Written by Don Washington   

Before we get started today America does not have a debt crisis. How can I say that? A country with a debt crisis can’t sell its debt so its bonds go for 20% or 30% or so but ours are going for like 2%. Our debt as a percentage of GDP is about three times less than Japan’s. Japan’s debt sits at 200% of their GDP. So look folks, there is no debt crisis. This austerity meme is out there for ulterior motives that have to do with protecting the wealthy and screwing the ordinary. It should also be noted that our Republican friends did this before in 1979.

It was only for one day but it cost us 120 million from a few hours of being in default. So these idiots know it will be bad they just don’t want to acknowledge it. All of the above being true today Moody’s suggested we drop our debt ceiling and that sounded great then they suggested we be more like Chile and Colombia and that sounded like something the World Bank or the IMF would want and that made me nervous because of who Moody’s actually is.

"Perhaps more than any other single event, the sudden mass downgrades of (residential mortgage-backed securities) and (collateralized debt obligation) ratings were the immediate trigger for the financial crisis.”

This is a line from the US Congressional Report about the Financial Crisis that’s costs us about $21 trillion dollars
http://www.ifc.org/ifcext/media.nsf/AttachmentsByTitle/SM09_InfrastructureCrisisFacility_IssueBrief/$FILE/SM09_InfrastructureCrisisFacility_IssueBrief.pdf
and counting in reference to Moody's Corp and Standard and Poor’s.

That’s right, the same prick-rat-bastards who knowingly took cash to lie about the stability of the above mentioned securities http://www.thefinaledition.com/article/un-jailed-americans/page-7.html, to drag in the little people and then downgraded them are now giving us advice on the debt ceiling.

Why, you ask would anyone listen to these lying, thieving, greedy, untrustworthy and corporate flunkies? Well, part of the reason is that Ray McDaniel and Deven Sharma, who run these on-going either criminal or incompetent or both operations are not in jail. Clearly they’ve done nothing wrong and this is why they continue to do what they do without anyone thinking that they might be doing EXACTLY the same unethical, illegal and horrible thing somewhere else in the market.

So let’s face it, the biggest epic fail of a system in the history of man that didn’t lead to the end of a society also led to no penalties, no reforms and getting the society the malefactors almost killed to not only save them but make them stronger. So when Moody’s suggests that they can help with ANYTHING you should get the same feeling people have in horror movies right when the 7’0” sociopath walks in the room with a chainsaw.

So quick primer on the debt ceiling; it was put in place in 1917 to provide political cover to raise money for the iffy proposition that was our participation in World War I. I think of it as a law created in “bad faith” and it typically gets raised because NOT raising it would be the act of someone clinically insane, sociopathically indifferent to the suffer of others and/or trying to destroy society as it exists now on the bodies of the poor, elderly and disabled.

That this actually describes large swaths of the Republican Party how we got here makes scary sense. No other major industrial power has a debt ceiling. As ideas go it’s an absolutely useless step that during sane times opens the door to political grand standing and in insane times, like these opens the door to economic Armageddon. I’ve talked about all of this before in some detail
http://mayoraltutorial.com/articles/it_took_nixon_to_open_china_and_obama_to_close_medicare_medicaid_and_social

You should read it and try not to do the next logical thing that involves travelling to D.C. and getting to an aforementioned negotiating table with brass knuckles and a list of clear demands around job creation, peace, economic and tax justice and everything else Obama might have decided would be his legacy.

But we’re not talking about all of that. We’re talking about a possibly; criminal/incompetent or both enterprise; giving us advice about how to solve our politically created crisis that might transform into a full-blown real life crisis. Moody’s suggests that we get rid of the debt ceiling. That is a good idea because it gets rid of what they are calling “periodic uncertainty" over the government's ability to meet its obligations,” and if you ask... what’s so different now.

The answer is that before the GOP became a neo-fascist breeding ground Moody’s and the S&P always thought the debt ceiling was a formality like bowing before the Queen because Congress usually raises the debt ceiling without controversy. Now its gonna be Russian Roulette and government by blackmail every time it comes up. We better hope the Chinese, Brits and Japanese don’t get worried about our dependability because if they do the whole country is gonna go right into the dirt.

So the basic idea good but the specific advice suggest we emulate Chile. You may remember Chile as the place where Milton Friedman helped kill a few hundred thousand people in the name of neoliberal economic purity. The particular “reform” they suggest is one favored by the IMF and World Bank, “fiscal rule” is one of their favorite plans. What it does is force a government to limit its debt at a time when it may need to really raise its debt. For example, at one point America had a debt that was 120% of our Gross Domestic Product (GDP). That was after WWII.

What Moody’s is suggesting is that we set a “fiscal limit” at say 60% of GDP. How would we have fought WWII? How would we have bailed out Europe with the Marshall Plan? The answer is that we couldn’t have done so. Nope, we’d have been chopping up our social safety net a long time before Reagan, Clinton, both Bushes and Obama. This is an idea that is bad on its face.

As a rule of thumb if you want to become a third world country with vast economic inequality, failing infrastructure and grinding endemic poverty/unemployment follow and idea from the World Bank or the IMF. Give this a read
http://www.thirdworldtraveler.com/IMF_WB/Budhoo_IMF.html and know that these people are not out to help solve our problems. They are, after all, part of the reason that the Republicans have been able to put us in this bad trick bag.

So what’s the solution? Nothing that our friends over at the GOP are suggesting; Sen. McConnell et. al are all politicking that’s how we got here in the first place. Let’s just get rid of the law and get to the real problems our country is facing.