No one in the world is more in love with getting deeply into debt than the United States government. Europe and Japan are not far behind in what has become a one-way street into the hell of deep debt. This hell comes only after one has enjoyed what the debt at first buys and brings to our individual and then collective lives. Bob Chapman writes, “Obviously government cannot function unless we continue as we have been building more debt and Americans will just have to be patient until the whole debt edifice collapses.”
Have you ever fallen into a well? No matter how hard you try to climb out of the water, the walls are too slippery and round. It’s a no-go and the sooner you realize this and conserve your energy the better. What should you do if you have a debt problem? First recognize that you have a problem and then stop spending. If the federal government were humble enough to recognize their problem and sit before a financial debt counselor, they would be told to stop feeding the beast—quit paying for things they can’t afford!
In Washington they can afford only a slice of what they spend. In his first three budgets, Obama borrowed nearly $5 trillion. Currently, the government is borrowing about 45 percent of everything that it spends. Obama’s projected 10-year plan would add nearly $10 trillion to existing U.S. debt. His proposed high level of deficit spending is why his $3.7 trillion budget for 2012 was rejected in the Senate by a 97-0 vote. In other words, under Obama, the government during the last three years has borrowed on average about $4 billion each day. And of course they want to keep on doing that.
Someone who is addicted to debt uses debt as a crutch for solving their financial and personal or getting out of debt. Other signs include living paycheck to paycheck and never planning for the future, constantly being in financial crisis, or being unwilling to take care of oneself in order to pay creditors.
Nothing is solved when you give a heroin addict more drugs. Same goes for the drunk. The American government, through the dropping dollar value it perpetuates by continuing to borrow absurd amounts of money, has already swindled debt holders in U.S. bonds of their promised returns. Certainly they are swindling away everyone’s decent future. A default defined by currency devaluation is part of what is going on. One day they will have little choice but to repudiate their entire obligation away because it will be mathematically impossible to do anything else.
Managing problems without solving anything is the best politicians can do. It’s like treading water in that well. You know you are going to drown sooner or later but you still keep kicking. Some screaming might bring help but who is going to come to the rescue of the Americans? Especially, who is going to help the Americans when, “Washington’s not raising a ceiling, it’s digging an ever deeper, damp and darkened hole for U.S. taxpayers and their children,” writes the Automatic Earth.
The Automatic Earth also writes, “On the real issues, nothing has changed since at least the demise of Bear Stearns and Lehman, and arguably way before that. There is too much debt in the system, way too much, perhaps as much as 10, 100 or even 1000 times too much. A government spending itself into colossal new debt levels can perhaps create the illusion of recovery for a limited period of time (check), but it will all end up just making things worse down the line.” That limited time is up as the bow of the American economy goes underwater with growth that’s going backwards.
Whether you are buying a car, a home, clothes or electronics, or fighting a war that you cannot you are buying what you cannot afford. If you regularly spend money you don’t have, you are a heavy debt user. If you cannot afford to pay your bills and you continue to spend money, you are a debt addict.
The Daily Bell signs in saying, “Well, sorry to burst the party balloons, but we just don’t see this as anything other than a continuation of the same. There is no ‘cure’ here. The ‘plan’ is not going to solve anything because it DOESN’T ADDRESS THE REAL PROBLEM.” The federal government and Obama should be held for child abuse for the levels of debt will be hung around the necks of future generations unless it is repudiated in full. “The leaders of both parties in both chambers have reached an agreement that will reduce the deficit and avoid default,” Obama said at the White House. What he forgot to mention is that he is sticking the problem up the rear ends of the younger generations who are probably wishing that Washington would just go away somewhere and leave them alone.
Raising the debt ceiling appears to promise salvation from financial Armageddon this week so everyone can go to lunch with smiles on their faces. In other words, having achieved no effective objective of solving the problem of too much debt, the United States of America will continue to get ever drunker on debt.
To the rest of the world and especially to the Russia’s Putin the United States of America is a parasite. “They are living beyond their means and shifting a part of the weight of their problems to the world economy,” Putin told the pro-Kremlin youth group Nashi. “They are living like parasites off the global economy and their monopoly of the dollar.”
