By: Kevin Gosztola
dissenter.firedoglake.com
Tuesday August 2, 2011 5:10 pm
The outcome of the debt ceiling talks is a foregone conclusion. An agreement has been established. The Obama Administration and GOP leaders came together and came up with a deal that would satisfy enough of Republican congressman beholden to the right wing economic libertarian “Tea Party.” Democratic leaders were stuck in the middle, trying to advance a plan that would be less destructive to the people of this country yet President Barack Obama gave very little support always indicating he was for a compromise with Speaker John Boehner, who was, as is typical, being driven by corporate interests and the faction of people Vice President Joe Biden would later accuse of “acting like terrorists.”
It was scripted political theater from the beginning to end and had a predictable outcome. One might recall the American people were given a preview of the debt ceiling talks back in December when Obama announced a tax cut deal that validated the GOP’s hostage taking strategy. Middle class tax cuts, jobless benefits and other items were held hostage until Obama committed to extending tax cuts for the top 2% of Americans.
Then, too, a bipartisan deal was achieved. New York Times columnist Paul Krugman warned giving into “blackmailers” would ensure demands in the future. “As long as Republicans believe that Mr. Obama will do anything to avoid short-term pain, they’ll have every incentive to keep taking hostages. If the president will endanger America’s fiscal future to avoid a tax increase, what will he give to avoid a government shutdown?”
On the debt deal, Krugman argues Obama surrendered. He agreed to “big spending cuts, with no increase[s] in revenue.” Democrats and Obama decided Republicans might have an “incentive” to make cuts next time around. He further emboldened corporate and special interests that have a vice grip on the American government. Worse, Obama signed off on a clear subversion of democracy by advocating for the establishment of a 12-person “Super Congress,” a panel of members in Congress that will cut at least $1.2 trillion and decide what to cut.
This is not surrender though. This is what President Obama wants. This is making government “work.” This is making certain gridlock doesn’t get in the way of Obama’s commitment to demonstrating he has “changed” Washington by making it “work.” And, to better understand the outcome of this bipartisan deal, one should remember what comedian George Carlin said about the word “bipartisan” meaning a much larger-than-usual deception is being carried out.
Whose Delusionary and Uninformed?
Those arguing that Obama had no choice but to bow to pressure from the GOP or Tea Party are significantly misinformed or willfully ignorant. There was a legal remedy for all of this. He did not have to risk more economic injustice in this country and put social programs like Medicare, Medicaid and Social Security on the chopping block. He had the opportunity to raise the debt ceiling in December but chose not to because he thought he would like to have a second chance to prove he can govern without being extorted.
Those suggesting the people of this country have to find something positive in this outcome are even shallower. Defense spending will not face deeper cuts than Medicare, Medicaid or Social Security. Or, if defense spending does face cuts, it will likely mean defense spending cuts come out of an extra $50 billion deal negotiated outside of the debt ceiling talks and the Defense Department will most likely end up with more funding and resources than before the debt ceiling “crisis” began to be manufactured by the political class in Washington.
Ezra Klein of The Washington Post seems to think that Obama’s strategy is “brilliant.” He has attached a double trigger that means defense contracting cuts and Bush tax cuts could go into effect if Republicans don’t “compromise.” What theater ensemble has Klein been watching move about on the political stage in Washington? As Matt Taibbi of Rolling Stone has written, the Democrats did not fight the GOP at all. They could not fight the GOP at all because they would have impeded the Obama Administration’s ability to cut a deal favorable to the GOP.
“[Democrats] made a show of a tussle for a good long time — as fixed fights go, you don’t see many that last into the 11th and 12th rounds, like this one did — but at the final hour, they let out a whimper and took a dive,” Taibbi concludes. “We probably need to start wondering why this keeps happening. Also, this: if the Democrats suck so bad at political combat, then how come they continue to be rewarded with such massive quantities of campaign contributions?” Adding, “Who spends hundreds of millions of dollars for what looks, on the outside, like rank incompetence?”
The answer is a few million liberals, who get involved in organizations like MoveOn and Organizing for America (the worst of the two) get involved in spending millions of dollars on what appears to be “rank incompetence.” The answer is unions with weak leaders like Richard Trumka of AFL-CIO, who pretend to be inching toward starting an independent political movement then turn coward and go back to business as usual.
What Looks Like “Rank Incompetence” is Intentional
What has been on display really isn’t “rank incompetence” at all. As many people who write and discuss politics are realizing, the Democrats’ role in the debt ceiling crisis was to not fight back against the GOP or the Obama Administration. It was to concede when necessary.
And, atrociously, the final moment of rolling over and playing dead for corporations and the wealthy in America came just when the Democratic Party seemingly used Rep. Gabrielle Giffords (D-AZ), who was shot in the head in Arizona by a sociopath in January. She was trotted out to vote for the deal. Standing on the House floor, Giffords’ condition was exploited to ensure that not enough Democrats would vote against the deal.
Is this really acceptable to people who support Obama? Is this really acceptable to people who are considering voting for Democrats in 2012 because they think that will remedy the continued onslaught on the poor, working, and middle class of America by the Tea Party, the shock troops for corporate and special interests in America?
It is no longer possible to tell someone with a straight face that Obama hasn’t continued the Bush “war on terror” policies that have a brought forth an assault on civil liberties. It should no longer be possible for someone to look another in the face and argue Obama is any better than Bush.
Not a single person has gone to jail for being criminally involved in the collapse of the economy in 2008. Jeff Cohen of FAIR points out Obama has consistently put “corporate deregulation and greed ahead of the needs of most Americans.”
Finally, the Republicans will not be beat back by finding Democratic candidates for primaries. The system is too broken for that to remedy much of anything. The debates should not center around which personalities will lead us the way forward. The focus should be on people like you—the people who are tuned into the political moment, who nod in agreement with the words of this post and other much more insightful posts here in other sectors of the blogosphere.
“The Outrage Must Come from You”
Keith Olbermann had it right on “Countdown” last night as he outlined what he called the “four great hypocrisies” of this debt ceiling deal:
Where is the outrage over these great hypocrisies? Do you expect it to come from a corrupt and corrupted media for whom access is of greater importance then criticizing the failure of a political party or defending those who don’t buy newspapers or can’t leap website pay walls or could not afford cable TV? Do you expect it to come from a cynical and manipulative political structure? Do you expect it from those elected officials who no longer know anything of government or governance but only perceive how to get elected or how to pose in front of a camera and pretend to be leaders? Do you expect it from politicians themselves who will merely calculate whether or not it’s right based on whether or not it will get them more contributions? Do you expect it will come from the great middle ground of this country with a population obsessed with entertainment, video games, social media, sports and media?
Where is the outrage to come from? From you!
Olbermann proceeded to declare that the people must become organized, unified and hell bent like the corporations which are organized, unified and hell bent on crushing the people of this country. He called on Americans to “find again the energy and the purpose of the 1960s and early 1970s and we must protest this deal and all the goddamn deals to come, in the streets.” And, he got specific urging general strikes, boycotts, protests, sit-ins, non-cooperation, takeovers, etc.
To the cynical who are saying strikes, boycotts, protests, sit-ins, non-cooperation, takeovers, etc can never happen, that Americans never engage in resistance and will not engage in resistance to save this country from permanent ruin, there are groups who have already been mounting efforts. This moment will only act as a catalyst for ensuring the number of people, who participate in the action, increase tremendously.
Occupy Wall Street is building up for September 17, calling for a “Tahrir moment,” which would involve citizens flooding into lower Manhattan to set up tents, kitchens, peaceful barricades, etc to occupy Wall Street. Using the means of communication that exists today, which radicals of the 1960s did not have, they intend to harness the power of a plurality of voices and demand “democracy not corporatocracy” right from the belly of the beast.
US Day of Rage (USDOR), which has endorsed Occupy Wall Street, is also working to fuel principled nonviolent protest on September 17th. A USDOR organizer explains the initiative is focused on challenging the illegitimate US government, which does not currently express the will of the people through free and fair elections. The initiative calls for nonviolent resistance and civil disobedience and aims to build toward a federal protest at the US capitol.
