Tag Archives: Debt

London Is Burning

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This just in from a blog in London:

Tonight, in one of the greatest cities in the world, society is ripping itself apart.

If you want to know the latest in the American-European Political-Debt Crisis of 2011, I recommend you read blogs like Penny Red.

If you want a preview of what’s coming to an American city near you, California is no longer the barometer. Look at what’s going on in London, or Dublin, or Greece, Italy, Portugal, and the entire European Union. Europe is now in worse shape than America, but maybe not for long.

Here’s an excerpt from today’s report in Penny Red:

Tonight in London, social order and the rule of law have broken down entirely. The city has been brought to a standstill; it is not safe to go out onto the streets, and where I am in Holloway, the violence is coming closer. As I write, the looting and arson attacks have spread to at least fifty different areas across the UK, including dozens in London, and communities are now turning on each other, with the Guardian reporting on rival gangs forming battle lines. It has become clear to the disenfranchised young people of Britain, who feel that they have no stake in society and nothing to lose, that they can do what they like tonight, and the police are utterly unable to stop them. That is what riots are all about.

And more from Penny Red:

 This morning, as the smoke begins to clear, those of us who can sleep will wake up to a country in chaos. We will wake up to fear, and to racism, and to condemnation on left and right, none of which will stop this happening again, as the prospect of a second stock market clash teeters terrifyingly at the bottom of the news reports. Now is the time when we make our choices. Now is the time when we decide whether to descend into hate, or to put prejudice aside and work together. Now is the time when we decide what sort of country it is that we want to live in. Follow the #riotcleanup hashtag on Twitter. And take care of one another.

I also recommend Baroque in Hackney, who can provide other pertinent links in Britain.

And today, in Wisconsin, the people are voting. I wonder if what they decide, one way or another, will be able to slow down, one iota, the spread of the chaos in the Western World.

I have to go to work now.

— John Hayden

American Debt Crisis: Many Questions About the Future of American Democracy

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The first battle of the American Debt Crisis is over. Perhaps the deciding battle will be fought in the 2012 elections.Everyone’s focused on the outcome of the presidential contest, but control of the House and Senate is at least as important.

IN 2011, NEARING THE END OF THE FIRST TERM OF PRESIDENT OBAMA, CONGRESS IS SPLIT. REPUBLICANS HOLD A MAJORITY IN THE HOUSE OF REPRESENTATIVES, AND DEMOCRATS HOLD A MAJORITY IN THE SENATE. Graph by Mattbot69 via Wikimedia Commons

Questions:

  • Is America now a three-party nation? Tea Party, Democratic Party, Republican Party? Which party, if any, will dominate the 2012 Congressional elections?
  • Will another party emerge? I’m thinking it might be called the Christian-Democratic Party. I think the Tea Party is clearly out of touch with bedrock Gospel values. The Democratic Party in America, oddly enough, more nearly reflects the Gospel message, but Democrats are so focused on being secular that they can’t connect their policies with values.
  • Exactly how real is the “Debt Crisis?” Republicans and Tea Party people have repeated “spending problem” and “debt crisis” over and over until it has become the common wisdom. But clearly, in comparison to the situation in Greece, or the European Union, or Japan, or many other countries, the U.S. financial situation if solid. The debt is not sustainable in the long run. But is it really a “crisis” in the immediate future? No. I would call it a “serious problem,” not a crisis. Common-sense problem-solving is needed, by reasonable people, in a non-crisis atmosphere. Can we do that?
  • Who are the winners and losers? I just don’t know. Except this: the core American programs of Social Security, Medicare, and Medicaid are safe for now.
  • Misinformation abounds all around. Especially this: Politicians are purposely misleading the public regarding the prospects of jobs and economic recovery. People need to know that we have entered a new reality in a global economy, and the age of American Privilege is over.

Now I have to go to work. Maybe I’ll write more thoughts about a Christian-Democratic Party later. It’s probably not what you think.

— John Hayden

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Connect The Chaos: Acedia, American Debt Crisis, Failure of Democracy

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America is not in the grip of mass hysteria. It’s more like mass acedia.

Americans are jamming the Congressional switchboards with telephone calls, as political and economic chaos draws near, but what’s the message? We have no consensus for constructive action. And surprisingly, we lack even a widely shared impulse to avoid self-destructive behavior. What we see and hear is more like a combination of teen-aged indifference and childish impatience: “Do something. Do Anything. Just stop bothering me.”

