A Deal Everybody Hates

By Greg Hunter’s USAWatchdog.com 

Everybody is thinking the debt ceiling deal is a done deal.  To that I say, not so fast.  First of all, this is a deal everybody hates including the President.  That doesn’t mean he won’t sign the legislation when it comes across his desk—he will.  The leaders in Congress have agreed to a plan, but the trick is going to be getting it through the House and Senate.  The far left hates it for the spending cuts and no upfront tax increases.  The far right hates it because the cuts are not deep enough.  There is less resistance to the deal in the Senate, but the House of Representatives is another story altogether.   There are probably at least 160 “NO” votes between Democrats and Republicans.  (The Senate is not a done deal either, but it is probably more likely to pass it than the House.)  The Black Caucus hates the debt deal so much it has asked the President to bypass Congress and raise the ceiling on his own by using the 14th Amendment.  That is not going to happen before the August 2nd deadline.  If the bill fails to get the votes, who knows what will happen.

There are some big sticking points.  The debt bill is supposed to be a two stage plan.  Basically, the first stage of the deal promises immediate cuts of a little less than a $1 trillion now along with raising the debt limit by around $2.4 trillion in total.  (The debt limit is also raised in 2 stages.)  This puts the debt limit high enough to make it past the 2012 election.  In the second stage of the deal, there is $1.4 trillion in more cuts.  According to the President, tax increases will also be on the table.  This will have to be done no later than December 2011.  The deficit reduction is supposed to be decided by a Special Congressional Committee.  Otherwise, big automatic cuts will kick in (they call this the trigger). This includes military spending and Medicare.  So, that alone is a big sticking point and has some in Congress shying away from this deal already.  Tax increases in stage two of the deal is also another big problem that could derail passage, especially in the House of Representatives.

Yesterday, David Plouffe, Senior WH Advisor, was on “Meet The Press” and was insisting the second stage should be “balanced,” which means tax increases (confiscation).  So, if this plan does win approval, Congress will be right back to chasing its tail in a spending and tax debate in the not too distant future.   $2.4 trillion in cuts may sound like a lot, but not when you consider the cuts happen over ten years.  That’s just $240 billion a year, and that hardly dents annual deficits of $1.5 trillion ($1,500 billion.)  This bill does not really cut spending, but merely slows it down.  Senator Lindsey Graham said today on ABC’s “This Week,” “. . . we’re no longer running toward oblivion. We’re walking toward it, and now we need to stop and turn around, go back the other way.  What do I tell people at home who say, what did you do about getting us out of debt?  I slowed down how much debt you add?  Instead of adding $10 trillion, we’re going to add $7 trillion 

Congressman Ron Paul said last week, “I think both sides are failing to understand the country is bankrupt.  There will be a default.  The only debate that is going on is how you default, and I vote for stopping the spending so we don’t have to print all the money.”  (Click here to see the complete Ron Paul interview.)  Of course, what he is talking about is the destruction of the buying power of the dollar, or inflation.  I am sure everyone has noticed big increases in food and energy in the last year or so.  That problem will only get worse as the deficits increase.  Even if a bill that lifts the debt ceiling does garner the President’s signature, America’s credit rating may be downgraded for not cutting enough spending.   The rating agencies were looking for a minimum of $4 trillion, and this deal provides a little more than half of that amount.  You know what happens when you have a low credit score don’t you?  You pay higher interest rates.  That would increase borrowing costs for the government and everybody else in the U.S.

I am still not sure the deal cut between the President and Congressional leaders of both parties will have enough votes to pass the legislation before August 2nd.  I look for real resistance in the House from both Republicans and Democrats.  Boehner and Pelosi will have a tough job getting the votes from their own parties to pass the most hated legislation to hit Washington D.C. in a very long time.  I am still betting Congress will miss the August 2nd so-called default deadline.

Comments
  1. Davis

    I got up this morning and had a good laugh at the Reuters headline “World warns of disaster if no debt deal done.” There is going to be a disaster all right, its inevitable. But it won’t be because no debt deal has passed, it will be because of all the debt deals that HAVE passed over the last 30 years. As usual the media and the pols are selling the sort term propaganda job rather than the long term reality and as always the rest of us will end up suffering the consequence of their folly, (and our own for buying into it all these years.)

    • Greg

      Thank you Davis for supporting this site. Please keep the comments and analysis coming!
      Greg

  2. Hoppe

    No news here. Same old Washington political wrangling to again “kick the can down the road”, past the next election.

    They stand on what I call the “Principle of Pragmatism”.

    I deluded myself, for a brief moment, that enough would find the courage to do the right thing for our country and my children.

    • Greg

      Thank you Hoppe.
      I just saw a poll on FOX and more than 90% hate this debt deal too!
      Greg

  3. George

    This deal is like having two pilots on the titantic. a weeks warning of an inceberg and the two pilots fight for control and end up hitting the iceberg. then they start playing the blame game as the ship sinks

    • Greg

      George,
      If it wasn’t so true your comment would be really funny. Thank you man!
      Greg

  4. Mitch Bupp

    The debt deal is nothing more than kicking the can down the road politics where we will have enough debt overhead to get through the 2012 election cycle and a commission that is just a cover to maintain the illusion that Congress is dealing with the debt issue. The commission makes it look like politicians are doing something when they are just positioning themselves for the game down the road.

