national debt

Selling Out America

kabukitheater.jpb_.jpegAs you know by now, the jobs crisis reality exploded Friday with only 18,000 jobs created for June and an even lower labor participation rate implying more people are falling out of the labor force count entirely.

While economists scream from the rooftops for policy to put America back to work, we have more debt ceiling games and calls for policy that will lose even more jobs.

The latest is Obama, as part of some debt ceiling negotiation offered to raise the age for Medicare. I kid you not.

According to five separate sources with knowledge of negotiations -- including both Republicans and Democrats -- the president offered an increase in the eligibility age for Medicare, from 65 to 67, in exchange for Republican movement on increasing tax revenues.

The Weird Have Turned Pro

"When the going gets weird, the weird turn pro."
- Hunter S. Thompson

When you live in interesting times it is sometimes hard to distinguish the real news from the fake news. For instance, I read this today.

WASHINGTON—A new report has revealed that when it comes to the important matter of owing large sums of money, Americans display a level of expertise and proficiency unrivaled throughout the world.

The same day I also read this.

The Treasury Department said Thursday that it will sell a record total of $115 billion in new notes next week, more than market participants had expected.

They both look like the could be real news, don't they?

The State of the Economy, Independence Day 2009 (I.)

ABC News reported an interview with with Paul Krugman last week his opinions that:

"I would not be surprised if the official end of the U.S. recession ends up being, in retrospect, dated sometime this summer," he said June 8 during a lecture in London.

However, Krugman argues people didn't listen to his entire speech, which included dire predictions about lingering unemployment. "There's a big difference between the end of a recession, which is really only when some things start to turn up, and the return to prosperity," Krugman told ABC News. "I think what people don't get is the difference between the end of a recession in a technical sense and actual recovery, which matters to people."

In my opinion, Krugman is exactly correct. In this four-part "Big Picture" look at the economy as of Independence Day 2009, I will argue that:

How do we prevent another Bust-out?

Herewith from the Encyclopedia of Credit:

The intentional act of driving a company into insolvency in order to extract as much of the assets as possible form the company for the use of the operators.

The End of the American Empire

Most people think that all you need to maintain an empire is guns, bombs, and soldiers. They are wrong.
To maintain an empire what you need above all else is money. Lots and lots of money. A victorious army in the field is useless without the wealth behind it.

A good example of this is the Suez Crisis of 1956, which marked the end to the British Empire.
America is following in Britain's footsteps.

Britain's attempt to strong-arm Egypt had indirectly caused a nationalist backlash and Gamal Abdul Nasser's rise to power. When Nasser nationalized the Suez Canal, Israel, France, and Britain invaded and quickly routed the Egyptian army.
But they had forgotten to do one thing - clear it with America.

America's Addiction

“A moderate addiction to money may not always be hurtful; but when taken in excess it is nearly always bad for the health.”
- Clarence Day

America needs an intervention.
Like any addict, America can't see the dependency problem that is killing it. President Bush tells us that we have an addiction to oil, and he's right. But that isn't the addiction that is killing us.
The monkey that we need to get off our backs is the dependency on other people's money. If we don't kick this habit it will ruin us for sure.

"Money doesn't mind if we say it's evil, it goes from strength to strength. It's a fiction, an addiction, and a tacit conspiracy."
- Martin Amis

Bankruptcy 2015 ? (Part II.)

In Part I of this series, I examined the 1992 best seller entitled "Bankruptcy 1995", which had predicted that the US would become unable to service its national debt as early as 1995 due to soaring budget deficits. So dire and well-documented was the warning that it affected the outcome of the 1992 presidential election, helping to elect Bill Clinton. In light of new looting of the national treasury by George W. Bush and the Republican Congress, I re-read the book to see if any of its predictions were now coming true. I posted those predictions, and the book's thesis that continued budget deficits would drive up interest rates and lead to "Death by Hyperinflation" or "Death by Panic" in Part I.
But "Bankruptcy 1995" obviously didn't happen, in spite of the fact that deficits have continued to be run nearly every year since then. Only part of the reason was the fiscally responsible Clinton tax and budget plan that began in 1993. In this diary I examine how a long-term, continuous decline in interest rates has actually reduced the carrying costs of the National Debt, and why that means the sky Hasn't fallen -- yet.

Bankruptcy 2015 ? (Part I.)

Is the US going bankrupt? With an intractable trade deficit and a national debt in excess of $9 trillion dollars, and an ongoing collapse in both the financial sector and of the national ($$$) currency, it may seem so. With that in mind, it is timely to consider documentary evidence of just what such a national bankruptcy would look like.

(NOTE: This is a republication of a diary originally published about a year ago at the Big Orange Political Blog, with minor updates to incorporate events that have occurred since)