Democratic processes are failing, and we have no King Solomon, no leader with the sure wisdom to know the right thing to do in the present circumstance.   Continue reading →

Debt Madness Was Always About Killing Social Security (via roger hollander)

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Below is a commentary worth reading. Conservative ideologues have hated Social Security from the beginning, in 1934.

Social Security is not the cause of the U.S. public debt, and neither is Medicare. To blame Social Security and Medicare is to lie! The methodic run-up of defense spending, starting in 1971, and the extension of U.S. military influence to every corner of the globe over the past four decades — those are the primary causes of the U.S. public debt, in my opinion. — John

Debt Madness Was Always About Killing Social Security Published on Wednesday, July 27, 2011 by TruthDig.com   by  Robert Scheer This phony debt crisis has now passed through the looking glass into the realm where madness reigns. What should have been an uneventful moment in which lawmakers make good on the nation’s contractual obligations has instead been seized upon by Republican hypocrites as a moment to settle ideological scores that have nothing to do with the debt. Hypocrites, because their rad … Read More

via roger hollander

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America: What I Believe In 2011

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Image via Wikimedia Commons

(Please click on “comments” at the left side of the title for an interesting back-and-forth between polar opposite points of view.)

The deadlock over raising the debt limit seems almost like a clash of religious beliefs. The two sides hold different beliefs. The deadlock has helped clarify my thinking about what I believe. Maybe this debt crisis of 2011 will help us all clarify who we are, and what we believe.

Image via Wikimedia CommonsI believe that Social Security, Medicare, and Medicaid are the best part of America. I believe that without Social Security, Medicare, and Medicaid, a large part of the American population — more than half the people over 65 — would fall into hopeless poverty.

Some people believe it would be impossible to balance the American budget without deep cuts in Social Security, Medicare, and Medicaid. I believe that America is still, right now, the most prosperous society the world has ever known. I believe that America can afford Social Security, Medicare, and Medicaid.

I believe it would be fair for the most prosperous among us — those with incomes of $250,000 or more a year — to pay a little more in taxes for the good of America. These people have prospered in America. They live the good life. Aren’t they patriotic enough to want to keep America strong? I believe they ARE patriotic and willing to help. It is inconceivable that they could be otherwise.

Some politicians say they oppose any tax increase because a tax increase would “destroy jobs.”

I don’t believe it. How would a modest tax increase destroy jobs? The president is not talking about making rich people poor. He’s talking about a modest tax increase on incomes over $250,000. How exactly will that destroy jobs? Will people earning $250,000 or more even notice a small tax increase? Will a small tax increase change their way of life? I don’t think so. Some may believe otherwise.

I believe there are other ways to balance the American budget. I believe we are spending far too much on a worldwide military presence. I believe we do not have to be fighting foreign wars in Iraq, Afghanistan and Libya. I believe we could drastically reduce foreign military spending, pull American soldiers out of harm’s way and closer to the North American continent. We could reduce defense spending by perhaps a third, and still have a military that is by far strong enough to defend the North American continent.

I simply cannot understand why anyone would want to destroy Social Security, Medicare and Medicaid. I believe the vast majority of Americans support these programs. I believe that common-sense cuts in general government spending and defense spending, combined with a small increase in taxes on the most fortunate among us, would bring the American budget into balance.

What do you believe?

THIS CHART PUTS THE FINANCIAL CONDITION OF MEDICARE AND SOCIAL SECURITY IN PERSPECTIVE. BEGGING THE QUESTION: IF MODEST CUTS WERE MADE IN U.S. SPENDING ON GENERAL GOVERNMENT AND DEFENSE, AND SOME EFFICIENCIES ARE FOUND IN MEDICARE AND SOCIAL SECURITY, THEN HOW MUCH WOULD STILL NEED TO BE RAISED IN TAXES? Chart via Wikipedia

Keep the faith.

— John Hayden

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Wildcat Debt Strike in Autumn of 2011

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At rock bottom, the interlocking political and financial structures of the U.S. are based on trust. Recently, a string of financial failures has shaken the credibility of the U.S. political-financial-industrial complex, resulting in a rapidly spreading failure of trust.

PRESIDENT BARACK OBAMA, Wikimedia Commons photo

Trust is frayed to the point where, at the end of this week, Speaker John Boehner severed negotiations with President Barack Obama on raising the U.S. debt ceiling and averting financial crisis. At this point, you really couldn’t call the Tea Party a party of “loyal opposition.”