    Secondly the debt is the result of two specific policies… First, the rich and corporate America has been buying up both sides of the Congressional isle where they have gutted the tax code by giving trillions of dollars of tax breaks to those who can afford them the most. While the FED is just giving money away money hand over fist to business and industry that are using our money to offshore jobs and buy more influence. Today, if tax policy was rolled back to the 1961 levels corporations and individuals making more than one million dollars a year would pay $716 billion in additional taxes. That’s right, since 1961 the rich and corporate America has seen a reduction in taxes of $716 billion a year!

    Today, the bigger they are the bigger bailout and the fact that more likely to get a bailout by the taxpayer who just can not afford anymore trickle down chum change economics.

    • Greg

      Mitch,
      Amen brother!
      Greg

    • Mitch Bupp

      missed that typo in the last line, “trickle down chump change”.

  5. Art Barnes

    Greg, can kicking is alive and well in America. Our esteemed Congress is playing in the olympics here, but both sides are kicking the same way, down the road. The “deal” is a farce, they won’t fool wall street for long, but they will fool the American people for another vote next year, thats all they want. I still believe we could do better than these paid for talking dummies but it never happens. They are all worried about the Asian markets, wouldn’t it be nice sometime for them to be worried about America. “None of the above” is really looking good for my vote next year. Simply stated: THIS DEAL IS A PRELUDE TO GREECE!

    • Greg

      Art,
      Thank you for weighing in. I think we are already Greece only many orders of magnitude worse.
      Greg

  6. Leo R. Lindquist

    Here are some quotes from our inspired Founding Fathers. Read them and add up how many of our current lawmakers follow their principles. Ron Paul for sure does, but how many others?

    I go on the principle that a public debt is a public curse, and in a Republican Government a greater curse than any other” – James Madison

    Timid men prefer the calm of despotism to the tempestuous sea of Liberty. – Thomas Jefferson

    “The principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale.”
    -Thomas Jefferson

  7. Frank Brady

    The debt deal is nothing but bi-partisan deceipt.

    1. There are no “cuts” in this plan. Agreeing to slow the rate of projected spending increases over the next 10 years from $10 trillion to $7 trillion is not a cut. That’s what this deal accomplishes.

    2. Even more deceptively, no Congress can bind future Congresses to anything.

    Obama, Reid, McConnell, and Buehner are all deliberately lying.

    Frank

    • Greg

      Frank,
      Two heads and one ugly body!! Thank you.
      Greg

  8. Leo R. Lindquist

    Also some other Founding Fathers quotes: “No measure can be more desirable, whether viewed with an eye to its intrinsic importance, or to the general sentiment and wish of the Nation” than to establish “a systematic and effectual arrangement for the regular redemption and discharge of the public debt.” ~ George Washington
    “There does not exist an engine so corruptive of the government and so demoralizing of the nation as a public debt. It will bring on us more ruin at home than all the enemies abroad against whom this army and navy are to protect us” (letter to Nathaniel Macon, August 19, 1821).
    To contract new debt (raising the debt ceiling?) is not the way to pay old ones.” – George Washington, from a letter to James Welch, April7, 1799.

    Share these quotations with your lawmakers today!!!!!!

  9. PatriotRider

    This deal is a complete and total sham. It proves several things.

    1. Washington will not and cannot change.
    2. Default is inevitable, either by actual default or by inflation/hyperinflation
    3. Democrats and Republicans are basically the same. Two heads of the same snake.
    4. This “deal” should prove to everyone that you better start prepping yourself and your family now for what is to come.

  10. mike nathe

    If this dosn’t pass we have an immediate 40% cut in the budget!
    perfect. why cant the republicans see that. or at least use it for leverage to get at leasr 25% across the board cuts. this is so simple too me am I missing something?

  11. nm

    Greg:

    A few weeks ago, I came here and left a comment telling you that the debt deal would be passed and was wondering why you were wasting our time discussing it. I take back my words.

    I don’t think people get what’s happening. Last night, I was talking to a friend about it and I said, if you owed $100 dollars on your credit card and asked the credit card company to lend you $100 dollars more (otherwise,you wouldn’t be able to pay back the original $100 dollars) – would that make sense? because essentially, that is what Obama is saying. He is saying, that in order to pay our debts, we need to borrow more money.

    Her response was: “No, it’s not the same thing. It’s not that simple”… but in fact it is! Then, she said gold had no intrinsic value and I asked why she thought that — she said you can’t sell it for cash!!!! (she actually asked, where one could sell gold?)

    This friend has an MBA.

    I rest my case.

  12. Vess

    What I can’t understand is how the 14th Amendment allows the President to bypass Congress and single-handedly raise the debt ceiling??

