Stephen Lendman

Bad policies assure bad results. Destructive ones assure calamities. Well before Obama took office, bipartisan initiatives plotted a course for disaster.

Bush accelerated it. Obama much more, so today America hangs on the precipice of what a previous article called the banana republicanization of America - a kleptocracy run by corrupt politicians and corporate crooks, scamming the public with austerity, debt peonage, and banker occupation, heading them toward mass impoverishment, misery and neo-serfdom.

Washington's current debt ceiling/budget debate centers around slashing entitlements and other social benefits to avoid a manufactured looming crisis. Off the table, however, are:

● cutting military expenditures minimally in half, ideally much more, including closing overseas bases, reducing force levels, ending foreign occupations, and renouncing imperial wars;
● taxing speculators and the rich;
● making corporations pay their fair share;
● strengthening America's social contract, not destroying it;
● stopping the offshoring of high-paying manufacturing and professional jobs plus many others;
● real regulatory reform with teeth;
● abolishing monopoly and oligopoly power;
● returning money creation power to Congress as the Constitution demands; and
● investing the nation's capital in productive growth, not handouts to Wall Street and other corporate favorites, as well as permanent imperial wars, turning America into a corrupted, fascist, lawless sinkhole not fit to live in, except for the elite few pulling the strings.

At the same time, political theater, malfeasance and machinations come at the time the economy is heading south. The latest Commerce Department data showed it stalled so far in 2011. In fact, conditions are much worse based on economist John Williams' calculations.

His Shadowstats Government Statistics (SGS) analysis "reflects the inflation-adjusted, or real, year-to-year GDP change, adjusted for distortions in government inflation usage and methodological changes that have resulted in a built-in upside bias (aka cooking the books) to official reporting."

As a result, his annual growth calculation bottomed out in early 2009 at minus 6% GDP, elevated to over minus 1% in early 2011, and now has it at over minus 2% heading south. In other words, the true state of economic America is bad, getting worse.

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Ellen Brown

The debt ceiling crisis can be averted by enforcing the Fourteenth Amendment, which mandates the government to pay its debts already incurred, including pensions. That means Social Security, which IS an “entitlement,” in the original sense of the word. We’re entitled to it because we’ve paid for it with taxes.

The game of Russian roulette being played with the U.S. federal debt has been called a “grotesque political carnival” and political blackmail. The uproar stems from a statute that is unique to the United States and never did make much sense. First passed in 1917 and revised multiple times since, it imposes a dollar limit on the federal debt. What doesn’t make sense is that the same Congress that voted on the statute votes on the budget, which periodically exceeds the limit, requiring the statute to be revised. The debt ceiling has been raised 74 times since 1962, 10 of them since 2001. The most recent increase, to $14.294 trillion by H.J.Res. 45, was signed into law on February 12, 2010.

Taxes aren’t collected until after the annual budget is passed, so Congress can’t know in advance whether or how much additional borrowing will be required. Inevitably, there will be some years that the budget pushes the debt over the limit, requiring new legislation. And inevitably, now that this tactic has been discovered, there will be a costly battle over the increase, wasting congressional time, destabilizing markets, and rattling faith in the American financial and political systems. There will be continual blackmail, arm-twisting and concessions. The situation is untenable and cries out for a definitive resolution.

Fortunately, there is one. A bevy of legal scholars are recommending that the issue be eliminated altogether by playing the Constitutional trump card. The Fourteenth Amendment provides at Section 4:

“The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.”

Where statute and the Constitution collide, the Constitution prevails. Whether the government should pay the bills it has already incurred is not a matter of negotiation. It is a Constitutional mandate. And those are the bills we are talking about here, as President Obama stressed in his remarks on the issue last Friday. He said:

“Raising the debt ceiling simply gives our country the ability to pay the bills that Congress has already racked up. I want to emphasize that. The debt ceiling does not determine how much more money we can spend, it simply authorizes us to pay the bills we already have racked up. It gives the United States of America the ability to keep its word.”

Ignoring the debt ceiling on Constitutional grounds would not, as Michelle Bachmann declares, make President Obama a “dictator.” It would simply mean he is complying with his Constitutional mandate to pay the government’s bills on time and in full.

