Lost in this silly squabble is the following: “the second coming of the Republican revolution,” as Politico.com dubbed the tea party contingent on Capitol Hill, failed to defuse the threat of the debt. Only 28 tea-party freshmen voted against the ballyhooed “Budget Control Act Amendment.”
Listen to the words of one wily politician whose country’s central bank holds almost 40 percent of dollars as reserve currency. Vladimir Putin’s response to the debt compromise was pitch-perfect, given the stakes stateside and beyond. This via RT and Press TV, respectively:
“The current deal struck by US lawmakers will not solve the underlying issues. This colossal debt, $14 trillion or more, means that the country has been living on credit, which is really bad for one of the world’s leading economies. They live beyond their means, and put a part of their burden on the entire world’s economy. … The country is … shifting the weight of responsibility on other countries and in a way acting as a parasite.”
Having impressed themselves no end, the lawmakers who came up with the “Budget Control Act Amendment” don’t impress Putin much. So what was the deceptive deal that was endorsed by 59 of the already stale tea-party freshmen, and got enthusiastic whoops from many among mainstream media’s menagerie of morons?
The budgetary ruse will be executed in two stages. Right away, in 2011, the limit on the country’s statutory authority to borrow will be raised by $900 billion. The budget will be cut by the same magical number—over the course of 10 years. As lamented on CNN: Fifty percent of the first round of staggered cuts will come, by this network’s accounting, from the state’s security spending. These cuts will include the military, intelligence, the department of home-grown terrorism (DHS), and the likes. Non-security spending may entail fewer workplace inspections, a little less Environmental Protection Agency enforcement, and some nips and tucks to the obese Health and Human Services. (Covert expressions of grief as on CNN were not for Lawrence O’Donnell and Chris Matthews, in whom the debt deal elicited grand mal seizures on MSNBC.)
The second stage of the deal duplicates the first. The game of smoke-and-mirrors continues through January of 2012 until January 2013, during which time the debt ceiling will be raised by between 1.2 to 1.5 trillion dollars. Totaling the same amount, cuts will be effected, again, only over the course of a decade. As our financial custodians raise the country’s credit card limit, they then reduce expenditure incrementally by the same amount.
In the best case scenario, you could call this deal a wash, these respective amounts having cancelled each other out. This, however, would be Pollyannaish. All that the colluding quislings in both chambers have undertaken is a “decrease in the rate of increase in government spending to just equal the increase in the government’s debt …”
So writes Prof. Richard M. Ebeling, at Northwood University’s blog, “In Defense of Capitalism & Human Progress.” Ebeling has assessed the 2012 leg of the deal to dupe America:
“[A]ssuming what has been agreed to by the Congress and the president is actually adhered to … The U.S. Treasury is being given the authority to borrow and spend an additional $2.4 trillion dollars over the next 18 months. But the $2.4 trillion spending reduction over ten years represents, on average, a ‘savings’ of $240 billion a year. Another way of thinking about this is that the government now has the authority to spend, on average, an additional $133 billion per month of borrowed money over the next year and a half. ‘Matching’ this, the government is supposed to spend $20 billion less every month over the next ten years.”
You’ve been had. What’s new?
Last month, Putin raged over the second plague of quantitative easing, QE2, unleashed by the Federal Reserve Bank, lambasting the Unites States for acting “as if they were ‘hooligans’ because they ‘flood’ the entire world with dollars … They start the money printing presses and throw dollars throughout the world in order to solve their immediate responsibilities. They say monopolies are bad but only if they are foreign – their monopolies are perfect. So they use their monopoly to print money until the whole world is flooded.”
This once-avowed communist congratulated his fellow Russians for not being like the Americans: “Good for us that we do not print reserve money.”
Putin is right. And, you’re likelier to get the goods on your government from the Russian Prime Minister than from the bobbleheads who help inflate the Beltway bubble. The cable commentariat is a cog in the sprawling American comitatus. They all feed off Rome.
As inevitably as water whirls down a plughole, the US economy will worsen. Be worried: The proof is in the Putin.
©2011 By ILANA MERCER
CATEGORIES: Economy, Federal Reserve Bank, Foreign Policy, Government, Inflation, Political Economy, Propaganda, Russia