Debt Ceiling Will Be Raised.
Debt Ceiling
Sometimes the obvious is so obvious as to be nearly invisible, like opening one's eyes upon awaking to find one's face pressed hard against the ceiling. That ceiling will not appear to be a ceiling, but a mono-colored textured surface without dimension or other detail. Here are just a sampling of the myriad reasons the debt ceiling will be raised.
- The U.S. Chamber of Commerce will not allow the federal government to default upon its credit and debt ratings. Would be horrible for business.
- With interest rates so low, the stock market is the premium venue for growing invested money. The stock market would be crushed by a government default on its debt obligations. Investors would have no place to earn money for possibly years, which includes virtually every Senator and Congressman on Capitol Hill.
- Failure to raise the debt ceiling will constitute an unprecedented admission of failure by those in both houses Congress.
- Since, failure to raise the debt ceiling would put the economy back into a deep recession and very likely, a depression, voters will rally around the anti-incumbent voting theme in unprecedented numbers sweeping incumbents of both parties out of office in unprecedented numbers.
- Neither the Dem's nor GOP's would benefit from the failure, politically, in the long run.
- In the wake of a new Recession or Depression, civil unrest would ensue, and security surrounding politicians would become tentative, at best.
- The domino effect would become world wide, wiping out fortunes of the wealthiest.
There are no Democrats on the radar screen who would filibuster raising the debt ceiling. There are however, a number of Republican Senators, who might be induced to do so, in order to secure the Tea Party vote in 2012. A dark horse Presidential candidate currently occupying the Senate for example. Sen. Rand Paul might be just such a candidate. His political rhetoric would be consistent with such a filibuster. With the economy in a recession or depression, Obama's reelection would be dubious, and a political opportunist like Sen. Scott Brown might see the debt ceiling as a path to the White House as the dark horse candidate who encourages Rand Paul, or another, to filibuster.
An obvious candidate for the job of filibustering would be Sen. Jim DeMint who has publicly stated this week: "I will oppose any attempt to vote to raise the limit on our $14 trillion debt until Congress passes the balanced budget amendment." This is just the kind if imbecile who could destroy America's economy. If he is true to his words, he will filibuster, and raising the debt ceiling will not occur. There is no way in hell that a Constitutional Amendment could pass, and be ratified by the majority of States, before the debt ceiling has to be raised to avert a default on government obligations.
DeMint's demented logic, may be calculating that defaulting on government obligations to Medicare and Social Security recipients would be a good thing. However, imbecile's aren't able to think through the consequences. If the government defaults on its obligations to its own citizens, what will that communicate to our international lenders about our obligations to them? It would quite literally, be economic suicide for America, pulling the floor out from the bottom of the value of the U.S. dollar. Americans would need wheel barrows of $50 dollar bills just to do the week's grocery shopping. It's happened before in the 1930's, and apparently Republican Jim DeMint intends to repeat the flaws of history, as the ignorant are want to do.
It is unwise for any to presume that Nero won't fiddle while Rome burns, on the basis that Nero is the caretaker of Rome. In fact, it just may be Nero who orders the fire to be set.
Whether or not, Standard & Poor's had such specific scenarios in mind when they downgraded America's economic outlook from stable to negative, I do not know. But, they certainly are considering similar scenarios to assert such odds as one in three that America could default on its debt obligations. It is time for all good men and women with families to provide for to come to the aid of their futures by contacting their representatives and demanding that the debt ceiling be raised and a steep economic decline be averted.
This is one issue which, if political Russian Roulette decides the day, could destroy a hundred million, or more American lives over the years, or even decades, to come. Something is very wrong with the American political system when any ONE person in the Senate has the power to destroy the economy for all Americans for years or decades. Yet this is precisely the situation America finds herself in.
Contact your Congressman and demand that the debt ceiling be raised. Contact you friends and family, and ask them to do the same. Or, you can sit back and enjoy the game of Russian Roulette and blindly hope that Sen. DeMint, or another, doesn't choose to destroy your financial future for the sake of some insane principle.
This is no time for Americans to be fiddling while Republican Senators play with the fire of extremism.
Comments Section
15 Comments
David, one gets the sense you are really jacked up over this one. But, as I see it, we have no reason to be worried. The good chef has planned and mixed all the ingredients into the cake. The cake is in the oven and the heat is on. In other words, the middle class workers can struggle along a little further under unsustainable Corpocracy edicts; housing, jobs, college tuition, federal debt, healthcare.
