FACING default on tens of millions of dollars in bond debt, Guam today defaulted on its obligations, sticking the banks and buyers who invested in its bonds with nearly $1 billion of bad debt. The default came after the island’s citizens took to the streets to protest cutbacks and austerity measures that threatened to collapse the government, rendering it unable to provide even basic services.

Does that sound impossible? Maybe it is a bit dramatic, but elsewhere in this section today is a letter from a reader who says we are drowning in debt and may indeed be unable to pay our huge obligations without severe reductions in the cost of government and drastic hikes in property and gross receipts taxes. We’re inclined to agree with the writer, who points out Guam is not an independent country, but we’re carrying a debt load as though we were.

By most accounts, we have borrowed as much on the financial markets as we can, and there are still thousands of taxpayers whose refunds have not been paid. Plus, we’re only about six months away from the next filing year with no indication that enough money will be set aside to pay 2012 refunds either.

The old adage of finding ourselves continuing to dig while in a deep hole comes to mind. Furthermore, our taking on of so much debt has been based on the belief that our economy will grow enough to enable us to pay back the loans. The potential military buildup has reinforced that hope, but it isn’t happening as fast as we would like, nor is it as solid a promise as our pledges to bond buyers about our ability to repay their loans.

Coincidentally, we were listening to a presentation on public radio yesterday by Robert Heinberg, the author of a book called “The End of Growth.” He presents the argument that globally, we are experiencing a series of dramatic economic changes which presage the end of growth as we have known it over the last 50 years or so. He describes what has been happening in country after country as they face the basic question of whether to pay back the banks and force the people to pay for that, or let the banks go under and suffer through a banking crisis.

The choice, for now, is to pay back the banks. So in many countries, including Greece, austerity programs are being imposed on the people, basically cutbacks in spending and services and, as a result, “increasing scarcity and poverty.” “As these austerity packages are implemented, the result is, with less government spending, the economies of these countries contract even faster than they otherwise would, and the debt problem becomes even more intractable.”

Heinberg is actually more optimistic than that quote sounds. He speaks of communities developing a resiliency and new abilities to survive despite hard times. As we wrestle with our very real economic problems, our island’s resiliency is going to be profoundly tested.