This is an excellent, MUST READ article in the NYT. Check it out!
White House Warns Against Threats of Debt Default – NYTimes.com.
President Obama is having a tough time these days. Firstly, President Putin has stolen the initiative on Syria. Yesterday, Larry Summers, Obama’s favored candidate withdrew his name from the list to be chair of the Fed. Thirdly, Obama is once again facing a Congress hostile to increase US debt.
We could potentially be seeing huge movements in financial markets ahead of yet another round of deadlock in the US Congress. This will affect peoples’ savings around the World, directly impact on jobs and the global recovery.
Let me turn this to an open question:
How should President Obama avoid another deadlock in Congress over the US borrowing level, with risk of global repercussions?
America goes through these periods of brinkmanship under practically every President as I personally experienced when I lived and worked in America.
The problem is that America allegedly keeps 2 sets of books:
1) The official version which shows that America is massively in debt, cannot pay its way and is torn between the tax and spend policies of quasi socialists like President Obama and the tax cutting tendencies of a primarily Republican Congress
2) The unofficial version, which includes money in multi-trillion dollar “Black Budgets” used to finance a series (at least 10), of top secret and not so secret military programs, including such things as:
a) Project Prime Argus which is concerned with how to reignite extinct volcanoes and cause earthquakes to order as an act of deniable warfare
b)Project Looking Glass, designed to study the nature of time, develop time travel and if they were able, re-engineer history to be more favourable to America
c)Work by DARPA and others to develop an army of self replicating machines and robots that can overcome any army, navy or air-force without the need for soldiers, sailors or human aircrew
These budgets funded from taxpayers and other more clandestine sources are being expanded whilst at the same time military and domestic budgets in the official economy are being squeezed.
Then there is USAID, a program on a much grander scale than the UK’s aid budget but with even larger amounts of waste, fraud and criminality in both the supply chain and at the recipient end.
After the invasion of Iraq, America sent plane loads of US dollars on pallets to that country.
As Donald Trump recounts in one of his many U Tube interviews, many of these pallet loads of dollar bills were stolen amid practically non existent security.
The CIA ship huge sums of money to Hamid Karzai the corrupt President of Afghanistan in the form of bribes and cash inducements and the cost of the Afghan War to America so far has been not much less than $70 billion USD.
Now the CIA is smuggling weapons into Syria in an effort to aid the rebels and topple Bashir Assad.
Presumably this costs something as well.
Then there is waste within the Federal Government within the official budget, particularly within the Pentagon.
Avoiding another deadlock with Congress and the resultant global repercussions that are exercising Dr Alf could be achieved by President Obama taking at least the following steps:
1) Appointing Ms Yelland as Head of the Federal Reserve now that Larry Summers has withdrawn his candidature
2) Bringing back Glass Steagall and sound money
3) Curtailing some of the more grandiose forms of military adventurism which are driving the need for so many top secret military programmes to something more akin to America,d defence requirements with a reasonable margin for error
4) Eliminating waste and using some of the money saved to help finance Obamacare which the Republicans hate almost as much as they dislike President Obama
5) Reducing the overseas aid budget to more manageable levels
6) Introducing more transparency into the official budgeting process
7) Lowering Corporation taxes to more reasonable levels to discourage firms like Apple, Google, Microsoft, Facebook, Merrill Lynch, State Street, Amazon etc., from basing themselves in the Dublin financial district and paying just 3% corporation tax on the bulk of their global earnings to the Irish Government
8) Introducing modest tarriffs on imported goods from China,South Asia and the Far East
9) Working with the Ratings Agencies(Moodies,Fitch and Standard and Poor,s) to explain the thrust of Government policy rather than just making it up on the hoof and announcing policy after the fact and then getting an unfavourable reaction
10) Making the US economy more attractive to wealthy foreign inward investors