Seize DC is calling for an action on September 10 to reclaim civil liberties and rights that citizens have lost in this country. The organizers condemn “the seeking of permits, the placing in quarantined zones, the appropriation of ‘free speech’ and the pro forma ‘right to dissent,’ treated as a purely formal and meaningless expression” that has come to curb the ability of any social movement to have an impact in this country. Those behind the action find they do not need permission for free speech or the right to assembly and will not submit to having their protest cordoned off by a “murderous and tyrannical oligarchy.” They intend to “seize” DC—capture the “attention of the city and the nation so that its policies of seize and destroy may end.”
October 2011 is calling on people to “stop the machine” and “create a new world.” On October 6, they will begin an occupation in Freedom Plaza in Washington, DC, and will not leave until the people there are comfortable leaving. October 2011 organizer Kevin Zeese says they will decide what demands to make, what first steps the government must show they intend to take, before they ultimately leave. They intend to push the government to take notice of the people in Freedom Plaza and following the initial action there will be follow-up actions to continue to democratize the country.
There are many initiatives going on in the country. Protests are happening every day and the people are coming out to show their leaders they are angry and outraged. Zeese concludes, “People are all reaching the same conclusion together. There is a group consciousness that is developing that the dysfunctional government that’s corrupted by corporate dollars is not acceptable anymore.”
A laundry list of civil liberties have been lost. Constitutional rights have been systematically violated. (The Dissenter, in its first weeks of operation, has brought forth this reality in multiple posts.)
Resistance efforts aim to turn back the assault. Zeese rightfully suggests that the way you gain constitutional rights and civil liberties back is that you use them. Like exercising a muscle, he says, the more you use civil liberties, the stronger they get in society.
Be Cynical—It Will Only Please the Powerful in This Country
Nobody can say people aren’t mounting a struggle to prevent this country from becoming a permanent oligarchy. No person can suggest that there is no effort to end the self-perpetuation of the project, which far too many hypocritically engage in while at the same time complaining about the way they are consistently shafted.
The Tunisia revolution, the first and second uprisings in Egypt, and the growing protests in Europe didn’t begin as strong as they are today. The challenging of austerity and autocracy in government didn’t begin with millions and millions of people instantly shaking the foundations of government. It took a few people finally deciding enough was enough. It took citizens entering a public square and deciding they had reached their breaking point with the power structure of society and weren’t going to take it anymore.
Blacks and white abolitionists didn’t wait for the country to reach their level of consciousness when they took action for emancipation from slavery. They took the lead. Women didn’t wait for the country to reach their level of consciousness when they took action for equal rights. They took the lead. Black people didn’t wait for the country to reach their level of consciousness when they took action against Jim Crow laws and beat back inequality and injustice. They took the lead.
Those who don’t get it won’t get it and cannot be expected to get it. They may get it once they see people in the streets. But, the people who understand the objective situation the country is in have an obligation and duty to take action. The resistance is called for and justified. No act of rebellion will be wasted. All outlets for enacting influence on power have been closed down and stopped up by the congressional-media-military-security complex. If the state of society to you is abhorrent, the answer is to get out in the streets and help reinforce the groups that are engaged in efforts for radically changing society.
Showing posts with label Debt Ceiling. Show all posts
Showing posts with label Debt Ceiling. Show all posts
Wednesday, August 3, 2011
Monday, August 1, 2011
36-Year Congressman John Conyers Calls for Protest Against the Debt Deal: “Thousands of People [Should Mass] In Front Of The White House To Protest This
Monday, August 1, 2011
Washingtons blog
36-Year Congressman John Conyers Calls for Protest Against the Debt Deal: “Thousands of People [Should Mass] In Front Of The White House To Protest This”
Rep. Emanuel Cleaver (D-Missouri) said of the debt "compromise":
It looks like a Satan sandwich.
Traditional conservatives such as Ron Paul are strongly opposed to the deal, and have warned Americans that this could spell the end of America as we know it.
The debt deal is so bad that long-time (36-year) Congressman John Conyers is calling for people to march on the White House:
We’ve got to educate the American people at the same time we educate the President of the United States. The Republicans, Speaker Boehner or Majority Leader Cantor did not call for Social Security cuts in the budget deal. The President of the United States called for that. My response to him is to mass thousands of people in front of the White House to protest this.
(Conyers is right about Obama - not Republicans - initiating cuts to social security.)
Why is the debt deal so bad?
As I've previously noted, the deal would create a "super congress" which is an end-run around accountability to the voters and the constitution.
As Chris Floyd writes today:
[The] extraordinary "special committee" or "Super Congress" ... is an unaccountable politburo which will be able to circumvent all normal democratic (and republican) principles and issue budget-slashing, tax-cutting legislation that cannot be debated or amended, but simply approved or rejected by the rest of the now-powerless representatives and senators.
That's not all. If the politburo -- handpicked members split evenly between the two gangs of thieves and poltroons that now hold sway on Capitol Hill -- can't agree on just how much they want to gut the budget and cut taxes for the rich, why then, this will trip a series of "triggers" which will automatically start gutting, slashing and cutting, without any vote by the democratically elected representatives whatsoever. And surely it would be superfluous in me to point out that these unaccountable "superpowers" will soon stretch to cover other areas of legislation beyond budgeting and taxes.
Behind all the flim-flammery of this manufactured "crisis", we are watching the creation of a new form of government -- or rather, the further mutation of the new form of government that the United States has been crawling toward for a long time. We called it a "neo-feudal oligarchy backed by a militarist police state" here the other day. No doubt there are many other ways you could describe this murderous, ravenous, lopsided monstrosity of a system. But the one thing you cannot call it is a "republic".
But at least the compromise will allow us to get our ballooning debt under control by making painful but necessary slashes to the budget, right?
Unfortunately, no.
As Business Insider reports:
The “historic, bipartisan compromise” reached to raise the debt limit does not end the struggle to reign in the federal deficit — in fact, it pushes the most difficult decisions off into the future.
More surprising, the debt deal actually cuts almost nothing now–it just promises future cuts that may or may not materialize.
There are very few specific cuts in the deal — and the $1 trillion in immediate cuts are almost entirely constituted of caps on future spending. And those caps are not required to be honored by future congresses.
In short, for the past month, Congress has been arguing about little more than an agreement to reach an agreement at some point in the future. Your tax dollars at work.
And the debt deal won't preserve America's AAA credit rating. At most, it will buy a couple of months to a year, and then we'll be downgraded.
Indeed, the Congressional Budget Office scores the compromise as providing only half of the cuts required by Standard & Poor's to avoid a debt downgrade (and concludes that only 2% of the total cuts will occur prior to the 2012 presidential election).
In other words, Washington is once again doing what it has been doing for years ... kicking the can down the road ... and trashing the Constitution.
No wonder even long-time Congressman Conyers is calling for the American people to march on the White House.
Washingtons blog
36-Year Congressman John Conyers Calls for Protest Against the Debt Deal: “Thousands of People [Should Mass] In Front Of The White House To Protest This”
Rep. Emanuel Cleaver (D-Missouri) said of the debt "compromise":
It looks like a Satan sandwich.
Traditional conservatives such as Ron Paul are strongly opposed to the deal, and have warned Americans that this could spell the end of America as we know it.
The debt deal is so bad that long-time (36-year) Congressman John Conyers is calling for people to march on the White House:
We’ve got to educate the American people at the same time we educate the President of the United States. The Republicans, Speaker Boehner or Majority Leader Cantor did not call for Social Security cuts in the budget deal. The President of the United States called for that. My response to him is to mass thousands of people in front of the White House to protest this.
(Conyers is right about Obama - not Republicans - initiating cuts to social security.)
Why is the debt deal so bad?
As I've previously noted, the deal would create a "super congress" which is an end-run around accountability to the voters and the constitution.
As Chris Floyd writes today:
[The] extraordinary "special committee" or "Super Congress" ... is an unaccountable politburo which will be able to circumvent all normal democratic (and republican) principles and issue budget-slashing, tax-cutting legislation that cannot be debated or amended, but simply approved or rejected by the rest of the now-powerless representatives and senators.
