Loan Modification

Just as large, complex bureaucratic corporations have vanished without a trace once their overhead costs exceed their carrying capacity, so too will cities inevitably go bust as the immensity of their insolvency becomes inescapable.

The same can be said of the entire Federal government, which has added $1 trillion to its overhead in recent years even as revenues fell. Now the budget exceeds $3.8 trillion while revenues are at best $2.3 trillion, creating a structural deficit of $1.6 trillion-- the expected deficit in 2012.

Cuts of a modest $100 billion are met with howls of pain, and the Federal fiefdoms are increasingly devoting their resources to self-protection rather than pursuing their mission.

...

[But] complexity can remain an asset, as long as it is self-organizing, self-correcting and self-regulating. A bureaucracy's systemic response to any challenge or threat is always the same: devote precious resources to self-preservation above all else. Thus the responses needed to save the system never receive the resources they need to be successful, and the bureaucracy's complexity and drive for self-preservation dooms it to collapse.