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Stephen Lendman

Previous articles explained an Obama-led bipartisan conspiracy to destroy America's social contract, returning the nation to 19th harshness harshness. But you'd never know it from major media reports, op-eds and editorials, ducking the issue even when critical.

The debate charade's gone on for weeks, both sides concealing their basic agreement on major cuts for political advantage.

Republican strategy is attacking big government, excluding its biggest part related to defense spending, imperial wars, and one-sided support for corporate interests and America's super-rich.

Waging no holds barred class war, they echo Ronald Reagan's 1976 Chicago's South Side presidential campaign speech theme when he attacked "welfare queens" without calling them Black. Today, all working Americans are "Black" in terms of struggling more than ever to make ends meet, and needing political Washington's help, not greater planned trickle-up poverty.

Obama and congressional Democrats agree with Republicans but won't admit it. According to Washington Post writer Zachary Goldfarb, Obama's also gambling on winning the political center saying:

His "political advisers have long believed that securing an agreement (even by slashing entitlements) would provide an enormous boost to his 2012 campaign, according to people familiar with White House thinking. In particular, they want to preserve and improve the president's standing among political independents, who abandoned Democrats in the 2010 midterm election and who say reining in the nation's debt is a high priority."

Perhaps Obama needs new advisers, given clear evidence that Americans overwhelmingly oppose cutting Social Security and Medicare with good reason. Their payroll taxes pay insurance premiums to receive them. Taking the money and running may jeopardize any politician's reelection, especially for high office. That said, Obama's strategists may, in fact, count on winning by default, given no viable Republican candidate opposing him. At least, not so far.

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Stephen Lendman

Nero (A.D. 37-68), Roman emperor A.D. 54-68. Nero, lyre in hand, watches Rome burn. Nero was accused of kindling the fire in 64 A.D. which destroyed much of Rome. (Image by © Bettmann/CORBIS)

With an approaching August 2 deadline, Paul Craig Roberts assessed the state of things accurately like he always does, saying in his new article headlined, "Disastrous Outcomes From An Orchestrated Crisis:"

"Americans need desperately to ask themselves why they put into political office such utterly irresponsible and incompetent people capable of creating such a totally unnecessary crisis loaded with such disastrous potential outcomes."

Michael Hudson's new article also covered important ground headlined, "The Debt Ceiling Set For Progressive Repealing," saying:

Obama's "blatantly empty threat (claims) there won't be money to pay Social Security checks next month (if Congress doesn't) 'tackle the tough challenges of entitlement and tax reform.' "

As always, Obama did what he does best. He lied. His threat "is not remotely true. But it has become the scare theme for over a week," and will be repeated until political Washington agrees on a deal destroying America's social contract, claiming it was done to save it.

In the end, of course, the debt ceiling will be raised as done routinely numerous previous times, including 10 times in the past decade and 74 times since 1962. Moreover, raised or not, no default will occur. Threatening otherwise is a lie. Failure to act, however, will lose America's AAA rating.

But that's virtually guaranteed anyway, given decades of reckless spending, largely on out-of-control militarism and handouts to Wall Street and other corporate favorites.

In contrast, America's entitlements are fiscally sound, needing only occasional tweaking to keep them steady-as-you-go for decades, maybe in perpetuity. But you'd never know it from bipartisan lying, regurgitated by managed new media deception.

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Paul Craig Roberts

Americans need desperately to ask themselves why they put into political office such utterly irresponsible and incompetent people capable of creating such a totally unnecessary crisis loaded with such disastrous potential outcomes.

With the world concerned about US financial credibility and the poor outlook for the US economy, now is not the time for the Republicans to grandstand on the public debt. The debt ceiling needed to be quietly raised. Instead, the Republicans started a fire and then threw gasoline on it, creating an inferno that could burn up the US social safety net or the US Treasury’s credit rating and the US dollar’s role as reserve currency or what remains of the separation of powers.

Consequently, world financial markets, currency markets, commodity markets, central banks, and mutual fund money market and bond funds are on pins and needles.

This level of irresponsibility is seldom seen even from American politicians.

Republicans have created a totally unnecessary crisis and turned it into compelling political theater. Will the US default? Will entitlements be slashed? Will Obama seize the power of the purse from Congress in order to save the dollar and the US credit rating? None of these questions needed to arise.

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