That's not all. If the politburo -- handpicked members split evenly between the two gangs of thieves and poltroons that now hold sway on Capitol Hill -- can't agree on just how much they want to gut the budget and cut taxes for the rich, why then, this will trip a series of "triggers" which will automatically start gutting, slashing and cutting, without any vote by the democratically elected representatives whatsoever. And surely it would be superfluous in me to point out that these unaccountable "superpowers" will soon stretch to cover other areas of legislation beyond budgeting and taxes.
Behind all the flim-flammery of this manufactured "crisis", we are watching the creation of a new form of government -- or rather, the further mutation of the new form of government that the United States has been crawling toward for a long time. We called it a "neo-feudal oligarchy backed by a militarist police state" here the other day. No doubt there are many other ways you could describe this murderous, ravenous, lopsided monstrosity of a system. But the one thing you cannot call it is a "republic".
But at least the compromise will allow us to get our ballooning debt under control by making painful but necessary slashes to the budget, right?
Unfortunately, no.
As Business Insider reports:
The “historic, bipartisan compromise” reached to raise the debt limit does not end the struggle to reign in the federal deficit — in fact, it pushes the most difficult decisions off into the future.
More surprising, the debt deal actually cuts almost nothing now–it just promises future cuts that may or may not materialize.
There are very few specific cuts in the deal — and the $1 trillion in immediate cuts are almost entirely constituted of caps on future spending. And those caps are not required to be honored by future congresses.
In short, for the past month, Congress has been arguing about little more than an agreement to reach an agreement at some point in the future. Your tax dollars at work.
And the debt deal won't preserve America's AAA credit rating. At most, it will buy a couple of months to a year, and then we'll be downgraded.
Indeed, the Congressional Budget Office scores the compromise as providing only half of the cuts required by Standard & Poor's to avoid a debt downgrade (and concludes that only 2% of the total cuts will occur prior to the 2012 presidential election).
In other words, Washington is once again doing what it has been doing for years ... kicking the can down the road ... and trashing the Constitution.
No wonder even long-time Congressman Conyers is calling for the American people to march on the White House.
Sunday, July 31, 2011
The US Constitution Makes Default Illegal: What a Real President Would Do on August 1, 2011
Webster G. Tarpley, Ph.D.
TARPLEY.net
July 27, 2011
Editor's NOTE:
This fictional speech that Webster G. Tarpley has suggested President Obama make is
fascinating.
--Dr. J. P. Hubert
My fellow Americans:
I speak to you tonight in an hour of grave danger to our nation. As you know, within the next few hours our government is in danger of failing to make payments of interest and principal which the United States Treasury has contracted to make. In technical terms, we are not far away from beginning to default on payments associated with those US Treasury securities which represent the public debt of the United States. As part of the same crisis, there is now a threat to over 70 million checks which your government issues every month — payments which go to recipients of Social Security, to providers of health services under the Medicare program, to Medicaid beneficiaries, to our active-duty and retired military personnel, to our defense contractors, to our government employees — in short, to everyone who receives a benefit from the federal government, who works for the federal government, or who does business with the federal government.
Default Means National Bankruptcy and World Chaos
A default of this kind means nothing less than national bankruptcy. Default is the essence of chaos and anarchy. It is a peril which we have successfully avoided during our entire existence as a nation, through a terrible civil war and the two world wars of the past century.
The United States dollar continues to play the role of the world reserve currency. This means that the central banks on every continent have chosen to maintain large portions of their reserves in the form of US Treasury securities. This role has been slightly diminished in recent years, but it is substantially intact. For the US government to default on payments through the US Treasury would therefore provoke a radical devaluation of the central bank reserves of the entire globe, wiping out some central banks and leaving others critically weakened. This might lead to massive dumping of US Treasury securities, leading to a general world panic to which no asset class would remain immune. We might see a dramatic decline of the dollar. This would represent the disintegration of the current world financial system, and a breakdown crisis of economic activity of unthinkable proportions. This might happen immediately, or it might require months or even years to explode in its full fury. In any case, it would put the United States on the road to national decline.
If you recall how financial markets seized up and ceased to function in the terrible days of September and October 2008, you have some inkling of the kind of catastrophic market climate that would be unleashed by the national bankruptcy of the United States. Borrowing, credit, mortgages, car financing, credit cards, and the like would not just require astronomical interest rates; many kinds of lending would disappear altogether. Millions more jobs would be lost.
The Public Credit is an Asset for All Americans and for the World
The United States Treasury securities market, with its $1 trillion per day of turnover, represents a unique national asset for our country. It is a signal achievement of the American System of Political Economy founded by Alexander Hamilton. It is the broadest, deepest, and most liquid market in the world. It is capable of absorbing trillions of dollars of securities and turning them into cash within a few hours – a capability unique on this planet. Despite how indignant we all are about the abuses of Wall Street, it would be extremely unwise to permit the Treasury securities market to be wrecked by ideological fanatics. All the more so since the Treasury market is unique in the world, and its extinction would leave no currency whatsoever in a position to function as the reserve medium of the world. This would have terrible implications for world trade and investment.
In short, our Treasury securities are the bedrock of all economic activity in this planet, and the common interest of humanity is well served by avoiding their chaotic insolvency.
The “Tea Party Caucus”: Right-wing Anarchists Funded by Malefactors of Great Wealth
Why, many Americans may wonder, should this crisis exist today? Here it is useless to talk in euphemisms in order to appear conciliatory; it is now necessary to call things by their names. As a result of the current world economic and financial depression which began in 2007-2008, the extreme right wing of the Republican Party, now calling itself the Tea Party, has been energized and revitalized. They have also begun to receive large amounts of political funding, including from a sinister individual who is reported to be the richest man in New York City. These are the malefactors of great wealth about whom presidents of both parties have been warning you for over a century. The goal of these opulent backers of the so-called Tea Party is to eliminate taxation and regulation upon themselves and their private business interests, many of which are in direct conflict with the public good. The impact of this Tea Party on public opinion has been magnified out of all proportion by the collusion of corrupt media cartels; in reality, the supporters of the so-called Tea Party do not exceed about 15% of our population.
Neo-Feudalism
Thanks to the economic royalists who support them, a Tea Party contingent numbering almost 90 members has entered the House of Representatives. Many are political novices. Many of them sincerely believe in the strange and un-American foreign doctrines of the Austrian school, according to which government is an unnecessary evil which needs to be abolished. It is entirely proper to see them as a species of right wing anarchist. The market, by contrast, they fetishize as infallible, and deserving of unbridled free reign over all the human affairs. They want a market without a government, something which has not existed in human affairs since the transition from the Old Stone Age to the Neolithic age, when the state emerged. The free market with no role whatsoever for government went out with Alley Oop the cave man, and it is not likely to return.
And all too often, the market of which they speak turns out not to be free, but rather dominated by predatory cartels, monopolies, and oligopolies. They are devoted to the causes of deregulation, privatization, the abolition of trade unions, more privileges for the wealthy, and a race to the bottom among the states. The world for which they are striving resembles perhaps nothing so much as feudalism as seen in Europe after the fall of the Roman Empire – and, like that anarchic chaos, it can only be described as A New Dark Age.
Most especially, these right wing anarchists of the Tea Party hate the social safety net which incorporates the precious economic rights for which the struggles of the American people won recognition during the New Deal and the Great Society. I am referring of course to Social Security, Medicare, Medicaid, unemployment insurance, the Head Start Program, the WIC program of high-protein meals for expectant mothers and infants, and many more. I am also referring to the right to collective bargaining for wage earners in the public and private sectors alike, and other features of a humane modern society.
Their reasons for this view read like a catalogue of the seven deadly sins, with pride, greed, rage, and envy in the lead. To these we must add class hatred, and also racism, since many of them are obsessed with the idea that their taxes are being spent to help minority groups.
New Deal America Repudiates the Tea Party
The problem faced by the Tea Party Republicans is that two thirds to three quarters of the American people warmly support the social safety net created by the New Deal and the Great Society. A recent poll has also shown that fully 80% of Americans want tax rates on the super-rich to be increased. Despite so many years of radio ranting, venal professors, and merciless sloganeering by politicians, the American people continue to repudiate the ideological platform of the so-called Tea Party. There is no hope their program could ever get passed.
