Posted 2 years ago on Nov. 8, 2012, 6:23 p.m. EST by hchc
from Tampa, FL
This content is user submitted and not an official statement
Upcoming Debt Issues
There is quite the trifecta of cuts and deals to be made this upcoming winter. Among them are the debt ceiling, the automatic cuts that kickin as part of the last debt ceiling deal, and the expiring Bush cuts. Its a three headed monster of disfunctionality that will be playing in all theaters near you.
It is doubtful that Obama will squirm into office this time and accomplish anything productive or game changing whatsoever. Expect more corporatism. The situation was much more ripe for aggressive decision making last time, and it failed miserably. Either he doesnt have the desire for it, or lacks the leadership/management ability to get it done. Ofcourse, Congress showed what a gutless bunch they are as usual too. It's hard to govern when one is accepting bribes 365 days a year.
As part of the Budget Control Act of 2011, there are a series of cuts that are set to automatically kick in on January 1st, 2013. Expect to hear each side screaming tragedy as they try to deal with 1.2T in cuts that are to be phased in over the next 8 years. Yes, that's years, not months. It's roughly about 150 billion a year. We are running deficits of over a trillion yearly, and with all this tough talk about debt in DC, no one wants to be the one to give up their slice of the pie. Watch as neither side can come close to getting 15% down, much less the 100% it would take just to balance the budget. Reducing the deficit would take even more than that. See why we are thinking there is really no way out of this?
The automatic cuts can be avoided by implementing cuts in other areas that weren't subject to the sequstration in the orginal plan. Now whether these will be real cuts or simply reducing increases (this is DC's prefered means of “cutting”) is anyone's guess. But you better believe after hearing cries of “devastating the military” for a couple months they will take it out of things like education instead. Because that's what they do. Bombs over brains. Effective initially, but not a good long term plan.
So where does this leave us? There will be some kind of a deal reached. There may be a small increase in upper taxes, as even many CEO's are claiming it is needed. More likely than not, for the rest of us our taxes are going to increase noticably, and get ready for a healthy dose of austerity. It may not be planned to come into effect immediately, in order to ease us into it, but its going to be part of the plan. Who needs libraries when we can stay in Afghanistan for another 10 years? Eh, no one reads anymore anyways.
And it wont stop there. Neither party has shown the ability to do ANYTHING about the banking cartel that is the end cause of all of this war and spending and debt (and dont give me the FrankDodd propaganda, that was so watered down to begin with it wouldnt even make decent toilet paper). MF Global and LIBOR prove it (google these two topics, very interesting stuff). Not a peep from anyone. Nothing.
Since Congress passed the Frank-Dodd Wall St Reform and Consumer Protection Act in 2010, nothing has really changed. This was their “landmark” legislation in response to the financial sector wreaking havoc on the global economy. Sure, Wall St likes to make a lot of noise about it. This past 3rd quarter, Jp Morgan and Wells Fargo each posted RECORD profits. Record profits on what exactly? What happened in the economy where they were so on fire they set records?
So clearly its not hurting them at all. On the other end, the amount of new bank applications this year has been ZERO. Yes, there has literally been no one who has decided to compete, because the big six (Wells Fargo, Bank of America, JP Morgan/Chase, Goldman Sachs, Morgan Stanley and Citigroup) have now managed to regulate most of their competition straight out of existence.
So there we are again folks. An economy that is centrally run by a group of elites that are destroying the entire monetary policy, most of the tax policy, they already screwed the trade policy, and their foreign policy shows no signs of changing course anytime soon.