Obama and US Debt Crisis

“The US is on the brink of a major economic crisis after negotiations between Obama and Republican Congressional leaders over the national debt dramatically broke down on Friday”, the western media reported yesterday. the US economic crisis has become very serious and now the debt crisis is really going to be Armageddon . Some say: “Raising the debt ceiling is a routine part of the way US government works. It happened 17 times under Ronald Reagan and 7 times under George W Bush. But now the Republicans say that Obama can not do it ! In 2000, Bush inherited a budget surplus, only to implement massive tax cuts !, launch two wars and oversee a recession that turned into a slump.” In a letter published just minutes after Obama began to speak, Boehner said: “In the end, we couldn’t connect. Not because of different personalities, but because of different visions for our country !.” He blamed Obama for failing to agree to deep cuts in social security and other welfare benefits ! and for demanding the taxes, especially the rich tax, be raised !! . “For these reasons, I have decided to end discussions with the White House !” Boehner said. The media reported: “Obama, showing anger and passion, called a press conference at the White House at short notice to express his frustration with the Republicans. He told reporters there had been “a breakdown in trust” between the White House and the Republican leadership. The collapse in talks comes with 10 days left until the US, for the first time in its history, faces the prospect of defaulting. Credit ratings agencies such as Moody’s and Standard & Poor’s have put the US on notice that its triple-A rating could be downgraded, which would be a national humiliation. Now Obama says he’s willing to sign up to a deal that makes heavy cuts in domestic and military spending.” It seems good, but can the coward Obama really do it ?

The current situation in the US is really comic-tragic. “Democrats and Obama insist on tax increases for the wealthy as part of a deal. Republicans demand $2.4 trillion in spending cuts in return for supporting an increase in the debt limit. The White House and Congress must forge a deal to raise America’s debt limit by August 2 or the government will run out of money to pay its bills and default on some obligations”, the media said. Obama has warned that the US is “running out of time” to raise the limit on US government borrowing and that failure to do so will lead in effect to a tax increase for all Americans. Obama and the Democrats demands tax increases for the wealthy, but the Republicans reject it !”, the media reported. In the recent days, Obama warned ordinary Americans of the seriousness of the situation: “This is not some abstract issue. These are obligations that the US has taken on in the past. The Congress has run up the credit card and we now have an obligation to pay our bills. If we do not it could have a whole set of adverse consequences . We could end up with a situation, for example, where interest rates rise for everybody all throughout the country, effectively a tax increase on everybody …millionaires and billionaires can afford to do a bit more … It turns out that our problem is we cut taxes without paying for them over the last decade … We fought two wars. We didn’t pay for them. We had a bad recession that required a recovery act and stimulus spending”. The US economic crisis is really serious. Between 2008 and 2011 the number of those living on food stamps increased by almost 50%, putting one American in seven in the program. But the Republicans try to cut the program’s budget and the health and nutrition scheme for the poor, including the poor pregnant women, infants and children, and the elderly. They would rather do all this than raise taxes on corporate owners, investors, oil and gas companies, etc. Obama already conceded most of what the Republicans want. But some ordinary Americans say: “The Republicans are entirely responsible for this mess; they f-u-c-k-ed America, but they call themselves patriots, and want the ordinary people to pay for their mistakes. It’s really funny that they have created the problem, and now they pretend that others are responsible for this mess.” The Republicans have said that they want to cut government spending without any increase in taxes. Some Americans say: “The ordinary people are not wise enough to see the roots of the problems, and the Republicans who have created the problem, can deceive them by their media. ‘Enough’s enough,’ Obama said, but it’s exactly what the ordinary Americans should say to their politicians.”

