Banking analyst Dick Bove recomended shedding all positions on the stock market today until Congress resolves the debt impass. http://www.cnbc.com/id/43915240 The Dow lost almost 200 points today and the NASDAQ and S & P 500 also suffered significant losses at the closing bell. As Ayn Rand is the philosophical queen of the Tea Party, and her pronouncement about selfishness being a virtue has been the ‘raison d’etre’ for much of the Rights posturing and postioning, I just wondered, as we appear ready to economically crash this nations economy for ideological gain, if selfishness was still the virtue Rand said it was.
As the Stock Market begins a descent, Bove, the Rochdale Securities analyst, writes that the liklihood of no deal will have severe repercussions. One is that there is no safe haven for investment now. He believes all stocks are likely to fall and that appears to have begun today.
The impass is essentially that on the Left activists are pressuring Congress to not to cave by demanding tax increases in any debt ceiling deal or face repercussions in the elections. On the Right the Tea Party refuses essentially to raise the debt ceiling unless they get everything they demand so Reids 90% capitulation isn’t even good enough so far.
The problem is that the debt crisis, that many on the Left tout as a trumped up and phony crisis, is not the only huge problem we face and spending cuts of the magnitude the Republicans want will only make the other crises worse. As I noted yesterday, we have a monumental and growing problem with unemployment and the same austerity methods Republicans are trying here have created unemployment rates as high as thirty percent, a level we can’t even comprehend, in other nations. The other crisis is a crisis of outdated and crumbling infrastructure, neglected because Republicans refuse to spend a dime and now it will cost us trillions. We have bridges not far from collapse and water and sewer systems about to give out. In addtion we have a badly outmoded electrical grid system that is also a good candidate on some hot day to collapse but fixing these problems requires tax increases not spending cuts to provide more tax cuts for the wealthy.
Not everyone reporting or editorializing on the news believes this debt impass is just ideological in nature. Robert Scheer writing on Common Dreams http://www.commondreams.org/view/2011/07/27-5 believes that this debt crisis is a phony creation to provide Republicans with the excuse to go after Social Security, which because it is paid for from a seperate payroll tax, has nothing to do with the deficit.
It is curious when Obama states that if we don’t raise the debt ceiling we might cause the government to be unable to send out Social Security checks because Social Security is funded for at least the next twenty five years because of our payroll taxes just for that purpose. What could cause the Social Security checks to stop?
The answer is that our government would take your and my payroll tax dollars paid in for social security and give that money to foreign investors ahead of our retired citizens because we cannot endanger our credit by failing to back our government bonds.
What a boatload of hutzpah that the same credit rating agencies Moody’s and Standard and Poors who helped cause the banking collapse by giving AAA ratings to toxic mortgages sold as securities, now threaten U.S. government bonds with a devalued rating. In addition S & P has now joined the Republicans in demanding 4 trillion more in cuts from programs that benefit the very people they helped the banking industry victimize. If we don’t exceed to this demand they will down grade the U. S. rating whether we raise the debt ceiling or not.
If they devalue America’s bond rating the rise in interest rates will destroy the rest of the U.S. housing market, will make it impossible to create new jobs and will put even more money in China’s hands. I hope selfishness is worth the costs of destroying peoples lives while making them pay for the process of destroying them. Maybe that is what Boehner really meant by,”The bigger the government, the smaller the people.”: What he really meant to say was the smaller the people running it.