Posts tagged Congress
By Ron Paul
Another Phony Budget Debate
Anyone watching last week’s debate over the Republican budget resolution would have experienced déjà vu, as the debate bore a depressing similarity to those of previous years. Once again, the Republicans claimed their budget would cut spending in a responsible manner, while Democratic opponents claimed the plan’s spending cuts would shred the safety net and leave vital programs unfunded. Of course, neither claim is true.
The budget does not cut spending at all, and in fact actually increases spending by $1.5 trillion over ten years. The Republicans are using the old DC trick of spending less than originally planned and calling that reduced spending increase a $5.1 trillion cut in spending. Only in DC could a budget that increases spending by 3.5 percent per year instead of by 5.2 percent per year be attacked as a “slash-and-burn” plan.
The budget also relies on “dynamic scoring.” This trick is where the budget numbers account for increased government revenue generated by economic growth the budget will supposedly unleash. The claims are dubious at best. Of course, reducing government spending will lead to economic growth. But real growth requires real cuts, not this budget’s phony cuts.
As important as reducing spending and balancing the budget is, focusing solely on budget numbers ignores the root of the problem. The real problem is that too many in Washington — and the nation as a whole — refuse to consider any serious reductions in the welfare-warfare state.
I have always maintained that the logical place to start reducing spending is the trillions wasted on our interventionist foreign policy. Unfortunately, there are still too many in Congress who claim to be fiscal hawks when it comes to welfare spending, but turn into Keynesian “doves” when it comes to spending on the military-industrial complex.
These members cling to the mistaken belief that the government can balance it budget, keep taxes low, and even have a growing economy, while spending trillions of dollars policing the world, and propping up some governments and changing others overtly or covertly. Thus, President Obama is attacked as soft on defense because he only wants to spend $5.9 trillion over ten years on the military. In contrast, the Republican budget spends $6.2 trillion over the next decade. That is almost a trillion more than the budget’s total so-called spending cuts.
If there are too many fiscal conservatives who refuse to abandon the warfare state, there are too many liberals who act as if any reduction in welfare or entitlement spending leaves children starving. I agree it is unrealistic to simply end programs that people are currently dependent on. However, isn’t it inhumane to not take steps to unwind the welfare system before government overspending causes a bigger financial crisis and drags millions more into poverty?
Far from abandoning those in need of help, returning the responsibility for caring for the needy to private charities, churches, and local communities will improve the welfare system. At the very least, young people should have the freedom to choose to pay a lower tax rate in exchange for promising to never participate in a government welfare or entitlement program.
Last week’s budget debate showed how little difference there lies between the parties when it comes to preserving the warfare-welfare state. One side may prefer more warfare while the other prefers more welfare, but neither side actually wants to significantly reduce the size and scope of government. Until Congress stops trying to run the world, run the economy, and run our lives, there will never be a real debate about cutting spending and limiting government.
The Obama Administration Wants Gun Owners To Wear RFID Tracking Bracelets?
Attorney General Eric Holder says that gun owners in the United States could eventually be forced to wear RFID tracking bracelets. In fact, in recent testimony in front of Congress he gave the impression that this was something that the Obama administration has been thinking about for quite a long time. Holder seems to think that this would advance the cause of “gun safety” and that gun owners wouldn’t mind having an RFID microchip tracking their every movement. Apparently he does not know gun owners very well, because most of the gun owners that I know would be extremely resistant to the idea of being “chipped”. But this is yet another example of how the Obama administration plans to erode Second Amendment rights. They want to put up as many obstacles as possible to owning and using guns.
When I first came across the testimony by Eric Holder that I am about to share with you, I could hardly believe it. This seemed like something that you would see on “The Onion” or on some other satire website. But this is very, very real. Eric Holder really does seem quite interested in having gun owners wear RFID tracking bracelets. Just check out the following quotes from Holder that come from a recent Free Beacon article…
“I think that one of the things that we learned when we were trying to get passed those common sense reforms last year, Vice President Biden and I had a meeting with a group of technology people and we talked about how guns can be made more safe,” he said.