    I just gave it another read. Sections 1-3 are totally irrelevant to this issue. Section 4 basically says that the USA can’t back off from its debts, including pension promises. Nowhere does it say that the President has the right to raise the debt ceiling. In fact, Section 5 explicitly says that it is Congress that is authorized to enforce this article.

  13. kennyg

    The only thing this deal does in turn the fire down so the hot water will boil a little slower and we will be eased into the 3rd world…..keep the info coming Greg.

  14. Jerry

    It is easy for me to see what must be done. These fools are still arguing, while Ron Paul makes sense once again. Stop the spending, bring the troops home, shrink big government, end the FED printing more money. Add up the savings. It would be a huge step in the right direction, and the only responsible one.

  15. Granny

    Nothing has been averted. The real cuts won’t happen and the spending is still increased. We’re going 90 MPH down a deadend street.

  16. james

    greg.
    iv been thinking about mr. rothchild rising from the grave to scare the stock market around the world,so he could control the whole world.
    lie to one side, they invest,-turn around and steal there money by letting the truth come out. then vise versa. american politics is not just a game anymore its world dominance.

    • Greg

      Thank you James.
      Greg

  17. Norm Ezzie

    Man, oh man! Could I go into launch-mode today- I’m on fire~~~ lets just say it the only way I can- sixty some years of social engineering,social justice and the looting of our national Treasury is reaching the “breaking point”- and in the meantime,those SOB’s in Washington will use that old tactic of: “duck and cover” just a little bit longer,all the time looking for their own “escape hatch”- Beck and his minions can chatter all day long about a “peaceful resolution”- Bottom line here is,there is none! Watch how those angry Tea Partiers get kicked to the curb- watch how the “money line and the color line” explode! Geee,am I trying to keep it polite? Ya bet your ass I am!!!!

  18. Henry

    Hi Greg, thanks for sharing your thoughts.
    I haven’t seen much evidence of representation from the far left in Washington or in this debate. In my opinion, the far left would be calling for major cuts in offense spending, an end to our ever expanding wars of terror, an end to our failed and barbaric war on people who choose the “wrong” recreational drugs, an increase in the minimum wage, affordable secondary education, a single payer health care plan, elimination of tax cuts and loopholes for the wealthiest few that began with Reagan, and major investments here at home in education and infrastructure, including public transportation. I see centrist and right wing representation, but little to none from the far left. There’s plenty of money available, it’s just being spent and hoarded in destructive ways by destructive, greed and power crazy people.
    Given the ever increasing wealth and income gap between the working class and the wealthiest few, I hope you’re not opposed to rolling back the tax cuts for corporations (some of which pay no taxes) and the wealthiest 5%. You understand the numbers, so you know how vast this gap is, and you probably know what has happened throughout history when a nation’s wealth is confiscated and hoarded by the wealthiest few at the expense of the many. A strong and educated middle class is a nation’s best asset.

    • Greg

      Henry,
      The country is in a very deep hole and we need vast cuts starting with the ongoing banking bailouts. You cannot have job creation without capital formation. What we have is debt formation. We are going to get the pain now or much worse later but pain we will get!
      Greg

  19. brian

    First the media made itself irrelevant by ignoring reality, the games being played here now threaten the credibility of our government in some very fundamental ways and with not just us but people all over the world.

    This deby ceiling deal is a slap in the face for any rational thinking person, these so called measures amount to nothing more than an attempt to kick the can down the road and whiffing badly like Charlie Brown, landing hard on our backside.

    • Greg

      Brian,
      Yes, the media is ignoring reality!! I blame the MSM for keeping the public in the dark and not truly informing them.
      Greg

  20. Jan

    This debt ceiling debacle certainly proves we have politicians and not statemen running the country. The Predident Tweeting all weekend? Good grief, what must other countries think of the US government? Everyone wants their face time before the cameras and the country continues to teeter on the edge.

    No matter what way they vote on this mess, it does nothing to provide jobs and without jobs we still have no tax base.

  21. Jehosaphat

    “The far right hates it because the cuts are not deep enough.”

    Except when it comes to their precious commodity: The Military Industrial Complex…

    While I am no defender of ‘left-wing’ politics, at least I know what they are – up front. They don’t try to hide too much anymore – you know what they’re about, and you either accept it or reject it.

    The ‘Right’ on the other hand, Pirates the ‘tea party’ ideals from Ron Paul, and turns them into Neo-Con ideals – i.e., cuts where we want them to come from, not where we don’t. I.e., same ‘ole, same ‘ole establishment Republican Crapola.

    We could easily cut a $Trillion dollars – or More from the defense budget; wars, contracts, inefficiencies – you name it, and still possess the strongest military on the planet – stronger than it is today I would wager.

    Now the Neo-Cons have place themselves in the unenviable position of not being liked by Anybody, save for their most ardent supporters. Shame really, especially because it Tarnishes the name of the original Tea Party, as Ron Paul envisioned and championed.

