What a sad state of affairs we’re in, as a criminal gang of looters rules over us in our once "land of the free."
The Father of the American Revolution, Sam Adams, believed that man should live in freedom with every fiber of his being. The tyrants hated Sam Adams because they feared him. Why? He spoke truth to power regardless of consequence, while incessantly agitating for revolution. Our worthy ancestor Sam Adams warned:
The liberties of our country, the freedom of our civil Constitution, are worth defending at all hazards; and it is our duty to defend them against all attacks. We have received them as a fair inheritance from our worthy ancestors: they purchased them for us with toil and danger and expense of treasure and blood, and transmitted them to us with care and diligence. It will bring an everlasting mark of infamy on the present generation, enlightened as it is, if we should ... be cheated out of them by the artifices of false and designing men. -- Sam Adams
Meanwhile, the pillage and plunder continues ...
Practically speaking, a ceiling that is raised automatically is no ceiling at all. Given that, why not dispense with the pretense? The reason is politics. No Congressman wants to be on the record voting for unlimited debt, yet most are willing to rail against fiscal recklessness while raising the ceiling every time it's reached. Any Congressman who gives lip service to a balanced budget Amendment but votes to raise the debt ceiling is a hypocrite. No one needs constitutional help to hold the line on the debt right now!
But epic levels of Federal red ink and the approach of the 2012 elections have raised the stakes. Despite the newfound urgency, nearly all Democrats and a very large chunk of Republicans argue that failure to raise the ceiling will be tantamount to economic suicide. They argue that such a rash move will cause the U.S. to default on outstanding debt obligations ... Higher interest rates they argue would cripple the economy ... As a result, they predict capping debt now will precipitate a far deeper economic contraction than what we have already seen in the last few years.
Few see the inherent absurdity in the notion that taking on more debt improves the economic health and creditworthiness of the United States. I would argue for the much simpler idea that more debt weakens a nation's financial position. More importantly, capping U.S. debt at current levels means bringing a future crisis into the present where it can be dealt with in practical terms. This is something that nobody in Washington actually wants.
A reduction in debt levels is good economics. Remember, taxpayers will have to repay with interest anything the government borrows now. The more the government borrows, the larger it grows, and the larger it grows, the weaker the economy becomes. The less money the government borrows, the more that is available for the private sector to borrow to increase production and create jobs.
Failing to raise the debt ceiling will force Congress and the President to tell the truth to Social Security and Medicare beneficiaries who have been promised more than taxpayers can deliver. They will have to concede that so-called government "trust funds" are mere accounting gimmicks, and that benefits will need to be cut if the programs are to be solvent ... [T]he stark reality will force the government to tell the truth ...
But, on the other hand, if we raise the debt ceiling, we can postpone the crisis into an indefinite future. All of these tough choices could be avoided ... [W]hile the politicians celebrate another dodged bullet, the U.S. economy will continue to be shot full of holes.
Our government is nothing short of a criminal enterprise. The sooner "We the People" wake-up to this fact, the better our chances for recovery. If we keep having faith in the 2-party charade, it will all end in tears.
What do you think U.S. officials did the last time the debt ceiling was raised, to $14.3 trillion? Do you think that they said, “Whew! We’ve bought a little time but now we have to really slash federal spending because we’ve got a ceiling of $14.3 trillion staring us in the face”?
Not on your life. They didn’t do anything to rein in federal spending and borrowing. Instead, they continued on their merry little spending and borrowing spree as if there were no tomorrow.
And why did they continue spending and borrowing? Because they didn’t worry one bit about the new debt-ceiling reset. They knew that when the $14.3 trillion maximum was reached, all they would have to do is raise the ceiling again. They knew that they could continue playing this game indefinitely into the future.
Oh, that’s not to say that there isn’t going to be a bunch of political posturing and maneuvering with the aim of getting maximum political benefit out of the so-called debt-ceiling crisis. Of course, there will be. But as I have stated for a long time, everyone, including the Republicans, is going to cave when push comes to shove.
Sure, there might be some spending cuts and tax increases to make the deal look good. But at the end of the process, the national debt will be permitted to increase higher than $14.3 trillion, and a new debt ceiling will be set. And the same thing will happen when that new maximum is reached sometime down the road.
