Heading To the Economic Trash Heap

There has been much talk recently in the media and in the Congress about the debt ceiling. But what is it exactly?

 

In actuality, it is an artificial cap that is placed on the limit the US Treasury can borrow in order to pay existing debt and obligations owed by the US government to others. Any other definition is purely political double-speak in order to seem more acceptable to to the general public.

And it is generally brought up for consideration during budget fights as the Members of Congress consider continuing resolutions to kick the need to pass a budget down the road.

Simple, yes?

It was reported on Saturday, December 28 in USA Today that Secretary Janet Yellen sent a warning letter to the Congress saying the Treasury will run out of money if the debt ceiling is not increased before (get this) January 14 to 23. Perfect. Right as the Trump Administration assumes responsibiity.

A reasonable person would think that brakes would be applied to any additional expenditures appropriated but not yet released. Much like knowing that the electric bill is due but the check isn’t in the mail yet, so hold off for a moment.

So, what happened next? Why, yesterday, if was reported that Yellen announced that the appropriations in the amount of SIX BILLION DOLLARS earmarked to go to fight to defend Ukraine’s border war with Russia was released.

Wait! WHAT?!? We don’t have the money which we have borrowed and may not be able to pay back, and we are STILL sending money to Ukraine? To defend that country’s borders, but no money to defend our own?

What are we? Freaking stupid?

It seems it is all a scam to scare people. Or launder money. Or have people think we are REQUIRED to bankrupt our own country to defend the world.

And maybe, the debt isn’t real either? Any of these ideas is as believable as the next.

We run a deficit each year which increases the debt. At least that is the concept we learned in Economics 101 and Political Science 102. But in reality, is it real?

We can look to 20th century European history for our answer. After World War I, Germany printed Deutschmarks to pay its reparations to the victors for causing the war. The Deutchmark became worthless. Soon enough, in a series of events, the world was fighting Germany again.

But this time, the Marshall Plan was enacted. And since then, the US has paid. And paid. By borrowing against its full faith an credit. To the tune of $36 TRILLION.

Until when? When we collapse?

It is time to stop this insanity and put our own financial house in order. Otherwise, soon enough, we will find ourselves on the economic trash heap like the great empires and nations which came and went before us.

Didn’t we learn that “Bread and Circuses” as an economic remedy have failed for thousands of years already?