The debt ceiling is just the latest scare tactic to herd the people into doing the Corpocracy’s bidding. This will be followed by a big debate with little action to bring the debt down appreciably. Then, you just wait until the cake is baked and, wallahh – you have a middle class willing to take $10-12/hr jobs without the slightest hint of a complaint.
At that point we can get on with globalization, peace and prosperity for all, etc.
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Roy,
Love your well deserved sarcasm. You are right, of course. That has been the strategy for decades by the duopoly parties in their contest to prove whose principles are bigger in duping the voters into voting for them.
However, this debt ceiling threat is a political reality with truly devastating potential consequences. It is an unprecedented event that a U.S. Senator has announced intentions to force America to default on its debt obligations using the filibuster in the Senate. Truly, unprecedented.
David I have to say that after reading comments from many Americans on the debt ceiling and the budget it does give me hope that your comment "The federal government's debt ceiling will be raised on a bi-partisan vote and signature of the president." is an accurate prediction of things to come.
That being said, after reading many statements from members of the Congress that will actually vote on the debt ceiling your comment "...and that would be, political imbecility. It will take only one political extremist, or dummy, to pull this off, and there are several candidates for the role." makes this statement more predictive of the vote to raise the debt ceiling.
It seems that many of or political leaders are much less intelligent than those they represent. You have left Kyl out of the hunt for the "one" but my money is on him to be the dummy. He doesn't seem like a leader and he represents Arizona which has it's share of extremist.
David, maybe the tea leaves are right for the Corpocracy to push for a 'one world' currency. China has been sufficiently capitalized with this last $600B of FED ponzi money. They are sitting on some $3T in their central banking system which can’t be put to use without a causal effect of increasing the yuan value which China is loathe to do. China is way too far entwined in globalisation to try and back out now.
And, the BRIC nations are pushing for a new world order currency and that is the goal of Soros, and, I would assume, WTO/IMF/Euro. The dollar and the Yuan are well positioned to get a bump from such a move. Maybe ‘one world’ currency is the next great follow-on to the –afta’s and the NAU.
Several congresspersons are in China/Asian rim for ‘meeting’s. I do believe that if President Obama feels he will be a one termer he will attempt to appease the socialists crowd with something like a ‘one currency’ attempt. He is working to gin up something on ‘immigration reform’ which, IMO, will be sufficient by itself to sink his boat.
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Roy, IMO, we already have a defacto 1 world currency, in the form of international trade ledgers. The fact is, currency isn't worth the paper it is written on, except for the good faith and credit of the nations issuing those currencies. It is that good faith and credit overwritten upon IOU's for tangible goods and services, that gives any value to currency.
Adam Smith goes into great detail on this matter in Wealth of Nations, and though, in Smith's time (1700's), gold was the tangible good underwriting currency, his work is just as relevant today, with other goods and services underwriting the paper currencies.
There are strengths and weaknesses to any system of international trade and the currency arrangements to keep track of who owes what to whom. Germany went to war with the World because its international debts could not be met by the German people. Japan went to war with the World because its economy and military expansion could not be supported with the absence of oil during a time of industrial growth and expansion. The current system of international trade and currency valuation updates has succeeded where the gold standard in the 1930's failed humanity.
Greece is a perfect example. Greece doesn't have the building of a war machine anywhere in its set of options to address its debt obligations, and in addition, Greece found international partners who would assist Greece in its economic recovery provided Greece's government corrected the internal causes of its devastating debt situation. War is not an option.
The enormous downside to a world currency, or even a world set of books of debits and credits, obligations owed and due, is that if that system fails, the economic collapse will such every nation into that black hole, for a time. Knowing this provides nation's the motive to insure that doesn't happen and to prevent rogue traders from upsetting the balance in any kind of forced manner.
China has not forced any other nation into anything. The debt obligations to China by the U.S. have been entirely, and voluntarily, undertaken by the United States government and American consumers. China hasn't altered the way its Yuan valuation mechanism for one simple reason, it would be disadvantageous to the Chinese economy and people. If the shoe were on the other foot, the U.S. would act no differently.
It is the U.S., not China, pushing for a one world currency valuation mechanism, and the U.S. and other debtor nations are doing this for one simple reason, it would be advantageous to their debt situation, especially in the area of trade balances. Negotiations on this matter will go nowhere unless and until an offer is made to the Chinese which the Chinese accept as advantageous to China.