Question:  What do you think will happen when the government is forced, starting August 2, to choose which bills to pay and which bills to default on — which promises to keep and which promises to break?

Answer:  I wouldn’t be surprised if a Wildcat Debt Strike sweeps across the U.S. like a prairie fire in the fall.

Consider the events that brought us to this convergence:

SPEAKER JOHN BOEHNER, Wikimedia Commons photo

  • Strike One — The financial bubble burst, and Wall Street persuaded the pillars of the U.S. government — the Treasury Department, the President, the Congress — that the world economy would collapse without a sudden government bailout. (Presidential candidates of both parties endorsed the bailout in 2008.) Wall Street extorted billions under TARP, but continued to pay bonuses as usual to Wall Street executives.  In 2009, billions more were spent in a giant stimulus package, propping up the profits and cash reserves of corporations and the compensation packages for CEOs.
  • Strike Two — The real estate bubble burst, and banks throughout the U.S. foreclosed on mortgages, further driving down the value of houses. As people found their mortgages underwater (that is, the mortgage is worth more than the house), they considered whether or not to continue making the monthly payment. Some homeowners lost jobs and were unable to pay; some calculated that it made no sense to throw good money after a bad house. It is now widely accepted that people can and will walk away from a mortgage.  Banks are not willing to modify impossible mortgages, and debtors are not willing to pay impossible mortgages.
  • Strike Three — The debt bubble bursts. That comes in August, if the U.S. government decides not to pay its bills, especially its obligations to individual American citizens.

It’s all reciprocal, isn’t it? I’ll play fair with you as long as you play fair with me. As long as my house has value, I’ll continue to pay my mortgage. As long as you pay me, I’ll pay my debts.

Everything depends on our belief in the myths that George Washington will own up to cutting down the cherry tree; and that Abe Lincoln will walk six miles to return a penny.

The entire system could come undone in a cascade of individual decisions to hoard cash and ignore debts. When the government refuses to pay someone — whether it be a Social Security beneficiary, a veteran, a bureaucrat, a soldier, or a Medicare bill to a hospital — that someone will in turn refuse to pay an obligation.

The autumn of 2011 might deteriorate into a general Wildcat Debt  Strike, with individuals following the government into spontaneous default on taxes, mortgages, car payments, and most of all, credit card bills.

— John Hayden

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American Debt Crisis: The Black Swan Is Circling Washington

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Another update on the Debt Crisis of 2011.

An ominous Black Swan is circling Washington, D.C., like a vulture, watching and waiting as the wise men and women of Congress argue over whether to resolve the Debt Crisis of 2011. Or not.

This is the most dangerous situation in Washington since the Cuban Missile Crisis of 1962. I was in Washington on the weekend of the Cuban Missile Crisis, and I remember it well. We didn’t know how close we came to the brink, until it was all over.

This Debt Crisis is surreal. The Cuban Missile Crisis was loaded with live ammunition. The Debt Crisis is loaded with stocks and bonds and hundred-dollar bills. No one knows what will happen if we pile up a lot of stocks and bonds and bills, and set off an uncontrollable chain reaction of unpaid debt. Never been done before. But we are about to go there.

There are three major schools of thought regarding the resolution of this debt crisis. You have your big fix, valued at around $4 trillions, and your little fix, $1.5 trillions to $2 trillions, give or take. (Or is it billions? I can never remember.)

And defying all logic, there is the “no fix” option, supported by the gentlemen and gentleladies from the Tea Party. (What kind of tea are they smoking at that party? Can I get some?)

Translation: Some folks want to fix the debt crisis for the long-term, so Congress can get on to other business.  Some folks will settle for a short-term solution. And some want to commit economic suicide on Aug. 2, rather than risk the chance of possibly serious complications down the road.

Hoo-boy! You think the rich and powerful are anxious about a little economic uncertainty? How are they going to respond to total economic chaos?

Remember the Black Swan? It’s a highly improbable disaster, resulting in unpredictable consequences of a catastrophic nature.  Have a nice weekend.

— John Hayden

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American Debt Crisis: Children Playing With Dynamite

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The words and events of the past few days give me the gut feeling that too many of America’s current political and business leaders are not mature adults, not capable of being serious or working responsibly.

Too many members of Congress seem to think the U.S. government is all a big game, and the winners are the ones who get the most political contributions, and the ones re-elected the most times. They don’t act as if they understand that the government and the economy of the United States are matters of real importance. Instead, they act as if they’re in a reality show on a fictional island, where there are no serious consequences, and the only goal is forming alliances, talking with bravado, and gaining fame.