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Poll after poll tells the same story: About two-thirds of voters believe that any deal to shrink a distended U.S. budget deficit should involve a combination of spending cuts and tax increases. Cuts alone would be unfair. Republicans in Congress are catering to a subset of a subset of voters. This gives Democrats an opportunity to remake the contrast that was so successful for them in 2008 about who is on the side of the middle class [!] Democratic pollster Liszt insisted in an interview. It’s a good question: “Who is on the side of the middle class in the US?” Republicans? Democrats?. Some say: “The Republicans openly and clearly defend the rich, and the Democrats secretly defend the rich ! It’s really ridiculous”. But the American middle class, i.e. the majority of Americans, need to have some real representatives in the power structure. “We, the people of the US, are the maid. The GOP is Arnold Schwarzenegger !”, some funny Americans say. They add: “Military spending is by far the biggest discretionary chunk in the U.S. federal budget. But cutting military spending is a political minefield. Obama has called for $400-billion in cuts -over 12 years. But we want far more. We have to be worry about our national debts. Military spending is the first item that should be cut. The second item is the rich tax cut, it should be cut too !” Many Americans and non-Americans know nothing about the details of the US debt. Some ask: “How does the US borrow money?” Treasury bonds are how the US – and all governments for that matter – borrow hard cash: they issue government securities, which other countries and institutions buy. So, the US national debt is owned mostly in the US – and the $4 trillion, i.e. $4000 billion foreign-owned debt is owned predominantly by Asian economies. The US Treasury releases the figures on this every month. Major foreign holders of treasury securities in April 2011 are as follows: (1)China, the biggest owner of US Trasury bonds, over $1152 billion [!!] (2) Japan, $907 billion [!!] (3)UK, $333bn. (4) Oil Exporters, $222bn (5)Brazil, $207bn, Taiwan $154bn, Russia $125bn, Hong Kong $122bn, Switzerland $112bn, Canada $88bn, Thailand $61bn, Singapore $61bn, Germany $61bn, India $42bn, Turkey $38bn, S. Korea $31bn, etc.

The American comments in the mass media are interesting: “When Bush II took office our national debt was 6.5 trillion. Suddenly, we decide to have an optional war with Iraq and give the wealthy tax breaks at the same time. 6.5 trillion to start plus 7.5 trillion for all this Republican nonsense gets us to 14 trillion national debt … Of the $14tn, $9.5tn is not owed overseas, presumably it’s owed to US banks and Wall street … Why is the U.S full of people that often voted against their own interest? … Unless excessive military spending is dealt with and the Bush tax cuts revoked, the US will continue to have serious economic problems … Unfortunately, our corporate media does not convey the truth to the people because it is, in itself, another hugely wealthy/powerful entity in America … An increase in tax on the super wealthy would solve much of this but it will never happen … the super wealthy churches could help but we know that’s never going to happen … All those middle class fools think that one day they can be rich, too, so they vote for the representatives of the rich. It never seems to occur to them that by doing so, they are perpetuating a system that makes it harder than ever to get rich … What Bush did to our country in 8 years will take decades to repair: trillion-dollar wars, tax cuts for the very wealthy, deregulation, worsening rates of poverty alongside paltry gains in US life expectancy and health between 2001-2009 … Americans are and have been Brainwashed. Most people here are completely removed and detached from what is going on. Yes, it’s hard to believe but there are people here who know what’s going on, but they feel helpless, what can you do? Stand in the middle of the street, and scream, people wake up, they are preparing you for the concentration camps … The USA doesn’t need an enemy abroad when they have the Republican party at home … Why not just tax the billionaires a lot more, the millionaires a little more and ensure all companies, especially the big multinationals, pay their fair share of tax? If it doesn’t happen don’t be surprised when the poor rebel … It turns out that our problem is we cut taxes without paying for them over the last decade. We fought two wars. We didn’t pay for them. … People won’t be able to pay for medical care, or drug prescriptions, because their Social Security or disability cheques will have been held hostage by a bunch of heartless, ruthless radical right-wing ideologues. All because those right-wingers want to prevent their rich chums from having to pay their fair share of taxes. What a bunch of hypocritical bastards”

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