This is the free market at work, and the fundamental construct of free markets is negotiated contracts which are agreed to by parties to the contract and enforced by consequences of failure to observe contract provisions.
At some point, debtor nation's pleas to re-negotiate their contracts with China in a manner that stipulates China allow its currency to float on the international currency markets, will be accompanied by an offer of advantage to China, and then, and only then, will China voluntarily change in a new contract, its currency valuation mechanism.
Now, to be sure, China is fudging on some of its world trade contractual agreements, but, here's the thing. All nation's fudge on their agreements where they can get away with it, and where such fudging doesn't pose a serious threat to the overriding contractual provisions. In a very real sense, international trade provisions are fluid and dynamic, as all partners to such agreements seek to get the best advantage of such contractual provisions.
The overriding lesson learned in the 20th century by all major nations, and most fledgling economies today, is that War over resources is the most costly and wasteful method, and ultimately self-defeating means, of trying to grow an economy and stabilize a political regimen against internal domestic turmoil. As long as this lesson of the 20th Century is kept in mind by the political entities and central banks of the nation's economies, the incentives and motives to make international trade systems work for all nation's willing to be contractual partners, will remain strong and overriding.
In a very real sense, the international community's interest and involvement in the internal turmoil of countries like Egypt, Tunisia, Libya, Iran, and other Middle Eastern and African nations, is predicated, not on domestic civil rights issues per se, but, upon those nation's economies which tend to be single resource economies with far too much wealth concentrated in the hands of authoritarian political leaders. This circumstance precludes those nations from fully participating in the global supply and demand exchanges which are the stabilizing factor for all the rest of the nations in the world. In other words, the international interest in such Middle Eastern and African nations is political and economic, and not human rights. If human rights and democracy were the issue, Somalia and the Sudan would top the international community's list of targets for intervention.
Oil, of course, is key, as it is the single resource which countries like Libya and Iran, Egypt and Tunisia, either have underwriting their economy, or, their nation's proximity to the choke point of international oil flow and trade, poses a potential threat to global international economic interests. Were it not for oil, China and Russia would not have abstained from the UN vote on intervention in Libya. They would have opposed it, instead.
Globalized trade and currency exchanges are geo-political regulatory mechanisms. On balance, and in the shadow of Nagasaki and Hiroshima and 100% destruction by firestorm of Nazi Germany's cities, this globalization of markets, trade, and even currency exchanges, are a net positive for humanity. And that is concept which the majority of people in the world are not educated enough to appreciate. Which is why direct democracy is not the prevailing form of government in the world today.
J2T2, in general agreement with your comments, I left Kyl out, because of the absence of direct quotes by him nailing down his position on the matter, or, his apparent absence of interest in running for President.
But, yes, Kyl's position within the GOP could potentially be furthered by filibustering the debt ceiling. But, I don't think Kyl would choose that role for himself, precisely because of the potential threat it would pose to his future as a Senator. The political winds at the back of the GOP have shifted dramatically around to headwinds, thanks to Gov.'s Kasich and Walker, and Rep. Ryan. Kyl is content with his career as a Senator and Kyl is very pragmatic where his personal political fortunes are concerned. Ergo, I don't think Kyl will be the one to filibuster. He may, however, be a back bench cheerleader for another who will, I suspect.
David, sounds as though you are leading the pack for globalisation. I believe most people prefer a level of international trade and cooperation among nations of the world. I also believe that most people don’t care for the level of globalisation being pursued, open society, open borders, throwing in everything but the kitchen sink, etc. WTO mandating immigration policy, acting supreme to the US constitution and so on.
You’ve clearly bought in to the ‘idea’ that peace and prosperity is more assured if the economies of all nations are intertwined so tightly that no nation can extricate themselves from the relationship, absolving the world of future wars. Such thinking is unrealistic, IMO, only serving to strengthen the hand of the corporate. I’m not much excited about living under corpocracy rule.
For example, we’ve been at the globalisation thing for 30 years or so and the corpocracy hasn’t bothered to discuss/debate/inform in the least relative to ‘their’ plans to globalise us. Your representative hates to field questions relating to trade, China, immigration, one world, jobs, lobbying, play for pay, etc. At best its, ‘just wait, things are getting better’.
