NEW YORK – “Banana Republicans,” sneered the Democrat’s leader, Senator Harry Reid. It’s not certain if Reid was comparing his conservative Republican opponents to monkeys or citizens of a Central American banana republic.
Either way, Reid’s nasty remark captured the bitter animosity surging through the US Congress as the mighty United States faces running out of money on 18 October.
Legislators in the House and Senate are at one another’s throats. President Barack Obama blames conservative “tea party” Republicans for trying to defund his signature health care legislation, and for opposing a raising of the US national debt ceiling – meaning Washington’s ability to borrow more money.
Christine Lagarde, head of the IMF, warns of a possible US default in which it fails to make good on its outstanding bonds. This would be financial nuclear war: world markets would go into panic and banks would face runs or collapse. The 2008 crash would look puny by comparison.
If Congress does not approve raising the debt ceiling, now at $16,699 trillion, the government will supposedly grind to a halt. Over 100,000 non-essential workers have already been temporarily laid off. We are told the US faces financial Armageddon.
Wait just a minute. I’m no fan of America’s Tea Party Republicans. But this time, they are speaking sense. Someone has to put a foot on the nation’s financial brakes. At least they have the guts to do what mainstream politicians do not: oppose the financial, military-industrial complexes and say no to ever bigger government.
America has got to clean up its dire financial mess. The 2008 crash was a warning. The United States has become deeply addicted to debt at all levels. The nation’s leading industry is now finance which keeps further addicting the country to the opiate of borrowed money.
The latest example of this fatal addiction was the failed attempt by the Federal Reserve to slow and then end what is euphemistically called “quantitative easing(QE)” – printing more and more money, then injecting it into the economy as a form of financial amphetamine.
This sleazy financial ploy, a usual recourse of bankrupt Third World countries, gives stock markets a phony boost. But the effort last month by the Fed to slow down QE caused a near panic on markets and was quickly abandoned. The temporary cure has become addictive.
The Tea Party rebels are telling the country that its bloated, corrupted finances have to be reined in. The deficit is caused by Washington spending far more than it collects in taxes. So spending must be slashed to bring it into line with revenue, and maybe taxes raised as well.
Military spending is the obvious target. The US accounts for almost half of the world’s total military expenditure. America’s close allies in Europe and Asia make up another 25%. The United States has no serious strategic enemies that can be identified.
The Pentagon’s annual budget, close to $1 trillion with foreign wars and black programs included, is not for defense of North America but designed to impose US military domination over large parts of the globe. But the US tax base cannot support such global ambitions – even when the cost is obscured by borrowed money. The wars in Iraq and Afghanistan were both waged on borrowed money.
Just as Europe has been undergoing the agonies of cutting spending, so must the US take bitter medicine. Its absurd tax code must be rationalized and made fair by cutting all loopholes. Farm subsidies and special benefits for ethnic minorities dropped. Wall Street, which has virtually taken over the government, must be curbed.
In 2007, the national debt stood at 36% of gross domestic product. Six years later, it’s now 75%. The US is fast bankrupting itself. Only the money-lenders and their corrupt politicians they own will benefit.
Break our addiction to debt demand the tea party stalwarts. Break our addiction to war add libertarians. Between unstoppable debt and endless wars we are being driven to ruin.
Will this happen? Not likely. Some fancy way will be found around the debt ceiling issue and the chariot of the borrowed money juggernaut will keep rolling on.