The Debt Ceiling’s Eleventh Hour Salvation

By: Karla Fetrow

President Obama is damned if he does and damned if he doesn’t.  This has been his legacy since he first came into office.  His first act as President set the precedent.  The bottom had fallen out of the housing market, plunging the world into economic turmoil.  Following the example set by a previous president, Herbert Hoover, in a similar time of economic collapse, he attempted to bolster the faltering stock market by bailing out the banks, hoping for a trickle down effect into the economy.  We all know how that story ended.  The banks took the money and ran, kissing global economics goodby and rearing their heads only long enough to file suit against defaulting countries.  Essentially, the bailout, which was squarely placed on the backs of tax payers, simply gave the banks added muscle to continue foreclosing on staggering businesses, raking in profits while stocks continued to tumble.  The Great Depression of the twenty-first century began taking the shape of the global economic collapse of nearly one hundred years ago.  What failed to stabilize the world market a century passed has failed today.

The euphoria over Obama’s election quickly evaporated.  His health care reform package was rejected.  His promise to close the Guantanamo Bay detention camp was stalemated by a Congress that refused to appropriate funds for shutting it down.  His clean air campaign was jeopardized by an open support for the leading oil companies and nuclear power plants.  He pulled American troops out of Iraq, but increased the war in Afghanistan.  His policies have made him look like a fence straddler and has made nobody happy on either side of the fence.

As times grew worse and America was called in to pay its share of debt; with China its major credit holder, the option of defaulting loomed like Eve’s tempting apple.  The only other option was a decrease in federal spending.  America held its breath.  If spending was decreased, who would get the ax?  Homeland Security?  Obviously not.  We needed their secure measures to build a wall on the Mexican border.  The DEA?  Their largely unsuccessful drug war was raking in way too much money for the proponents to dismantle their program.  What about Social Security payments?  It seemed vulnerable enough, a left over scrap of a socialized program to bring us out of the first depression.  The problem was, there were too many people approaching retirement age who had absolutely no interest in losing the fund they had invested into all their lives.  A cut in Social Security would mean the rising up of America’s largest generation; a generation that historically had never been very quiet.

Like all good story lines, the stand off between the House and Congress came to an end in the eleventh hour, with a compromise that sort of pleased everyone, but that was more like discovering the flood waters had reached your porch, and though they hadn’t subsided, they haven’t destroyed your house yet either.  It’s a sigh of relief, but not one of euphoria.

China is clearly not impressed.  Despite the debt ceiling placed on what America is going to borrow, and a more frugal spending budget, it has reduced America’s credit rating.  “Big fluctuations and uncertainty in the US treasury market will influence the stability of international monetary and financial systems, thus hurting the global economic recovery,” writes Zhou Xiaochuan, governor of the People’s Bank of China. As a precaution, the Chinese will “closely observe” the implementation of this week’s debt deal.

In a statement posted on the People’s Bank of China website, Xiaochuan writes, “We hope that the US government and the Congress will take concrete and responsible policy measures … to properly deal with its debt issues, so as to ensure smooth operation of the Treasury market and investor safety.”

Which leads to the investors into the stock market, who weren’t clearly impressed, either.  In an article written by “The Washington Post”, they state, While passage of the debt deal was intended to spare the American economy from the effects of a credit default, stock markets did not rally on news of the deal, but instead fell. As Ariana Eunjung Cha and Cezary Podkul explained:

U.S. stocks plunged early Wednesday, a day after suffering their worst daily decline in nearly a year, as investors grappled with signs that the economic situation in the United States and Europe might be deteriorating.

In volatile morning trading, losses to the Dow Jones industrial average, S&P 500 and the Nasdaq indexes fluctuated between between negative 0.5 percent and negative 1.5 percent. The last time the Dow — which has lost nearly 8 percent in the past nine sessions — had such a sustained losing streak was in February 1978. Energy, materials and consumer companies were among those leading the sell-off.”

The Huffington Post is optimistic.  Joel Rubin enthusiastically points out that major cuts to defense spending have not only been approved in a bipartisan manner by Congress, but that even more are on the way. He declares that this means that the days of unlimited defense spending increases, where all systems can be purchased, are over.  He declares, “now is the time for tough choices to be made between defense programs that serve our “warriors” ( very strange word choice, since our military are paid employees of the government, making them soldiers, not warriors) and those that we have maintained for too long due to bureaucratic, parochial or ideological reasons. It’s time to stop spending dollars that we don’t have on programs that we don’t need and that don’t make us more secure.”

The Tea Party feels like they’re winning.  Although the tea party set the parameters for the deal, they didn’t get as many spending cuts as they wanted, so they are the ones grumbling the most.  Not to be deterred, they plan to take their strategy to the streets, encouraging in baby steps, a plan that would cut into Medicare and Social Security funds.