Out of their despair that their ideological goals could ever be met through the democratic process, these wealthy individuals and their anarchist following have evolved a diabolical strategy. Their strategy is extortion. It is an attempt to place the United States government under duress. It is an attempt to mutilate, alter, and denature our Constitution through unconstitutional means.
It is nothing short of an illegal coup d’etat.
The Tea Party cloaks themselves in public as the greatest admirers of the U.S. Constitution. But in one concrete instance after another, we find that the Tea Party is at war with the Constitution.
The Tea Party Hates the Constitution in Practice
Our Constitution speaks not once but twice about the general welfare. To the Tea Party, this is anathema, since they believe that government should serve the wealthy few.
In terms of the issue at hand, Article I, Section 8 of the Constitution specifies that the Congress shall have the power “To borrow money on the credit of the United States.”
This is once again anathema to the Tea Party. In such a fundamental provision as this, enacted in response to the bitter lessons of ungovernability taught by the Articles of Confederation interlude, the Tea Party faction sets itself above the wisdom of the founders. The Tea Party would rewrite this provision to read that the Congress shall NOT have the power to borrow money on the credit of the United States, and the framers be damned.
This is what they admit when they demand their so-called balanced budget amendment. Such an amendment would destroy the finely wrought mechanism of the separation of powers and its accompanying checks and balances, which have served us so well over the centuries. But it is also a subterfuge, since the Tea Party knows very well that this amendment has no chance of being approved by the Congress, nor by the states. Rather, it has included in their litany of cut, cap, and balance purely as a deal-breaker, to make absolutely sure that no possible settlement can be forthcoming in the time available. They are determined to make all negotiations fail.
The Tea Party Goal is to Bankrupt the United States
The goal of the Tea Party faction of Congress is nothing less than the national bankruptcy of the United States, procured by forcing our default on the contractual and legal obligations of this government. They regard default and bankruptcy as positive goods, and indeed as indispensable steps on the path to the free market utopia they fondly imagine. Their reasoning is that, once the United States has gone bankrupt, it will henceforth be either prohibitively expensive or totally impossible for the Treasury to sell its bonds on the world financial markets. Therefore, payments on Social Security, Medicare, Medicaid, and other programs will have to be cut – not by law, but by the brute force of having no money.
This they do in wartime, with some 160,000 troops in the field, many of them fighting determined enemies on the other side of the world.
They claim they want predictabilty to allow businesses to create jobs, yet they court the greatest chaos and instability our nation has ever faced in our financial affairs – insolvency.
These same Tea Party ideologues, still feigning a concern about the American people, have already sponsored legislation which would give foreign creditors — the Chinese, the Japanese, the Saudis, and others — top priority in payments made by the federal government, ahead of our military personnel. According to these bills, we can be sure that Americans whose lives depend on Social Security, Medicare, and Medicaid will be dead last when disbursements are made. We can perhaps now see the real dimensions of the sinister plan with which we are confronted. By driving this government into bankruptcy, the Tea Party hopes to roll back the Constitution by wrecking the Congressional ability to borrow money as a practical matter, while at the same time destroying the entitlement programs which the most extreme Republicans have hated since the time of Franklin D. Roosevelt.
And not just Tea Party fanatics endorse this strategy. Indeed, it has the sympathy of rich elitists of all political stripes, including the academic and foundation left, who welcome the effort to strip away the economic rights of the American people.
Default Spells Genocide Against the American People
This is a policy which threatens the very lives of millions of Americans. It raises the specter of genocide against our own people. And I have not become President of the United States to preside over genocide against Americans.
I am not motivated by any ambition for the aggrandizement of the powers of the presidency. I have negotiated in good faith for months. The other side has not. I have offered reasonable concessions. Indeed, I have waited until now, when the clock reads five minutes to twelve, constantly hoping that the legislative process in Congress would yield an acceptable result. But now, with the specter of national bankruptcy in full view, and no reasonable outcome forthcoming, it is my responsibility to act. Since I sit in the seat that belonged to Washington and Lincoln and Roosevelt, it is my hope that my actions may be worthy of their heritage.
In a Conflict Among Statutes, the Constitution Decides
I am faced first of all with a conflict among statutes passed by Congress. On the one hand there is the debt ceiling law, which states that the Total Public Debt Outstanding of the United States of America shall not exceed $14.294 trillion. Since our public debt reached that level on May 16, this statute could be interpreted as barring any further auctions of United States treasury bills, notes, and bonds. And if we cannot borrow money in this way, since our current income is inadequate to meet all our obligations, we are headed for default, bankruptcy, and, worst of all, social chaos.
But this is not the only statute in the US Code. There are also other statutes to which I must pay attention. All public expenditure of the United States government, as you know, is carried out by law — by a law called the federal budget, which specifies what amounts are to be spent and on what. Every expenditure has to go through the Congress not once but twice — it must be authorized, and then it must be appropriated, and each of these requires the consent of the two houses of Congress and the signature of the president. I am now confronted with a series of expenditures which the current Fiscal Year 2011 budget, passed by Congress and signed into law by me, requires me to make. This includes the entire vast array of social safety net, defense, transportation, health, regulation, inspection, government employment, and other activities which I outlined above. I am under legal compulsion to make these expenditures.
Concerning Treasury securities outstanding, each one of these is an explicit contract that the United States government will pay specific sums of interest and principal at specified dates. Respect from the sanctity of contracts also requires me to make every one of these payments, without exception.
This is therefore my situation: on the one hand, the debt ceiling forbids me to borrow. On the other hand, the federal budget and the implied contracts represented by entitlements and Treasury securities require me to pay. Since tax revenue, partly because of recent and misguided legislation, is not adequate to make all of these payments, something has to give.
It is obvious that, when two or more statutes conflict, we need to look to the Constitution itself for guidance as to which one will apply. Given the extraordinary attention which the Constitution gives the concept of the general welfare, this guiding principle needs always to be kept in mind. Beyond this, our founding document contains two especially relevant provisions. On the one hand, we find that it is Congress which has the power to borrow money. But on the other hand we also have the 14th amendment, section 4 which states:
“The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.”
In other words, this country is not allowed to default. Default is unconstitutional. Default is illegal. Default is a federal crime.
This is not an option which I can choose to exercise or ignore. It is not something I can invoke or not invoke. This is the Constitution talking. This provision binds me, and ought to bind the opposition in Congress, since they too have sworn to uphold the Constitution.
The Debt Ceiling is Unconstitutional and Must Be Disregarded
This provision places upon the President the responsibility to guarantee the timely payment of all United States debt obligations, regardless of attempts to the contrary that might come from other organs of government, including Congress or, for that matter, the courts. These words make me the ultimate guarantor of the solvency of the United States, especially under emergency conditions in which other branches of government have failed to do this. I am the last backstop. The buck stops here.
By contrast, the Constitution nowhere makes any reference to a debt limit. In fact, the first debt limit was instituted in 1917, less than a hundred years ago. Somehow we got through our first century and a quarter of national life, conquered the frontier, won the Civil War, and created the world’s greatest industrial power without any need for a debt ceiling.
In my considered judgment, and in the light of Amendment 14, Section 4, of the U.S. Constitution, a statutory debt ceiling is therefore unconstitutional. And all competent constitutional jurisprudence agrees that the president must not be bound by legislation which the courts are likely to find unconstitutional. This is all the more true in the present acute crisis.
Accordingly, I have issued an executive order directing the Secretary of the Treasury to resume Treasury auctions today, August 1, 2011, with a view to maintaining the uninterrupted ability of the United States to meet all of its financial obligations, budget and debt, foreign and domestic, without exception. The full faith and credit of our country will be maintained.
I cordially invite the Congress to approve and validate this decision ex post facto.
If your child is in Head Start, it will remain open. If you rely on Social Security, this means you will get your check. If your life depends on Medicare, you can rest assured that your doctors and hospitals will be paid on time so that they can continue their useful activity. If you are living in a nursing home and require Medicaid, those payments will also be available. If you are a member of the military, or a government employee of any kind, you will receive your salary on time. If you are a private firm doing business as a contractor with the government of the United States, you will be able to meet your payroll. If you are carrying out medical research or other scientific research funded by a US government grant, you can be assured that this support will not be interrupted. If you are a person or institution or government anywhere in the world who has purchased United States Treasury securities, you will be paid every penny, on time. If you want to buy a United States Savings Bond or cash one in, you can go ahead and do it.