“By making them either through finger print identification, the gun talks to a bracelet or something that you might wear, how guns can be used only by the person who is lawfully in possession of the weapon.”
“It’s those kinds of things that I think we want to try to explore so that we can make sure that people have the ability to enjoy their Second Amendment rights, but at the same time decreasing the misuse of weapons that lead to the kinds of things that we see on a daily basis,” Holder said.
Video of Holder making these comments to Congress is posted below…
So would you be willing to wear a government-issued RFID tracking bracelet in order to own a gun?
Of course not.
And such a thing would essentially be a de facto system of gun registration. It would be inevitable that all of the information about the guns and their matching gun owners would be stored in a massive government database somewhere.
In addition, it is also conceivable that under such a system that the authorities could use it to physically track the location of guns and gun owners at all times. Some have suggested that this would be good for us because it would mean that law enforcement agencies could “send automatic alerts if a weapon moves away from the tracker, indicating that the gun is lost or stolen“.
But do we really want the government to know where they can find us and our guns 24 hours a day on a permanent basis?
That would give them the perfect tool if they wanted to implement a widespread policy of gun confiscation someday.
Look, I am all in favor of making guns safer. But in the end, that is not what this is about. Just like all other recent presidential administrations, the Obama administration is eroding our liberties and freedoms on a daily basis. We are becoming a “Big Brother society“, and they will keep pushing the envelope until the American people demand that they stop. The following is an excerpt from an outstanding commentary by John Whitehead of the Rutherford Institute…
Adding injury to the ongoing insult of having our tax dollars misused and our so-called representatives bought and paid for by the moneyed elite, the government then turns around and uses the money we earn with our blood, sweat and tears to target, imprison and entrap us, in the form of militarized police, surveillance cameras, private prisons, license plate readers, drones, and cell phone tracking technology.
All of those nefarious deeds that you read about in the paper every day: those are your tax dollars at work. It’s your money that allows for government agents to spy on your emails, your phone calls, your text messages, and your movements. It’s your money that allows out-of-control police officers to burst into innocent people’s homes, or probe and strip search motorists on the side of the road. And it’s your money that leads to innocent Americans across the country being prosecuted for innocuous activities such as raising chickens at home, growing vegetable gardens, and trying to live off the grid.
The Obama administration has been very open about the fact that it is anti-gun.
They do not like the fact that tens of millions of Americans currently own guns.
People like Obama and Holder are fully convinced that guns make society less safe, even though the cold, hard statistics show just the opposite.
Most people just want to be able to protect their homes and their families. Because when a home invader breaks in, you never know what is going to happen…
A man breaking into a Winter Haven home Monday morning was shot and killed by the family living there, Police Chief Gary Hester said.
It happened at a little before 7 a.m. on Lake Marriana Road Drive. A mother, father, and son woke up to the sound of someone, identified by police as 40-year-old Mitchell Large, trying to get in through a porch door.
Chief Hester said one of the family members fired a warning shot.
“[A resident] fired a warning shot above the door. That warning shot did not deter the intruder. The intruder didn’t retreat,” Hester said.
According to politicians such as Obama and Holder, we are just supposed to allow home invaders to take whatever they want, do whatever they want to our wives and children, and then call the police when it is all over so that they can file a report.
What do you think would have happened if that family had been unarmed when that home intruder had entered their home?
That is frightening to think about.
But if Obama and Holder have their way, almost the entire country will eventually be unarmed.
This article first appeared here at the The American Dream. Michael Snyder is a writer, speaker and activist who writes and edits his own blogs The American Dream and Economic Collapse Blog. Follow him on Twitter here.
Image credit: http://endoftheamericandream.com
HUMPHRIES: Give members of Congress a million dollars a year
Columnist Rusty Humphries responds to Congressman Moran’s complaint that $174,000/year, plus amazing healthcare, plus a fantastic pension isn’t enough for members of Congress to live on.
