The government is pulling out all the stops to avoid reaching the debt ceiling limit until after Congress returns from the Thanksgiving weekend. Treasury Secretary Timothy Geithner is obviously hoping that with Congressional Fat Cats sated with Turkey, the path of least resistance to raising the debt limit is assured.
Since January 1st of this year, the Government has added to the overall deficit some 1.3 Trillion dollars according to the Treasury. Of that amount 1.25 Trillion fell into the Debt Held by the Public category. Only 60 billion, that’s right, billion with a “B” went into the Intragovernmental Holdings section. To put it another way, the Government dumped the deficit on the backs of taxpayers.
95% of the entire deficit added this year was dumped in the taxpayers lap. That’s the same taxpayer that has seen millions of jobs lost (at a rate of more than 500,000 per month) and millions of those same job seekers go onto extended, extended, extended benefits to keep from having riots in the street as we approach Christmas.
The Government is spending 100% of the money and taking only 5% of the blame, guess who get’s left holding the bag.
The Value of the US Dollar meanwhile has fallen from around 85 in value to 75 in just 11 months. That’s a 12 percent drop in value in less than a year! And Mort Zuckerman is worried about the Fed losing it’s autonomy and triggering a crisis in confidence in the dollar. What does he call a 12% loss per year with the Fed at the helm?
The markets are not reacting to profit and loss, trading volume is robotic and the money is headed for precious metals. We keep pushing the crisis up the hill into the future, but the hill is getting steeper and we are getting progressively weaker. The government has no ideas for solutions and not stomach to implement them. The extend and pretend has worked so far, and until it doesn’t, they plan to continue the shell games until the lights go out.
We raise the deficit ceiling at our own peril, it just prolongs the reckoning a few more months. There is no telling what will be the triggering event, but this camel is staggering under its load and it can’t take much more. We do live in a world wide economy and the world is saying that we have a massive problem that we are doing nothing about and they don’t want it either.
Raising the debt is not the answer. Cutting benefits, especially at Christmas is political suicide. Guess which way the politicians are going to roll? Christmas pudding anyone?