With the debt ceiling negotiations approaching, it’s important to get a few things straight right off the bat, because the accusations against the House Republican bill as draconian and ultimately suicidal will be screamed from every news anchor, newspaper and communist run social media site in the country. This is a big deal, even if you have rejected politics a long time ago. You might have no interest in politics, but politics are interested in you (stolen from Trotsky).
The media and every leftist lunatic will claim that failing to pass a debt limit increase will cause the loss of the dollar as the world reserve currency. This is a flat-out lie. That boat has already sailed. What do you think de-dollarization is? De-dollarization is caused by massive overspending resulting in the need to print, or inject more dollars, even unbacked by Treasuries, in order to have the cash on hand to spend on luxuries like the Green New Deal, transgender surgeries, electric car incentives, wind and solar incentives, the de-oilization of our power grid etc., and other nations recognize it as irresponsible and reckless so they’re getting away from the dollar before they’re wrapped up in the collateral damage of its implosion.
The media and politicians will tell you that you need to raise the debt limit to avoid defaulting on our obligations. That’s a lie. The government raises enough cash through taxes to pay for Social Security (paid for by workers over the course of their lives) Medicare and Medicaid. It raises enough money to pay the interest on the debt, currently about $1 trillion. So there would be no default, whether the debt limit is increased or not. What would not be paid for is a great deal of discretionary spending and some tough choices would have to be made. Do we want to fund the FBI and CIA, or the military? Do we want to subsidize NGOs currently facilitating the immense illegal invasion of our country or do we want to fund the VA? These are the negotiations nobody in the uniparty wants to have, because the answers to most of these from the people are not the answers they want
So, what you have to understand going in is that what the media and the uniparty politicians are really arguing for is to fund all of the whacko Green New Deal idiocy. To be fair, there are some valuable things to everyone in America that will not be paid for, either, but that’s the cost of running the debt from $800 billion at the time Obama was elected to $32 trillion over the intervening 15 years. Yes, the math is right, about $2 trillion per year in excess spending over revenues.
The Chinese and Russians have proposed to trade in Yuan and Rubles respectively as a means of providing a safe haven from the dollar. Why? What’s happened in the past few years that made the concept of abandoning the dollar as the world reserve currency and opting for a BRICS-backed currency palatable? The absolute dedication to Modern Monetary Theory that suggests that debt is irrelevant, because no one expects the U.S. to repay it, they don’t have to, because the economy is strong enough to support it and will until the end of time.
Understanding that the dollar has been the world reserve currency since the end of WWII, when America was recognized as the most stable, advanced economic system on earth given the utter devastation of other nations in the war, both winners and losers, and you get why it was the world reserve currency. What changed? America is no longer stable. The spending is irrational, the printing of fiat currency is ubiquitous and the fact that there seems to be no end to the amount of debt America is willing to take on.
Once you get past the point where debt is in excess of 100% of GDP, you lose the argument that simply curtailing some fringe spending will put the economic house in order. There isn’t enough economic output to cover the debt (including government spending), much less the recent proposals of even greater spending to push the GDP higher, but no proposal to curtail spending to achieve the same thing except from the House proposal to hold spending at 2022 levels.
It is important to understand that when they propose more spending, they expect that government spending to increase the GDP and keep it closer to the 100% mark so people don’t panic, but at the last glance the debt to GDP was 120% and has been as high 134.8%.
The fight is over the current spending bill passed out of the House, which returns spending to the 2022 level in exchange for raising the debt limit $1.5 trillion. It’s not exactly cutting spending, which we should be doing if just to restore confidence in the dollar. Unless the government engages in actual spending cuts, it will not be able to stem the flow of other nations choosing the Yuan or the Ruble as a more stable currency in which to hold value. My bet would be on the Ruble rather than the Yuan.
Add to all of this the understanding that the petrodollar is effectively dead, most of the nations of OPEC have chosen to trade in Yuan instead of exclusively the dollar for sales of oil to other nations, once an absolute no brainer, and you understand that there is almost nothing holding up the dollar’s value and despite whatever final agreement comes out of the negotiations, there will be no reason for any of these nations to reconsider their decisions to de-dollarize their economies.
Add to all of that a banking system that relies on close to 0% interest on short term loans from the Fed while the Fed is forced to raise interest 3,4,5 maybe 6% to combat the inflation-causing constant spending and injection of literally faith-backed dollars and you start to have banking failures, the weak at first and even the strong as inflation persists until there’s a total collapse.
Would you bet on the value of the dollar that the entire economy of your nation relies on in this scenario? Nope, and neither will any of the other nations.
This is not an argument of whether or not the U.S. should default on their obligations, they have the money to stave that off no matter what. This is an argument about what to spend the excess on. No one in media will tell you that. No one in politics will tell you that. They rely on your fear of economic collapse while every policy coming out of Washington is aimed directly at economic collapse. As is typical, the only thing going on here is trying to frame it in a way to increase political power for the uniparty.
If they wanted to save the nation, they would stop the invasion at the southern border that we cannot economically, or culturally survive; actually cut spending on discretionary spending as much as 1% using de-regulation to lessen the burden and expenses of every department, including the military (since they can’t recruit anyway); restore the oil and gas activity back to Trump levels to use as a threat to return to the petrodollar, i.e. refusing to accept Rubles or the Yuan as exchange currencies for American oil and gas and refusing to purchase oil from any nation participating in foreign currencies for the exchange. If they did that, they would instill confidence in the dollar both internationally and at home and send shockwaves throughout the BRICS nations.
But they don’t want to save it, they want to kill the U.S. economy and no one in Washington is free enough of corruption to agree on these few, miniscule changes.
My novels of freedom, and especially individuality, Rebel and Rogue about a young man, growing up trying to do the right thing. They’re available on Amazon and our website 12 Round Productions, where you can also find access to our red-pill film Lies of Omission.
Good morning, T.L. Your are right. The fear porn will become intense this week and next. It will scare a lot of people. Maybe enough to make McCarthy (who I don't trust to begin with) cave and pass 'Sippy Cup's' ceiling increase. Even so, what about other countries? Even if many Americans don't see or understand the precipice we are teetering on, other countries do. Why should they invest in a broken down nag when better choices are now available. Besides, a lot of those other countries harbor a lot of animosity against the US because of the strong arm tactics having been used against them over the decades. The economy is corrupt and it affects us all. But, seriously, I don't believe its the worst of our problems.
Good Morning TLD,
Right on and to the point and you have captured the essence of the thing.
A picture tells a thousand words, and your choice of picture gives us the idea.
Jamie Dimon of JP Morgan Chase, wants the .gov to help him in his quest to
be the biggest bestest banker and suggests .gov employ eminent domain rules
to help him get the land he needs for building smart cities.
The little guy with his paltry $250K (insured) retirement savings might survive for a time,
but business accounts will not. The preferred business accounts will be bailed out, the
mighty Janet Yelling told us right out. And, of course media will hail them and tell the
ordinary citizen he needs to sacrifice his life for the "greater good". Communism.