If that's true, it's not just the government rearranging deck chairs on the Titanic. It's all of us. Rather than writing about finance, I should be learning how to farm, studying carpentry and familiarizing myself with various weapons. Because if the debt system fails en masse, things will get more than a little uncomfortable for those of us with limited survivalist skills.
I do agree with you that the bailout of GM is sowing the seeds of destruction for the rest of the auto industry. It's the same process we've seen in the airline industry for the past 20 years, with rolling bankruptcies sweeping through the industry.
You almost feel sorry for Ford, which has been doing the right things, but is sure to be undercut-to-death by GM and Chrysler over the coming months. Add in the overcapacity you mentioned, and it's doomed. (The problem there I think is reliability. Capacity would be fine if cars still died after 80,000 miles, but my Jeep has 280,000 miles on it and starts every time. If everyone owned Land Rovers, we would be replacing them like mad.)
I do think you're right, though, in one sense. There is a real risk in the market if demand for (particularly) U.S. Treasury debt dries up. The most recent auction went very well, but there is certainly risk that future ones will not. If and when that happens, we'll probably see a pretty permanent top in the markets.
But I don't think the whole debt structure is going down. I just see absolutely no signs of it in the market, anywhere. Is there some data I'm missing? The absolute debt levels are scary, I'll admit, but the market right now is showing no panic. Are we all just deluding ourselves?