Originally published on OpEdNews
The United States Government and its presstitute media have wasted time and energy creating hysteria over a non-existent debt ceiling crisis. After reading the news in the Ministry of Propaganda and witnessing the stupidity of the US government, the rest of the world is struck dumbfounded by the immaturity of the world's only superpower.
What kind of superpower is it, the world wonders, that is willing to go to the eleventh hour to convince the world, which holds its banking reserves in US Treasury debt, that the US government will default on the debt?
Every country in the world now worries about the judgment and sanity of the country with the largest nuclear arsenal in the world.
This is the achievement of the Republicans, who took an ordinary commonplace increase in the debt-ceiling limit, an event that has occurred routinely many times over the course of my life, and turned it into a crisis threatening the world financial system.
To be clear, there was never any risk whatsoever of US default, as President Obama has power established by President George W. Bush's Presidential Directive 51 to declare default a National Emergency and to set aside the debt-ceiling limit and Congress' power of the purse, and to continue to issue the debt necessary to fund the US government and its wars.
That the American press ever took this highly-hyped "crisis" seriously merely demonstrates their prostitute status.
The US public debt is rising too rapidly against US GDP, although it is still below the percentages during World War II. The problem that is ignored by the idiots in Washington and the presstitutes is that the debt is rising relative to the economy because the economy is not rising, but war expenditures are.
Why is the economy not rising?
It is not rising, because it has been off-shored. What formerly was US GDP produced in Gary, Indiana, St. Louis, Detroit, Silicon Valley, and other US locations is now GDP for China, India, Indonesia and other countries where manufacturing labor and professional services can be hired below US rates.
What happens with off-shoring? The answer is clear. US GDP, consumer income, career opportunities, and tax base leave the country. Corporate profits and bonuses rise due to the lower labor costs.
Who is this good for?
The answer is that it is only good for Wall Street, corporate shareholders, and corporate management. Their incomes go up, and the GDP goes down along with the employment opportunities of Americans and the tax base for government.
The other destroyer of American economic prospects was the deregulation of the financial sector. Economists theorized that markets were self-regulating and created the illusion that greed was never a problem. This was music and dollars to Wall Street's ears. Federal Reserve Chairman Alan Greenspan and the Wall Street-owned US Treasury jumped on board. Those, who like Brooksley Born, were empowered by US law to regulate derivatives, were driven out of office by the Federal Reserve Chairman, the US Treasury Secretary, and the Securities and Exchange Chairman.
Financial institutions freed from Glass-Steagall, freed from capital requirements, and freed from oversight, immediately took debt leverage on highly unrealistic bets to amazing heights. When the schemes collapsed, the Federal Reserve lent US and foreign banks $16.1 trillion dollars, a sum larger than the US national debt and larger than the US GDP.
Where did the Federal Reserve get $16.1 trillion to lend?
The Fed created it out of thin air with a stroke of a computer entry.
While the Federal Reserve created $16.1 trillion in new loans for private banks, the bailed out banks bulldoze the foreclosed homes of the evicted Americans.
So in America, the light unto the world, American citizens are thrown out of their homes in order that banks can bulldoze their homes.
Only in America does this makes sense.
And it is not only Americans who are being made homeless by US policies. Afghans, Pakistanis, Iraqis, Yemenis, Somali, Libyans are also consigned to homelessness by American policy. Moreover, America's wars against these peoples, together with the supporting military/security budget, account for 75% of the US budget deficit. Indeed, the cost of these wars exceed the planned future budget savings from the debt limit deal.
In other words, the cost of the wars that make millions of foreigners homeless use up revenues that the federal government could have used to keep Americans in their homes and teachers in the schools. As much as many Republicans profess to be concerned about the US public debt, Republicans were not sufficiently concerned to address their issue by cutting back the $1.2 trillion military-security budget or by raising the low tax rates on the mega-rich.
Look at these July 30 headlines, just two days prior to the default deadline, from the online group, Stop NATO:
- US Military To Be Based In Australia To Confront China
- Call To Expand American Counterinsurgency Operations In Philippines
- US Could Upgrade Polish Warships For Baltic Sea
- Bulgaria: Pentagon Continues Upgrading Military Bases
- US Uses Romanian Air Base To Supply Afghan War
- America's Africa Partnership Station In East Africa
- Mongolia: US Leads NATO, Asian NATO Allies In Military Exercise
- Libyan War: Over 17,000 NATO Air Missions, Nearly 6,500 Strike Sorti
- The Big Picture: War on Libya is War on Africa
What in the world is a country facing bankruptcy and default doing conducting military exercises in Mongolia and Central Asia? What is the North Atlantic Treaty Organization, designed to counter a Soviet thrust into Western Europe, doing in Mongolia?
Why are these military expenditures necessary, but not expenditures to keep America's homeless population from rising while homes are destroyed?
Why do not the Republicans listen when mega-billionaire Warren Buffet says that the tax rate on his massive income is lower than the tax rate on his secretary's income?
