolves the intention--ensuring us that it has the good sense--to require the rich make a "meaningful contribution" to deficit and debt reduction.

The House, at the same time, is now scrambling to ensure entitlements are at zero risk after a lengthy political campaign to exact austerity by holding our nation hostage to the risk of default. They see the economy tanking and are feeling the gamma-risk proportion (the angst) inflecting toward a full accountability.

Congress is engaged in managing an over-accumulated risk proportion. Accountability is being managed not by reducing the proportion but by psychologically reducing the level of angst associated with it.

The Democratic Senate is acting to ensure a good sense for what is fair and equitable while the Republican House is ensuring, with full faith, that "We the People" (the government) will pay the interest on the debt at no risk. We have clear confirmation, then, of the philosophy that "governs" the risk.

We should all expect, with full faith, that We the People will pay the debt no matter what. Whether by hook or by crook, our credit is good.

Bad credit, we can all be sure, is what our representative form of government is modeled to reduce to zero (which assumes all the risk elsewhere). In order to keep the faith, that risk reduction has to also be fair and equitable--it must be Pareto Optimal (without loss of principal in zero-sum). Since this risk reduction actually accumulates political risk in proportion to the reduction, we are binomially determined (structured) to effectively counter-party the risk politically, which is what we see happening today, tomorrow, and the next.

By structurally modeling for counter-party assumption of the risk, we can faithfully, routinely, expect the detriment (the sacrifice) needed will be exacted to pay the interest on the debt (the principal at political risk of default) in priority.

What the principals need to avoid is the risk of liability associated with a benefit being derived from a deliberate detriment (and the more it is avoided the more unavoidable it becomes).

In order to keep the faith, we need to have a practical, governing philosophy to support it--the good sense that assures the credit "We the People" extend it. As we perpetually determine whether that philosophy should be democratic or republican, the debt (the risk) accumulates to determine our fate in a crisis proportion. It's not that it can't be avoided if "We" have the political will to self-determine, despite the elite philosophy that "The People" are not capable.

With the margin of profit scoring at record levels, the beneficiaries that do not want to share the record debt generated to support it will be forced to account for all the risk in a too-big-to-fail proportion.