The Debt Ceiling Charade

By: Jeff Berwick | Wed, Jul 27, 2011
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What a circus the debate over the raising of the US Government debt ceiling has become. It's fun to watch everyone involved wriggling around trying to ignore the blue whale in the room.

It used to be an elephant... perhaps around 1986. But now, after a decade of wars and trillion dollar deficits, the US Government debt has become like the largest mammal in the history of the world - the blue whale - and is perhaps so large now that it might be in everyone's best interest just to ignore it or their heads may explode from realizing the enormity of the problem.


Beyond Salvageable

The official debt of the US Government is $14 trillion but they've spent more than $60 trillion that was supposed to be "saved" in things like the Social Security trust fund for decades now, meaning the total debt and liabilities of the US Government is now over $75 trillion - an amount that works out to over $1 million per family of four.

One of the most perfectly titled websites, WTFNoWay.com, has published a visualization of US Government debt that is worth checking out. They calculate total debt and liabilities of $114.5 trillion (slightly above our estimate of $75 trillion) and show what that looks like in terms of $100 bills.

That stack on the right is what the total debt of the US Government looks like in terms of $100 bills. Yet, there is no talk of reducing it anytime in the near future - only on how much to increase it by.


Barack's Two Choices

Barack Obama, puppet to the global financiers and other private interests, commandeered the airwaves of the US the other night to state that the options are simple. He gave the US public two options:

"If you want a balanced approach to reducing the deficit, let your member of Congress know," he said. "If you believe we can solve this problem through compromise, send that message."

Is that all this is about? A balanced approach or a compromise? It seems so simple now. Thanks, Obama-tron or those who write what you recite.

He doesn't mention the other two options. Both of which are much less nebulous and are better for the US public in general in the long run.

One is to keep the debt ceiling where it is and immediately cut the US Government deficit by a tremendous amount to a level where it is not in deficit. God forbid, only spend as much as you steal? That's just crazy.

The other option is to default. Admit that the US Government is so indebted that it is mathematically impossible to pay off the debts and liabilities and to default and renege on those debts.

But, those two options were ignored.

Instead he asked for the "help of the people". He asked people to call in with their ideas as though perhaps some housewife from Nebraska might come up with something they missed at the last second!

And call in they did. Congressional switchboards were swamped with calls. There can only be one thing you can say with certainty about the tens of thousands who called - they are highly delusional!

Do they suppose that perhaps a quick call to some congressional intern with their ideas might get heard? Or that there is some easy solution to this gigantic mess that only they could provide?

Instead, democracy was reduced to its ultimate and inevitable state: groveling. Many people called in to beg their overlords to give them the money through various subsidies or tax breaks. Or take it away from someone else who is not them. At this point in democracy the government is just a big Santa Claus with a gun. You ask him for stuff and cower in submission when he says no.

In reality, however, no matter what sayeth the man on the street the politicians will keep doing what they are doing and wrangle and do deals far from the prying eyes of the public and sell-off anything they can to fatten the pockets of themselves or their benefactors. They have no skin in the game and are there just to take what they can.


The Show Will Go On

Even though they are getting down to the supposed final days of this dispute it is still highly unlikely that the politicos will not raise the debt ceiling. The reason is simple. A raising of the debt ceiling allows business as usual to continue in Washington - at least for the time being. Not raising the debt ceiling means having to do things politicians don't like: be accountable, make cuts to the size of government and have less money in the trough with which to steal, bribe and finagle.

That's why not raising the debt ceiling at all, or lowering it, was never one of the choices offered. And why gold hits new highs every day.

 


 

Jeff Berwick

Author: Jeff Berwick

Jeff Berwick
Chief Editor
The Dollar Vigilante

Jeff Berwick

Anarcho-Capitalist. Libertarian. Freedom fighter against mankind's two biggest enemies, the State and the Central Banks. Jeff Berwick is the founder of The Dollar Vigilante, CEO of TDV Media & Services and host of the popular video podcast, Anarchast. Jeff is a prominent speaker at many of the world's freedom, investment and gold conferences as well as regularly in the media including CNBC, CNN and Fox Business.

Jeff's background in the financial markets dates back to his founding of Canada's largest financial website, Stockhouse.com, in 1994. In the late '90s the company expanded worldwide into 8 different countries and had 250 employees and a market capitalization of $240 million USD at the peak of the "tech bubble". To this day more than a million investors use Stockhouse.com for investment information every month.

Jeff was the CEO from 1994 until 2002 when he sold the company and still continued on as a director afterwards until 2007. Afterwards, Berwick went forth to live on and travel the world by sailboat but after one year of sailing his boat sank in a storm off the coast of El Salvador. After being saved clinging to his surfboard with nothing but a pair of surfing shorts left of all his material possessions he decided to "live nowhere" and travel the world as spontaneously as possible with one overarching goal: See and understand the world with his own eyes, not through the lens of the media.

He went on to visit nearly 100 countries over four years and did and saw things that no education could ever teach. He met and spoke with a plethora of amazing people, from self-made billionaires to some of the brightest minds in finance - as well as entrepreneurs from a broad range of backgrounds and locations from tech companies in southern China to resource developers in Mongolia, Thailand, Russia and Chile. He also read everything he could find on how the world really works... politically and financially. A pursuit he continues to this day.

He expatriated, long ago from his country of birth, Canada, and considers himself a citizen of the world. He has lived in numerous locales since including Los Angeles, Hong Kong, Bangkok and currently lives in Acapulco, Mexico and is building a home in Cafayate, Argentina. In essence, everything he writes about here for TDV he has done or is doing.

As well, during his travels, both real and virtual (through the internet), he met some amazing people who have a similar shared vision of what is currently going on in the world and enticed them to come aboard TDV and provide their own brand of analysis.

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TRUE MONEY SUPPLY

Source: The Contrarian Take http://blogs.forbes.com/michaelpollaro/
austrian-money-supply/