(From The Washington Times)
Rep. Jim Moran, Virginia Democrat, is retiring after spending over 20 years in Congress. He thinks he and his overworked colleagues are underpaid. They get a measly $174,000 a year salary, so it’s unreasonable for us to expect them to pay for things like a house in Washington, D.C.; dinners at all those expensive restaurants; or Obamacare.
Well, after listening to his lively speech, he’s inspired me and changed my mind.
I say, Let’s give each member of Congress ONE MILLION DOLLARS a year!
But there’s a catch:
Image credit: http://www.againstcronycapitalism.org
Nationalism or Internationalism?
Published by Gary Franchi
Senate Majority Leader Harry Reid and President Barack Obama are working both sides of the Atlantic this week. But their mutual target is Russia. Reid is busy on Capitol Hill in that regard, while the President is on a week long European tour. While Reid and Obama are wrestling with several issues besides Russia, they’re sending a mutual message that the U.S. will punish Russia for its military operation in Ukraine.
Furthermore, a pricey aid package for the newly installed Ukrainian government based in Kiev is in the works.
President Obama is meeting with leaders from the G-7 nations. His stop in Holland yesterday was widely regarded as an attempt to isolate Russian President Vladimir Putin and deter him from moving his forces beyond the Crimean peninsula and further into Ukraine.
Obama and the G-7 allies have also firmed up their decision to remove Russia from the annual G-8 economic summit. The removal appears to be official, which is why the G-8 is now being called the G-7.
Notably, the G-7 will meet in June 2014 in Brussels, Belgium, to discuss what organizers say is “a broad agenda.”
But what Obama and his allies are doing overseas has a way of softening up the folks back home in America—to justify foreign aid for Ukraine.
On the home front, Sen. Reid is stumping for an aid package for Ukraine as Congress embarks on a marathon session this week. Reid expects the Senate to work right through the weekend as President Obama wraps up his overseas trip.
For the record, the Senate:
· Will reconsider extending jobless benefits.
· Furthermore, unless Congress takes corrective action by April 1st, Medicare reimbursements to doctors will be slashed by nearly 25%.
· Reid also wants to officially raise the federal minimum wage to $10.10 an hour. But Republican support is lacking on that so far.
However, the first order of business this week will be the Ukraine-aid bill, which calls for $1 billion in loan guarantees.
Reid noted: “I am hopeful and somewhat confident that this legislation will receive the bipartisan support it deserves.”
But does a Ukraine-aid bill really deserve support?
During this busy phase in Washington, the missing argument is that the U.S. can scarcely afford the time and the money to play both sides of the ocean to aid Ukraine via the IMF.
Foreign aid is preferable to going to war, but the Constitution is silent on foreign aid. This means that the national charter does not authorize providing such aid in the first place.
Earlier this month, Treasury Secretary Jack Lew announced: “[I]t’s important to note that for every dollar the United States contributes to the IMF, other countries provide 4 dollars more.”
Lew added that the U.S. has developed an actual “package of bilateral assistance focused on meeting the most pressing needs in Ukraine, to include a 1 billion-dollar loan guarantee.”
Lew also has urged Congress to approve legislation to “support the capacity of the International Monetary Fund to lend additional resources to Ukraine.”
However, if money must be spent, it’s arguably better to avoid Medicare cuts and extend jobless aid for Americans—instead of extending foreign aid.
Indeed, all this talk in Congress and by President Obama to isolate Russia misses a key point.
That point is as follows: In a way, America needs to isolate itself from world commitments which force U.S. taxpayers to guarantee international loans. Like never before, the U.S. needs to get its own house in order.
Simply put, we need to operate on a more nationalistic impulse—not more internationalism.
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By Hunter Lewis
More High Stakes Appointments to the Federal Reserve
It will still be the Obama Fed long after this president has gone.