Those intent on bankrupting the government of the United States and pitching our country into chaos may attempt to reverse this decision in the courts. I have directed the Solicitor General of the United States to prepare to refute their arguments. Since our constitutional position is strong, I have no doubt that we will prevail.
Some will say that the debt ceiling has been around for almost a century, and that so many precedents should not be overturned. That kind of thinking would leave us in bondage to judicial monstrosities like Plessy v. Ferguson, which validated racial segregation, or the infamous Dred Scott decision, which said that skin color was the basis for denying people rights given by God and natural law, and recognized by the Constitution. It will not be the first time we have fixed what turned out to be a terrible mistake.
Others in the House of Representatives bent on driving our nation into default have already announced their intention of impeaching me over this issue. I welcome their attack and the opportunity it will give to further clarify these great issues of the American public.
They will try to impeach me for what I am doing to save the public credit of the United States. In my view, I would truly deserve impeachment were I to refrain from taking this timely action. The President must take care that the laws be faithfully enforced, and this includes the federal budget and the commitments embodied in our entitlements programs and in the solvency of our Treasury securities.
I look forward to next year’s elections, which I expect will be largely fought over this issue and the larger questions which it raises.
Some have raised the question of the debt ratings agencies, and of their future evaluation of the United States public debt in the light of these events. I take this opportunity to announce that the Attorney General, the Department of Justice, and the FBI, acting under my direction, have initiated a comprehensive investigation of corruption and malfeasance which has been alleged against these ratings agencies in connection with their failure to provide timely warning to investors who had purchased certain toxic derivative securities in 2007-2008. We are also studying the legal means of depriving these ratings agencies of the extraordinary and quasi-governmental authority they exercise because of laws and regulations which limit certain forms of public and private investment to securities which have received favorable ratings from these agencies. To this end, we are cooperating with the authorities in Italy and other countries who have also undertaken aggressive investigations of the corruption of these ratings agencies.
The Department of Justice is also investigating reports that members of Congress have entered into criminal conspiracies with bankers and hedge fund operators for the purpose of selling Treasury securities short in the context of the current crisis, and linked this to the votes they cast. The Attorney General has promised to report on this issue at the earliest possible date.
For my part, I do not intend to sell America short. Historically, those who have bet against the United States have not prevailed, nor will they prevail today.
My great predecessor, Franklin D. Roosevelt, delivered his first inaugural address on a morning in March 1933 when every bank in our country had been forced to close its doors because of panic runs, and the economic heart of the nation had stopped beating. In the face of that emergency, the defiant rallying figure of FDR promised action with these words:
It is to be hoped that the normal balance of executive and legislative authority may be wholly adequate to meet the unprecedented task before us. But it may be that an unprecedented demand and need for undelayed action may call for temporary departure from that normal balance of public procedure. I am prepared under my constitutional duty to recommend the measures that a stricken nation in the midst of a stricken world may require.
Roosevelt spoke these words at a time when a new Congress had failed for almost three months to do anything meaningful to fight the Great Depression and the banking panic which were ravaging the land in those years. Some at that time had concluded that our form of government was unworkable in a modern crisis, and they were looking abroad for new models of totalitarianism. We must always realize that any system of government which cannot solve the most urgent, life and death problems of the everyday life of the people is not long for this world. It risks being swept aside. If democracy brings chaos, that may be the end of democracy. In this sense, the future our democratic representative government depends on our solvency.
It is in this spirit that I am dealing with the current crisis. I remind you all that, while avoiding national bankruptcy and default in the short-term is absolutely indispensable, this will not by itself solve the majority of our economic problems. The world will remain gripped by an economic and financial depression of incalculable proportions. We will still have some 30 million unemployed in our country. We will still witness American families thrown on the street by fraudulent foreclosures. We will require a comprehensive economic recovery program, supplemented by significant domestic reforms, and capped by a new world monetary system, to put the current world depression behind us.
It is, however, my hope that, by rebuffing those political forces seeking to drive our country into bankruptcy and chaos, we have gained the time necessary to address these issues of economic recovery and financial reform free from the climate of blackmail, extortion, and shakedown.
In the meantime, America will be open for business, today, tomorrow, and every day. Equally important, we can be confident in the ability of our constitutional system to protect the general welfare and the public interest from the machinations of small cliques of fanatics, wealthy though they may be.
I ask for your support. Thank you.
TARPLEY.net
July 27, 2011
Editor's NOTE:
This fictional speech that Webster G. Tarpley has suggested President Obama make is
fascinating.
--Dr. J. P. Hubert
My fellow Americans:
I speak to you tonight in an hour of grave danger to our nation. As you know, within the next few hours our government is in danger of failing to make payments of interest and principal which the United States Treasury has contracted to make. In technical terms, we are not far away from beginning to default on payments associated with those US Treasury securities which represent the public debt of the United States. As part of the same crisis, there is now a threat to over 70 million checks which your government issues every month — payments which go to recipients of Social Security, to providers of health services under the Medicare program, to Medicaid beneficiaries, to our active-duty and retired military personnel, to our defense contractors, to our government employees — in short, to everyone who receives a benefit from the federal government, who works for the federal government, or who does business with the federal government.
Default Means National Bankruptcy and World Chaos
A default of this kind means nothing less than national bankruptcy. Default is the essence of chaos and anarchy. It is a peril which we have successfully avoided during our entire existence as a nation, through a terrible civil war and the two world wars of the past century.
The United States dollar continues to play the role of the world reserve currency. This means that the central banks on every continent have chosen to maintain large portions of their reserves in the form of US Treasury securities. This role has been slightly diminished in recent years, but it is substantially intact. For the US government to default on payments through the US Treasury would therefore provoke a radical devaluation of the central bank reserves of the entire globe, wiping out some central banks and leaving others critically weakened. This might lead to massive dumping of US Treasury securities, leading to a general world panic to which no asset class would remain immune. We might see a dramatic decline of the dollar. This would represent the disintegration of the current world financial system, and a breakdown crisis of economic activity of unthinkable proportions. This might happen immediately, or it might require months or even years to explode in its full fury. In any case, it would put the United States on the road to national decline.
If you recall how financial markets seized up and ceased to function in the terrible days of September and October 2008, you have some inkling of the kind of catastrophic market climate that would be unleashed by the national bankruptcy of the United States. Borrowing, credit, mortgages, car financing, credit cards, and the like would not just require astronomical interest rates; many kinds of lending would disappear altogether. Millions more jobs would be lost.
The Public Credit is an Asset for All Americans and for the World
The United States Treasury securities market, with its $1 trillion per day of turnover, represents a unique national asset for our country. It is a signal achievement of the American System of Political Economy founded by Alexander Hamilton. It is the broadest, deepest, and most liquid market in the world. It is capable of absorbing trillions of dollars of securities and turning them into cash within a few hours – a capability unique on this planet. Despite how indignant we all are about the abuses of Wall Street, it would be extremely unwise to permit the Treasury securities market to be wrecked by ideological fanatics. All the more so since the Treasury market is unique in the world, and its extinction would leave no currency whatsoever in a position to function as the reserve medium of the world. This would have terrible implications for world trade and investment.
In short, our Treasury securities are the bedrock of all economic activity in this planet, and the common interest of humanity is well served by avoiding their chaotic insolvency.
The “Tea Party Caucus”: Right-wing Anarchists Funded by Malefactors of Great Wealth
Why, many Americans may wonder, should this crisis exist today? Here it is useless to talk in euphemisms in order to appear conciliatory; it is now necessary to call things by their names. As a result of the current world economic and financial depression which began in 2007-2008, the extreme right wing of the Republican Party, now calling itself the Tea Party, has been energized and revitalized. They have also begun to receive large amounts of political funding, including from a sinister individual who is reported to be the richest man in New York City. These are the malefactors of great wealth about whom presidents of both parties have been warning you for over a century. The goal of these opulent backers of the so-called Tea Party is to eliminate taxation and regulation upon themselves and their private business interests, many of which are in direct conflict with the public good. The impact of this Tea Party on public opinion has been magnified out of all proportion by the collusion of corrupt media cartels; in reality, the supporters of the so-called Tea Party do not exceed about 15% of our population.
