printFrom John King, USA (CNN statist) to Shepard Smith (FoxNews statist), to Fareed Sakaria (all-round Zombie), to Larry Kudlow: all are agreed that the chief danger to the US economy comes from the debt debate, and not the actual debt.
Causality has been turned on its head in all but one of the Newsspeak-dominated TV programs. Thus it is alleged that the downgrade of America’s credit rating is what will cause the country’s economic downfall, when it is the reverse. First came an economic collapse. Assorted indices are catching up.
Ask yourself this: If the US Treasury was flush with cash—and on a sound footing—would a downgrade of its credit outlook by Standard & Poor’s or Moody’s cause the country to go off the economic cliff? Economic reality dictates an economic demotion—a flight from US Treasuries and the dollar and a concomitant rise in interest rates, because, what do you know? The US is broke.
The latest wheeling and dealing is here.
In this preordained, dead-end debate, default is another fudge factor:
“Federal tax revenues vary by month, but should total around $2 trillion to $2.5 trillion for FY 2011– an average of perhaps $180 billion per month. So clearly the federal government has sufficient tax revenue to make interest payments to our creditors. For now, those interest payments represent about 12 percent of the total federal budget.”
UPDATED I: BASTARDS LOWER THE BAR. The dead-end debt debate reaches a new low. The newsspeak in circulation (and native gullibility, and I’m being charitable) has ensured that Americans now believe that the political stand-off, and not the spiraling spending, is what will seal the country’s economic fate.
The next step?
The players—the people who fund this orgy are at work—arrive at a Grand Compromise to loud fanfare, their own. This “compromise” is truly Orwellian: you make a huge deal about cutting spending just a wee bit more than the rise in the debt ceiling which you’ve okayed.
How far astray from the original goal of slashing the debt have the politicians led a willing people? Well, at least everyone now knows what the S & P is.
Read about the upcoming symbolic vote on Boehner’s plan.
UPDATE II: “DEFAULT BY INFLATION.” As I said above, the natural laws of economics do not obey the (positive) laws politicians make, whatever these creatures ask you to believe. Warns Ron Paul:
“Default is coming. The only argument that’s going on now is how to default, not send the checks out or just print the money. In all countries our size, they always print the money,” Paul said.
“They’re going to raise the debt limit, and then they’re going to print the money, and then they’ll default by inflation, and that’s much more dangerous than facing up to the facts of what’s happening today.”
One more example of the govt flimflamming the great unwashed to gain more control over us. Don’t ever believe the bastards and vote accordingly.
I already see a shirt design (inspired in party by George R.R. Martin’s popular fantasy series): “Correction is Coming”, with a rampant bear instead of a direwolf…
Why doesn’t the Gov use GAAP rules for preparing the budget reports?
Why has M-3 information been discontinued?
Why, as Vox Day has noted in his book, does it seem many of the relevant economic numbers are cooked for months if negative, but released much sooner if favorable? Why are actions such as FedGov looking at using Pension Funds to apply to the debt? IRAs? 401(k)s?
Will private holdings of Gold & Silver be grabbed a’la FDR’s actions?
Economic Chameleons & Political Parasites have hung us out to dry and we have followed their Piper’s song to impending ruination and Fascist slavery.
There are two phenomena going on: first and loudest, of course, is the partisan Kabuki Theater of each side blaming the other for not “compromising” or not “being serious” and just trying to score political brownie points for 2012; second is the real financial crisis due to a “representative” government that has over-promised Americans who wish to live beyond their means via “borrow and spend”. Unlike many on the right who view “Washington politics” as some alien entity imposed on real America, I view it as the essence of the “something for nothing” culture quite reflective of Exo-beltway America.
The federal government hemorrhages $ 4 billion per day – $ 120,000,000,000 per month. The debt payments can be made with: (a) selling off Yosemite to become the Emperor Hirohito memorial game preserve, (b) raising taxes [unpopular], (c) cutting spending [unpopular], or (d) borrowing MORE money to pay the debt payments. Default will screw the financial markets. Stopping social security payments will mean landlords have to go to court to evict Granny. Stopping defense contract payments will mean “shutdown payments” to the contractors. Stopping highway projects will leave road messes.
In short, America has f*****d itself and it’s stuck inside!
It is now 5:25pm central time and the vote on the Boehner bondoggle has been postponed for lack of support. Perhaps the Tea Party freshmen and other hard heads couldn’t be conned. I don’t know what is going to happen but I hope it’s a big flap that unsettles the establishment of both parties.