The Obama administration has repeatedly complained about Republican blocking tactics in the Senate. In this context, it is worth remembering that the Democrats blocked President’s Bush’s last three nominees to the Federal Reserve Board. The Democrats calculated that a member of their party might win the White House in 2008 and why not wait in the hopes that a Democrat could shape the Federal Reserve for a generation to come.
This bet paid off, in that the seven member board is now comprised entirely of Obama appointees. Moreover Fed member terms are for 14 years, so a president’s choices may influence monetary policy long after he has left office.
Does any of this matter? Yes, the Federal Reserve has more power over the economy than the president himself. But isn’t monetary policy a non-partisan affair? Surely Fed members don’t operate with R’s or D’s on their backs.
Actually the idea of appointing non-partisan Fed members is even more of a fairy tale than the similar idea of appointing non-partisan judges. No one doubts anymore that the appointment of a Supreme Court Justice is about politics. The illusion has persisted a little longer that we just need “good people” at the Fed, regardless of political and economic orientation, but illusion it is. As in the rest of politics, the Fed represents a battle between ideas and special interests.
The pretense of non-partisanship lasted longer at the Fed because until recently both Republicans and Democrats largely agreed about what they wanted from it. With the exception of Ronald Reagan, they were Keynesians who wanted more dollars printed and lower interest rates, because that was seen as the route to getting elected or re-elected, and why worry about the long run consequences, since as Keynes pointed out “in the long run we are all dead.”
This is now changing. Republicans succeeded in blocking Obama’s nomination of radical economist Peter Diamond to the Fed in 2011. After Democrats invoked the “nuclear option” of restricting the filibuster, Republicans could no longer repeat this performance. But 28 of them voted against Obama’s nomination of Janet Yellen to be the new Fed chairman. Only 11 of them voted to confirm: Flake (Ariz.); Kirk (Ill.); Corker (Tenn.); Coburn (Okla.); Collins (Maine); Coats (In.); Chambliss (Ga.); Burr (N.C.); Alexander (Tenn.); Ayotte (N.H.); and Murkowski (Alaska).
Bob Corker (R-Tenn.) exemplifies the confused Republican of today. He grasps that current monetary policy favors endless expansion of government control over the economy, with huge pay-offs to Wall Street and other special interests along the way, but falls for the circular argument that Fed members are “well qualified” precisely because they come from Keynesian university economics departments, government, or Wall Street.
In retrospect, there was something notable about George W. Bush’s last three appointees to the Fed board—the ones that were blocked by the Democrats. None of them had advanced degrees in economics. This was a throw-back to the old days when Fed appointees were rarely academic economists, but a sharp departure from current practice, when most are.
Respected financial writer Jim Grant jokes that today’s Fed has replaced the gold standard with the “Phd standard.” The problem, of course, is not Phds, but the economics departments they are coming from, and the lack of common sense in those departments. The Phd standard has given us the likes of the last Fed chairman, Ben Bernanke, who bet the future of the US and indeed the world on a completely unproven and untested economic theory while literally smirking at those few unintimidated souls who, like Congressman Ron Paul, dared question him.
President Obama has now given us three more nominees to the Fed and the Senate has had a chance to interview them. The first and most important is Stanley Fischer, aged 70, nominee for vice chairman as well as a regular member.
The most curious thing about Fischer’s resume is that, having been born in Zambia, and naturalized as an American in 1976, he accepted Israeli citizenship in 2005 in order to become head of Israel’s central bank. Today he holds dual citizenship. Prior to living in Israel, he worked as a vice chairman of Citigroup from 2002-5, the years leading to the bank’s bail-out, and prior to that was deputy director of the International Monetary Fund, chief economist of the World Bank, and professor at MIT, where he taught Ben Bernanke among others. Somewhere along the way, he acquired a personal fortune of between $14 and $56mm.
We are thus to understand that President Obama, having searched the entire length and breadth of our land, could find nobody better than a 70 year old with Wall St. and International Monetary Fund baggage who had most recently worked for a foreign government.
