The Fiscal Cliff Hoax - Our Collapsing Economy and Currency

fiscal cliffOriginally published by Institute for Political Economy

Is the “fiscal cliff” real or just another hoax? The answer is that the fiscal cliff is real, but it is a result, not a cause. The hoax is the way the fiscal cliff is being used.

The fiscal cliff is the result of the inability to close the federal budget deficit. The budget deficit cannot be closed because large numbers of US middle class jobs and the GDP and tax base associated with them have been moved offshore, thus reducing federal revenues. The fiscal cliff cannot be closed because of the unfunded liabilities of eleven years of US-initiated wars against a half dozen Muslim countries–wars that have benefited only the profits of the military/security complex and the territorial ambitions of Israel. The budget deficit cannot be closed, because economic policy is focused only on saving banks that wrongful financial deregulation allowed to speculate, to merge, and to become too big to fail, thus requiring public subsidies that vastly dwarf the totality of US welfare spending.

This is Scary, Possible Currency Crisis

currency exchange Economist


Every day another story, fact, detail makes my eye balls pop out, but some hair raising reads are worse than others.

The oh shit headline, Europe on the brink of a currency crisis meltdown:

Currency pegs are being tested to destruction on the fringes of Europe’s monetary union in a traumatic upheaval that recalls the collapse of the Exchange Rate Mechanism in 1992.



Bankruptcy 2015 ? (Part II.)

In Part I of this series, I examined the 1992 best seller entitled "Bankruptcy 1995", which had predicted that the US would become unable to service its national debt as early as 1995 due to soaring budget deficits. So dire and well-documented was the warning that it affected the outcome of the 1992 presidential election, helping to elect Bill Clinton. In light of new looting of the national treasury by George W. Bush and the Republican Congress, I re-read the book to see if any of its predictions were now coming true. I posted those predictions, and the book's thesis that continued budget deficits would drive up interest rates and lead to "Death by Hyperinflation" or "Death by Panic" in Part I.
But "Bankruptcy 1995" obviously didn't happen, in spite of the fact that deficits have continued to be run nearly every year since then. Only part of the reason was the fiscally responsible Clinton tax and budget plan that began in 1993. In this diary I examine how a long-term, continuous decline in interest rates has actually reduced the carrying costs of the National Debt, and why that means the sky Hasn't fallen -- yet.

Bankruptcy 2015 ? (Part I.)

Is the US going bankrupt? With an intractable trade deficit and a national debt in excess of $9 trillion dollars, and an ongoing collapse in both the financial sector and of the national ($$$) currency, it may seem so. With that in mind, it is timely to consider documentary evidence of just what such a national bankruptcy would look like.

(NOTE: This is a republication of a diary originally published about a year ago at the Big Orange Political Blog, with minor updates to incorporate events that have occurred since)