“Never In The Field Of Human Conflict Was So Much Owed, By So Many, To So Few”
I’m trying to think of a phrase that conjures up the strange spirit and times that exist in USA at the moment. “So much owed, by so many, to so few” is growing on me given that the greatest monetary trick ever pulled off in modern times was undoubtedly the USA elite bankers and politicians raising the debt ceiling from a surplus to circa $16.5 trillion in just over a decade to pay for their largesse. And having continually socialised the losses onto present and future generations, in order to support a select few, perhaps the phrase (made famous by Winston Churchill) is fitting after all..
“Only in America” is a phrase often used in ordinary conversation, only in American could a proportion of the electorate get frothy at the mouth with regards to their upcoming election, you know the one that’s already been decided, Obama to win? To witness thousands of Americans ‘whoop whooping’ at conventions, were their best hope is a dollar millionaire (two hundred and fifty times over), who gives versions of “hopey-changey” speeches that worked four years ago, is truly a sight to behold. A candidate who paid less than 15% tax on his massive wealth can apparently “feel the pain” of his fellow citizens and guide them to the promised land..Actually were this republican nomination is concerned that ‘promised land’ may prove to be a bit tricky..
As a Mormon Mitt Romney believes in a living prophet. As of 2006, President Gordon Hinckley is one of the oldest and longest serving prophets of the Mormons. According to their beliefs members receive timely instructions from God through the prophet as to how they should live their lives and how the business of the church should be conducted.
This should be a scary situation for Americans, they might be voting in a version of Evan Almighty, the guy might actually takes his orders from a de-facto president, who takes his orders from a direct line of communication with God..gulp.. Still if it results in Mitt giving away his vast wealth and the globe looking forward to the USA standing down it’s 700 + military bases and instead spreading love and peace all’s well that ends well right? Oops, Romney declared that the USA will increase its spending on military hardware if he’s elected. He hasn’t mentioned how he’ll pay for it, or address the national debt, a debt that needs unified political approval in order to be raised yet again..
The USA public debt has increased by over $500 billion each year since fiscal year 2003, with increases of $1 trillion in FY2008, $1.9 trillion in FY2009, and $1.7 trillion in FY2010. As of January 9, 2012 the gross debt was $15.23 trillion, of which $10.48 trillion was held by the public and $4.756 trillion was intergovernmental holdings. The annual gross domestic product (GDP) to the end of June 2011 was $15.003 trillion (July 29, 2011 estimate), with total public debt outstanding at a ratio of 100% of GDP, and debt held by the public at 69% of GDP.
We can all recall the stalemate in August 2011, when the USA was in crisis due to it’s debt ceiling needing to be raised. Eventually, after much political give and take, the debt ceiling was raised. From the previous debt ceiling, which had reached its cap at $14.3 trillion, the ceiling was raised to $16.4 trillion, an increase of $2.1 trillion. The agreement also included cutting the federal budget deficit by $2.5 trillion. This gargantuan overall rise was to be administered in three tranches, firstly $400 bl, then $500 bl and those first two tranches have now been spent, they’ve vanished. Which means that the mixture of circus and pantomime that is the USA govt has to convene again to agree the next tranche of cash, the remaining $1.2 trillion. If the govt. apparatchiks have done their back of fag packet sums correctly, should see them through to OCT/NOV, when the USA election is held..or will it?
Not the election, that’ll go ahead, but the fresh debt, will it last? Well given that the USA admin. has now reduced itself to the equivalent of looking down the arm rests of the oval office sofas for spare change, (raiding federal pension schemes for cash), then the omens aren’t good. The Treasury has burned through a staggering $900 billion in order to keep the USA economy’s head above water inside five months. At this rate the total raise would expire in July-August. The comparison with tiny Greece are fascinating..
Greece is continually portrayed as Jenga of the complex global system, if that piece of irregular shaped wood comes loose then the whole edifice supposedly comes crashing down. Rescue Greece>rescue Europe>rescue Euro currency>financial world continues to turn on it’s axis, but what if we reversed that logic? Perhaps all this theatre and pantomime, these incredibly harsh austere measures being unleashed on the Greeks and Italians, on the Spanish and the Portuguese aren’t to rescue Europe, but to salvage the USA and it’s battered and staggered dollar. Greece needs €14 bl to avoid a default, the USA needs an extra $1.2 trillion in order to spin the plates, yet the default word is never mentioned in the same breath as deficit where America is concerned.
The hubris the USA is currently experiencing is unlikely to lose momentum, the ceiling raise will no doubt be passed and the equity markets will no doubt rally, as they do in nearly every election year. But that debt will still remain and could accelerate up to $20 trillion by 2014. By such time the USA debt versus GDP ratio could reach 120% an alarming figure for a country that would have to induce eye watering deficit reduction plans, in the form of austerity measures, in order to arrest back control. That can wait until after election year, it’s the American way..