The second nominee after Fischer is Lael Brainard, who has recently worked at the Treasury as an undersecretary. Ms. Brainard told senators that the Fed should protect “the savings of retirees.” She did not bother to explain how refusing to allow interest to be paid on savings, or seeking to foster inflation higher than interest would do so.
The final nominee, Jerome Powell, would be a reappointment. Although not a Phd economist and nominally a Republican from the George H. W. Bush administration, he fits the Obama mold in other ways, notably by being from Wall Street, and by being willing to keep quiet and go along. His most daring moment came when he called the Fed’s money creation machine under Bernanke and now under Janet Yellen “innovative and unconventional” and added that “likely benefits may be accompanied by costs and risks.” He has been a reliable vote for Bernanke and likely will be for the Yellen/Fischer regime as well.
Senator Corker waxed enthusiastic about this group of three, saying “I’m impressed,” and leading bond manager Mohamed El-Erian describes them as a “dream team” together with Yellen.
This does indeed seem to be a “dream team” for Wall Street, for corporations boosting profits to record levels with the help of government deficits, for other special interests feeding off the stimulus trough, and for government employees. For everyone else, it just promises more and eventually even worse economic misery.
Most recent book by Hunter Lewis:
Image credit: http://www.againstcronycapitalism.org
About Hunter Lewis
Hunter Lewis is co-founder of AgainstCronyCapitalism.org. He is co-founder and former CEO of global investment firm Cambridge Associates, LLC and author of 8 books on moral philosophy, psychology, and economics, including the widely acclaimed Are the Rich Necessary? (“Highly provocative and highly pleasurable.”—New York Times) He has contributed to the New York Times, the Times of London, the Washington Post, and the Atlantic Monthly, as well as numerous websites such as Breitbart.com, Forbes.com, Fox.com, and RealClearMarkets.com. His most recent books are Crony Capitalism in America: 2008–2012, Free Prices Now! Fixing the Economy by Abolishing the Fed, and Where Keynes Went Wrong: And Why Governments Keep Creating Inflation, Bubbles, and Busts. He has served on boards and committees of fifteen leading not-for-profit organizations, including environmental, teaching, research, and cultural and global development organizations, as well as the World Bank.
By Adam Dick
Ron Paul on CIA Targeting Congress
RPI Chairman and Founder Ron Paul, speaking on the Fox Business show The Independents Wednesday night, addresses the Central Intelligence Agency’s spying on the Senate Intelligence Committee — seemingly to cover up torture revelations against the agency. Paul notes the irony that Committee Chairman Dianne Feinstein (D-CA) “doesn’t care about our privacy, but, lo and behold, she does care about her own.”
Watch the complete interview here:
Surveillance State advocate Diane Feinstein cries about CIA searching of her committee’s computers
Oh wait, they’re spying on me? Then that’s a different matter. I thought they were only going after people I didn’t like – which coincidentally is pretty much everyone but me.
This won’t do. I am part of the court, the political class. I am a US Senator, your rules do not apply to me!
(From The Washington Post)
A behind-the-scenes battle between the CIA and Congress erupted in public Tuesday as the head of the Senate Intelligence Committee accused the agency of breaking laws and breaching constitutional principles in an alleged effort to undermine the panel’s multi-year investigation of a controversial interrogation program.
Chairman Dianne Feinstein (D-Calif.) accused the CIA of secretly removing documents, searching committee-used computers and attempting to intimidate congressional investigators by requesting an FBI inquiry of their conduct — charges that CIA Director John Brennan disputed within hours of her appearance on the Senate floor.
