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destroyed the system itself.
    Armies and police geared up to combat the expected riots and unrest, but none materialized. But neither have any significant changes in how the system is run. At the time, everyone assumed that, with the very defining institutions of capitalism (Lehman Brothers, Citibank, General Motors) crumbling, and all claims to superior wisdom revealed to be false, we would at least restart a broader conversation about the nature of debt and credit institutions. And not just a convwersation.
    It seemed that most Americans were open to radical solutions. Surveys showed that an overwhelming majority of Americans felt that the banks should not be rescued,
whatever the economic consequences
, but that ordinary citizens stuck with bad mortgages should be bailed out. In the United States this is quite extraordinary. Since colonial days, Americans have been the population least sympathetic to debtors. In a way this is odd, since America was settled largely by absconding debtors, but it’s a country where the idea that morality is a matter of paying one’s debts runs deeper than almost any other. In colonial days, an insolvent debtor’s ear was often nailed to a post. The United States was one of the last countries in the world to adopt a law of bankruptcy: despite the fact that in 1787, the Constitution specifically charged the new government with creating one, all attempts were rejected on “moral grounds” until 1898. 12 The change was epochal. For this very reason, perhaps, those in charge of moderating debate in the media and legislatures decided that this was not the time. The United States government effectively put a three-trillion-dollar Band-Aid over the problem and changed nothing. The bankers were rescued; small-scale debtors—with a paltry few exceptions—were not. 13 To the contrary, in the middle of the greatest economic recession since the ’30s, we are already beginning to see a backlash against them—driven by financial corporationswho have now turned to the same government that bailed them out to apply the full force of the law against ordinary citizens in financial trouble. “It’s not a crime to owe money,” reports the Minneapolis-St. Paul
StarTribune
, “But people are routinely being thrown in jail for failing to pay debts.” In Minnesota, “the use of arrest warrants against debtors has jumped 60 percent over the past four years, with 845 cases in 2009 … In Illinois and southwest Indiana, some judges jail debtors for missing court-ordered debt payments. In extreme cases, people stay in jail until they raise a minimum payment. In January [2010], a judge sentenced a Kenney, Ill., man ‘to indefinite incarceration’ until he came up with $300 toward a lumber yard debt.” 14
    In other words, we are moving toward a restoration of something much like debtors’ prisons. Meanwhile, the conversation stopped dead, popular rage against bailouts sputtered into incoherence, and we seem to be tumbling inexorably toward the next great financial catastrophe—the only real question being just how long it will take.
    We have reached the point at which the IMF itself, now trying to reposition itself as the conscience of global capitalism, has begun to issue warnings that if we continue on the present course, no bailout is likely to be forthcoming the next time. The public simply will not stand for it, and as a result, everything really will come apart. “IMF Warns Second Bailout Would ‘Threaten Democracy’ ” reads one recent headline. 15 (Of course by “democracy” they mean “capitalism.”) Surely it means something that even those who feel they are responsible for keeping the current global economic system running, who just a few years ago acted as if they could simply assume the current system would be around forever, are now seeing apocalypse everywhere.

    In this case, the IMF has a point. We have every reason to believe that we do indeed stand on the brink of epochal