As financial pain piles up, things just might turn ugly in America

Every time there’s a wild binge of some sort, there comes a day of reckoning. For Americans, we might be seeing the first early warnings that it’s not far away.

In front of the Jefferson County Courthouse in Birmingham this morning, a couple dozen protesters picketed against proposed sewer rate increases in the county where I live. Rates have skyrocketed over the past decade because of billions of dollars that the county borrowed for the sewer system. Much of the money was lost to waste and fraud. Several politicians and contractors went to prison for their part in the massive fraud.

Explaining the full story would bore you silly, but it involves greedy local politicians, greedy contractors and slick NYC bankers who sold the county on making complicated and dangerous financial transactions that county officials didn’t really understand. (This PDF is the best summary I can find of how the debt accumulated.)

The county owes billions to the banks and is threatening to file a bankruptcy which would make the one Orange County, Calif., filed in 1994 pale in comparison. County sewer customers are angry about any proposal which would keep increasing their bills in order to give more and more money to the banks, so politicians are willing to pull the bankruptcy switch.

With the Tea Party movement, it’s been easy for some people to dismiss it as the ravings of spoiled white people who don’t want to pay taxes to support others. (And I think the message from the Tea Party types has been murky and confused at times.) But look at the picture above. Today’s protesters are black. It’s harder for someone such as Jon Stewart or Stephen Colbert to paint these guys as racists.

The problem with the sewer debt here is complicated and there aren’t any easy answers, but this is just the tip of the iceberg. We’re going to see this scenario repeated over and over as people start hurting from paying money for all sorts of things. The point isn’t whether they’re right or not. The point is that when anger from hurting people gets to a boiling point, it’s going to spill into something ugly. That’s what I believe is going to play out.

We’re going to start seeing a lot more protests over things of this nature, because people are angry and hurting and don’t know what to do. It’s an environment that’s ripe for protest, as I saw in another example that recently came my way. A guy named John Ringer has recorded a protest song that he’s spending time trying to get onto the air all over the country to express anger about the direction of the nation. (You can see his video here.) He doesn’t have a music career. He’s just an angry guy expressing his anger in the only way he knows how.

Things are going to get ugly. I don’t know whether it will be this year or if politicians can keep inflating the bubble enough to delay it from collapsing for another decade or more. But the pile of fictitious money being pumped out has to collapse at some point and lead to massive problems — mostly likely inflation — and those problems are going to send millions of angry people into panic mode. The problems will be of their own making, but they won’t understand that. They’ll be looking for people to blame — especially people who do still have money and property.

I’ve said for a long time that I thought we were heading toward economic and social collapse. I still believe that. I don’t have a prediction about when it will happen, because I can’t find my tarot cards and my crystal ball is murky. I just know that there’s going to be a day of reckoning — and I’m certain it’s going to be ugly when it gets here.