Image credit: http://www.againstcronycapitalism.org
55 Things About America You May Not Know
Is America the greatest nation on the planet? Before you answer that question, you might want to check out the statistics that I have shared in this article first. The reality is that the United States is in a deep state of decline, and it is getting harder to deny that fact with each passing day. Mentally, emotionally, physically, spiritually and financially we are a train wreck. Many that are “patriotic” attempt to put a happy face on our growing problems, but the truly patriotic thing to do is to admit just how bad things have gotten so that we can start finding solutions. If you truly love this country, then you should know that this nation needs a huge wake up call. We have abandoned the values and the principles that early Americans held so dear, and as a result our society is a giant mess. The following are 55 things about America that you may not know…
#1 We are supposed to have a government “of the people, by the people, for the people”, but only 25 percent of all Americans know how long U.S. Senators are elected for (6 years), and only 20 percent of all Americans know how many U.S. senators there are.
#2 Americans spend more on health care per capita than anyone else in the world by far, and yet we only rank 35th in life expectancy.
#4 Of all the major industrialized nations, America is the most obese. Mexico is #2.
#6 According to a new report from the U.S. Department of Agriculture, 31 percent of all food in the United States gets wasted. In case you were wondering, that amounts to approximately 133 billion pounds of food a year.
#8 In America, we even put 81-year-old women in prison for feeding the birds.
#9 According to a Newsweek survey taken a few years ago, 29 percent of all Americans could not even name the vice president.
#10 Americans spend more time sitting in traffic than anyone else in the world.
#11 60 percent of Americans report feeling “angry or irritable”. Two years ago that number was at 50 percent.
#12 36 percent of Americans admit that they have yelled at a customer service agent during the past year.
#13 Only 30 percent of all Americans can tell you in what year the 9/11 attacks happened.
#14 There are more “deaths by reptile” in America than anywhere else in the world.
#15 Right now, 29 percent of all Americans under the age of 35 are living with their parents.
#17 According to a study conducted by the Mayo Clinic, nearly 70 percent of all Americans are on at least one prescription drug. An astounding 20 percent of all Americans are on at least five prescription drugs.
#18 Americans spend more than 280 billion dollars on prescription drugs each year.
#19 According to the Centers for Disease Control and Prevention, doctors in the United States write more than 250 million prescriptions for antidepressants each year.
#20 Children in the United States are three times more likely to be prescribed antidepressants than children in Europe are.
#21 In the United States today, prescription painkillers kill more Americans than heroin and cocaine combined.
#22 America has the highest rate of illegal drug use on the entire planet.
#23 According to the federal government, the number of heroin addicts in the United States has more than doubled since 2002.
#24 It is hard to believe, but 56 percent of all Americans now have “subprime credit”.
#25 America exports more weapons to other countries than anyone else in the world.
#26 The United States has the most complicated tax system on the entire planet.
#27 Corruption is rampant throughout our society. In fact, America leads the world in money given to fake charities.
#29 In 2008, 53 percent of all Americans considered themselves to be “middle class”. In 2014, only 44 percent of all Americans consider themselves to be “middle class”.
#30 70 percent of Americans do not “feel engaged or inspired at their jobs”.
#31 40 percent of all workers in the United States actually make less than what a full-time minimum wage worker made back in 1968 after you account for inflation.
#32 Back in the 1970s, about one out of every 50 Americans was on food stamps. Today, about one out of every 6 Americans is on food stamps.
#33 The marriage rate in the United States has fallen to an all-time low. Right now it is sitting at a yearly rate of 6.8 marriages per 1000 people.
#34 In the United States today, more than half of all couples “move in together” before they get married.
#35 America has the highest divorce rate in the world by a good margin.
#36 America has the highest percentage of one person households on the entire planet.
#37 100 years ago, 4.52 were living in the average U.S. household, but now the average U.S. household only consists of 2.59 people.
#39 For women under the age of 30 in the United States, more than half of all babies are being born out of wedlock.
#40 At this point, approximately one out of every three children in the United States lives in a home without a father.
#42 America has the highest teen pregnancy rate in the world by a very wide margin.
#43 Approximately one out of every four teen girls in the United States has at least one sexually transmitted disease.
#44 America has the highest STD infection rate in the entire industrialized world.
