Tuesday, August 2, 2011
Sen. Obama & debt ceiling- 2006
What did President Obama think about President Bush's desire to raise the debt ceiling back in 2006 when he was still a US Senator?
“The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure... It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies. … Leadership means that ‘the buck stops here.’ Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt and a failure of leadership. Americans deserve better. I therefore intend to oppose the effort to increase America’s debt limit.” (ABC News.com)
Ah.
What did we learn?
And now that two full weeks of fear, hysterics and kabuki were played upon the American people, what did we really learn from all this?
Some thoughts:
1) We learned that in spite of all the theatrics and incessant scare rhetoric about the US' credit rating being affected if the deal did not pass, that it still is in jeopardy even though we did.
~ "Many economists believe that America could soon lose its triple-A credit rating, despite a deal being agreed. Standard & Poor's, the rating agency, recently said that a credible fiscal plan would need to include $4tn of deficit-reduction measures." - Guardian UK
2) We learned that America actually has Four main political parties, not two. They are, from right to left, the Tea Party (a group so staunchly fiscal conservative that even Wall St. can't control them), the Republicans (who represent nothing of the party Reagan led even though they keep evoking his name at every turn), the Wall-St democrats like Obama (emphasis on small-d because when it comes to economics and military, there is Zero difference between them and the Republicans) and the True Democrats (who actually care about poverty, environment, other social ills, etc but can never get any traction because the Wall-St. wing attracts the donors)
3) We learned President Obama is incompetent. Strong words but truthful. Here's economist Paul Krugman's take on the deal:
~ "The deal itself, given the available information, is a disaster, and not just for President Obama and his party. It will damage an already depressed economy; it will probably make America's long-term deficit problem worse, not better; and most important, by demonstrating that raw extortion works and carries no political cost, it will take America a long way down the road to banana republic status."
4) We learned if the goal of pushing this deal through before Aug 2nd was to calm the markets, it has and will continue to fail. You may see a spike tomorrow and perhaps this week will end on a high note as the Dow is concerned. But never ever forget what the market wants even more than a debt ceiling deal- it wants QE3 (which ironically would push the national debt higher but no one speaks publicly on that) and if it takes creating volatility or artificially deflating the 'bubble' enough to give Bernanke political cover to give the free money, Wall St. will do it- you can Bet on it.
5) We learned and continue to learn that Russian Prime Minister Vladimir Putin is correct when he recently accused the United States Monday of living beyond its means "like a parasite" on the global economy. Russia, like China and many other nations hold a large amount of U.S. bonds and treasuries. And quite frankly they're very nervous about our economic situation because in this 21st century global community, our economy affects all others, either positive or adverse.
6) Don't know if we learned this but we Better- Nothing was solved. No problems were truly addressed or fixed. And this whole two-week circus had ZERO to do with job creation, home value stabilization or any other economic factor that will make any genuine positive dent in people's lives.
Here's an example from AP: "Manufacturers had their weakest growth in two years in July, a sign that the economy could weaken this summer." Of course it should have said 'is weakening' but you know the media.. never give up on 'recovery'
But I digressed.. back to point 6-- politicians used fear of not getting social security checks or military pay to cause further needless panic to make political points. The truth was had we passed the Aug 2 threshhold, those in need and those who serve still would have gotten paid. The President always held the power to temporarily extend the deadline or raise the debt ceiling on his own via the 14th Amendment.
The US was Never Ever in any threat of default-- EVER
Now let's try to put this ugliness behind us and salvage the rest of a nice summer week the best we can.
Monday, August 1, 2011
Grad Students of the America- unite & suffer
From CNN.com:
Debt ceiling deal to hit grad students hard -- "Some students will have to start paying off their loans while they're in school under a last-minute debt ceiling deal to keep the country out of default and reduce deficits by at least $2.1 trillion over a decade. As part of the savings to trim the deficits, Congress would scrap a special kind of federal loan for graduate students. So-called subsidized student loans don't charge students any interest on the principal of student loans until six months after students graduated.
Congress would also nix a special credit for all students who make 12 months of on-time loan payments.
The changes would take place July 1, 2012."
~ If your life economically is better today, August 1st 2011 than it was exactly three years ago, understand you are one of the Very few & probably best to not speak openly of it.
Hoping for a miracle- A 'No' vote
Though not likely, I am hoping strongly the debt plan agreed by those wretched politicians Obama and Boehner won't get passed today. I'm hoping strongly that tea baggers and genuine liberals can come together, even if for different political motivations and vote down this bill, and in the process humiliate those who put it together Sunday evening.
Perhaps someone with guts and courage like Sen. Sanders can filibuster it
Why would I say that- 3 basic reasons:
1) This bill does nothing for everyday people but keep the status quo. 2 trillion will be cut over the next 10 years with Zero in tax increases for the wealthy. In addition, Obama failed to get extensions of unemployment compensation. So in reality, who did it help? Besides banks and investors I mean...
2) This is a controversial point but I make it nonetheless- it has been 3 years since Lehman Brothers collapsed and nothing is now allowed to fail. I mean Nothing! Every so-called line in the sand or deadline is met with 11th hour compromises and selling of soul to get deals passed that never help anyone but the power elite.
This is true for the US and Europe. Remember Greece? Remember those cretons Sarkozy of France and Merkel of Germany coming up with last second compromises to protect their banks from taking financial losses two weeks ago?
How many times can these vile politicians be allowed to keep kicking the can down the road? How long can bankers and investors be protected and Never allowed to take Any financial hit? Does no one have principle and conviction to stand firm to their beliefs and not compromise under pressure?
I also hoped it forced interest rates to begin spiking up. Zero or near-zero interest allows speculators to make excessively risky bets which put the nation in deep jeopardy of another collapse, which we are financially ill-equipt to handle. The extremely low interest has encouraged people to get into further debt by buying shit they don't need with money they don't really have to cover the purchases. Finally this is Killing savers who are getting no rate of return on their savings in which to keep up with inflation and forcing them via intentional steering into the dangerous and rigged stock market for some kind of dividend.
3) This point is equally controversial but will be made nonetheless. America, as I've expressed before is the equivalent of a patient in a hospital ward in 'serious condition' and the 'doctors' are not treating the cancers rotting it from within. Instead the focus is simply to stabilize the 'patient'. If going a couple days beyond August 2nd is necessary to jolt the world markets and jolt the American people out of a state of blissful ignorance, then so be it.
As we stated before 15-20% of Americans are directly feeling the Great Recession. That means 80-85% are relatively or completely untouched. They are intentionally and willfully oblivious to the suffering of others and overall rotting of this nation. A mini-crisis sometimes is the best way to wake people up.
I have to assume the bad people will win- they've been winning for 3 years now. So I have to assume the deal will be passed today. But like everything else this government has done since Sept. 08, it is Never, Ever with the best interests of the American people in mind.
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