    • Greg

      Jehosaphat,
      The U.S. spends more on its military than the entire world does combined. There needs to be deep cuts everywhere of we will not have a country to defend!
      Greg

  22. Matslinger

    I read the above anlogy that made reference to the Titanic, and cant
    help but go off task here… how many of you know that the White
    Star Lines and the Titanic were owned by J.P. Morgan? and that many of the European
    opponants to the 1913 Fedeal Reserve, (and) Nikola Tesla’s financere
    for (free energy)John Astor, were invited on a boat ride in 1912??
    My point is, that there’s absolutley no evil that wont be committed
    to sustain the Rothschild death grip over Amerika.
    Just over a year ago Poland’s entire addmimistration was assassinated
    in a bogus plane crash because they lipped off to the Rothschilds IMF.
    Bribery, blackmail, intimidation, and even murder will be employed if
    necessary to keep Amerikas ship speeding dead center toward it’s 100 mile wide iceberg.
    There are no parties in politics, accepting the one that just
    concluded at Bohemian grove.
    America has been made dangerously stupid! Civil servants are marching
    in parades across America carrying pro-communism banners, JUST so
    they can continue their unskilled no account woodtick gigs, pretending (all is well) in the fantasy world we have provided them.
    The budget bill WILL pass, and the slightly less than 90 degree economic drop
    off the charts, will now become a true 90 degrees, with rocket engines on it ! Mat

    • Greg

      Good stuff Matslinger! Thank you for your perspective.
      Greg

  23. Davis

    I commented in my own blog about how as the Asian markets opened PMs were down and the Yen and Swiss Frac were both off against the dollar. I also made an analogy that the debt deal was like a junkie getting his fix and that each ne hit gave diminishing returns and that the markets would again reverse once reality set in. Well it took a shorter time than even I expected. After opening up 200 points the DJIA is down 136! The PM have regained their losses and then some. Clearly our politicians have embarked on a fool’s errand and everyone can see it but them.

  24. g.johnson

    the dogs and ponies are outdoing themselves now. what a show!

    next step? all circuses and no bread.

    even ron paul (god bless him) does not have it altogether right when he says that america is bankrupt. we are talking about nothing more than numbers on a balance sheet, ones and zeros in a computer.

    the sun still rises and sets according to its ancient schedule. the rivers still flow and soil still bears fruit. we are rich in resources and all elements required for productivity.

    what is really wrong? we are corrupted.

    why isn’t wall street in jail? take nine minutes and ten seconds to find out here:

    http://www.forbiddenknowledgetv.com/videos/corruption/why-isnt-wall-street-in-jailcenk-uygur-leaves-msbnc.html

    by the way, the guy who produced this little snippet on msnbc has recently stepped down under pressure from “above” for his efforts to produce actual real news on fake news msm channels. so enjoy this one while you can. there won’t be many more like it.

    we are not in a financial dilemma as much as we are experiencing a moral meltdown.

    no amount of legislating is going to change anything as long as world class criminals remain free to ply their trade.

    • Greg

      Thank you G. Johnson for your comment and content!
      Greg

  25. pdog

    What Federal gov’t programs are cut for the fiscal year 2012 and for how much in just the first step?

    pdog

  26. AndyB

    The can they have been kicking down the road now has an imbedded IED. All the straw man terrorists in the world couldn’t bring this country down faster than our corrupt pols. Whether it is the DEMs who have ensured the efficacy of the marxist Cloward-Piven strategy of implosion through entitlement unsustainability, or the REPUBS who want to continue having the US military being the enforcement arm of the global banking cartel in itds worlwide pillage and rape, it makes absolutely no difference.

  27. Disgusted

    WHY is anyone “surprised” by this manufactured charade & kabuki theater?
    Of course these spineless, self serving political parasite’s are INCAPABLE of “doing the right thing for the country,” the ONLY thing Owebummer & “establishment” of BOTH parties elites care about is THEMSELVES. This DISGUSTING sham doesn’t just “kick the can down the road,” They KICKED US, the people, in our cans.”

  28. OTE

    I’m with you Greg. This deal isn’t deficit or debt reduction. Just an accounting trick the public doesn’t see.

    But a couple other thoughts. Corporate taxes are all paid for by the consumer. How about a straight sales tax. Period.

    The XIVth Amendment is a silly concept. Those who claim that the debt shall not be questioned under Section 4 seem to either get tired of reading or they are just parroting the drivel of someone else. My evidence? Section 5 XIVth Amendment. Congress still retains the power. POTUS and your ignorant supporters of this XIVth Amendment nonsense, shut up.

    • Greg

      OTE,
      I think you are correct. According to former Assistant Treasury Secretary, Paul Craig Roberts, Mr. Obama can extend the debt ceiling because of executive orders President George W. Bush put in place. Thank you for the comment.
      Greg

  29. Joe

    Hunter

    You nonentity; the “Far Left” in America does not exist! You must be joking. Lick a boot.

    • Greg

      Joe,
      What? “You nonentity; the “Far Left” in America does not exist! You must be joking. Lick a boot.” Where did you get this and what are you talking about?
      Greg

    • joe

      First – Joe is no relation to me.