Too many politicians appear childish, not mature, focusing only on themselves, like a two-year-old would, and on the interest groups that pull their strings. They don’t appear to have developed the capacity to care about the needs of  others, and by others I mean the millions of real people scratching every day to earn a living, support their families, cope with illnesses.

Too many politicians seem always to put themselves and their special interests first; the needs of the larger community are of no interest to them. The needs of others be damned, the needs of the nation be damned. It’s all a game. It’s all about me and my little circle of friends.

And They Call Themselves ‘Patriots’

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The western front of the United States Capitol...

Image via Wikipedia

No. 4 in a series on the Debt Crisis of 2011.

Here’s an American paradox, or maybe it’s a morality story. You work to pay your bills. I work to pay my bills, thereby maintaining the fiction that I’m solvent and creditworthy.

While you and I are working to pay our bills, right-wing zealots are conspiring to prevent the government of the United States of America from paying its bills. They even pretend that it would be right and good for the U.S. to ignore its debts.

The premeditated intent of these patriot-politicians is to subvert Congress and sabotage the U.S. Treasury, force financial default, and destroy America’s credit rating. With malice aforethought, they plan to run the U.S. government straight into bankruptcy and shut it down.

By bankrupting the Treasury, these people — the Tea Party, the Libertarians, the Anarchists, the tax protestors — hope to smash and destroy the government, and kill its hated programs and taxes. Then they will wave the American flag and celebrate.

Isn’t it sedition and treason to destroy from within the government of your own country?

Believers in this Tea Party and Libertarian conspiracy call themselves “Patriots.”  But aren’t they really traitors and turncoats?

— John Hayden

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American Debt Crisis: Rich and Powerful Demand Total Victory over Middle Class and Poor

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No. 3 in a series on the Debt Crisis of 2011.

President Barack Obama floated a trial balloon on the front page of the Washington Post on Thursday, in a long story that said the President is prepared to discuss cuts to both Medicare and Social Security. As the headline put it, Medicare and Social Security are “on the table,” otherwise known as the chopping block. No one quoted in the story was willing to have their name attached to the information.

In the whole, long newspaper story, the words “defense” and “defense cuts” were never mentioned. Not once. What? You mean Medicare and Social Security are on the table, but the elephantine defense budget is not? It’s not credible, not believable.

As Obama was supposedly preparing to sacrifice Medicare and Social Security, Republicans repeated their long-stated position: Tax increases for the rich are NOT “on the table.” Republicans allowed as how they might be willing to wheel and deal on tax breaks and loopholes, so long as the net effect is no increase in taxes on the rich.

Also yesterday, AARP, the largest organization representing senior citizens, made its position clear: The AARP opposes any cuts in Medicare and Social Security.

So, the lines are clearly drawn in the class war to divide up what’s left of the American Dream. The rich and powerful have made clear they will accept nothing less than total victory over the middle class and poor. President Obama hints he might be a willing accomplice in the cashing out of Medicare and Social Security. If so, it would be a presidential betrayal of the American people on a historic scale.

(If you cringe at the words class war, don’t forget that class warfare will probably be followed by generational warfare, pitting mother against daughter and grandfather against grandson. See “Divide And Conquer: The New Plan To End Social Security by Dividing America at 55.”)

Could President Obama possibly be serious about caving in to the rich and powerful on both Medicare and Social Security? Plus a player to be named later, Medicaid?

I hope the President is not serious. To balance the budget by cutting Medicare and Social Security for the middle class and the poor, while at the same time refusing to raise taxes on the rich by a single penny, would be a craven injustice. Remember, the rich are paying tiny taxes, compared to what they have paid historically, and their wealth continues to expand, in a continuing social transfer of assets from bottom to top.

In my opinion, there is nothing wrong with the American budget that could not be remedied by modest tax increases on the wealthy, accompanied by modest spending cuts in the defense budget. That’s what should be “on the table.”

I hope Obama floated this balloon simply to highlight how outrageous it would be to force the middle class and the poor to pay for the financial crisis created by the rich and powerful. In any event, the trial balloon provided an easy target for Democrats in Congress to shoot down.

Do you suppose that anyone is negotiating in good faith as the clock ticks down to financial default by the U.S. government?  If U.S. leaders fail to behave responsibly, the hard times ahead could test the fabric of American society like never before.

— John Hayden

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