by Stephen Lendman
With an approaching August 2 deadline, Paul Craig Roberts assessed the state of things accurately like he always does, saying in his new article headlined, “Disastrous Outcomes From An Orchestrated Crisis:”
“Americans need desperately to ask themselves why they put into political office such utterly irresponsible and incompetent people capable of creating such a totally unnecessary crisis loaded with such disastrous potential outcomes.”
Michael Hudson’s new article also covered important ground headlined, “The Debt Ceiling Set For Progressive Repealing,” saying:
Obama’s “blatantly empty threat (claims) there won’t be money to pay Social Security checks next month (if Congress doesn’t) ‘tackle the tough challenges of entitlement and tax reform.’ ”
As always, Obama did what he does best. He lied. His threat “is not remotely true. But it has become the scare theme for over a week,” and will be repeated until political Washington agrees on a deal destroying America’s social contract, claiming it was done to save it.
In the end, of course, the debt ceiling will be raised as done routinely numerous previous times, including 10 times in the past decade and 74 times since 1962. Moreover, raised or not, no default will occur. Threatening otherwise is a lie. Failure to act, however, will lose America’s AAA rating.
But that’s virtually guaranteed anyway, given decades of reckless spending, largely on out-of-control militarism and handouts to Wall Street and other corporate favorites.
In contrast, America’s entitlements are fiscally sound, needing only occasional tweaking to keep them steady-as-you-go for decades, maybe in perpetuity. But you’d never know it from bipartisan lying, regurgitated by managed new media deception.
America’s Looming Debt Disaster
Worry also about financial expert/investor safety advocate Martin Weiss’ assessment. Earlier he downgraded US debt to C-, the equivalent of S&P’s BBB- or one notch above junk, heading for it eventually.
In doing so he said:
Regardless of the debt ceiling/budget debate charade outcome, “few will escape the far-reaching consequences of America’s unfolding debt disaster.”
Even if resolution is reached, “it could be just a dress rehearsal for the true tragedy of a nation unable to end its own financial decline any more effectively than a Greece, Ireland, or Portugal.”
Why? “Among the 49 sovereign nations Weiss Ratings covers, the US has one of the heaviest debt burdens, the weakest international reserves, and the least stable economy.”
More than any other nation, it depends on others for deficit financing, making up shortfalls by out-of-control money creation. The Fed, in fact, accumulated trillions on its balance sheet, making up for what foreign countries won’t buy, plus trillions more in toxic debt, offloaded to them by Wall Street. Moreover, consumers are extremely debt dependent through mortgages, credit cards, and other ways they borrow.
Most dangerous, however, “America’s largest banks have the greatest exposure to high risk derivatives – nearly 40% more today than during the debt crisis of 2008.” They’re a ticking time bomb able to explode anytime when least expected.
Today, in fact, “there are so many canaries in the coal mine, the din is deafening.” Others include the nation’s greatest ever housing depression with no end in sight, rising unemployment (much of it hidden and unreported), “skyrocketing” poverty (two or threefold the official rate), and many other deepening problems that won’t quit. Moreover, the contagion is global.
Trends analyst Gerald Celente monitors it, offering Trend Alerts. On July 13, he headlined, “PIIGS, PRESSTITUTES AND THE GLOBAL MELTDOWN,” saying:
Serious economic trouble keeps getting worse, highlighted by few jobs, and most around are low pay, low or no benefit ones, often temporary that workers can’t count on for steady, reliable income.
As a result, “the more people out of work (or with too little income), the less they consume. And in (America) where consumer spending accounts for (around) 70% of GDP,” less of it assures economic decline. Moreover, Europe is reeling under similar problems, and China faces a “ready-to-pop property bubble.”
“And as goes the US, Europe and China, so goes the rest of the world….(N)o nation will escape the economic fallout and few will escape the political consequences.”
No matter, major media scoundrels regurgitate lies, “cover(ing) for the politicians and financiers, the Presstitutes of the world – with their stable of ‘well-respected’ pundits – are accomplices in promoting” the Big Lie about recovery because they’re well paid and secure to do it.
In fact, they’re mindless of what ordinary people face – the greatest economic disaster in our lifetimes, worse than the Great Depression when a president actually focused on putting Americans back to work and reforming a corrupted system. Not perfectly but he tried.
Today, in contrast, despite a looming economic disaster, the combination of corrupt congressional leaders, a go-along majority in both Houses, and a cowardly, feckless president (the nation’s worst by far) fiddles while Rome burns. Instead of governing responsibly, they’re arranging an end game to rob people of their futures, while further wrecking a troubled economy heading south.
Representing Wall Street, not Main Street, they’re arranging “to bury Social Security, Medicare and Medicaid, not save them,” says Hudson, and he’s right. It was planned long before Obama took office, but he jumped on it after his November 4, 2008 election. In fact, he set in motion what he didn’t reveal, pretending he’d serve everyone equitably as America’s first Black president. He lied, of course, and one led to another until every major pledge was broken.
That most of all highlights his tenure – a leader who promised one thing but did another, serving wealth, power and privilege, not millions counting on him for real “change to believe in.” They’re still waiting as the US ship of state sinks, its aristocracy safely offshore, plotting new ways to steal more.
A previous article explained that economist Arthur Okum began calculating America’s Misery Index by adding the unemployment and inflation rates for a sense of public pain or lack of it in good times.
In May, it hit a record high, exceeding 25, surpassing the earlier June 1980 21.98 top, based on how both measures were calculated then, not today’s methodology, distorted to hide painful truths.
However, it’s currently approaching 30 based on 1980’s formula, according to economist John Williams’ calculations, putting unemployment at 22.7% and inflation at about 7%.
In fact, International Forecaster editor Bob Chapman estimates unemployment at about the same level with inflation at about 10%, heading for 14% by year end and still higher next year, explaining serious economic weakness getting worse.
A Final Comment
In August 1971, America’s financial system unraveled when Nixon closed the gold window, ending the last link between gold, the dollar, and sound money. Thereafter, currencies floated, competing with each other in a casino-like environment, manipulated by Wall Street, powerful insiders, hedge funds, and governments.
Today, a new unraveling threatens because irresponsible politicians seek political advantage over what’s best for the country and most people in it. As a result, the financial storm that struck in fall 2007 may turn out to be prelude to a catastrophic greater one coming.
International Forecaster editor Bob Chapman and others predict it, but it’s anyone’s guess precisely when. It may arrive by surprise when few people expect it. When it hits, however, it’ll be with tsunami force, sweeping away everything in its path, except kleptocrats out of harm’s way.
Stephen Lendman lives in Chicago and can be reached at lendmanstephen@sbcglobal.net.
Also visit his blog site at sjlendman.blogspot.com and listen to cutting-edge discussions with distinguished guests on the Progressive Radio News Hour on the Progressive Radio Network Thursdays at 10AM US Central time and Saturdays and Sundays at noon. All programs are archived for easy listening.
http://www.progressiveradionetwork.com/the-progressive-news-hour/.