      Second – Far left doesn’t exist in this country???? Apparently, somebody is too ashamed to look in the mirror in the morning. Either that or Joe is just another union thug. Six of one, ….

  30. chowthen

    Here we go again from Mitch Bupp about rich corporate America. I wonder where we would be without the rich corporate America? They’re the one’s giving us jobs until the free trade where they found out they could move manufacturing someplace else other than the expensive USA.

    The small business argument of taking the USA out of the recession is unbelievable. How could McDonald’s or mom and pop operation save us when they only have low paying jobs and hire non professional workers?

    There are simple solutions to our problem and one is to rescind on all free trade agreements and go back to the good old days of protectionism. In other words make what we can in the USA (especially parts and components of finished product) and export the excess. Have you noticed that foreign car manufacturers sets up assembly in the US but import parts and components? That’s because the manufacturing of parts and components is where the real money is and high paying jobs. Parts and components are not taxed for importation but a finished product is (like a fully assembled car). Impose tariff on all imports (including software coding outsourced should be considered imports) all other countries can do the same to our exports, this makes a real competition. Get government out of private business let private business deal with Unions (like if you don’t like it go find another job).

    • Mitch Bupp

      Chow you do realize that it was corporate America who pushed the USA into the world economy? Do you realize that reason most small businesses are Joe the Plumber or other small outfit that operates a small business are in business because the value of their work worth more than they are being paid by another company? I don’t consider a business with $5 million a year in business to be a small business.

      I agree with you about a tariff on foreign made products in a way to protect the American economy from companies shipping jobs outside the USA.

      Government got out of the way of business and we see where deregulation got us… WE ARE HERE NOW!

      And unions …need to exist because without unions the business sector will use people like slaves as if we are in China. Corporate America has been suppressing wages for 30 years ever since union influence started to decline.

      The private sector has already busted almost all of the unions. The only reason that public sector unions exist today is that government leaders can not operate in secret to destroy unions the way corporate America does.

      And don’t forget that it was GW Bush who tried to reclassify the workers at McDonalds as manufacturing jobs …… that’s an example of how bad the system is broken.

      you said, “They’re the one’s giving us jobs until the free trade where they found out they could move manufacturing someplace else other than the expensive USA.”

      And finally, did you know that the founding fathers created regulations making corporations and private partnerships with government a TEMPORARY entity? The colonialists experienced the corporate tyranny of the British government and the East India Trading Company.

  31. Martin

    Greg,

    Newt Gingrich once remarked that the only part of the contract with America that he couldn’t push through was Term Limits. What was telling this time around was the refusal to EVEN debate a balanced budget Amendment. The Day of Reckoning is what has been kicked down the road.
    The TEA party will mark the beginning of a three party system in the U.S. where impossibly obvious theorems like Term Limits — Flat Tax — and the incredibly preposterous — balanced budget Amendment — will finally get their day in the sun. Although not successful this time around the TEA party members certainly made the process more difficult for the Careerists.
    Thanks Martin

  32. Chuck O.

    Here we are 3 years down the road and NOBODY has gone to jail. I just don’t get it. Washington and Wall St. are stealing us blind and NOBODY gets jail time. Why can’t we just make the FED. dissolve the debt;
    (and abolish the FED) we just borrowed that money from ourselves. It’s a sham, shell game, slight-of-hand; anybody else would be arrested and sent to jail. Why aren’t the people rioting in the streets of DC.? This whole country is ASLEEP! Most of the media, too.
    The banks should be MADE TO anti up what they STOLE, instead the taxpayers are MADE to.
    GOD, this whole thing is ludicrous.

    • Greg

      Chuck O.
      This is one of my major gripes, No big banker has gone to jail for the mess they caused. Not even a single indictment. An economy cannot exist let alone thrive in an environment of fraud and criminal conduct!!!
      What’s worse is the banker bailouts are continuing and no one in the MSM says a word!!! Thank you for this comment. By the way, I am no fan of the funny money Fed either!!!!!
      Greg

      • Art Barnes

        Yea, and all the bastards in D.C. talk about and are worried about are the markets, foreign first then ours, wonder why, could it be the markets provides the asses with their energy needs (campaign contributions); they are a big joke. Did anyone out there report that any of the so-called cuts will not even take effect until 2013, what a sham!

        • Greg

          Art,
          I am as frustrated as you my friend. Yes the so-called cuts are more than a year away ands after the 2012 election. There are few real leaders in D.C. This debt bill does not cut the debt but merely slows the growth. What a sham!!!!!!!! Thank you for all your comments and yes the economy is tanking as I and many sources quoted here predicted!
          Greg

    • Bob

      ten years down the road from 9/11 and nobody gone to jail. You can’t have a money system in a lawless land. A country of laws comes before a fair money system.

  33. Big Dick

    It is sad to see the money wasted day by day in foreign wars that ENRICH THE ELITE and kill off the cream of our country. I am ashamed to say I was in the stupid war in SE Asia that got the military industrial complex rolling. It has been downhill for America ever since. It will end badly for us just as in Rome where the corrupt ruled to oblivion.