Neo-Feudalism
Thanks to the economic royalists who support them, a Tea Party contingent numbering almost 90 members has entered the House of Representatives. Many are political novices. Many of them sincerely believe in the strange and un-American foreign doctrines of the Austrian school, according to which government is an unnecessary evil which needs to be abolished. It is entirely proper to see them as a species of right wing anarchist. The market, by contrast, they fetishize as infallible, and deserving of unbridled free reign over all the human affairs. They want a market without a government, something which has not existed in human affairs since the transition from the Old Stone Age to the Neolithic age, when the state emerged. The free market with no role whatsoever for government went out with Alley Oop the cave man, and it is not likely to return.
And all too often, the market of which they speak turns out not to be free, but rather dominated by predatory cartels, monopolies, and oligopolies. They are devoted to the causes of deregulation, privatization, the abolition of trade unions, more privileges for the wealthy, and a race to the bottom among the states. The world for which they are striving resembles perhaps nothing so much as feudalism as seen in Europe after the fall of the Roman Empire – and, like that anarchic chaos, it can only be described as A New Dark Age.
Most especially, these right wing anarchists of the Tea Party hate the social safety net which incorporates the precious economic rights for which the struggles of the American people won recognition during the New Deal and the Great Society. I am referring of course to Social Security, Medicare, Medicaid, unemployment insurance, the Head Start Program, the WIC program of high-protein meals for expectant mothers and infants, and many more. I am also referring to the right to collective bargaining for wage earners in the public and private sectors alike, and other features of a humane modern society.
Their reasons for this view read like a catalogue of the seven deadly sins, with pride, greed, rage, and envy in the lead. To these we must add class hatred, and also racism, since many of them are obsessed with the idea that their taxes are being spent to help minority groups.
New Deal America Repudiates the Tea Party
The problem faced by the Tea Party Republicans is that two thirds to three quarters of the American people warmly support the social safety net created by the New Deal and the Great Society. A recent poll has also shown that fully 80% of Americans want tax rates on the super-rich to be increased. Despite so many years of radio ranting, venal professors, and merciless sloganeering by politicians, the American people continue to repudiate the ideological platform of the so-called Tea Party. There is no hope their program could ever get passed.
Out of their despair that their ideological goals could ever be met through the democratic process, these wealthy individuals and their anarchist following have evolved a diabolical strategy. Their strategy is extortion. It is an attempt to place the United States government under duress. It is an attempt to mutilate, alter, and denature our Constitution through unconstitutional means.
It is nothing short of an illegal coup d’etat.
The Tea Party cloaks themselves in public as the greatest admirers of the U.S. Constitution. But in one concrete instance after another, we find that the Tea Party is at war with the Constitution.
The Tea Party Hates the Constitution in Practice
Our Constitution speaks not once but twice about the general welfare. To the Tea Party, this is anathema, since they believe that government should serve the wealthy few.
In terms of the issue at hand, Article I, Section 8 of the Constitution specifies that the Congress shall have the power “To borrow money on the credit of the United States.”
This is once again anathema to the Tea Party. In such a fundamental provision as this, enacted in response to the bitter lessons of ungovernability taught by the Articles of Confederation interlude, the Tea Party faction sets itself above the wisdom of the founders. The Tea Party would rewrite this provision to read that the Congress shall NOT have the power to borrow money on the credit of the United States, and the framers be damned.
This is what they admit when they demand their so-called balanced budget amendment. Such an amendment would destroy the finely wrought mechanism of the separation of powers and its accompanying checks and balances, which have served us so well over the centuries. But it is also a subterfuge, since the Tea Party knows very well that this amendment has no chance of being approved by the Congress, nor by the states. Rather, it has included in their litany of cut, cap, and balance purely as a deal-breaker, to make absolutely sure that no possible settlement can be forthcoming in the time available. They are determined to make all negotiations fail.
The Tea Party Goal is to Bankrupt the United States
The goal of the Tea Party faction of Congress is nothing less than the national bankruptcy of the United States, procured by forcing our default on the contractual and legal obligations of this government. They regard default and bankruptcy as positive goods, and indeed as indispensable steps on the path to the free market utopia they fondly imagine. Their reasoning is that, once the United States has gone bankrupt, it will henceforth be either prohibitively expensive or totally impossible for the Treasury to sell its bonds on the world financial markets. Therefore, payments on Social Security, Medicare, Medicaid, and other programs will have to be cut – not by law, but by the brute force of having no money.
This they do in wartime, with some 160,000 troops in the field, many of them fighting determined enemies on the other side of the world.
They claim they want predictabilty to allow businesses to create jobs, yet they court the greatest chaos and instability our nation has ever faced in our financial affairs – insolvency.
These same Tea Party ideologues, still feigning a concern about the American people, have already sponsored legislation which would give foreign creditors — the Chinese, the Japanese, the Saudis, and others — top priority in payments made by the federal government, ahead of our military personnel. According to these bills, we can be sure that Americans whose lives depend on Social Security, Medicare, and Medicaid will be dead last when disbursements are made. We can perhaps now see the real dimensions of the sinister plan with which we are confronted. By driving this government into bankruptcy, the Tea Party hopes to roll back the Constitution by wrecking the Congressional ability to borrow money as a practical matter, while at the same time destroying the entitlement programs which the most extreme Republicans have hated since the time of Franklin D. Roosevelt.
And not just Tea Party fanatics endorse this strategy. Indeed, it has the sympathy of rich elitists of all political stripes, including the academic and foundation left, who welcome the effort to strip away the economic rights of the American people.
Default Spells Genocide Against the American People
This is a policy which threatens the very lives of millions of Americans. It raises the specter of genocide against our own people. And I have not become President of the United States to preside over genocide against Americans.
I am not motivated by any ambition for the aggrandizement of the powers of the presidency. I have negotiated in good faith for months. The other side has not. I have offered reasonable concessions. Indeed, I have waited until now, when the clock reads five minutes to twelve, constantly hoping that the legislative process in Congress would yield an acceptable result. But now, with the specter of national bankruptcy in full view, and no reasonable outcome forthcoming, it is my responsibility to act. Since I sit in the seat that belonged to Washington and Lincoln and Roosevelt, it is my hope that my actions may be worthy of their heritage.
In a Conflict Among Statutes, the Constitution Decides
I am faced first of all with a conflict among statutes passed by Congress. On the one hand there is the debt ceiling law, which states that the Total Public Debt Outstanding of the United States of America shall not exceed $14.294 trillion. Since our public debt reached that level on May 16, this statute could be interpreted as barring any further auctions of United States treasury bills, notes, and bonds. And if we cannot borrow money in this way, since our current income is inadequate to meet all our obligations, we are headed for default, bankruptcy, and, worst of all, social chaos.
But this is not the only statute in the US Code. There are also other statutes to which I must pay attention. All public expenditure of the United States government, as you know, is carried out by law — by a law called the federal budget, which specifies what amounts are to be spent and on what. Every expenditure has to go through the Congress not once but twice — it must be authorized, and then it must be appropriated, and each of these requires the consent of the two houses of Congress and the signature of the president. I am now confronted with a series of expenditures which the current Fiscal Year 2011 budget, passed by Congress and signed into law by me, requires me to make. This includes the entire vast array of social safety net, defense, transportation, health, regulation, inspection, government employment, and other activities which I outlined above. I am under legal compulsion to make these expenditures.
Concerning Treasury securities outstanding, each one of these is an explicit contract that the United States government will pay specific sums of interest and principal at specified dates. Respect from the sanctity of contracts also requires me to make every one of these payments, without exception.
This is therefore my situation: on the one hand, the debt ceiling forbids me to borrow. On the other hand, the federal budget and the implied contracts represented by entitlements and Treasury securities require me to pay. Since tax revenue, partly because of recent and misguided legislation, is not adequate to make all of these payments, something has to give.
It is obvious that, when two or more statutes conflict, we need to look to the Constitution itself for guidance as to which one will apply. Given the extraordinary attention which the Constitution gives the concept of the general welfare, this guiding principle needs always to be kept in mind. Beyond this, our founding document contains two especially relevant provisions. On the one hand, we find that it is Congress which has the power to borrow money. But on the other hand we also have the 14th amendment, section 4 which states:
“The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.”
