Disastrous Outcomes From An Orchestrated Crisis

[Lumi]

Disastrous Outcomes From An Orchestrated Crisis

By Paul Craig Roberts



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.



Consequently, world financial markets, currency markets, commodity markets, central banks, and mutual fund money market and bond funds are on pins and needles.


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 offshoring 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.


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 hit.


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.

 

[Duff Miver]

Why is no one concerned about the trade deficit?

Why is no one concerned about the trade deficit?

It's on track to hit $600 billion this year. That's $2000 for every man, woman and child, right out of their pockets and sent elsewhere.

Half of it goes to China. Half of it goes to oil exporters, especially Canada, Mexico, and Saudi Arabia.

Eliminate those two things, keep the $600 billion in this country....at $60K per year, that's 10 million jobs.

 

[Duff Miver]

Whoops! Sorry, that should have been a new thread.


Back to your thread


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.

I agree completely, except that I wold use the word "stupid".

However, it's an easy problem to solve.

All voters should be required to pass the same test as applicants for citizenship are.

That would winnow out the chaff.

 

[Lumi]

Is America Caught In The Closed-Mind Trap?

Is America Caught In The Closed-Mind Trap?

Is America Caught In The Closed-Mind Trap?

By Paul Craig Roberts



A reader responded to my recent column about how the US president was becoming a Caesar with a question: "Wouldn't a Caesar be preferable to a democracy in which the people are too ignorant, disinterested, and stupid to engage in self-government?"


Before I became a widely read columnist with many reader responses, I would have disagreed with the reader's characterization of the American people. Today, I cannot answer the reader's question with a "no" as confidently as I would like.


I receive appreciative words from many readers who are well aware of what is going on. I also hear from many who are so partisan and have such strong emotional responses that they are unable to follow an argument. I don't know what percentage these groups comprise in the population, but there seem to be a number of Americans, both on the left and the right, who are prepared to censor, and even to kill, in order to defend their illusions and delusions.


I remain a suspect boogeyman for some on the left, because of my association with the Kemp-Roth bill and Reaganomics. As I, and others, have explained so many times, Supply-Side economics reversed the monetary/fiscal policy mix in order to cure stagflation. But some leftists persist in their insistence that it was all a trick to cut taxes for the rich?the rich being those with more money than they. A stressed-out $100,000 a year guy with a family in a high-cost city is thrown into the rich class with the hedge fund manager who paid himself one billion dollars.


To give the leftists their due, at least they know that I was a member of the Reagan administration. However, the right-wing zealots think that I am a commie-pinko-liberal.


Recently I wrote an article pointing out that the Republicans had picked a bad time, when the world was already concerned about US financial credibility, to make an issue over the routine increase of the debt ceiling, thus creating an impasse that threatens default. The Republicans see in the debt ceiling issue an opportunity to cut social spending as the price of allowing an increase in the national debt.



One can't blame the Republicans for trying to do something about the growth of the public debt. However, there is a risk in the Republican's intransigency, and that risk is that, thanks to presidential directives put on the books by President Bush, President Obama has the authority to declare the prospect of default a national emergency. Obama can simply set aside the debt ceiling limit and seize the power of the purse from Congress. The transformation of the president into Caesar would take another large step forward.


I wrote that I regarded this risk to be greater than the risk of additional public debt.


Several Republicans never reached the point of the article. I had taken for granted that everyone knew, especially Republicans, of the Republicans' concern with entitlements and unfunded liabilities. I assumed that Republicans were aware of their party's long history of reacting against the debts that are being piled upon our grandchildren, that they knew of the Grace Commission during the Reagan years, that they knew of Republican Pete Peterson's many dramatic warnings and proposals, that they knew of David Walker's accounting of the unfunded liabilities and the Republican Party's determination to do something about the heavily-hyped cost of Social Security and Medicare.


I assumed that Republicans knew that during the Reagan years David Stockman and Alan Greenspan had accelerated the payroll tax increases that President Carter had put in place to ensure the long-term viability of Social Security and had spent the money for current operating expenses, leaving unfunded IOUs in the Social Security "trust fund." I assumed that Republicans knew that Republican Chairman of the Council of Economic Advisors, Michael Boskin, and his Boskin Commission had reconfigured the Consumer Price Index in order to understate inflation and, thereby, reduce the cost-of-living-adjustments in Social Security checks.


I assumed that Republicans somewhere along the way had read at least one paper by a Republican policy analyst or think-tank member about the Social Security "Ponzi scheme" and the unaffordability of Medicare.


But, no, the Republican partisans who denounced me as an anti-Republican liberal propagandist for saying what is widely reported in the media?that the Republicans want large cuts in Social Security, Medicare, and Medicaid as the price of their agreement to an increase in the debt limit?know nothing whatsoever of their party's position on social spending. Apparently, they don't even watch Fox News.


These same partisans apparently have not noticed that the $1.2 trillion military/security expenditures are "off the table" when it comes to controlling spending. The Republicans and also the Democrats regard war as more important than old age pensions and medical care for the poor and the elderly. My Republican critics have also failed to notice that House Republican Majority Leader Eric Cantor has made certain that tax increases on mega-high incomes are also "off the table." According to mega-billionaire Warren Buffett, in America today we have the situation in which Buffet's secretary pays a larger share of her income in taxes than does Buffet.


When I wrote that the Republicans' fixation with slashing the social safety net?a throw-away line that is in every news report on the debt ceiling imbroglio?could turn out to be a threat to the separation of powers, several Republican partisans took extraordinary offense.



Only a no-good liberal propagandist would claim that Republicans wanted to slash the safety net. My statement of an obvious fact reflected in the Republicans' own proposals was all that it took for my critics to conclude that a notorious Reaganite was a Republican-hating liberal.


It is annoying that people who have no idea what they are talking about are so ready to pop off. But it is discouraging to a writer that people are so emotional that they cannot follow an argument. Discouraged, in part by block-headed readers and from censorship of my writings by various Internet sites, I quit my column a while back and signed off.


I was beset by thousands of emails pleading and demanding that I continue to write. I relented, and the emails from thoughtful readers keep me going.



It is rewarding to hear from intelligent and open-minded people. But as the weeks and months go by, I find it ever more tiresome to tolerate closed minds spewing hate and ignorance. I have become convinced that there are enough frustrated and ignorant people out there to constitute a movement for a Fuhrer.



Washington, which has produced a long list of disastrous policy decisions since the collapse of the Soviet Empire two decades ago, will no doubt continue making incredible mistakes about everything, and we will end up with a Caesar or a Fuhrer.