    • slingshot

      You made it. Welcome Home.

  34. Diane Carol Mark

    Hi Greg,
    The NIA (National Inflation Association) posted a highly observant article last night. Among many of their statements is another mathematical analysis. They included the following (spot on again):

    “Everybody in Washington assumes that interest rates will remain at artificially low levels for the rest of this decade. The interest rate that the U.S. paid on its total marketable debt in the month of June was only 2.38%. Exactly one decade earlier, in June of 2001, we paid 6.162% interest on our total marketable debt or 159% higher than current average interest rates. On August 15th we owe our next interest payment of approximately $30 billion. Imagine if that payment rises 159% higher to $77.7 billion or $932.4 billion annualized. Later this decade, interest rates will not only rise back to normal levels like we had in 2001, but will likely rise to artificially high levels to balance out the damage being created today from artificially low interest rates.”

    🙂 Diane

    • Greg

      Diane Carol Mark,
      Thank you for the comment and for supporting this site.
      Greg

  35. wolf

    As Michael Ruppert likes to say, “Unless you change the way money works, you change nothing.”
    Nothing has changed.

  36. Antonio

    The face that these bureaucrats put on, as if they are grappling with tough decisions, is just to sucker you and I into believing that they’ve tried ‘everything’. Well they haven’t! I say: cut every program across the board 20% (including & especially our bloated defense), withdraw us from the wasteful wars, charge money if a country like South Korea wants our military might in the form of bases or close them. Raise taxes on people making over $500,000 back to what they paid pre-Bush, and call it a day. I don’t know if that’ll fix everything but our country will be in a much better situation if this happened!

    • Greg

      I say a 10% cut to start, followed by 5% cuts until the debt is paid, but that will never happen. Thank you for the comment. I agree with all true debt cutting plans and yours is a good one!!!
      Greg

  37. Miro Markovic

    Another good article. Thank you, Greg!

    We elected our government. That government spends our money the way it sees fit. When that government gets into a trouble, then we all have to bail it out, sooner or later. Before we do that, we can complain as much as we like, go to the streets, raise a lot of noise, but those vents of displeasure will not make any difference. We deserve our government, because we have elected it. Why the people are still upset?

    This time we are going under at a lower rate, thanks to the decision of a current Congress. Since we have no other choice, let us enjoy the ride and be happy!

    • Greg

      Miro,
      Thank you for your support and comment.
      Greg

  38. MasterLuke

    I saw a topic on CNN this morning “Will U.S. Default?”. I was chuckling to myself because what it should read is “Will U.S. Total Default?”. U.S. has already partially defaulted.

  39. Ambrose

    Greg,

    You are probably right – Congress will miss the August 2nd so-called default deadline. Even if they pass the legislation, there won’t be enough time to implement it. The “Default Truck” will still hit us. (I love the cartoon.)

    The DC fiasco shows that our Congress members lack basic accounting skills, in addition to lack of ethics. In the last 111th Congress, 203 Members (152 Representatives, 51 Senators) listed law as their occupation. Almost 38% of the Congress members are lawyers. (203 out of 535 Members – 100 Senators and 435 Representatives) Should we trust the lawyers to handle the finance of our country? I fear not.

    Ambrose

    • Greg

      Ambrose,
      Thank you for your support and many comments!
      Greg

  40. Tom H

    Nothing for nothing, but if the rich pay more in taxes, or for that matter, everyone pays more taxes, the criminals we elect will just spend it all, grow bigger, and we will still have an exploding debt problem. The dollar is debt(FRN’s)!!!!!! The only way to stop the maegalomaniacs in Washington is to cut off the flow of money and pass a balanced budget ammendment. They always spend more than they have and they always will, because that is how they roll. Anyone who thinks bigger taxes will create a smaller gov’t is crazy. We should abolish income tax because it is unconstitutional. We should abolish the Federal Reserve and return the power to create money to the people because the the Federal Reserve is unconstitutional.

    We need to approach this as the American People vs. an out of control gov’t. As long as they have us divided into democrats and republicans, we will continue to argue about higher taxes or less spending rather than address the fundamental issue, which is that we are, right now today, exactly what our constitution was designed to protect us from becoming. We as a people need to let the powers know that we are on to their scheme. And, we need to be more diligent in electing people that demand a strict adherence to the constitution.

    Americans are not so unique that they just by chance became the greatest, freest, richest nation in the history of the world. It was our constitution that allowed this to happen. We have drifted very far from that shining city on the hill because our constitution was hijacked by a bunch of politicians who could not resist the nectar that was offered them by the international banking cartel, so that they may steal our sovereignty and the wealth of our once great nation.

    It is time to start naming names and calling out the criminals. It is time for the people to stand up and demand the free press we were granted rather than accepting the propoganda machine that perpetuates the evil.

    The reason the greatest transfer of wealth in the history of the world is occuring right now is not some mystical event that has no explanation, it is because democrats and republicans want it that way.

