Will America go into default?
The debt ceiling, the debt ceiling, everybody says the debt ceiling. Apparently Obama has to raise it if Uncle Sam is to pay his bills. The big issue is the question of how to get more money so America doesn’t have to keep borrowing cash from foreigners: cut spending and cut taxes? Or keep spending and raise taxes? The answer depends on which baseball team you support. I mean, political party.
Well anyway for a long time I dismissed all this debt ceiling talk as the usual shenanigans from the plutocrats in Congress. But then I read that if an agreement could not be reached between the Blue Team and the Red Team then America would default on its loans. Pensions would go unpaid! Babies would be forced to shovel coal! And so on! Apparently Moody’s – an organization possibly related to the burger joint of the same name at the end of my street – is threatening to downgrade America’s “Triple A rating” (which I believe describes the quality of its hotels).
That doesn’t sound good, I thought. But then again, maybe it does. I remember when Russia defaulted in 1998. All the experts said “N-o-o-o, you don’t want to do that,” and then when it happened, there was a lot of suffering at first, but foreign imports became more expensive, Russian exports became cheaper and gradually the economy improved. Sanity was introduced into Moscow’s real estate market and I was able to rent an apartment in the center. Tatu topped the charts around the world, a first for a Russian pop act. Coincidence? I think not.
The experts knew nothing then. So do they know nothing now? Well, maybe, but I have to admit that I just don’t like the sound of an American default. It’s understandable if collapsed superpowers and decrepit European nations struggle with their bills but America? Hell, no! That would be like stumbling upon Ronald McDonald eating a dead rat he had found in a bin. Unseemly.
OK, I thought, I need to pay more attention, find out what’s really going on. Naturally that meant watching TV. But I dropped cable ages ago, and network news is unwatchable. Fortunately I had recently acquired a little black box that connected my TV to the Internet so I had access to lots of English language foreign news channels.
“This could be interesting,” I thought, “let’s see what Johnny Foreigner thinks.”
First I tried Press TV, the Iranian propaganda channel. Alas the connection was too slow to load, probably because it is fueled by camel dung and the heat generated by burning Torahs. Then I tried Moscow’s RT, but the talking head was interviewing Yevgeny Yevtushenko about poetry. The newscaster on France 24 was banging on about Rupert Murdoch. Alright, what about Al Jazeera? They’re reliable, yes? I mean, their set design looks a lot like the BBC’s…
Unfortunately, Al Jazeera had managed to find a typically glib and useless American academic so accustomed to being surrounded by people with exactly the same opinions as himself that all he could do was repeat the standard Evil Republicans vs. Saintly Democrats narrative – hard to tolerate if, like me, you consider reality to be a little more complex than a George Lucas high concept. Fortunately there was another fellow on, a man with glasses who lived in Singapore who was able to admit that:
1) borrowing more cash is necessary in the short term
2) the federal government’s current spending patterns are indeed unsustainable
3) if taxes are not raised then some tax loopholes will need to be closed at least
Then again, I already knew all that and I’m not on TV.
But if Al Jazeera’s talking heads weren’t much help, at least the news ticker at the foot of the screen provided some amazing statistics. For instance: under Obama federal spending has risen 30% above the modern norm; America’s debt to GDP ratio- already 75%- is on course to hit 83% if current spending patterns continue; and America borrows 43 cents for every dollar it spends. But did you know that government programs designed to help the less fortunate buy homes will not guarantee mortgages to individuals with the same level of debt as the federal government itself? Curiouser and curiouser!
So are we doomed? In the long run, probably yes – certainly our descendents are going to be saddled with our debt for all eternity, while not enjoying anything like the same level of social spending. But, hey, who cares? They’re not even born yet! According to Al Jazeera, the Chinese are pretty relaxed about this while debt ceiling drama. They know the plutocrats in DC are putting on a little election show and fully intend to keep lending money to Uncle Sam. Because that buys influence, right?
Meanwhile I’ve got this little box that connects my TV to the Internet…. it’s the most amazing thing….Thousands of films and TV shows… hey, remind me: what was I talking about again?
Originally published over at the awesome RIA Novosti website
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I find it curious and more than a little suspicious that everyone keeps talking about “the debt ceiling,” and yet I have never heard anyone talk about “the debt floor.”
Indeed. And is there a debt attic? And what lurks therein?
This was awesome. And I loved that, the moment I started reading it, “America, F**ck Yeah (Bummer Remix Version)” started playing on my Pandora station!
*A debt nook
*A debt veranda
*A debt palazzo
*A debt disco
And who the fuck knows what happens in the debt basement? Or, heaven, forbid the debt shed. Or worse still- the debt dungeon.