I had not paid much attention about the debt ceiling until the story broke that House Majority Leader Eric Cantor (R-VA) had to remove himself from debt ceiling negotiation talks due to his short bet against the U.S. dollar. I first heard about this on Free Speech TV's "The Thom Hartmann Show" over a week ago and since that time, very few people are comprehending the gravity of this situation. A CONGRESSMAN IS BETTING AGAINST HIS OWN COUNTRY'S CURRENCY AND ECONOMY!!! Representative Cantor's bet is tantamount to treason and you can best believe that he is the NOT the only congress member betting against America.
Just a few weeks ago, Representative Anthony Weiner (D-NY) was forced by his own party to resign over him sending pictures of his penis to an online acquaintance. Though he made the fatal mistake of lying about the incident to every news outlet that put a microphone in front of him, the offense had NOTHING to do with his job performance nor did the incident take place during work hours as far as we know. Yet, this story proliferated every news broadcast for 3 weeks. Now, we have this bombshell about a congressman in a key leadership position who has broken his sworn oath of office and is actively betting against U.S. currency but NO ONE is calling for Eric Cantor's resignation or indictment! How could this be? Well, the debt ceiling talks is the latest act in the kabuki theater of American politics and we citizens continue on as a helpless, clueless audience seemingly paralyzed to say or do anything about the unfolding drama happening before our very eyes.
Perhaps a lot of us don't understand the whole concept of our national debt and debt ceiling talks, so let me make it plain for you. The U.S. total debt is currently over $54 trillion and the interest on that debt is well over $3 trillion (source: U.S. National Debt Clock website). Currently, the U.S. has a $14.294 trillion credit limit which was raised from the previous $12.394 trillion credit limit back in February 2010 (source: Treasury Direct website). Our country is $100 billion away from reaching the new credit limit and we only have a little over $3 trillion in tax and state revenue coming in which will only cover our interest payment. The gross domestic product or total market value of final goods and services produced in our country which serves as our collateral for obtaining loans is currently at $14.7 trillion. Looking at this from a personal finance perspective, our country is a horrible credit risk (even though Moody's Investors Service gives the US a AAA credit rating just like they gave all the toxic assets that led to the 2008 financial crisis) and would be extremely hard-pressed to get a loan. However, congress and the president have the exclusive privilege of raising the country's credit limit infinitely despite our inability to pay off the ever-increasing debt. Once the new credit limit is agreed upon, our government goes about the business of selling treasury bonds (debt) to individuals, corporations and other countries such as China, Japan, and Russia. Our country also sells large amounts of its debt to other countries that export oil (Ecuador, Venezuela, Indonesia, Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, the United Arab Emirates, Algeria, Gabon, Libya, and Nigeria) and serve as banking centers (Bahamas, Bermuda, Cayman Islands, Netherlands Antilles, Panama and the British Virgin Islands). The countries that are designated in bold happen to be places that are in conflict either with the U.S. or internally. Who in their right mind borrows money from their alleged enemies?
Why is it that Republicans are giving President Obama such a hard time about raising the debt ceiling when it could mean that America defaults on its loans? I am only calling out the republican party because other than Representative Bernie Sanders (I-VT), Democrats have done little to fire up bi-partisan working class support for increasing taxes on the wealthy. Most economists and many business leaders believe that an inability to raise the debt ceiling would have damaging and potentially catastrophic economic consequences. Certainly, an already vulnerable American public would suffer, with increased interest rates, delays in payment for military personnel and the elderly, as well as a suspension of a variety of other vital services. Since our nation is currently occupying/fighting in Iraq, Afghanistan, Pakistan, and Libya, there also is a serious risk to our nation's troops overseas and to our strategic international interests. The evidence is strong that our nation would suffer immediate and irreparable harm if the debt ceiling is not raised. President Obama could issue an emergency executive order to suspend the debt limit since the criteria has been met to do so but what does this mean for our country's escalating debt? It means that we will continue to wallow in this debt until the countries we owe money call it in and herein lies the farce all of this foolishness.
The world operates on a fiat currency system meaning that the top currencies such as the U.S. dollar, European euro, the Japanese yuan and British pound have no intrinsic value, i.e. they are not based on any physical commodity, but their worth depends on people's faith in them. If people lose faith in a fiat currency, it will stop holding any value and will become no more precious than the paper it was printed on. Seeing as the House Majority Leader Eric Cantor has a bet against the dollar, it would appear that one of the very people who is paid and entrusted with "bearing true faith and allegiance" to his country, has forsaken it. The deafening silence about this traitorous act leads me believe that the rest of congress is in on the same bet. Sadly enough, average citizens are the ones who have to shoulder the overwhelming burden of endless debt. Yet, when it comes time to print up our "funny money" or borrow it from other countries, that same congress always votes to give the majority of it to banks, corporations and wealthy individuals via bailouts, tax breaks and subsidies aka corporate welfare. President Obama has proposed $4 trillion in deficit spending cuts (nobody seems to give a damn about the $54+ trillion principal) that come from social safety programs such as Social Security and Medicare. The diabolical formula is to gradually raise the full eligibility age to 70 for workers born in 1973 and thereafter, that would cut Social Security outlays by 12 percent by 2050, which would equate to massive savings in dollar terms. But, as the Congressional Budget Office has noted, an increase in the eligibility age is, in effect, a cut in the benefits which people are expecting to get. “Forcing people with lower-than-average life expectancies to delay claiming benefits would reduce their lifetime benefits.” CBO said in a report last March. “For example, someone who died at 68 would collect benefits for four years rather than six. And because people with lower earnings tend to have shorter life expectancies, they would be more likely to be harmed by the change.” Source: Reducing the Deficit: Spending and Revenue Options - CBO March 2011
It would seem that the people who are supposed to be working toward our best interests would rather see us die than to force their obscenely rich friends to pay up on a little income tax. Instead, they keep citizens at each others' throats with nonsense such as democrat vs. republican, left vs. right, conservative vs. liberal, gay vs. straight, red state vs. blue state, etc. Meanwhile, the entities who have bought our leadership lock, stock and barrel, laugh at how ignorant, apathetic and self-defeating the only people who can put an end to the suffering, oppression, poverty and war that they inflict upon us. Though President Obama has backtracked on many things he said on the campaign trail, one thing is true -- he can't do this alone. Everybody needs to get involved in how this country is being run. Step #1 - Get educated on what's ACTUALLY happening and how the world has been working without the input of everyday people like you and I. The executive, legislative and judicial branches of our government are being paid by corporations and banks to screw over the very people who pay their base salary and benefits.
Our government has already legalized torture, wiretapping, occupation of sovereign nations, bribery and discrimination via the Patriot Act, foreign policy and the Citizens United decision. How long is it going to take us to do something about any of the myriad problems we face before we find ourselves unable to do so? Time is ticking very fast. I hope that Republicans are not "playing chicken" with our economy and that the debt ceiling will be raised before we go into default. But until then, Security Exchange Commission, Department of Justice, Congressional Ethics Committee, get your damn hands out of the cookie jar and start investigating, indicting and sentencing U.S. elected officials who are betting against America!!!!