    The reason our jobs are all gone is not some stroke of bad luck, it is because republicans and democrats want it that way.

    The reason we don’t follow our constitution anymore is because the constitution favors the people rather than democrats and republicans.

    As long as we allow democrats and republicans to control the country, we will get exactly what democrats and republicans have always given us: less freedom, huge debt, war, lies, and tyranny.

  41. joe johnson

    You notice how Hunter puts the word confiscation in parenthesis, hinting what a horrid socialist Obama is. Of course he doesn’t say, as all disengenuous Republicans won’t, that Obama simply wants to roll back the Bush tax cuts given to the wealthiest amongst us. Under Obama’s proposal the ultra wealthy will still pay far less than they did under either Nixon or Reagan. In 2008 Americas top 400 earners averaged 270.5 million in income, the 2nd highest on record. In 1955, by contrast, Americas top 400 average income- in 2008 dollars- was a mere 13.3 million. In other words, the top 400 in 2008 reported incomes that, after inflation, amounted to more than 20 times the incomes of the top 400 a half century ago. In 2008 the top 400 paid just 18% of their income in federal taxes, in 1955 that figure was 51%. So let me ask you, were we an economically stronger, more generally prosperous country back in 1950, or are we better off today.

    • Greg

      Joe,
      If it makes you and all politicians feel good to call taxes “revenue,” be my guest. However, It is a fact taxes are confiscation. By the way, I have said in this site several times, that we should have raised taxes for the wars and had a draft. If we did that, then we would only be committing resources and precious American lives for the really important conflicts. Saddam Hussein was such a threat to America we kicked his tail in 3 weeks. If you still believe in the phony Republican/Democrat WWE fight you have been watching on the debt ceiling debate, then please put the next tooth that falls out of your head under your pillow for some Federal Reserve Notes. Obama said he wants to roll back the Bush tax cuts, but he didn’t do it! That’s because he and the rest of the folks in Washington (BOTH DEMOCRATS and REPUBLICANS) work for the corporations and banks! Immelt is the so-called “Jobs Czar” for the Obama Administration, and GE did not pay taxes and out sources lots of jobs. Need I say more about the fake fighting in Washington? Thank you for your comment.
      Greg

      • joe johnson

        It is true that Obama is no less a corporate shill than Republican demagogue Ronald Reagan. It is also well known that this debt ceiling debate is no more than Kabuki theatre, considering the debt ceiling was raised seven times under the Bush regime. I am well aware that we are not a Replublic, we’re not even the mobocracy we once were. This government we endure today is a functioning plutocracy. We are the very definition of a banana republic. The point is that those that have benefited from all the U.S. government largess should be made to pay more in taxes. After all, we’re only talking about giving back the hundreds of billions they stole from future taxpayers to begin with. However, if you wish to talk about the legitimacy of a federal tax in the first place that’s a whole other issue. Maybe you should revisit the civil war era when another highly regarded Republican occupying the White House murdered 500,000 of his fellow countrymen to exert federal power and control over this nation. Less than 100 years after the U.S. constitution was drafted it had already been corrupted by men ever since celebrated as great Americans.

      • Henry

        I agree that taxes are confiscation, but they are a necessary sacrifice needed to fund a government, and in theory, create a civilized, secure, and prosperous society. The problem lies in determining who pays how much, and how it’s spent. The mess we’re in now was created during a period of greatly reduced taxes on the wealthiest few, greatly increased military spending, greatly increased pay for CEO’s, banksters, and those at the top, but stagnant wages for the working class. We have also reduced spending on education and infrastructure, while exporting our jobs to the lowest foreign bidders. Dennis Kucinich has it right, in my opinion – end our illegal wars, reduce military spending, roll back the tax cuts for the wealthiest few, end the bankster bailouts, and invest our money here at home. Societies with a vast income and wealth gap between the working class and the ultra wealthy have a long and proven history of failure…

  42. Art Barnes

    Greg, all the talk today missed the government’s market economic announcement of a very dismal manufacturing report. This report is just another indicator that the economy is experiencing stagflation, no debt ceiling even if for real will stimulate it because there are not enough manufacturing base left in the states to do so even if there was a recovery or cuts were actually made. The bastards in D.C. made sure of that by giving the corporation tax incentives to take our jobs offshore starting in the 1980’s. Believe it or not many of the so-called “leadership” are still in since the 80’s and still crapping on our jobs allowing them to leave, at least for the jobs that are still here. You can’t shame them, they made the rules and adjust the rules as they go to keep them in power and their country club villas. This can’t turn out good!

  43. Miro Markovic

    Greg, would that be too hard for you to give us your view/opinion about the possibility that, when our government issues its bonds, individual investors and/or foreign government investors simply refuse to buy those useless bonds any longer.
    What will our government do then?

    Print more fiat money?

    Or, go in its real default, because our economy cannot produce enough revenue to service existing debts and other obligations toward the pensions and social securities.

    Thank you in advance for you efforts!