We could look at the EU for a historical perspective on globalisation. It seems that most of the EU’s have adopted a ‘don’t worry, be happy’ modus operandi. With a socialist demeanor they (PIIGS) seem to live large for about 5 years then blow up and beg Germany to bail them out.
IMO, if the US was taken out of the equation, didn’t exist, the world would come apart in about one years time. The US constitution and the US dollar is the glue holding things together. Where would you point to show globalisation has improved the world overall? For all the resources dumped on the Asia I can’t see where putting several millions to work there is anything to crow about. Just moving industries and jobs from point A to point B doesn’t equate to ‘peace and prosperity’. Does help the corporate bottom line around the world. In fact, with China it seems the corpocracy has set up a communist nation to be the big kid on the playground. Nobody, other than Trump, seems to want to call China on the carpet for their aggressive trade stance. And, most fear Trump will start WWIII if he should become President and push China to straighten up and fly right.
Thirty years in and nobody seems to know how to deal with China. But, its clear to me that there won’t be any major creation of jobs in this country until the populations of India, China and Africa are gainfully employed, unless someone can deal with China. There’s a big congressional junket visiting Asia and China this week and I can’t wait to be informed of their ‘report to the nation’ on the progress of globalisation on their return. Snicker, snicker, etc. You say China is fudging. I say they are raping us while the Corpocracy pins us down for the act.
I suspect the junket is comprised mostly of young Tea Party idioms seeking campaign donations so they won’t have to be seen sucking up to political PAC’s (corporations) on this side.
Otherwise, we have the Corpocracy we deserve.
Roy, sounds like your comments refuse to acknowledge reality for your prejudices against globalization.
Your comments seem to approach this from the point of view that globalization is something any of us, can do anything about, and that it is a new phenomenon. Your comments are wrong, no both counts.
Globalization began with General Washington, Great Britain, France, and Spain prior to the existence of America, and it has been growing in fits and starts, ever since. The British Empire sought globalization, like the Roman and Chinese empires before it. Sure, its a lot more mathematically complex today, but, the essentials are precisely the same today as these historical times, with regard to balance of trade, trade agreements, and currency translations, though metal coin instead of paper, back then.
Globalization of markets is not something ANYONE can reverse without a collapse of the entire system. You seem to approach this from the point of view of a few people implementing some grand design. Nothing could be further from the truth. Underlying globalization is the very simple concept of a producer seeking a buyer at a mutually agreed upon and beneficial price for both parties. Banks, private and Central, trading markets, producers and consumers, are all pursuing their personal goals which are predicated upon selling and buying at the best price. Technology which creates cheap shipping across borders, and an international banking system that facilitates balance of payments across borders between international producers and buyers, are what have permitted the age old activity of buying and selling to take place across national borders.
Lest you forget, however, the Mountain Men of Pre-America days, found their markets for beaver and otter pelts in Europe. Books and education in the colonies were imported from Europe, along with a host of grains and fruit trees which could not be found in the Americas prior to the Conquistadors. Sheep, cattle, pigs, and horses all came from Europe to the Americas as timber, potatoes, and furs were returned back to Europe.
Globalization of markets is neither new, nor, under any small group of individual's control. Where there are producers in one country, and demand in another, globalization of trade and markets and currency exchanges will, of necessity, arise to accommodate the desires of producers to sell, and consumers to buy, at the best negotiated prices for both.
To diminish or halt globalization, one would have no choice but to advocate that governments intercede and ban international trading in part, or whole, and in so doing, governments would pick the winners and losers in trade. Is that really what you intend?
I agree with you, that our nation has an obligation to do what it can, to promote both balanced trade which benefits our economy as much it benefits foreign economies, and that employment maximization must be an important factor when negotiating international trade agreements. But, governments are limited to how much they can influence free trade, before they begin harming their own economy more than helping it.
As we are witnessing, jobs in America are being harmed as much by political ideological warfare, if not more, than by globalized trade.
Your view and mine, have a lot in common. Corporations should not be persons in the eyes of the law, and corporations should have no place in the government's deliberations or lawmaking, beyond that of having an equal voice for their employees as every other American has. Limit corporate and union contributions to political campaigns to the that of the average contribution made by America's middle class. All of these reforms, would work to reduce the negative consequences of globalization of markets.