Stock markets agree and are headed down. Dollar is going in the same direction; it’s a downer all the way. Same goes for manufacturing activity. Also housing prices are continuing to drop confirming Americans’ worst fears of insolvency. In terms of debt and future financial obligations the United States government is the world’s biggest drunkard. It’s embarrassing!
The economic contraction that is beginning everywhere is going to make mincemeat out of the tax base and thus the fiscal condition of cities, States and the federal government. The bells of doom, can you hear them ringing?
Was a nice 30-minute rally while it lasted but by noon stocks fell more than one percent on Monday amid weaker-than-expected manufacturing data and uncertainty about whether the debt deal in Washington will actually pass. “The market is just nervous that they can’t even get this deal done, they can’t even get a watered-down deal done,” said Marc Pado, U.S. market strategist, Cantor Fitzgerald & Co. in San Francisco.
Meanwhile Central Falls, Rhode Island, one of a handful of U.S. cities and counties facing fiscal collapse in the wake of the economic recession, filed for a rare Chapter 9 bankruptcy on Monday. Adam Brochert writes, “How many straws does it take before the camel’s back breaks? If the U.S. monetizes the municipal debt, the dollar could go into a tailspin. If not, we are headed for another deflationary wave in line with the 2008 fiasco. There are no good solutions, only tough choices that will be painful on Main Street.” HSBC has a solution, we find out also on Monday, cutting 30,000 jobs.
Wall Street equity futures were lower on Tuesday as a last-minute congressional deal to raise the U.S. debt ceiling failed to ease worries about a possible U.S. credit downgrade as legitimate questions lingered over the economy’s strength, which is weakening fast. While the congressional compromise averts default, many investors feared it doesn’t go far enough to satisfy rating agencies, which are not so easily fooled by political shenanigans. If the U.S. government’s rating is downgraded, it could increase Treasury rates and raise the nation’s borrowing costs, which would further strangle the American and then world economy. Perhaps the Americans are waiting for a fleet of UFOs laden with gold to come and bail them out of their mess?
Bob Chapman writes, “The administration is scared, especially after government credit was put on negative watch. A game of chicken is being run in Washington by two groups of politicians run and owned by the same group of people behind the scenes. They all want enabling debt extension with a small touch of austerity. They want a deal that has the legs to keep the economy going until after the next election. The most important thing they want is a reduction in Social Security and Medicare, so those funds can be used to reduce debt and fund the military industrial complex. They also want starvation and the inability to buy drugs by the elderly to hasten their demise. That means less Social Security and Medicare spending. In two years we will also have the Obamacare death panels, where massive elimination will be put into motion.
“There is nothing the Illuminists despise worse than useless eaters. There is ample evidence that these elitists, by their own words, want to reduce world population by 60% to 90%, dependent on which of these persons you listen too. Last week Ted Turner opted for 90% on CNN. That is what the fight regarding debt extension is all about. The only forthright and honest person in Congress to call it the way it is is Ron Paul. He says the bill sanctions the status quo and that it is impossible to balance the budget without cutting military, Medicare and Social Security spending and that is impossible. The debt limit will be raised, but we fervently hope without Social Security and Medicare cuts. You have to understand your adversaries. These people in Congress are almost all paid whores and the people who control them with money are insane. If you can grasp that you can understand what really this is all about. Watch carefully which members won’t allow military cuts and which want to cut SS and Medicare and then you will have identified the enemy,” said Chapman.
Paul Craig Roberts speaks of financial Armageddon for Americans when he says, “The U.S. dollar could plummet in exchange value and lose its role as world reserve currency. The U.S. would no longer be able to pay its oil bill in its own currency, and as its balance of payments is heavily in the red, the U.S. has no foreign currencies with which to pay its oil import bill. Or its manufactured goods import bill, or any other bill. We are talking about a crisis beyond anything the world has ever seen.”
The key concept here is freedom. American’s freedom is being eroded heavily by its debt and that is not a good feeling or thought to entertain. A great nation and its people have sold their souls to the bankers who have only been too happy to eat America alive.