In other words, this country is not allowed to default. Default is unconstitutional. Default is illegal. Default is a federal crime.
This is not an option which I can choose to exercise or ignore. It is not something I can invoke or not invoke. This is the Constitution talking. This provision binds me, and ought to bind the opposition in Congress, since they too have sworn to uphold the Constitution.
The Debt Ceiling is Unconstitutional and Must Be Disregarded
This provision places upon the President the responsibility to guarantee the timely payment of all United States debt obligations, regardless of attempts to the contrary that might come from other organs of government, including Congress or, for that matter, the courts. These words make me the ultimate guarantor of the solvency of the United States, especially under emergency conditions in which other branches of government have failed to do this. I am the last backstop. The buck stops here.
By contrast, the Constitution nowhere makes any reference to a debt limit. In fact, the first debt limit was instituted in 1917, less than a hundred years ago. Somehow we got through our first century and a quarter of national life, conquered the frontier, won the Civil War, and created the world’s greatest industrial power without any need for a debt ceiling.
In my considered judgment, and in the light of Amendment 14, Section 4, of the U.S. Constitution, a statutory debt ceiling is therefore unconstitutional. And all competent constitutional jurisprudence agrees that the president must not be bound by legislation which the courts are likely to find unconstitutional. This is all the more true in the present acute crisis.
Accordingly, I have issued an executive order directing the Secretary of the Treasury to resume Treasury auctions today, August 1, 2011, with a view to maintaining the uninterrupted ability of the United States to meet all of its financial obligations, budget and debt, foreign and domestic, without exception. The full faith and credit of our country will be maintained.
I cordially invite the Congress to approve and validate this decision ex post facto.
If your child is in Head Start, it will remain open. If you rely on Social Security, this means you will get your check. If your life depends on Medicare, you can rest assured that your doctors and hospitals will be paid on time so that they can continue their useful activity. If you are living in a nursing home and require Medicaid, those payments will also be available. If you are a member of the military, or a government employee of any kind, you will receive your salary on time. If you are a private firm doing business as a contractor with the government of the United States, you will be able to meet your payroll. If you are carrying out medical research or other scientific research funded by a US government grant, you can be assured that this support will not be interrupted. If you are a person or institution or government anywhere in the world who has purchased United States Treasury securities, you will be paid every penny, on time. If you want to buy a United States Savings Bond or cash one in, you can go ahead and do it.
Those intent on bankrupting the government of the United States and pitching our country into chaos may attempt to reverse this decision in the courts. I have directed the Solicitor General of the United States to prepare to refute their arguments. Since our constitutional position is strong, I have no doubt that we will prevail.
Some will say that the debt ceiling has been around for almost a century, and that so many precedents should not be overturned. That kind of thinking would leave us in bondage to judicial monstrosities like Plessy v. Ferguson, which validated racial segregation, or the infamous Dred Scott decision, which said that skin color was the basis for denying people rights given by God and natural law, and recognized by the Constitution. It will not be the first time we have fixed what turned out to be a terrible mistake.
Others in the House of Representatives bent on driving our nation into default have already announced their intention of impeaching me over this issue. I welcome their attack and the opportunity it will give to further clarify these great issues of the American public.
They will try to impeach me for what I am doing to save the public credit of the United States. In my view, I would truly deserve impeachment were I to refrain from taking this timely action. The President must take care that the laws be faithfully enforced, and this includes the federal budget and the commitments embodied in our entitlements programs and in the solvency of our Treasury securities.
I look forward to next year’s elections, which I expect will be largely fought over this issue and the larger questions which it raises.
Some have raised the question of the debt ratings agencies, and of their future evaluation of the United States public debt in the light of these events. I take this opportunity to announce that the Attorney General, the Department of Justice, and the FBI, acting under my direction, have initiated a comprehensive investigation of corruption and malfeasance which has been alleged against these ratings agencies in connection with their failure to provide timely warning to investors who had purchased certain toxic derivative securities in 2007-2008. We are also studying the legal means of depriving these ratings agencies of the extraordinary and quasi-governmental authority they exercise because of laws and regulations which limit certain forms of public and private investment to securities which have received favorable ratings from these agencies. To this end, we are cooperating with the authorities in Italy and other countries who have also undertaken aggressive investigations of the corruption of these ratings agencies.
The Department of Justice is also investigating reports that members of Congress have entered into criminal conspiracies with bankers and hedge fund operators for the purpose of selling Treasury securities short in the context of the current crisis, and linked this to the votes they cast. The Attorney General has promised to report on this issue at the earliest possible date.
For my part, I do not intend to sell America short. Historically, those who have bet against the United States have not prevailed, nor will they prevail today.
My great predecessor, Franklin D. Roosevelt, delivered his first inaugural address on a morning in March 1933 when every bank in our country had been forced to close its doors because of panic runs, and the economic heart of the nation had stopped beating. In the face of that emergency, the defiant rallying figure of FDR promised action with these words:
It is to be hoped that the normal balance of executive and legislative authority may be wholly adequate to meet the unprecedented task before us. But it may be that an unprecedented demand and need for undelayed action may call for temporary departure from that normal balance of public procedure. I am prepared under my constitutional duty to recommend the measures that a stricken nation in the midst of a stricken world may require.
Roosevelt spoke these words at a time when a new Congress had failed for almost three months to do anything meaningful to fight the Great Depression and the banking panic which were ravaging the land in those years. Some at that time had concluded that our form of government was unworkable in a modern crisis, and they were looking abroad for new models of totalitarianism. We must always realize that any system of government which cannot solve the most urgent, life and death problems of the everyday life of the people is not long for this world. It risks being swept aside. If democracy brings chaos, that may be the end of democracy. In this sense, the future our democratic representative government depends on our solvency.
It is in this spirit that I am dealing with the current crisis. I remind you all that, while avoiding national bankruptcy and default in the short-term is absolutely indispensable, this will not by itself solve the majority of our economic problems. The world will remain gripped by an economic and financial depression of incalculable proportions. We will still have some 30 million unemployed in our country. We will still witness American families thrown on the street by fraudulent foreclosures. We will require a comprehensive economic recovery program, supplemented by significant domestic reforms, and capped by a new world monetary system, to put the current world depression behind us.
It is, however, my hope that, by rebuffing those political forces seeking to drive our country into bankruptcy and chaos, we have gained the time necessary to address these issues of economic recovery and financial reform free from the climate of blackmail, extortion, and shakedown.
In the meantime, America will be open for business, today, tomorrow, and every day. Equally important, we can be confident in the ability of our constitutional system to protect the general welfare and the public interest from the machinations of small cliques of fanatics, wealthy though they may be.
I ask for your support. Thank you.
Friday, July 29, 2011
Disastrous Outcomes From An Orchestrated Crisis
By Paul Craig Roberts
Opednews.com
July 28, 2011
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 off-shoring 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.
Opednews.com
July 28, 2011
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 off-shoring 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.
Wednesday, May 25, 2011
“Both Parties And The White House Are Advocating A US Default”
Tyler Durden
Zero Hedge
May 24, 2011
Last week David Stockman was on Tom Keene, making the usual media rounds (sometimes we marvel at his patience and endurance), as one of the few voices of fiscal prudence available to TV producers who seek to hold a balanced debate on the topic of US insolvency. Today, Reagan’s budget director was again on Bloomberg TV explaining the reality of the situation to Matt Miller for the nth time (by now even a 2 year old will understand the cul-de-sac facing the US), although presenting a new spin on the situation, namely that we have gotten to a point where both parties are implicitly pushing for a US default, while though their inability to reach a political compromise, blaming each other for this inevitable outcome. “The real problem is the de facto policy of both parties is default.
When the Republicans say no tax increases, they’re saying we want the U.S. government to default. Because there isn’t enough political will in this country to solve the problem even halfway on spending cuts. When the Democrats say you can’t touch Social Security, when you have Obama sponsoring a war budget for defense that is even bigger than Bush, then I say the policy of the White House is default as well…That is the question that really needs to be understood better and appraised by the bond market. Both parties are advocating default even as they point the finger at each other.”