    • Greg

      Miro,
      Print baby print. That’s what QE2 was all about so this is not a wild idea. We are the world’s reserve currency (for now) and this is what allows the U.S. to do this.
      Greg

  44. claymore06

    How much treason and conspiracy are we going to tolerate from the leftist garbage in the White House and congress?

    • Greg

      claymore06,
      There’s plenty of “treason and conspiracy” to go around for both parties. Do you hear anyone talk about ending the ongoing banker bailouts and government sanctioned accounting fraud. No. Do year hear anyone squawking about the recent revelation that the Fed bailed out the world, and spent $16 trillion with many conflicts of interest at the big banks? No. We have no solutions to the real problems we face, just two broken parties trying to hold on to power as the U.S. ship oi state sinks.
      Greg

  45. James T

    I’m just blowed away at how the teapartiers are being treated for trying to do what appears to be best for the country. Makes you wonder why Dave Ramsey is not hammered for what he preaches.

    • joe johnson

      Get a clue, the Tea party is a big business enterprise, a fact that becomes crystal clear knowing that the Koch brothers are it’s main backers. They poured mucho dinero into tea party candidates coffers during the mid terms. Sadly, the membership ranks of this fiasco masquerading as a peoples party are the most clueless from the American population. They speak out against government health care not realizing that’s what medicare is. They decry entitlement programs though they would be rioting in the streets if their social security stopped coming. They are retards led around by the koch bros and other business elites. the Koch brother agenda of course includes globalization of production, driving down wages while crushing and annihilating any labor organizing. They wish to get all those public services that benefit the working class into the hands of private industry for maximum profit and zero regard for the public good. These boys own the highest court in the land as was demonstrated with the latest ruling giving corporations the same rights as an individual when contributing to political campaigns. Elections are now openly bought in full light of day and no one seems to care.

  46. Samantha in Tucson

    I think a big issue is the newly formed “special committee – a.k.a. Super Congress” who will make recommendations (up or down vote) to the Congress/Senate on how to handle this incredible financial mess in the long term. The committee has until November to come up with – yet again – another “special” scam.

    Our State Rep from Tucson, AZ., Raul Grijavla, voted against this charade and is disturbed by this new committee with the final arbitrator being none other than President Obama (of course).

    We ARE headed for inflation. My husband and I went to Maine for a month and saw incredible food inflation. Example: gallon of milk in Tucson, AZ = $2.75 (max); gallon of milk in Belfast, Maine = $4.00-4.54! The milk is only one example. Gas prices are among the highest in the nation (New England). Many folks are scared to death about heating costs this winter, especially those who are on fixed incomes.

    However, there seems to be a solid faction of individuals in Maine that are preparing for the collapse – farming, canning food…running around like squirrels getting ready for a very hard time ahead. Mainers have always been like this to some extent, but now things are ramping up.

    I think the folks I know who are doing this are very smart. These are not “wackos” who are anti-social, etc.; the people I know who are preparing are educated, professionals, and not fooled by the man behind the curtain.

    So…here I sit in Tucson, AZ. I still have a job (Praise God) and am okay. However, I hear the homeless population is on the increase in the city, unemployment in Pima County is between 40-45,000 people, and the lines for the new call center jobs $10/hr.)are at record levels. The call centers used to pay around $15/hr., but can now take advantage of the terrible job situation and offer a much lower hourly rate.

    That’s it for today, Greg. Thanks for all you do to enlighten the people.

    • Greg

      Thank you Samantha for the reporting and comment!
      Greg

  47. joe

    All of us (including the politicians – before they were politicians) learned at an early age that “there is no such thing as a free lunch.” Politicians (like joe ‘bite-me’ biden who is charging the secret service rent to protect him and his family) know this fact as well as the rest of us, and yet they spend other people’s money like this is not the case. According to obama’s definition of “rich,” every member of congress, many of their aides, and obama himself ARE rich. I am hopeful that the first thing that happens when our government collapses due to a debt crisis is that the people confiscate all elected officials’ assets first to help pay for their mistakes. One can only hope…

  48. nm

    The key comment here: By Frank Brady:

    no Congress can bind future Congresses to anything.

    So, what’s the point of a 10 year deal?

  49. joe johnson

    Suspiciously, the only plane during the 9-11 attacks that would have benefited this country, that being the one headed for Capitol Hill, did not hit it’s mark. Had that been the only flight that was successful we would be better off today. Unless and until all those serving themselves in the House and Senate are removed from office, taking their industry lobbyist friends with them, we are doomed to a excruciatingly painful end. Our next choice to lead this country must not include a member from either of the prevailing parties, both of these parties must be forced to wither and die, or we will die as a nation.

  50. Bill

    Public now conditioned to accept QE3 so Fed can monitize the Debt away. We’ll simply default on the Fed eventually. Smart money buying Gold & Solver ahead of upcoming FOMC meeting, 9Aug. After which Markets will recover. QE3 will raise GDP going into Election & Administration can claim start of a recovery. Just Continuation of synchronized devaluation of world currencies.

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