Among the political pundits, speakers and legislators, who is winning seems to be the main object of interest.  There is very little discussion about who is losing.  For starters, we could look at the Federal Aviation Administration.  Reports Jennifer Bendery of Huffpost Politics, “a day after lawmakers hightailed it out of Washington for a month long recess, Transportation Secretary Ray LaHood on Wednesday called on Congress to come back immediately and take care of its unfinished business: reauthorizing funding for the Federal Aviation Administration.”

The FAA has been partially shut down for 12 days now as lawmakers struggle to overcome a political dispute over unions. The shutdown doesn’t impact safety issues, LaHood emphasized, but it continues to leave 4,000 FAA workers furloughed without pay and another 70,000 construction workers without work.

In addition, the debacle is costing the government about $30 million in lost tax revenue each day since the shutdown makes it technically illegal for the FAA to collect federal taxes on airline tickets. The government has lost about $360 million so far and, in a sad commentary on the state of the ordeal, some airlines are actually raising ticket prices to benefit from the government’s loss.

While the government freely allows tax revenue to drift away over a union busting campaign, other questions concerning the government’s willingness to cut costs remain unanswered.  Where are the cuts in their own departments?

 

The salary of the President of the US is currently $400, 000 a year, double what it was in the year 2000.  The Vice President earns $230,700, up from $181,400 in the year 2000.  Rank and file Senators and Representatives, US Court judges, federal district judges, the Speaker of the House, all make in excess of $170,000 a year.  They voted in their pay increases, nearly double the amount of the more comfortable and affluent years of the 1990’s, in 2001.   Add to this, the per diem, transportation costs, lodging and food for a special session.  A special, largely unresolved three day session costs the state’s tax payers over a million dollars for accomplishing very little.  While the representatives flock together with no compromise, scrutinizing programs for ways to tighten the budget, they never once turn inward and reflect that possibly they could vote for a cut in their own salaries.

Filibusters and special sessions simply fleece more of the tax payer’s dollars for decision making that never decides much of anything beyond an escalated opinion of their own value.  Eleventh hour salvation is nothing more than a ruse to keep media attention spotlighted on political aspirants as they polish up their images for the upcoming elections.  The debt ceiling is nothing more than a stalemate for the inevitable crisis that is looming over us; the devaluation of the American dollar.  History repeats itself, and so it has done since the real estate market collapsed and the banks received their bail-out.  We stagger under the burden of the unfair distribution of the wealth.  We work twice as hard to make the same amount of money that goes half as far due to the rising costs of living.  Unemployment closes in around us.  We are told we must sacrifice more, live leaner, choose our entertainment more modestly.  We are chastised for hoarding gold or silver while metal prices soar.

History repeats itself.  During the dark days of the Great Depression, we had prohibition, union busting, gang warfare, homelessness, while government officials and a corporate elite lived in luxury.  The Great Depression also featured a man made disaster; mass erosion from large scale farming resulting in lifeless soil.  The Dust Bowl swept through the plains states, driving home a few ecological lessons concerning crop rotation, proper irrigation and furrowing your fields to comply with the landscape.  Over the years, the lesson has been forgotten as hills are flattened to make way for development.  Agri-business stretches out for miles in  mono-production industry, stripping the indigenous plants and the soil of life.  Oil spills into our waters and radiation burps into the air.  We are asked to sacrifice; our health, our education, our freedom to travel, our care for the elderly, so the government can continue to be a bloated bureaucracy pampering the wealthy.  They are the ones who should sacrifice.

http://rt.com/usa/news/china-america-debt-credit/

http://www.washingtonpost.com/politics/obama-signs-debt-ceiling-deal-to-avert-default-eyes-now-turn-to-supercommittee/2011/08/02/gIQAfwYesI_story.html

http://www.huffingtonpost.com/joel-rubin/how-the-debt-deal-creates_b_917124.html

http://www.huffingtonpost.com/2011/08/03/tea-party-medicare-paul-ryan_n_917347.html

