With the world concerned
about US financial credibility and the poor outlook for the US economy, now is
not the time for the Republicans to grandstand on the public debt. The debt
ceiling needed to be quietly raised. Instead, the Republicans started a fire and
then threw gasoline on it, creating an inferno that could burn up the US social
safety net or the US Treasury's credit rating and the US dollar's role as
reserve currency or what remains of the separation of powers.
financial markets, currency markets, commodity markets, central banks, and
mutual fund money market and bond funds are on pins and
This level of
irresponsibility is seldom seen even from American politicians.
Republicans have created a
totally unnecessary crisis and turned it into compelling political theater. Will
the US default? Will entitlements be slashed? Will Obama seize the power of the
purse from Congress in order to save the dollar and the US credit rating? None
of these questions needed to arise.
While the world media
fixates on the orchestrated debt ceiling crisis, the US government continues to
bomb civilians in Afghanistan, Libya, Iraq, Pakistan, Yemen, and Somalia and
continues with preparations to do the same thing to Syria and Iran.
The violations of other
countries' sovereignties, the naked aggressions that constitute war crimes, the
murder of noncombatants, and the horrible moral and economic expense inflicted
by the maximization of the military/security complex's profits are somehow not a
crisis. These are just routine, normal, everyday necessary events. Nothing to
notice or to become upset about.
The off-shoring of US jobs,
GDP, tax base, and consumer demand that has eroded away the US economy and the
government's tax base, thus elevating the deficit, is somehow not a crisis.
These are just the imperatives of globalism and the routine maximization of
shareholders' profits and management's performance bonuses.
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The US has become such a
ridiculous collection of fools that no real crisis can be recognized. Instead,
the country is mesmerized by a fake crisis.
The fake orchestrated
crisis can easily turn into a real one. If income support programs are slashed,
so will be consumer demand, and the US economy will decline further, widening
the budget deficit and national debt.
If the Republicans force
the country into default, the dollar will suffer. At the least, import prices
will rise and the trade deficit with them. At the worse, the dollar will lose
its reserve currency role, and the US will no longer be able to pay its oil bill
in its own currency. With its balance of payments deep in the red, it has no
foreign currency with which to purchase oil.
If Obama has to seize the
power of the purse in order to prevent a new financial crisis from landing on
top of the ongoing financial crisis, democracy will take another big
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. It would appear that the
American population is too insouciant to use the vote with any care.
Little wonder that the
president is becoming a Caesar.
Dr. Roberts was Assistant Secretary of the US Treasury for Economic Policy in the Reagan Administration. He was associate editor and columnist with the Wall Street Journal, columnist for Business Week and the Scripps Howard News Service. He is a contributing editor to Gerald Celente's Trends Journal. He has had numerous university appointments. His books, The Failure of Laissez Faire Capitalism and Economic Dissolution of the West is available (more...)