What's not making US news
I've never been a huge fiscal politics nut. By and large, I am concerned with social issues like education, environment, and health, rather than issues of economy. Yet every once in a while, an issue comes along which makes me stop and remember that there is some value to keeping track of the national purse-strings.
President Bush just signed into law a bill which raises the U.S. ceiling on national debt to 9 trillion dollars. Why would we need to raise the ceiling on the permissible amount of national debt? Read this next line very carefully and think about its consequences:
We had to raise the ceiling to prevent a first-ever default on U.S. treasury notes.
That's right. The United States was about to default on our currency. Given that the United States' dollar is the international currency of exchange that's bad news for the world, and particularly bad news for the United States. When buying and selling in the international market, you are more likely to be dealing in United States dollars rather than in Yen or Euros, even between non-U.S. countries. That this is so provides an enormous boost to the value of U.S. dollars because they are much in demand. Why are they in demand? Because we haven't ever had to devalue our money.
To discover that we are close to defaulting on the value of our treasury notes (dollars) is scary indeed. Not only does that put international exchanges at risk, but even the possibility of default should shake international confidence in the value of the dollar causing merchants to choose to rather do business in Euros. If that occurs, the United States will find our economy in the middle of an early-20th century style great depression. Yikes.
I place the blame for this economic disaster squarely on the President's irresponsible and unjust tax cuts for the wealthy. We need to force the wealthy to pay the fantastical benefits that they have inherited from our system. If they are willing to reap the enormous benefits for themselves, they ought to be willing to pay for them. A society will only function for so long as the rich are willing to understand that they owe their august privilege to the oppression and crushed spirit of the working class. 'Noblesse oblige' is not just a phrase, but must be the backbone of any society that desires to avoid (literal) class warfare.
President Bush just signed into law a bill which raises the U.S. ceiling on national debt to 9 trillion dollars. Why would we need to raise the ceiling on the permissible amount of national debt? Read this next line very carefully and think about its consequences:
We had to raise the ceiling to prevent a first-ever default on U.S. treasury notes.
That's right. The United States was about to default on our currency. Given that the United States' dollar is the international currency of exchange that's bad news for the world, and particularly bad news for the United States. When buying and selling in the international market, you are more likely to be dealing in United States dollars rather than in Yen or Euros, even between non-U.S. countries. That this is so provides an enormous boost to the value of U.S. dollars because they are much in demand. Why are they in demand? Because we haven't ever had to devalue our money.
To discover that we are close to defaulting on the value of our treasury notes (dollars) is scary indeed. Not only does that put international exchanges at risk, but even the possibility of default should shake international confidence in the value of the dollar causing merchants to choose to rather do business in Euros. If that occurs, the United States will find our economy in the middle of an early-20th century style great depression. Yikes.
I place the blame for this economic disaster squarely on the President's irresponsible and unjust tax cuts for the wealthy. We need to force the wealthy to pay the fantastical benefits that they have inherited from our system. If they are willing to reap the enormous benefits for themselves, they ought to be willing to pay for them. A society will only function for so long as the rich are willing to understand that they owe their august privilege to the oppression and crushed spirit of the working class. 'Noblesse oblige' is not just a phrase, but must be the backbone of any society that desires to avoid (literal) class warfare.
posted by The Academian | 9:51 PM
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