#45 According to the latest figures released by the U.S. Centers for Disease Control, there are 20 million new sexually-transmitted infections in the United States every single year, and Americans in the 15 to 24-year-old age range account for approximately 50 percent of those new sexually-transmitted infections.
#47 America produces more pornography than any other nation in the world.
#48 America has the most lawyers per capita in the entire world.
#49 If you choose to be a “Constitutionalist” in America today, you may get labeled as a potential terrorist by the U.S. government.
#50 America has the largest national debt in the history of the world. Back in 1980, the U.S. national debt was less than one trillion dollars. Today, it is over 17 trillion dollars.
#51 According to the Congressional Budget Office, interest payments on the national debt will nearly quadruple over the next ten years.
#52 Americans spend more money on elections than anyone else does in the world by a very wide margin.
#53 65 percent of Americans are dissatisfied “with the U.S. system of government and its effectiveness”. That is the highest level of dissatisfaction that Gallup has ever recorded.
#54 Only 8 percent of Americans believe that Congress is doing a “good” or “excellent” job.
#55 70 percent of Americans do not have confidence that the federal government will “make progress on the important problems and issues facing the country in 2014.”
This article first appeared here at the The American Dream. Michael Snyder is a writer, speaker and activist who writes and edits his own blogs The American Dream and Economic Collapse Blog. Follow him on Twitter here.
Image credit: http://endoftheamericandream.com
Russia Threatens To Abandon The U.S. Dollar And Start Dumping U.S. Debt
The Obama administration and the hotheads in Congress are threatening to hit Russia with “economic sanctions” for moving troops into Crimea. Yes, those sanctions would sting a little bit, but what our politicians should be made aware of is the fact that Russian officials are promising “to respond” if economic sanctions are imposed on them. As you will read about below, one top Kremlin adviser is even suggesting that Russia could abandon the U.S. dollar and start dumping U.S. debt. In addition, he is also suggesting that if sanctions are imposed that Russian companies would not repay the debts that they owe U.S. banks. Needless to say, Russia could do far more economic damage to the United States than the United States could do to Russia. The U.S. financial system relies on the fact that the rest of the planet is going to use our currency to trade with one another and lend gigantic piles of it back to us at super low interest rates. If the rest of the world starts changing their behavior, we are going to be in a massive amount of trouble. Those that believe that the United States is “economically independent” are being quite delusional.
In order for U.S. economic sanctions against Russia to be effective, Europe would also have to get on board.
But that simply is not going to happen.
There is no way that Europe could risk having Russia cut off the gas, especially considering the economic condition that Europe is currently in.
To get an idea of just how incredibly dependent the rest of Europe is on Russian natural gas, check out the chart in this article. A whole bunch of European nations get more than half their natural gas from Russia.
And according to the Telegraph, even the UK has already completely ruled out economic sanctions…
Europe would be pushed back into recession, Russia into financial meltdown. This is not the sort of self harm Europe is prepared to contemplate right now. Indeed, thanks to the indiscretion of a UK official, who was snapped going into Downing Street with his briefing documents on display for all the world to see, we know this to be the case. Trade and financial sanctions have already been ruled out.
So the U.S. can do whatever it wants, but Europe is not going to be any help. Perhaps Canada will stand with the U.S., but that will be about it.
Russia said on Tuesday that it would retaliate if the United States imposed sanctions over Moscow’s actions in Ukraine.
“We will have to respond,” Foreign Ministry spokesman Alexander Lukashevich said in a statement. “As always in such situations, provoked by rash and irresponsible actions by Washington, we stress: this is not our choice.”
So what would the response look like?
Lukashevich did not say, but top Kremlin adviser Sergei Glazyev is suggesting that Russia could abandon the U.S. dollar and refuse to pay back loans to U.S. banks…
“In the instance of sanctions being applied to stated institutions, we will have to declare the impossibility of returning those loans which were given to Russian institutions by U.S. banks,” RIA quoted Glazyev as saying.
