Two thousand million a day, that’s the minimum the Bush administration is borrowing every day, weekends and holidays included.
In the month of July, 2003, the national debt increased $81 billion. That’s an average of $2.6 billion a day (TWENTY SIX HUNDRED MILLION PER DAY), all on the tab for you and your grandchildren to pay back some day.
Three point eight percent (roughly 4 percent) of the money borrowed in just one day would have saved the AmeriCorps organization of volunteer teachers and college graduates mentoring our poorly educated public school students who cannot read or write. But Congress left on its month long summer vacation without approving an emergency $100 million it would have taken to save 50 percent of these volunteers. And the school year will be underway before Congress goes back to playing their games at our expense.
George W. Bush talks a great story, but there’s little substance in the follow up. It’s almost as though the man from Waco believes that if he makes speeches about what he intends to do, that’s enough. There’s no need to really do it if Americans believe and give him credit for what he intended.
It isn’t just education this republican administration has cut, it’s everything but defense. And there is no reason for it. At least there doesn’t seem to be a reason other than to reduce the American standard of living to that of a third world country in order to level the playing field for the New World Order.
Let’s face a few facts.
Knowing full well that the recession we are not having would produce federal revenue of only about $1.8 trillion in fiscal 2003; the federal government went right ahead and planned an annual budget of $2.1 trillion. In other words, they deliberately set out to run a deficit of $304 billion that would be made up for by the federal government’s unique ability to borrow us into oblivion by selling U.S. Treasury securities.
With receipts even less than expected, that deficit is now anticipated to be $455 billion ($151 billion more than anticipated) and that’s not including the $150 to $200 billion they steal from Social Security and other entitlements and hide just as Enron hid its debts.
Figure it out for yourself. Borrowing a minimum of $2 billion a day 365 days of the year gives you what? That’s the real deficit including the outlandish annual interest the Beltway Bandits simply hand every entitlement on top of the cash stolen, putting all taxpayers further in debt.
On May the 28th, not wanting to appear too greedy, Congress increased the national debt ceiling $984 billion when they might just as well have made it a full trillion. That fantastic amount of borrowing is expected to be gone by this time next year.
Wake up, it gets worse.
While the millionaire monitor readers of what passes for news in this country were dutifully keeping their mouths shut, the fact that we hit the national debt limit of $6.4 trillion 92 days earlier on February 20th went unnoticed by most of the public. The result was that the federal government was able to put a three month one full quarter of the fiscal year squeeze on every state and local government in the nation.
Over that period of time, without much of the federal money for budgeted programs from housing, block grants, education and Medicare to Homeland Security and on top of their own shortfalls in revenue, states and local governments were forced to take drastic action. Increasing local taxes one way or another plus layoffs of government people in programs common across the nation.
Did it hurt the federal government? Not a bit. Once the debt ceiling was raised, the Beltway Bandits immediately made up for everything by borrowing every cent they had unable to borrow during the 92 day dry spell. The national debt shot up $118 billion in the month of June alone.
Having used money budgeted for other purposes to conduct an invasion; the federal government now had its larder replenished. Did they then revitalize the programs they had shorted for three months? Absolutely not.
Many states and local governments, having once adjusted to the crisis, now find themselves in further economic straits. More cuts and layoffs are anticipated.
President Bush claims to be providing tax cuts for everyone and continues to harp on the idea that every parent will receive a $400 break for each child, but the critics claim the tax breaks mostly benefit the extremely wealthy, not the common man.
Most taxpayers will find that if they get any break at all it will be offset by increased taxes at the local level or doing without essential services like street maintenance and police. Local police are not even getting the funds for Homeland Security the feds want them to add.
Can this go on?
Maybe. As long as investors are willing to contract with the government for U.S. Treasury securities, in affect loaning the government money, the Washington borrowholics would seem to have an unlimited source of additional revenue, a wide open credit card. Of course, these investors must maintain faith in the American taxpayer’s continued ability to pay them annual interest plus a payoff at term, and there are signs that this faith may be diminishing.
The borrowholics try to maintain the fiction that they have money other than what they get from taxpayers and can somehow manage this huge debt. For instance, the term “Intragovernmental Holdings” that accounts for about 43 percent of the national debt is meant to imply that one governmental body owes another and it’s just a matter of insider tradeoffs, but it isn’t true. Reducing this debt requires taxpayer money and in most cases is a form of double taxation, plus interest.
Statements from politicians to the effect that “the government always pays its debt” is meant to make people believe that the money to do this comes from somewhere other than the taxpaying public. There is no other source, other than more borrowing, and the politicians couldn’t handle it themselves even if they were all John D. Rockefeller clones.
In short, U.S. Treasury security sales or what is commonly referred to as “the bond market” is just as much of a bubble as the stock market, subject to faith and all sorts of spurious notions.
On Friday, August 1, at 5:31 pm Eastern Time, Reuters issued a report titled “Mortgage Havoc Wreaks 100-yr Storm on Bond Markets.”
The first paragraph of this article reads: “Nightmares became a reality this week in the massive fixed-income sector as one of the worst band market plunges in the past decade only got worse. Traders and investors alike fear the trouble isn’t over yet and, come Monday morning, the turmoil could continue.”
In yet another article titled “Man Your Battle Stations, This is No Drill” Bob Moriarty said; “Worldwide derivatives in total are above $150 trillion dollars. We have derivatives on derivatives on derivatives. And no one wants them really marked to market or the financial system is going to collapse. It may do so anyway, the invisible bond market crash of the last 6 weeks is causing more problems than you can possibly dream of.”
The big mortgage house like Fannie Mae and Freddie Mac are selling off Treasuries while some of the government’s biggest lenders, China for example who loans the U.S. about $300 billion a year, are liable to seek other investment. Top that off with the Euro supplanting the dollar and you’ve got a condition of factors that could amount to a financial perfect storm.
All in all, the Bush administration may find that its credit card is not as wide open and unlimited as once thought.
“Published originally at EtherZone.com : republication allowed with this notice and hyperlink intact.”