Sovereign Default

Two guys, Sovereign and Subject, have an arrangement of sorts.  Subject does the work, Sovereign sponges off of him.  Subject puts up with it, because Sovereign will beat him up if he doesn’t.

Sovereign has gotten greedy of late.  He’s decided to issue bonds backed by Subject, with a guaranteed return rate.  He keeps some of the funds raised for himself, and maybe uses some to make Subject’s life a little more productive as well, but with the explicit condition that Subject is going to have to pay these funds back with interest.

Subject doesn’t like this plan.  He also sees that Sovereign has very little incentive not to overpromise what Subject is capable of.

Sovereign has two takers in his Subject bond offering, Investor and Leech.  Investor is impressed by what Subject is capable of, and wants to keep him well funded to achieve more, and to profit in the process.  Leech is a bully and a coward, and wants Sovereign to squeeze Subject for all he can.  Both have purchased bonds for very different reasons, but both are very concerned by the writing on the wall.  It’s becoming apparent that Subject is overworked.  He’s lost his motivation, and he’s been giving so much to Sovereign and Sovereign’s creditors that he hasn’t been able to properly take care of himself. Payments meeting the exorbitant amounts Sovereign has promised are no longer a given.

Naturally, Sovereign is troubled greatly by this development.  If Subject underperforms, his gravy train derails: Not only does he lose his direct revenue stream, but also his take from controlling access to Subject.

This is similarly a catastrophe for Leech, as he’s been counting on Sovereign keeping Subject producing.  Leech doesn’t have the strength or courage to push Subject around himself, so he’s been content to get his cut from funding Sovereign’s bullying efforts.  But with recent developments, he’s starting to get cold feet.

Investor is worried too.  Specifically, he’s worried what Sovereign and Leech might do to Subject if he doesn’t meet Sovereign’s demands.  Sovereign might just kill him in a fit of rage.  Leech might give up on Sovereign altogether and just try to extract what Sovereign promised him directly from Subject.

Poor Subject.  He’s saying to anyone who will listen “I never asked for this!  I wanted to be left alone.  I promised nothing to anyone.  Why should this be my problem?”

Investor sympathizes.  He’s always seen Sovereign’s involvement as an obstacle, not an asset.  Investor always saw his bond purchase as a way of buying into the opportunity that Subject represented.

Leech is having none of it.  He has no qualms about trying to hold Subject responsible for Sovereign’s promises.  All he knows is that he was promised a guaranteed return, and he’s gonna get it one way or another.

What honest man would blame an equally honest fellow man for refusing to honor debt incurred by others?  How would such a default constitute a moral failing?  When a private individual incurs debts in another’s name without his consent, that is called identity theft.  Why is it considered to be a binding agreement when perpetrated by government?

When I hear of the legacy of debt I and my children and my children’s children will be buried under, all I can think is “Hell no.  I’m not gonna pay.”  Let’s get this crap off the balance sheet.  It doesn’t belong there.  We need to throw out the bums who thought it was proper to promise our labor, and to repudiate the debt incurred by them.  I have no sympathy for the creditors who thought it was safe to count on our compliance.  And for those creditors who thought they were making an investment, I’m sorry, but you were mistaken, and you are a victim as much as we have been.  Let’s get up, dust ourselves off, leave Sovereign and Leech in the wreckage of their ill-conceived plan, and work together directly from now on.