It’s all one great big political fraud, one that is designed to show federal officials wringing their hands over the out-of-control federal spending and debt, while, at the same time, permitting them to continue their ever-growing spending and borrowing spree.
For those of you who are like, way too smart, savvy, and pragmatic and stuff, to adopt Sam Adams' radical spirit, you better at least prepare yourself for the coming economic storm. Oh, yeah. It's coming.
We take precautions, but we cannot know how events will sort out winners from losers, survivors from the dead. The best we can do is to recognize that disasters can hit, and that precautions taken in advance are wise. Precautions can reduce the impact of disasters, but they cannot prevent them.
When we see a crisis coming, we spend extra money to make preparations. We reallocate our budgets. The more likely the crisis and the more devastating its results, the more we should allocate.
Our problem today is that the most obvious source of a major crisis today is the debt structure of Western governments, central banks, and commercial banks. Because governments are the problem, there will not be a solution provided by politicians. The same is true of central banks.
There comes a time to start looking for a storm shelter.
The worst crisis from the government's point of view is the national debt crisis. It leads to calls for reduced government spending. For this crisis, the government has this well-orchestrated response:
- An admission that it is real, but not imminent
- A promise to deal with it later
- A call to spend more now to spend less later
- Kabuki theater
In his interview in front of an audience, President Obama warned about the consequences of a default by the U.S. government. It could unravel the worldwide economic recovery. You can see the video here.He is correct. If the Federal government ever stops paying interest on its debt, the repercussions in the financial markets would be severe. It would be worse than the crisis in the fall of 2008.
The problem we face is this: with every increase in the Federal debt ceiling, the likelihood of default increases. The politicians' solution to the threat of default is to delay the default.
The government is trapped. It really does face the prospects of default if the debt ceiling is not raised. The alternative is to cut spending drastically before August. But that would be a form of default. Certain groups that have been promised largesse from the Federal government would find that the promises were not binding.
The problem is now selective default. The Congress and the White House always agree to defer any form of default. This is why we can be sure that selective default is inevitable. The deficit numbers do not allow the government to escape the increase in the debt ceiling.
We know from decades of experience that selective defaults are not politically acceptable. So, the deficit keeps growing. The debt ceiling keeps getting raised. This is done in the name of default-avoidance.
The battle over the debt ceiling is a sham.
OUR FAMILY'S STORM SHELTER
A tornado is like specific budget cuts. No one knows in advance whose house will be blown away.
Some families buy houses with storm shelters. But hardly anyone ever builds a home.
Most families are barely getting buy. They spend as much as they bring in after taxes and mortgage. They do not make specific cuts in spending deep enough to build up a reserve.
So, they do not prepare storm shelters. They kick the can. They imitate Congress.
Do you need gold coins? Yes. Do you need a back-up plan if you lose your job? Yes. Do you need a network of people who might be able to find you a job? Yes. Do you need a side business? Probably. Do you need skills that can be transferred to a new line of work? Yes. Do you need a plan to make sure you stay on the short list of "must not fire"? Yes.
Are you actively building your financial storm shelter?
Congressmen talk about the need to reduce the deficit. Talk is cheap.
Voters talk about the need to clean house in Congress. But it never happens.
When the tornado of selective default comes, you need to be in your storm shelter. Maybe your house will be blown away. Maybe not. But don't be inside it when you find out.
Indeed. "Voters talk about the need to clean house in Congress. But it never happens."
President George Washington warned in his Farewell Address, "the habits of thinking in a free Country should inspire caution in those entrusted with its administration, to confine themselves within their respective Constitutional spheres; avoiding in the exercise of the Powers ... [because] of that love of power, and proneness to abuse it."
Boy, how times have changed. We cheerlead today, both left and right, most advances in Executive power and blatantly unconstitutional acts passed by the Congress. When anyone dares question the motives of our rulers, they're quickly labeled unpatriotic and/or unAmerican by the masses.
Washington and Adams would be dubbed "freaks on the fringe" today, isolated and ignored. We have earned the problems we face. We have won our own enslavement.
It is incredible how as soon as a people become subject, it promptly falls into such complete forgetfulness of its freedom that it can hardly be roused to the point of regaining it, obeying so easily and willingly that one is led to say that this people has not so much lost its liberty as won its enslavement. -- Estienne de la Boétie