In which your first President goes full Debbie Downer

On the question of whether or not Obama will win re-election, I'm going to quote The Sundance Kid... "That's one possibility."  And since I'm in a dark mood this morning, I'm going to tell you what I think that would mean.

You're not gonna like it.

The first thing that will happen is Obama will take the GOP to war over the Bush Tax Cuts. It may seem like the GOP is in a power position here, but they aren't.  With no election to face, Obama won't hesitate to take us over the brink and let all the cuts expire.  You could argue that even if he DID have another election to run he wouldn't care, since he will have survived 43+ months of 8% unemployment, miserable job growth, horrible GDP, a $16 trillion deficit, and a historic low in labor force participation... what could possibly scare him at this point?  He's going to feel invincible... and the truth is, he very well might be.

The GOP will have two choices.  Refuse to budge on Obama's desire to let the cuts expire only for the rich, or force Obama's hand and allow them to expire on everyone.  If they let the cuts expire only for the rich, Obama gets to claim victory, and when (not if, when) those increased tax rates hammer the economy further, the GOP's votes to help make it happen will give Obama political cover.

On the other hand, if the GOP does the right thing and fights to keep all the rates the same, Obama will move quickly to the doomsday option and allow them all to expire. When the increased tax burden hits middle class families in January, Obama will take to the Rose Garden podium and argue that he wanted to save middle class families from increased rates but the nasty GOP, the party of the Rich, simply wouldn't go along with it unless their rich friends got a cut too. And the complicit media will back him up... the headlines will be "GOP sacrifices Middle Class to protect the Rich."

Having won this battle, an emboldened Obama will re-embark on his quest to increase the size, scope, and power of the Federal Government.  And since every new program will be pitched as a "free" giveaway, the GOP will oppose those programs at their great peril.  Again, if they go along, they provide Obama cover when the system implodes.  If they fight, they lose the midterms and give Obama what he wants... control of all 3 branches of Government.

But that's just the next four years.  What happens after that?  Well that all depends on wether or not we've crossed a Rubicon where turning the ship around is no longer possible because too many Americans are dependent on the things Government now "gives" them.

Let's assume we have.  What would that mean?

Well as entitlement spending and the cost of servicing our debt approaches/exceeds 100% of GDP there will be less and less money available for the basic functions of Government, like infrastructure spending. Even though we already have an aging electrical grid that is highly susceptible to major outages, whatever money is left for Infrastructure won't be spent there... it will be spent on things like roads and bridges, because as Centrally Planned Nation States fail, they tend to spend the bulk of their available funds on making things LOOK like they're not failing (it's called "hiding the decline")... and unlike roads no one can actually see the electrical grid.

So in ten years time, our grid might start to look like a 2nd World power grid, with major outages two or three times a year (think India).  In twenty years we might be sitting on a 3rd World grid with minor outages almost every day (think Cuba or Viet Nam).  And those outages will get more frequent and more severe precisely when people can least afford to be without power... during periods of severe weather... like heat waves and blizzards.

What happens if the entire Northeast is hit by a blizzard, the overtaxed grid fails, and the power goes out for a week or more?  There simply wouldn't be any way that an over-stressed Government could do anything to help millions of stranded people.  No way at all.

Could you survive a week in a freezing house without the ability to get to the store for supplies?  Water purification pumps will cease to operate if the outage is massive enough and you may have to boil your water. But what if your stovetop is electrical? Do you have some other way to purify your water?  Power outages would mean no refrigerator units at supermarkets (not that you could get to them anyway) or at your home. Do you have a week's worth of non-perishable food to eat after the stuff in your fridge rots?

Am I being overly dramatic? It happened in India a couple of weeks ago and it's going to happen in Greece soon (hell the Los Angeles city grid fails at least twice a summer). The difference is those countries are blessed with more temperate climates.  And in the case of India, you've got a population used to making do with less.  How does a pampered American society unaccustomed to harship or scarcity of any kind make do in this kind of scenario?

I fear the results would not be pretty.

UPDATE:  A colleague alerted me to this great BBC mockumentary. It's a what-if that looks at vulnerabilities in the British transportation system, but it comes to a lot of the same conclusions I've come to in the piece above. Let's just say it didn't make me feel any better.