And boy, have we overdosed. Unlike Sarah Palin, credit isn’t inherently bad. It can cover your ass in an emergency, it allows businesses to get started, and it enables people to pay over time for big purchases, like a house, that it would be virtually impossible to pay for in cash up front. Credit at the general store was how great-grandpa got basic necessities until the crops were sold each year. He’d pay his account in full after the harvest and the cycle would repeat. Except that now the general store is Wal-Mart and grandpa is charging groceries because he can’t pay for his prescriptions, his property taxes and his food with his job as a greeter. Credit no longer tides us over temporarily; it has become a way for Americans to live beyond their incomes, to spend much more than they earn, consistently, year after year. Some Americans are slapping down the plastic because they have to have that $800 prescription drug or they will die, others because they have to have those $800 Manolo Blahniks or they will simply DIE. In either case, we never expected a day of reckoning when we’d have to cough up some of this hypothetical money.

At least, we thought we were immune, until the 21st century’s first Black Monday. Sure, the market is rallying on Super Duper Jewish New Year Tuesday, but this could be eye-of-hurricane stuff, it could be like the zaftig yet supposedly consumptive diva rising from her deathbed for one last aria before she abruptly and inexplicably expires. Now, those of us who have had our coffee and are able to shift our focus from our Wiis or wee-wees for a millisecond, are asking ourselves the following questions:

WTF is going on?

Here is the Readers’ Digest condensed version: People got loans who couldn’t afford to pay them back. The financial institutions—that’s such a dignified name, we’ll just call them Credit/Risk Analysis Professionals (CRAP)—that issued these loans sold them before the ink was even dry on the contracts, passing the risk onto some other piece of CRAP that was gullible enough to buy them, leaving the issuing CRAPper with no incentive to give a shit if the loans were repaid and every incentive to keep making more shit-stupid loans. The CRAP that was buying these loans eventually got a farking clue that they weren’t worth the bog roll they were printed on, and stopped buying, leaving the last CRAP purchaser holding a smelly bag of shit.

These steaming piles are preventing the CRAPs that are holding them from issuing any more credit until they can offload this shite. Without credit, no one buys shit. Without people buying shit, the people selling shit go out of business. Which means that their employees and suppliers no longer have any money (or credit) to buy shit. Which means that the economy gets stopped up like your toilet from too much shit not moving through the pipes and then we are all in deep shit.

And we should add that shit travels globally these days. The CRAPs that are left holding these steaming piles of American shite could be located in London, Beijing or Auckland. So when we say we could be up shit’s creek without a paddle, we mean the Danube as much as the Hudson.

Why should I care if these stupid pieces of CRAP drown in a cesspool of their own making?

Because going cold turkey on credit will mean that they flush us down with them.

But don’t we need to get our heads out of our asses and end this crappy cycle of endless credit?

It wouldn’t be a bad idea. But think of it like anal sex: would you rather take it up the ass suddenly, with no warm-up fingering, no lube, or would you rather work up to it slowly and gently?

Ok, I see your point, how do we relax our sphincters then?

With the three R’s: Regulations, Relief and Rectitude

Rrrrregulations: You loan it, you own it

The feds need to get their finger out and restrain the issuing of credit and the international trade in debt. From now on, loans can not be sold by the original lender. If they’re stuck permanently holding the bag, it just might put a damper on the CRAPs making totally dumbshit loans. Debt-to-income ratios and credit worthiness should be matters of national policy, not individual judgment calls by the CRAPs. The CRAPpers will whine that big daddy government shouldn’t tell them how to run their business, but they’ve already proven that, like toddlers who reach into their nappies and smear shit on the walls, they cannot be left unsupervised.

These restrictions should be phased in to avoid a cold enema-like shock to the system. Credit should become progressively harder to obtain over a 15 year period, to prevent the massive recession that would occur if suddenly no-one could buy shit.

For example, it used to be the norm that you had to put 20% down on a house purchase. That was gradually whittled to 10%, then 5%, then 3%, then 0% down and 100% mortgages became the stupendously moronic norm. That process needs to occur in reverse. If the law were changed overnight to require at least 20% down on all house purchases, the real estate market would collapse. So, the % down needs to be increased incrementally so buyers and sellers have a chance to adjust and plan accordingly. The same concept should be applied to other types of credit, such as auto loans, credit cards, business loans, etc., with a gradual tightening of standards. Credit card limits should be lowered as each payment is made, and credit worthiness standards for auto and other loans should be tightened slowly, to strike a balance between people getting loans they can’t possibly pay back and every auto dealership and other credit-dependent business in the country suddenly going belly up.

Relief: Taking an enormous collective credit dump

Most existing loans need to be forgiven, with no tax liability, to wipe the toilet bowl clean. Why? Because individuals and businesses are spending most of their incomes on debt payments. This effectively prevents everyone from adjusting to the new world order of no easy credit in the future. I know this is difficult for many of today’s Americans to grasp, but paying for shit in the future with real currency instead of Monopoly money is going to mean actually having some of it around. Like, in a savings account—remember those? Americans’ savings habits were better in the Great Depression than they are today. The savings rate is a negative number, folks. Do you grasp what that means? It means we are, in the aggregate, spending more than we earn every year, getting deeper into debt doodoo. Most Americans are making the minimum monthly payments on their particular steaming pile o’debt, and then continuing to live on credit, not just because we can, but because we have no real money left after each paycheck is divided up amongst our creditors. The only way to get off this sorry-go-round and start saving for purchasing in a world of drastically reduced access to credit is to eliminate that pile o’debt. Think of it as a collective declaring of bankruptcy. To whit:

Student debt:
- All extant federal student loans should be forgiven.
- Private student loans should be paid off by the feds.
- Higher education should be free to eliminate the need for future student loans.

Medical debt:
- All existing medical debt should be forgiven—i.e., paid off by the feds, not the patient.
- Universal health care should be implemented so no future medical debt is accumulated.

Housing debt:
- There should be a moratorium on all foreclosures.
- All subprime mortgages should be refinanced to make the payments affordable for the homeowner.
- All future foreclosure action should be vetted with heavy oversight to ensure that the homeowner is genuinely at fault rather than a victim of predatory lending or circumstances beyond their control. Legitimate foreclosures would be allowed to proceed, but eliminating illegitimate foreclosures would reduce the number to almost 0.

Rectitude: the formal, dignified air assumed by a proctologist just prior to an exam

That’s right, no whinging. We are all going to have to suck it up, drop trou, and take our financial pessary. It isn’t going to be any easier for the CorporateMoFo staff than it is for you. In fact, it’s going to be harder for us because we live in New York, where there is all this neat shit to buy. We hoped the chickens wouldn’t come home to roost for another few generations but, since they have, look on the bright side: farm fresh eggs for everyone.