Tea Party “flatulence”. Today, the Tea Party Nation spokesman correctly complains about “too much spending” but proposes NOTHING SUBSTANTIVE in cuts – other than what amounts to about 2 hours of the annual federal deficit:
http://www.washingtonpost.com/opinions/why-the-tea-party-is-unyielding-on-the-debt-ceiling/2011/07/27/gIQAGvEVdI_story.html?hpid=z3
Here are some cuts: Manned space exploration, Departments of Education & HUD & Homeland Security & Agriculture, Agribusiness subsidies, War on Drugs, Wars in Afghanistan and Iraq and Libya, troops in Italy & Germany & Japan & Korea. Longer term is to reform military pensions and then the tougher one of social security and the 900 lb gorilla called Medicare!
But congrats to the Tea Party for opposing studies in cow flatulence!!! (probably 2 seconds of the national deficit).
Personally, I’d make Ebeneezer Scrooge look like Santa Claus (I would raise taxes AND cut spending big time making me about a popular as the bubonic plague) but even so I can’t figure out how to make an impending $1,500,000,000,000 go away in one year – and with a geriatric time bomb, the long term looks bleak.
Meanwhile, I am waiting for the Tea Party to support non-interventionism and ending the Drug War….
And to top it all off, government school has trained “Boobus Americanus” to believe in fairytale-financing of the social security trust fund.
A few weeks ago I interviewed a liberal (modern definition) shill for the preservation of social security benefits. When I pointed out that the 2.7 trillion dollar “trust fund” was an accounting fiction, she insisted it will be paid since it’s backed by the “full faith and credit of the United States”.
She didn’t have much to say when I asked what current income stream of wealth would actually pay these obligations. (Or at least pay them in a currency with actual purchasing value.)
It will certainly be an interesting ride.
Myron
Combine all your cuts with Department of Energy, Commerce, serious cuts to the EPA, destruction of the FDA. Add repeal of the mortgage-interest tax deduction and the employer-provided health insurance tax deduction and you’re most of the way there, though this doesn’t take care of the longer term which is entirely dominated by Medicare.
Besides re-election, what Zero, Reid and Pelosi are working on here is splitting the Repubs into a RINO party and a Tea Party. On this one, I’m rooting for Zero. Time for the useless Republicrats to slink away.
[“Zero”: it always makes me laugh. It’s great.]
I have gotten to a point where I can no longer discuss this debt thing or anything else without a string of expletives, so I will just pray, ” May worms eat every politician that lies or has lied to his constituents.” OK Lord the ball is in your court.
PS: Ilana you are always on target. Stay the course.
The turkeys need to know the difference between insolvency and bankruptcy though either way thanksgiving is a given with or without silver service!
The US is insolvent and heading to bankruptcy, that is a truism, the problem with a corporation like the government is that it has special privileges such as creating currency out of nothing and others such as reliance on ersatz slavery in the form of tax. The interesting question is how do you collect tax when the money has suffered a Zimbabwe meltdown?
Rather than using Weimar cigarettes as a means of exchange why not adopt something like Bitcoin?
[Bitcoin.com is one example]
Preparing hard private currencies and other means of exchange prior to a meltdown might have a very interesting effect on the outcome of hyperinflation. What happens when a failing currency has to compete with an alternative that is back by real value? Do legal tender laws work in hyperinflation? I guess we will find out sometime soon.
Of course Ron Paul is right on the laws of economics. I prefer to pump the breaks, slow down the out-of-control car, and try to turn it around to just blowing up the vehicle on August 2nd or whatever. The media and population are statist and deliberately putting a wrench in the engine, even if done in the name of “small government”, would backfire.
Sadly, things are so out of whack that we may merely be choosing between a slow catastrophe, a delayed catastrophe, or an immediate catastrophe.
Once again, we can go through what’s to come the hard and painful way OR we can go through it the really hard and really painful way; there are no other choices! Until we and our leaders grow up and face the fact that the irresponsible, truly voo-doo economics of the past 100 years, the total disregard of the Constitution (e.g. the Fed, Social Security, meddling overseas, The Great Society, the zillion and one unaccountable, unelected bureaucracies, adherence to case law rather than original intent, etc., etc., etc.), we are indeed inescapably doomed. Thinking we’re immune from moral law in all of this is shear madness, and we’re about to have a “play date” with reality. All of this noise in Washington is the sound of so many thieves and parasites squabbling over a dwindling carcass.
“It’s the elderly, stupid” – yes, apparently the Federal Government pays $26,000 for everyone over 65:
http://www.jewishworldreview.com/0711/samuelson.php3
Good article Ilana (as usual).
Here’s a novel idea for the statists: “bail out” the credit agencies, then they can cow ’em into bumping up the country’s credit rating. Hell, make ’em bump down the credit score of the other countries’ credit rating too…we could become the credit capital of the world……..Only by becoming insane can one think like them.
If the American government was a business, wonder how Dun & Bradstreet would rate it.
Oh…off topic: “Patriot Update” had a picture of Ron Paul’s office, on his desk is a sign that says “Don’t steal…the government hates competition”…too good.