Wednesday, July 27, 2011

Toxodebtosis

Toxoplasmosis is a fascinatingly tragic condition.  A mouse infected by the protoctistan, Toxoplasma gondii, behaves strangely.  Instead of scampering away at the first whiff of feline scent, as an uninfected murine certainly would, the mouse is dangerously attracted to eau de chat.  As its predator steadily approaches, the unfortunate mouse simply awaits, even welcomes, its catastrophic end.

Humans may also be infected by T. gondii.  Those with toxoplasmosis often exhibit an unreasonable penchant for obviously risky behavior.  Neurally transfixed by the parasite, an infected person may not only stare danger in the eyes, but willingly step within its opened jaws.

Though many metaphors, some more purple and florid than others, have been offered to describe the debt ceiling crisis currently threatening the United States, toxoplasmosis may be as good as any.  Like a parasitized mouse, the American economy and polity seem to be marching steadily and willingly towards a possible August 2, 2011, default.  Unlike the mouse, however, if the United States is consumed by default, it will likely take the rest of the world with it.  The weird serenity currently infecting the political classes in the District of Columbia, some of whom appear not simply to have accepted default, but positively to welcome it, suggests a debilitating political disease capable of leading to much economic pain.

While it remains unlikely that the United States will actually default next week, equity, bond, gold, and even food markets, as well as credit rating agencies, have already begun to price in significant economic damage.

Can a treatment be found in time?  If so, will it merely control the symptoms, or cure the disease?  Whatever the result, the current debt ceiling crisis amounts to the largest and most dangerous game of cat and mouse ever played.

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