http://www.usatoday.com/news/washington/2011-08-03-poll-debt-agreement_n.htm

http://www.huffingtonpost.com/2011/08/03/ray-lahood-faa-furlough_n_917326.html

http://usgovinfo.about.com/od/thepresidentandcabinet/a/presidentialpay.htm

About karlsie

Some great perversity of nature decided to give me a tune completely out of keeping with the general symphony; possibly from the moment of conception. I learned to read and speak almost simultaneously. The blurred and muffled world I heard through my first five years of random nerve loss deafness suddenly came alive with the clarity of how those words sounded on paper. I had been liberated for communications. I decided there was nothing more wonderful than writing. It was easier to write than carefully modulate my speech for correct pronunciation, and it was easier to read than patiently follow the movements of people’s lips to learn what they were saying. It was during that dawning time period, while I slowly made the connection that there weren’t that many other people who heard the way I did, halfway between sound and music, half in deafness, that I began to understand that the tune I was following wasn’t quite the same as that of my classmates. I was just a little different. General education taught me not only was I just a little isolated from my classmates, my home was just a little isolated from the outside world. I was born in Alaska, making me part of one of the smallest, quietest minorities on earth. I decided I could live with this. What I couldn’t live with was discovering a few years later, in the opening up of the pipeline, which coincided with my first year of junior college, that there were entire communities of people; more than I could possibly imagine; living impossibly one on top of another in vast cities. It wasn’t even the magnitude of this vision that inspired me so much as the visitors who came from these populous regions and seemed to possess a knowledge so great and secretive I could never learn it in any book. I became at once, very conscious of how rural I was and how little I knew beyond the scope of my environment. I decided it was time to travel. The rest is history; or at least, the content of my stories. I traveled... often to college campuses, dropping in and out of school until one fine day by chance I’d fashioned a bachelor of arts degree in psychology. I’ve worked a couple of newspapers, had a few poems and stories tossed around in various small presses, never receiving a great deal of money, which I’m assured is the norm for a writer. I spent ten years in Mexico, watching the peso crash. There is some obscure reason why I did this, tightening up my belt and facing hunger, but I believe at the time I said it was for love. Here I am, back home, in my beloved Alaska. I’ve learned somewhat of a worldly viewpoint; at least I like to flatter myself that way. I’ve also learned my rural roots aren’t so bad after all. I work in a small, country store. Every day I greet the same group of local customers, but make no mistake. My store isn’t a scene out of Andy Griffith. The people who enter the establishment, which also includes showers, laundry and movie rentals, are miners, oil workers, truck drivers, construction engineers, dog sled racers and carpenters. Sometimes, on the liquor side, the conversations became adult only in vocabulary. It’s a good thing, on the opposite side of the store is a candy aisle filled with the most astonishing collection, it will keep a kid occupied with just wishing for hours. If you tell your kids they can have just one, you have an instant baby sitter; better than television; as they agonize over their choice while you catch up on the gossip with your neighbor. We also receive a lot of tourists, a lot of foreign visitors. They are usually amazed at this first sign of Alaskan rural life style beyond the insulating hub of the Anchorage bowl. Many of them like to hang around and chat. They gawk at our thieves wanted posters. They laugh at our jokes and camaraderie with our customers. I’ve learned another lesson while working there. You don’t have to go out and find the world. If you wait long enough, it comes to you.

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6 Comments on “The Debt Ceiling’s Eleventh Hour Salvation”

  1. The land of the “what” and the home of the “what” …. America call home .. we need to take the “life long career” out of politics .. it should be a “service” to the country .. I’d like think that most people elected to office are well meaning ..”would like to think” .. but maybe if they know that 2 terms were all they would get, they would work harder for the voters and the country and not their own long term interests … good article, thanks !!!

  2. “President Obama is damned if he does and damned if he doesn’t. “

    Karla, he did a lot of the ‘damning’ himself.

    But hey – the man was nominated for a Nobel Peace-Prize, essentially for his first sixty days in office (the cutoff date for the nominations) – the only thing he’d accomplished by that time was a Super Bowl party – but, as the Nobel committee said, they wanted to encourage him (rather like telling the new kid on the team that he was the ‘last winner’ that day).

    On Day One, he could have sent a clear message to Congress, the military, and anyone else who needed the lesson; instead, he ‘settled in’.

    “The euphoria over Obama’s election quickly evaporated. His health care reform package was rejected. His promise to close the Guantanamo Bay detention camp was stalemated by a Congress that refused to appropriate funds….”

    Stalemated? Hardly.

    There’s no need to appropriate funds to ‘close’ anything. You pick up, and go.

    In southern Oregon/northern California, deep in the middle of high-desert country on Federal land, there’s a surreal camp with long barracks-buildings, rusting barbed-wire fences and guard towers – it looks for all the world like a concentration camp-meets-ghost town. Both are correct; it’s the Tule Lake ConcentrationSegregation Center and Internment Camp; one of several where we shipped Japanese-Americans to sit out the war in squalid conditions. In 1946, when they closed the place, there were no ‘funds appropriated’ for the process – the military just shipped everyone to the nearest cities (Portland and San Francisco), and closed the friggin’ doors.

    Again – Obama could have closed the Guantanamo Bay ConcentrationDetention Center the day he took office – by something called an ‘Executive Order’ (readers might remmeber that G.W. Bush made serious use of this process when he was in office, trampling on civil liberties and opening up a wholesale assault on that Goddamned piece of paperthe Constitution in the process.