“We will have to move into other currencies, create our own settlement system.”
He added: “We have excellent trade and economic relations with our partners in the east and south and we will find a way to reduce to nothing our financial dependence on the United States but even get out of the sanctions with a big profit to ourselves.”
Glazyev also stated that Russia could start dumping U.S. debt and encourage other nations to start doing the same. The following comes from a Russian news source…
“We hold a decent amount of treasury bonds – more than $200 billion – and if the United States dares to freeze accounts of Russian businesses and citizens, we can no longer view America as a reliable partner,” he said. “We will encourage everybody to dump US Treasury bonds, get rid of dollars as an unreliable currency and leave the US market.“
Clearly Russian officials understand the economic leverage that they potentially have. In fact, Glazyev seems fully convinced that Russia could cause “a crash for the financial system of the United States”…
“An attempt to announce sanctions would end in a crash for the financial system of the United States, which would cause the end of the domination of the United States in the global financial system.”
On that last point Glazyev is perhaps overstating things.
On their own, the Russians could do a considerable amount of damage to the U.S. financial system, but I doubt that they could completely crash it.
However, if much of the rest of the world started following Russia’s lead, then things could get very interesting.
Just yesterday, I wrote about how China has chosen to publicly stand in agreement with Russia on the Ukrainian crisis.
If China also decided to abandon the U.S. dollar and start dumping U.S. debt, it would be an absolute nightmare for the U.S. financial system.
And keep in mind that the Chinese were already starting to dump a bit of U.S. debt even before this latest crisis. In fact, China dumped nearly 50 billion dollars of U.S. debt in December alone.
The only way that the current bubble of debt-fueled false prosperity in the U.S. can continue is if the rest of the world continues to lend us trillions of dollars at ridiculously low interest rates that are way below the real rate of inflation.
If the rest of the world stops behaving in such an irrational manner, interest rates on U.S. government debt would rise dramatically and that would also mean that interest rates on virtually all other loans throughout our financial system would rise dramatically.
And if that happened, it would be a complete and utter nightmare for our economy.
Unfortunately, most Americans have no understanding of these things. They just assume that we are “the greatest economy in the world” and that nothing is ever going to threaten that.
Well, the truth is that we are rapidly approaching a “turning point”, and after this bubble of false prosperity pops things will never be the same in the United States again.
This article first appeared here at the Economic Collapse Blog. Michael Snyder is a writer, speaker and activist who writes and edits his own blogs The American Dream and Economic Collapse Blog. Follow him on Twitter here.
Image credit: http://theeconomiccollapseblog.com
Comcast Merger and the FCC controlling the news?
Published by NextNewsNetwork
WASHINGTON DC | The merger between Comcast and Time-Warner cable is a concern to many independent cable providers and others. Critics of the merger, like our guest today believe the purchase will create a monopoly that will dominate the marketplace. When Comcast recently purchased NBC Universal, the company pressed hard for Federal approval. It is interesting to note that FCC Commissioner Meredith Attwell, soon after approving the deal, was hired by Comcast. The terms of her employment deal have never been disclosed.
Other than a former FCC Commissioner in their employ – Comcast has close ties to the Obama Administration that may help rubber stamp the merger. Comcast CEO, Brian Roberts, has enjoyed Golf outings with President Obama on Martha’s Vineyard, while Comcast Executive Vice President David Cohen is a frequent White House guest and major fundraiser for the Democratic Party.
This relationship may underscore NBC’s ongoing coverage of President Obama as Comcast owns NBC – It may also explain the recent move by the FCC to install Government minders in newsrooms across the country – quizzing reporters and editors on how they select stories – a move that was highly criticized and has since been canceled by the White House.
Our guest today to break down the Comcast/Time Warner merger and the FCC’s failed Newsroom Monitoring Program is the director for media and democracy – Todd O’Boyle – his organization – “Common Cause” at CommonCause.org
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