If you like knowing that you can access your money whenever you want, that might be about to change, thanks to America’s resident nutcases in Washington. An American debt default could crash the entire global economy. You can thank those funloving fools in Washington.
This has happened before. It’s a formula. The debt ceiling is a standard play for a party with no talent and no ideas. They’ve done this many times before. Whenever the GOP has a majority in either house, the debt ceiling is used to try to get leverage over a Democrat president. The sheer scale of this habitual irresponsibility is huge.
We’ll leave out the bit about America defaulting on legal obligations. We’ll say nothing about destroying America’s credit rating and making money much more expensive to borrow. After all, a party with a track record of total hostility to paying legally payable debts must be a good credit risk.
Meanwhile the media is covering a potential “catastrophe”, which in conservative-speak, means another self-inflicted problem. The thing is that this is a quite avoidable catastrophe, created purely for political purposes, and a massive own goal if it happens.
If the US defaults on debt, the global credit market is in big trouble. You could start a Depression with this. That issue apparently isn’t under consideration. Most of the world’s money has some links to the US in direct or indirect forms. As a debtor, the US is a major component of the global credit market.
The reason is pretty basic, actually. If you’re a lender, the money owed to you is an asset. If that asset goes down, so do your net assets. Your net assets are your collateral for doing your own borrowing. Banks borrow on the basis of their mortgage portfolios. The entire credit market works on this general principle.
US debt, which is gigantic, underpins this market. The US is the world’s biggest borrower, by far. The debt pays for government spending, defense, etc. The situation is exacerbated by generations of very rich people refusing to pay taxes, so the government has to borrow more. The Republicans also want to drastically cut IRS funding that’s needed to chase some of that tax that’s not being paid.
The irony here is that at least some of that money which should be paying tax is income from government contracts. The same contracts which are paid for by government borrowing. If the tax had ever been paid the hit to revenue would be much lower and the debt much lower.
In effect, the Republicans want to have the government contracts, but not have the borrowing, AND protect the non-taxpayers. Meanwhile, Trump provided tax cuts for these people who don’t pay taxes.
For sheer illiteracy in governance, this takes some beating. It’s not easy to be this idiotic or irresponsible. To be as self-righteous as the GOP on the subject of fiscal responsibility is a bit difficult, too, but they seem to manage.
The spending issue is also rather farcical. Their donors are often government contractors. Without those contracts, they wouldn’t make anywhere near the kind of money they do. The rest of the world doesn’t have the money to give them anything like the same size contracts.
But – The GOP has been banging on for decades about government spending. So the idea is to cut welfare. To cut welfare just when Main Street is being hit by massive cost increases for everything. Welfare helps pay the bills for businesses, but who cares?
What it boils down to is self-serving delusion, at a huge price. As usual, the choice is insanity or not.
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Disclaimer
The opinions expressed in this Op-Ed are those of the author. They do not purport to reflect the opinions or views of the Digital Journal or its members.