The answer is that the Republicans have an agenda: War. And Republicans want to fund this war, not by taxing high incomes but by cutting support programs for the down and out.
To cut to the chase: Even if all the cuts actually happen, the weakening economy will result in new deficit projections that will wipe out the expected savings from the debt limit agreement.
What then will the government do?
Until US policymakers comprehend that the economy has been moved offshore and take steps to bring it home, there will be no solution to America's debt problem or to its unemployment problem.
Where should I invest my money?
I have $10k in a 401K. Should I invest it in American equities right now or overseas?
Please explain your answer.
this site does not give investment advice
We have traders, finance people on the site but generally this site isn't focus on particular markets for investment purposes.
I suggest if you're thinking of changing something now, tomorrow, you're way too late in the game.
Rpberts for President
Paul Craig Roberts for President!
Rescript of Honorius
Undergraduate history majors can see the correlation between Rome overextending its resources through war and subsequently falling into decline. Personally, I'm just waiting on the Grand Universal Crawfish (i.e. so many people default that the banks can no longer go after them), when I will promptly stop paying bills and engage in black market trade.
Top 10 similarities between fall of Rome and the fall of America
Here is an article that i wrote a while back that is similar to yours.
Hope you like it.
Hmm. . . sounds scary. I
Hmm. . . sounds scary. I wonder if the NFL season will be affected? Surely the Home Shopping Network will be OK too. . . right? I know the economy's tough. . . boy, I'm glad I bailed on getting that stupid engineering degree and now have a stable job as a free-lance therapeutic dog masseuse. I need some bracing-up after those worries so I think I'll drive my 2-ton, 7 passenger SUV 3 miles to get a $4 half-caff, caramel macchiato. I just wish I'd stop getting those calls about my late payments on the SUV and my college loans. Well, I know things are bad for SOME people but riots? What are those English and Greeks thinking about? But the TV experts tell us that it's only a few malcontents so not to worry. I'm in good shape and nothing like that could ever happen here. Everything will be fine.
Please keep the essays coming Mr. Roberts. Thank you.
The Hurt Locker
So were all agreed the USA is in a world of hurt.
What are we going to do about it?
Why do we beat the drums and rattle the sabers in prep to confront China on there side of the globe? Why don't we just stop buying Chinese goods? Why don't we put a tariff on all Chinese goods coming in to the USA including all American companies that want to sell out side U S Borders? Why don't we accuse all US companies that leave the USA of treason? Why is it are elected officials are so blind? Could it be greed? Why do we keep allowing more and more new people into our country when we know there are not enough jobs for everyone. Why don't we bring are armies home to defend are own borders? Why do we keep giving the Arab country's billions in aid when they hate us anyway and we have so many needy Citizens here at home?
Why do we not have a replacement for the space shuttle? Why is it we have to hitch a ride with the Russians to the Space Station? Why is it prices go up, wages go down?
Why is it rent goes up … jobs disappear?
Why is it we can’t make a car that gets 100 even 200 miles to the gallon? Why is it we aren’t smart enough to find an alternative fuel?
Why is it so many of our young people are violent ,over weight, disrespectful, lazy, hooked on video games, carry guns to school. Why do we allow this to happen? Why is it everyone in the middle class down to the dirt poor see all the why’s ….. but do nothing?
very good question
One thing I see is this never ending pure economic insanity coming from the GOP, we just are hearing it in Iowa and the crazy people who vote for them makes the situation much, much worse. It' drags the "debate" into insanity land. I have no idea why people would vote against their own self-interests as well as the national interest.
i.e. they are currently voting in people who will destroy their meager retirement and health care.
On the other hand, some of the Democrat proposals, reeking of special interest agendas I can understand the hatred of that as well.
But why people are not in the streets rioting when other nations are is beyond me. The only thing I see is this never ending "divide" being used as a distraction.
I don't get it for most of these people have to at least balance their own checkbooks so one would think they could reason out some common sense solutions and get behind them.
Don't blame the young people
One of Dan Daveed's WHYs presumes a premise that I -- as in truth an old man -- would question.
"Why is it so many of our young people are violent, over weight, disrespectful, lazy, hooked on video games, carry guns to school. Why do we allow this to happen?"
I don't think they are any more violent than they were in yesteryear. Stats seem to be showing that more are overweight than formerly but the young people I know aren't ... and when some of them start to get that way, they manage to turn it around. They aren't disrespectful to me, although I hear complaints about that from some of my neighbors.
The young people I know have access to and probably know how to shoot, some more than others, but none of them carry guns to school or anywhere else, unless hunting. Far from lazy, I hire young people from time to time and they work hard and competently when given the chance.
Now, about those games ... those little beeper things that seem to fascinate them for hours on end ... yeah, I agree, WHY?
I guess I "allow" it ... the video games ... I could try to put a stop to it ... but I'd like to give a reason and I don't have a reason. I can't criticize what I don't understand.