According to this BBC article:
“US Treasury Secretary Jack Lew has warned the US may default on its debt by the end of the month if Congress does not raise its borrowing limit.”
The US is a society that runs on debt—everything from house,
car, education, healthcare et cetera is funded by debt. So the government
asking for more to pay for its giant federal government is not a surprise.
But now apparently this other factor has now come into play—the
massive size of the US debt. It topped 17 trillion in 2013.
I ran out of cash in NYC once, and I asked a friend of mine,
who happened to work as a credit analyst in a French bank, if she would loan me
a little bit more money. She’s already given me $600. After a careful pause,
she said in her elegant accent, “I am sorry, Sushma. But after looking at your
balance sheet, I don’t think you can pay back more if you borrow, so I cannot
give you more.” Thank god for responsible credit analysts and their honesty.
Unfortunately for the
US, it seems they didn’t have good friends who told them to stop borrowing when
enough was enough. So the USA binged out on its credit card. It bought massive warplanes which cost $1.3 billion dollars a unit (for more on that, search the Internet for "B-2 Spirit.") It fought expensive wars in Afganisthan and
Iraq that cost it 60 billion just in 2001 alone, right after 9/11. It keeps the
largest arsenal of nuclear weapons guarded by tired, disgruntled soldiers,
which cost billions to maintain but which have no use value except to scare
people and create a sense of unease and enmity.
And of course there's those generous handouts to big companies like Monsanto in the form of farm subsidies--an observer cannot help wondering how real Monsanto's stock value is if it is receiving millions (billions?) from various branches of the US government to keep its Round-Up Ready to spray on crops of the people of the world. It hasn't escaped people's notice that Round-Up Ready is just a slightly modified version of Agent Orange--making you wonder if the Vietnam War ever ended or the hawks are still at it, waging a slightly expanded version of the war on a slightly more ambitious scale.
And of course there's those generous handouts to big companies like Monsanto in the form of farm subsidies--an observer cannot help wondering how real Monsanto's stock value is if it is receiving millions (billions?) from various branches of the US government to keep its Round-Up Ready to spray on crops of the people of the world. It hasn't escaped people's notice that Round-Up Ready is just a slightly modified version of Agent Orange--making you wonder if the Vietnam War ever ended or the hawks are still at it, waging a slightly expanded version of the war on a slightly more ambitious scale.
From its 17 trillion debt, it pays 54 billion dollars a year for a giant security-industrial complex whose main tasks seem to include torture and other human rights violations against innocent citizens of other countries. And then there’s the little light amusement provided by the torture of keeping people awake at night through the subtle means of electronic waves that are directed via cellphone towers (or their lookalikes), and which are undetectable by anyone but the victims. Nice, I always admire subtlety.
The USA has sold 3.66 trillion dollars to China as “foreign
reserves” so it could fund a massive surveillance apparatus on its own and other
countries, in order to listen in on what people said to each other every day. What
did Angela Merkel have for breakfast today? I would really like to know if she
chose the German bread or the French croissant.
Apparently China’s had enough of all this, and is no longer buying “foreign reserves” of dollars from November 2013. According to this article in Bloomsberg.com:
“It’s no longer in
China’s favor to accumulate foreign-exchange reserves,” Yi Gang, a
deputy governor at the central bank, said in a speech organized by China
Economists 50 Forum at Tsinghua University yesterday…
China’s
foreign-exchange reserves surged $166 billion in the third quarter to a record
$3.66 trillion, more than triple those of any other country and bigger than the
gross domestic product of Germany, Europe’s largest economy.
Besides foreign reserves, China also bought up giant pies of
the US debt (this is a mystery to me why any country would want to buy up
trillions of another country’s debt. I look forward to emailing Nobel Laureate Paul Krugman
for an explanation.)
According to Wikipedia, my favorite source of unbiased information:
As of January 2013, $5 trillion or approximately 47% of the
debt held by the public was owned by foreign investors, the largest of which
were the People's Republic of China and Japan at just over
$1.1 trillion each.[8]
Germany seems to have similarly wisened up and decided to ask for its gold back from the US. But apparently its not so easy to get it sent back--according to this article titled "US Dollar's collapse: Where is Germany's Gold?", dated February 2013:
The financial world was shocked this month by a demand from Germany’s Bundesbank to repatriate a large portion of its gold reserves held abroad. By 2020, Germany wants 50% of its total gold reserves back in Frankfurt – including 300 tons from the Federal Reserve. The Bundesbank’s announcement comes just three months after the Fed refused to submit to an audit of its holdings on Germany’s behalf. One cannot help but wonder if the refusal triggered the demand.
And you better read the chart from Treasury.gov, which Wikipedia cites, since it reveals the total number of countries holding on to US treasury securities.That’s a lot of big and small countries holding on to a giant stack of IOUs, signed by the flamboyant signature of Uncle Sam.
Of course, the nice thing about the US is that they always
had solutions for everything—including bankruptcy. From what I can remember
from those non-profits that so helpfully tried to get people out of debt once
they’d maxed out their credit cards, the first steps seemed to be:
11.Pay back your debt, even if its small amounts
22. Stop spending on café lattes: in
other words, cut back on the expensive frivolities of warfare, nuclear arsenal
buildups, and torture and persecution of innocent citizens, and stick to the essentials
of food, education, healthcare
3. 3. Be realistic and realize your limitations— if you
are making $10 at MacDonald’s, you cannot buy Jimmy Choos. If your budget is
substantially smaller than what you’d thought, you have to reduce the size of your
spending.In other words, it might be time to scale back the wars and focus on building some real human security programs that focus on tangible results.
I always admired the Americans for the fiscal
sobriety programs they ran in conjunction with non-profits that provided other
life advice. I hope those grassroots messages reach out to the top.
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