Globalization of markets is not the enemy here. The corporate control of governments is the enemy here. You are critiquing the symptom, and not the source of the problem - the influence of wealth upon governments. Globalization is as at least as old as Alexander the Great, and is a natural byproduct of human innovation, production, and consumption. Read your Adam Smith, Wealth of Nations. Globalization was extant in Smith's day. It is as inevitable as the rising of the Sun in the morning.
It is the corruption of the globalized marketplace, by privileged players with access to government power, that is the source of such gross imbalances and boom - bust cycles which are so deleterious to average working men and women and consumers.
David, sounds like it comes down to a degree of expectations from gov’t, from international trade and so on. The Corpocracy seems a limiting factor to good gov’t and good trade relations.
The posterchild for the Corpocracy might be Enron. The height of Corpocracy audacity might be Allen Greenspan accepting an award for ‘best economist of the year’ or something like that, from Enron mgmt. Some award should be given GW in saying that Enron never got any special treatment from his administration as Enron was the biggest contributor to the Bush political campaigns.
For so many perceived wrongs the thread can be followed right to corporate personhood. That’s where we should be focused. IMO, it’s either the constitution or the corpocracy. Save the world – abolish corporate personhood law.
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Everyone should understand from the 8th grade on, that corporations exist for one overriding purpose, and that is enriching itself. Therefore, corporations are prone to even killing the goose that lays the golden egg, if they think they can garner one more golden egg today and not have to wait till tomorrow.
Corporations only give passing consideration to the needs and well-being of society, government, and culture. These are all, ultimately, only means to corporate ends.
Folks revere profitable corporations, all the while failing to comprehend that if left to their own devices, they would put themselves out of business for a short term profit. We saw this happen in 1929, and we saw it again in 2007-08. Corporations should become the tools and agents for society, government, and culture, not this other way around that we are witnessing today. But, it takes some education in economics for people to grasp these concepts, and corporations have a vested interest in insuring such education is imparted as little as possible. Ergo, economics is not taught in high school, or if it is, it is Home economics, not macro-economics.
Prezactly David, I wish I had wrote that.
So, for those of us beyond the 8th grade I suggest reading this http://www.reclaimdemocracy.org/pdf/primers/santa_clara_blues.pdf
and stop by the Republic Sentry Party to begin righting some wrongs.
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David, we are not alone! Check out these cities and counties that are beginning to chop away at the root of Corpocracy.
Roy, thank you for that link to just above, to Reclaim Democracy. Good stuff there, which I can use and support, going forward.
Roy didn't we have a world currency, in essence, until the ending of the Bretton Woods accord in the early 70's? Every currency was hitched to the dollar and the dollar to the gold standard, if I understand it right, and it wasn't until this ended that manipulations such as the Chinese are doing resumed once again. The currency manipulations were also a problem between the WWI and WWII time frame.
David I think what we see as globalization today is not the globalization of markets but the globalization of corporations on a scale that is far larger than ever before. We also see the relocation of capitalism to the low cost labor countries such as Britain saw after the American revolution. The difference now is the smaller free enterprise system of the new America has been replaced with the corporate capitalist system of today.
Globalism as we see it today has been badly managed. Trade agreements that do not include labor and environmental equalization has led to of all things a communist dictatorship in China becoming a major labor supplier to the capitalist markets. Not very enlightened if you ask me, but corporations are not concerned with enlightenment just the profit for the next quarter.
Like you said, J2T2, the corporations are not concerned with enlightenment, just the profit for their next quarter and annual reports/dividends. Hence the need for adequate for regulation and oversight of corporations. This is a problem the world round.
With new technologies, come enormous social, cultural, and regulatory challenges to insure against the creation of Frankenstein's, like the one in global recession Frankenstein in 2008.
This poses a very special challenge for democracies, where corporations have varying degrees of high level control over government bodies which can destroy the concept of government of, by, and for the people. Elevating the level and quality of education amongst the people is the best possible defense of such defacto government takeovers by corporations, as well as political reforms which deny and reject corporate access to government. The government should consult with corporations, not be controlled by them.
Yes, globalization has been badly managed, because the corporations have been at the helm of the process, albeit hiding behind their politician puppets.
You are quite correct to distinguish between corporations today and what constituted globalized trade in history. Monopolies were limited in history, but, with the advent of oligopolies today, monopolization is no longer limited, nor manageable, where corporations control political financing for public office.