The long dreaded moment has finally come. Argentina has defaulted on its national debt for the second time in thirteen years, and while the consequences haven’t been as dire as its first default in 2001, one can almost feel the country collectively holding its breath as it watches the effects ripple through the Argentine economy.

Western news outlets like Bloomberg, Reuters and the Wall Street Journal have framed the default as a government failure. Phrases like “Argentina missed a deadline for paying interest on $13 billion of restructured bonds” make it seem as if the government just forgot to send in the rent this month. In truth, the responsibility for Argentina’s default is as American as apple pie, and a big slice belongs to US Federal Court of Appeals Judge Thomas Griesa.

Over the last few years, Judge Griesa has enabled an avaricious group of Wall Street capitalists known as “vulture funds” to push a country of 41 million to the brink of economic collapse. At every juncture, Judge Griesa has not only ruled in favor of the vulture funds, but given them unprecedented power to enforce their rulings. The end result is a default whose length and consequences are yet unknown, and a new set of rules in debt disputes that favor private entities over sovereign countries.

Argentina is not the first country to face down a vulture fund in court. Paul Singer, who looks like a deranged Dr. Phil, has made an absolute killing through purchasing the distressed debt of developing countries like the Democratic Republic of Congo and Peru for a fraction of its worth, and then suing those countries to recover maximum value.  This strategy has helped Singer build US $25 billion in assets under his firm, Elliott Management.

Singer, who is originally from Jersey, is Ayn Rand’s prodigal son. He has donated so much money to the Republican Party he’s practically an honorary Koch brother by now. He has also spent millions lobbying against that pinko commie Kirchner government, all because of his fervent belief that he should be making as much money for himself as humanly possible. Yay, libertarians!

When Argentina’s economy imploded in 2001, Singer saw his opportunity to cash in, buying up some of Argentina’s record US $100 billion in defaulted bonds for pennies on the dollar, and then suing the country in New York federal court to recover the full 100. Argentina has refused to pay them a penny. The vast majority (over 92 percent) of the other bondholders took the more rational route and reached an exchange agreement with Argentina whereby the value of their bonds was reduced, allowing Argentina to emerge from debt and start paying its creditors.

Fortunately for Singer, Judge Griesa buys into the whole philosophy that allowing an economically vulnerable country to emerge from a crippling debt is kinda bullshit. In 2012, he declared that Argentina could not pay the exchange bondholders if they were not also paying the vulture funds. To take this new decree to an even further extreme, Griesa ordered that any bank that processed a payment from Argentina to the exchange bondholders would be held in contempt of his court.

In fact, Argentina has US $539 million sitting in the Bank of New York Mellon right now that was intended to satisfy the very debt on which it has defaulted.  The bank has refused to send the money to the exchange bondholders because of Griesa’s order.

Griesa’s ruling in the case, as economist and Nobel laureate Joseph Stiglitz told The New York Times, amounts to “America throwing a bomb into the global economic system.”  If the Griesa ruling is to be held up as precedent, then why would any bondholder agree to a debt restructuring?  Why wouldn’t every investor take a page from the vulture funds’ playbook and just litigate any sovereign state that goes into default?

“A basic principle of modern capitalism – that when debtors cannot pay back creditors, a fresh start is needed – has been overturned,” Stiglitz said in his own article published on project-syndicate.org.  “If [the Griesa] principle prevails, no one would ever accept debt restructuring. There would never be a fresh start – with all of the unpleasant consequences that this implies.”

Griesa’s decision wasn’t just unfair, it was uninformed. Floyd Norris, a columnist for the Times, revealed that Griesa failed to fully understand the bond transactions involved in the case, and hence, has issued a verdict the consequences of which not even he understands.  Considering that he is 83 years old, maybe his incompetence isn’t as shocking as it should be.

Argentina begged the Supreme Court to hear an appeal. But even with official warnings from Brazil, France, Mexico, the US, the IMF and the World Bank that Griesa was setting a dangerous precedent for global debt markets, SCOTUS decided that it would rather consider whether hobby lobby – a company that doesn’t sell anything more significant than baking and party supplies – should have to pay for its employees birth control. So they rejected Argentina’s request.

The entire US federal judicial system has been on a horrid tear lately of favoring private interests over public ones. US law protects individuals and companies when they go bankrupt, but there is no legal procedure for destitute countries. Instead, a makeshift process has been created, leaving sovereign states – who are already at a massive disadvantage in bargaining with big multinational lenders – at the mercy of judges like Griesa.

Instead of attempting to resolve the problem, Griesa left all parties in a quandary where nobody really knows what is going to happen.  Along the way he has somehow sought to justify lining Singer’s pockets to detriment of an entire nation of people, and perhaps even the global economy.

It’s time for him to retire, but I wouldn’t advise traveling too far south.