Less than two days before the nation is scheduled to default on its debt payments, our government continues its game of scare tactics and playing Russian roulette with the economy.
Signs of political and social meltdowns are rippling across the nation. The list includes the lack of a new federal budget, police using force against elderly veterans during peaceful protests and mobs of people looting grocery stores because their food stamp cards failed to work on Saturday.
Bloomberg BusinessWeek explains where all of this is leading and how it could impact everyone here and around the globe:
“The government has $12 trillion in outstanding debt that is used to underpin short-term borrowing among banks and investment houses on Wall Street. A default could freeze that market and lead to widespread bank collapse, a debacle that would be sure to spread worldwide. Because a U.S. default would be such an unprecedented event, it’s hard to know how bad it would be—but Goldman Sachs suggests it could cost at least 4.2 percent of GDP over the year.”
Once again, it comes down to the banks. More than five years ago, we were told the sky would fall unless banking and corporate bailouts were approved. At the time, politicians were warned of a total economic collapse and martial law in America.
The same tactics are being used to ram through the Affordable Care Act (Obamacare) and a ceremonious debt ceiling hike. Similarly, private interests – not the American public – would benefit from it all.
The health insurance industry helped create and foist the Affordable Care Act onto the public, a movement being advanced by President Barack Obama and other political leaders. Forbes.com noted Obamacare has sent “the value of health insurance companies common stocks up by 200 percent to 300 percent.”
People must be incredibly gullible to believe an industry known for denying claims would ever give away something for nothing. If it's really so great, the price tags for premiums would be advertised everywhere. Instead, people cannot even access the website, which is being called nothing but a giant front for data mining.
Meanwhile, veteran benefits and Social Security benefits are in peril, according to a variety of media reports. At the other end of the spectrum, we have near riots in stores because the EBT (food stamp) cards were offline for only a few hours after an apparent computer glitch. Some of the people on food stamps are taking to Twitter and other social media outlets to threaten riots if their benefits are cut off.
To top it all off, we had a pathetic display of “power” with the government using force on elderly veterans staging peaceful protests against the so-called shutdown. Other senior citizens at national parks were also harassed as they were removed from park grounds. Closing national parks and monuments was supposed to show us just how bad it is, when it can’t even come close to painting the depth of the real picture.
Decades of bad policies and back-room deals by both political parties brought us here. Tax breaks and other sweetheart deals give mega-corporations an unfair advantage. Mega-corporations even earn tax credits for taking their business overseas. By one account, 64 corporations with billions of dollars in assets paid an average of just 8.1 percent in taxes. Additionally, offshore holdings allow them to escape taxation on approximately 40 percent of their money.
The “global” economy and sheer greed has driven down wages and eliminated millions of well-paying jobs. Economists and others have warned that unbridled borrowing would render the nation unable to even pay the interest on the debt, let alone the debt itself. We have to wonder if this is now a problem we can fix even if the debt limit is raised into the next galaxy.
Regardless, Congress probably will not let the nation go fully into default. Then all of the stress, the lies and the hand-wringing will amount to nothing more than political wheel-spinning and grandstanding. Shame on all of them for this deceptive, self-serving display and shame on everyone who thought it could never come to this.
Unfortunately, it has.