    “The Tea Party feels like they’re winning. “

    And why shouldn’t they? They did. Grover Norquist has made it clear that he wants to reduce government to the size where it “can be drowned in a bathtub.” Michele Bachmann made it clear three times in a CNN interview that she would “not vote to increase the debt ceiling, no matter what.”

    Obama gave in to the Republicans at every turn during this process – to the extent that now, one of the big three credit agencies has downgraded our credit – not because they don’t believe we’ll pay our bills, but because “…the political brinksmanship of recent months highlights what we see as America’s governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed.”

    In short, one of the nation’s premier credit agencies views Congress – and by extension, America – as being too polarized to govern itself.

    The Tea Party made it clear last November that, if a Tea Party Congress were elected, their first act would be to shut down the Government.

    Karla, we live in a country where a sizable number of elected officials and the electorate at large not only mistrust the nation’s government, but are actively working to destroy it.

    And why not? As you pointed out, the senior members of America’s governing bodies are overpaid, corrupted by PAC money, and serving their own interests. We’re now in the position where the most effective changes (publicly-funded elections; salary reductions; abolition of lobbyists, PAC’s, and anonymous donations) are now impossible, as they would have to be enacted by the very people who benefit.

    Obama pandered his way into an office which has proved to be far over his head – it’s beyond his skill-sets and his abilities both as a leader and legislator; his only concern now is to double-down and keep pandering to a group of people who never wanted him there in the first place.

    “Never bring a knife to a gunfight.” That’s a saying which keeps entering my mind as I watch Obama’s last pathetic year play out in a spasmodic orgy of sellouts and further pandering. He’s become an embarrassment to himself – and certainly to those of us for whom ‘hope’ and ‘change’ were something other than poster-words by which to create soundbites.

    I mourn the leader who could have been.

    The rest of us?

    I remember seeing something above the help-desk at a company for which I used to work. “Today Isn’t Your Day,” read the first line. “Tomorrow Doesn’t Look Good, Either.”

    -W

  3. So, the inevitable ruin of “democracy” (LOL!) has been temporarily postponed – whoopdee-fucking-doo.

    Take note – as the national debt continues to climb and the value of the old greenback loses ground against the yuan the dollar *will* experience hyperinflation. It would not surprise me in the least if within the next decade one would have to pay hundreds of thousands of dollars for something as simple as a loaf of bread: by this time it will be far too late to do anything but live hand-to-mouth if you made no preparations.

    A couple months ago I submitted a basic survival guide for times of social turmoil and unrest (and there’s no charge for it – it’s published right here on the Subversify webpage: I will not make a dime of profit from it…) – to those of you who have made little or no preparations and have no idea where to start, I strongly suggest that you read it and use it as a guide for your own survival strategy: it’s not the most in-depth guide, but it certainly will get you started on the right track.

  4. @W.D.- “But hey – the man was nominated for a Nobel Peace-Prize, essentially for his first sixty days in office (the cutoff date for the nominations) – the only thing he’d accomplished by that time was a Super Bowl party – but, as the Nobel committee said, they wanted to encourage him (rather like telling the new kid on the team that he was the ‘last winner’ that day).”

    Or, rather more like the carny who lets the shill win for the big set-up.

    @Azazel- I agree everyone should read the guide and go out to their local libraries and read more about living in their areas. Nobody is going to help us but ourselves and we will be able to help nobody else as much as we would like to if we don’t know how. (See article here: http://subversify.com/2011/05/27/surviving-the-chaos-a-guide-to-preparation-for-national-turmoil/ )

  5. Will, I was trying to pull myself as much into a neutral viewpoint as possible; which admittedly, isn’t at all easy. It must be difficult not listen to the devil, once he takes you to the top of the mountain and promises you the world. With his first act, that could have been predictable if he had studied history and human behavior along with his voluminous legal text, he began a domino effect that simply couldn’t be stopped. When he rolled up his shirt sleeves, it became clear that he worked for the corporates and not for the people. He betrayed a trust that wasn’t easily won to begin with, and for this reason alone, he’s damned.

    I agree, Azazel, it’s only a temporary postponement. The politicians are preening themselves for the next election, believing media publicity will enhance their chances, believing the American people will accept their “polls” as genuine, but nobody’s fooled. The noises they make are stage props, the frenzy and froth at the mouth is artificial. They do this to cover the sound in the background, muffled but growing louder. It’s the sound of civil unrest. There is no taking the country back. The country is torn to shreds. There is only taking back our rights to be human beings.

  6. Great job as always K. The London riots should hopefully serve as a warning to the U.S. government that even self-indulgent Americans are capable of violence. As soon as people start to suffer they will make their government suffer. Illegal downloading, something that’s destroying the movie and music industry, and WikiLeaks type sites are just the starting move from an nation full of anxious people.

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