On the debt ceiling negotiations in Washington D.C.:
“Between now and November 2012, it is virtually certain [Congress] can’t pass a large, permanent increase in the debt ceiling. We’ll have periodic short-term fixes, a month, two months, and then they’ll back to squabbling and this enormous political battle we’re having over the major components of the budget: revenues, Social Security, Medicare and so forth. It will be back to the same old gong show.”
“I don’t have any hope they’ll come to a substantive agreement on the big things that need to be done because both parties have ruled off the table the essential things that are necessary.”
“We have to raise revenue, there is no doubt about that. We have to allow the Bush tax cuts to expire for everybody, not just the rich. We have to reset Social Security if we’re doing to make any headway in denting this massive, $6 billion a day borrowing spree we’re on… Neither [political] party is facing up to the real truth or telling the public.”
On broadening the tax base through VAT taxes or taxes for Wall Street:
“At the moment it is very unlikely [that any of these taxes will be implemented], but that is simply a measure of how unrealistic the debate is down in Washington today.”
“If they were realistic, they would be discussing what are the new revenue sources we can possibly tap in order to fill this gigantic $1.5 trillion hole in the budget. What are the pros and cons, what are the tradeoffs? You hear none of that discussion. They’re whistling past the grave. They should be talking about new sources of revenue and possibly increasing some of the existing taxes we have in place today.”
On when Washington will get to the point of discussing raising taxes:
“I think [Washington will discuss raising taxes] only when we get a major, thundering conflagration in the bond market.”
“For the last 10 years, Congress has been lulled to sleep by the central banks that keep buying all the debt and therefore holding down the real cost of interest on the middle and long term debt that we are issuing every day.
“And frankly, bond fund managers who somehow think that the tooth fairy is going to arrive and fix this problem, when it’s clear that is not going to happen, and that we have sovereign risk on the debt of the United States, just as clearly as the world is now discovering there are sovereign risks in the European debt issues and so forth.”
On whether there will be a 9/11-style crisis in the economy:
“That kind of crisis would be a vicious sell-off in the global bond market. That could come sooner than people think, because the Fed is getting out of the market with QE2 ending.”
“For the last six months, the Fed has bought nearly 100% of this $6 billion a day that’s been issued. Once they are out of the market, where is the new bid, where is the new demand going to come from? The Chinese are getting out of the market because finally they are having to deal with the rip-roaring inflation they have had. The people’s printing press of China will not be buying as much U.S. debt because of its own internal problems.”
“When we get to real investors, what are some of the real investors saying today? PIMCO is short the bond, they’re selling, they’re not buying.
“When we get into a two-way market when real investors began to look at real risk, begin to look at the gong show in Washington and the magnitude of the gap that we are borrowing, I think we’re going to get a re-rating of sovereign risk. We’re going to get a huge dislocation in the global bond market, and then maybe the wake-up call will finally come.”
On political problems in solving the debt problem:
“The problem is not the debt ceiling. When push comes to shove, at the 11th-hour, they will do it for a couple of weeks or months and we will have a little more borrowing headroom and will be back to the same impasse where we are now.”
“The real problem is the de facto policy of both parties is default. When the Republicans say no tax increases, they’re saying we want the U.S. government to default. Because there isn’t enough political will in this country to solve the problem even halfway on spending cuts.
When the Democrats say you can’t touch Social Security, when you have Obama sponsoring a war budget for defense that is even bigger than Bush, then I say the policy of the White House is default as well.”
“That is the question that really needs to be understood better and appraised by the bond market. Both parties are advocating default even as they point the finger at each other.”
Zero Hedge
May 24, 2011
Last week David Stockman was on Tom Keene, making the usual media rounds (sometimes we marvel at his patience and endurance), as one of the few voices of fiscal prudence available to TV producers who seek to hold a balanced debate on the topic of US insolvency. Today, Reagan’s budget director was again on Bloomberg TV explaining the reality of the situation to Matt Miller for the nth time (by now even a 2 year old will understand the cul-de-sac facing the US), although presenting a new spin on the situation, namely that we have gotten to a point where both parties are implicitly pushing for a US default, while though their inability to reach a political compromise, blaming each other for this inevitable outcome. “The real problem is the de facto policy of both parties is default.
When the Republicans say no tax increases, they’re saying we want the U.S. government to default. Because there isn’t enough political will in this country to solve the problem even halfway on spending cuts. When the Democrats say you can’t touch Social Security, when you have Obama sponsoring a war budget for defense that is even bigger than Bush, then I say the policy of the White House is default as well…That is the question that really needs to be understood better and appraised by the bond market. Both parties are advocating default even as they point the finger at each other.”
On the debt ceiling negotiations in Washington D.C.:
“Between now and November 2012, it is virtually certain [Congress] can’t pass a large, permanent increase in the debt ceiling. We’ll have periodic short-term fixes, a month, two months, and then they’ll back to squabbling and this enormous political battle we’re having over the major components of the budget: revenues, Social Security, Medicare and so forth. It will be back to the same old gong show.”
“I don’t have any hope they’ll come to a substantive agreement on the big things that need to be done because both parties have ruled off the table the essential things that are necessary.”
“We have to raise revenue, there is no doubt about that. We have to allow the Bush tax cuts to expire for everybody, not just the rich. We have to reset Social Security if we’re doing to make any headway in denting this massive, $6 billion a day borrowing spree we’re on… Neither [political] party is facing up to the real truth or telling the public.”
On broadening the tax base through VAT taxes or taxes for Wall Street:
“At the moment it is very unlikely [that any of these taxes will be implemented], but that is simply a measure of how unrealistic the debate is down in Washington today.”
“If they were realistic, they would be discussing what are the new revenue sources we can possibly tap in order to fill this gigantic $1.5 trillion hole in the budget. What are the pros and cons, what are the tradeoffs? You hear none of that discussion. They’re whistling past the grave. They should be talking about new sources of revenue and possibly increasing some of the existing taxes we have in place today.”
On when Washington will get to the point of discussing raising taxes:
“I think [Washington will discuss raising taxes] only when we get a major, thundering conflagration in the bond market.”
“For the last 10 years, Congress has been lulled to sleep by the central banks that keep buying all the debt and therefore holding down the real cost of interest on the middle and long term debt that we are issuing every day.
“And frankly, bond fund managers who somehow think that the tooth fairy is going to arrive and fix this problem, when it’s clear that is not going to happen, and that we have sovereign risk on the debt of the United States, just as clearly as the world is now discovering there are sovereign risks in the European debt issues and so forth.”
On whether there will be a 9/11-style crisis in the economy:
“That kind of crisis would be a vicious sell-off in the global bond market. That could come sooner than people think, because the Fed is getting out of the market with QE2 ending.”
“For the last six months, the Fed has bought nearly 100% of this $6 billion a day that’s been issued. Once they are out of the market, where is the new bid, where is the new demand going to come from? The Chinese are getting out of the market because finally they are having to deal with the rip-roaring inflation they have had. The people’s printing press of China will not be buying as much U.S. debt because of its own internal problems.”
“When we get to real investors, what are some of the real investors saying today? PIMCO is short the bond, they’re selling, they’re not buying.
“When we get into a two-way market when real investors began to look at real risk, begin to look at the gong show in Washington and the magnitude of the gap that we are borrowing, I think we’re going to get a re-rating of sovereign risk. We’re going to get a huge dislocation in the global bond market, and then maybe the wake-up call will finally come.”
On political problems in solving the debt problem:
“The problem is not the debt ceiling. When push comes to shove, at the 11th-hour, they will do it for a couple of weeks or months and we will have a little more borrowing headroom and will be back to the same impasse where we are now.”
“The real problem is the de facto policy of both parties is default. When the Republicans say no tax increases, they’re saying we want the U.S. government to default. Because there isn’t enough political will in this country to solve the problem even halfway on spending cuts.
When the Democrats say you can’t touch Social Security, when you have Obama sponsoring a war budget for defense that is even bigger than Bush, then I say the policy of the White House is default as well.”
“That is the question that really needs to be understood better and appraised by the bond market. Both parties are advocating default even as they point the finger at each other.”
Subscribe to:
Posts (Atom)