Are we finally coming into reality? New Year = New Matzav?
This week started with President Obama Monday demanding lawmakers raise the U.S.’s $16.4 trillion debt ceiling, warning Republicans not to insist on spending cuts in return. The same day, Federal Reserve Chairman Ben Bernanke advocated getting rid of the debt limit altogether. The Washington Post reports in a conversation at the University of Michigan Bernanke said the debt ceiling has only “symbolic value.” And the week ends with lawmakers still careening towards a deadline somewhere between mid-February and late March, when the U.S. will run out of funding for most government programs and risk default. They have no plan to raise the ceiling or abolish it. Even so, perhaps playing chicken with the debt limit, a charade we already witnessed once before in 2011, is not the real story.
“Bernanke is quite correct, it is theatrics,” Doug Casey, chairman of Casey Research, professional investor, and author of Totally Incorrect: Conversations with Doug Casey tells The Daily Ticker. “The problem is the amount of debt itself. The problem is so big at this point, I think it’s very questionable whether this can be solved at all.” Related: Debt Ceiling Theatrics Could Spark 10% Sell-Off
Casey points to the money America owes above and beyond the official $16 trillion in national debt, as the real issue. This includes the so-called unfunded liabilities from entitlements like Social Security and Medicare.
Two former U.S. government officials put the federal government’s actual liabilities in excess of $86.8 trillion, or 550% of GDP, in a Wall Street Journal Op-Ed. Casey argues we’re talking of upwards of $100 trillion when you also factor in the liability of promises such as FDIC deposit insurance. “This is far more than can conceivably be repaid, so the debt is going to be defaulted on, it’s simply a question of how,” he says.
There is the specter of outright default like we’ve seen in the case of Argentina, where Casey himself spends much of his time. There’s also the scenario of “destroying the dollar,” devaluing it so the debt burden isn’t as heavy. Related: Bill Gross: Fed’s “Hot Air” Will Keep Bond Bubble Aloft in 2013 Casey takes it one step further.
“I think the U.S. government should default on the national debt,” he says, pre-empting his statement with the admission that it may sound outrageous and too radical. “I say that for several reasons. The most important of them is if they don’t default on it, it’s going to make the next several generations of Americans into effect indentured servants, serfs, to pay off the debt that their parents and grandparents have incurred.”
On another note - Israeli Elections are Tuesday. Most are well aware of the "powers that be" that ran the dynamic [in-sync] duo of Obam-ney; In Israel it seems the political pull/poll is among those who back Bibi and those who back Peres [who seems to be dead set to undermine Bibi in the face of the American standoff between Bibi and Obama].
If Bibi does win, it will be interesting to see how he holds it together against the Obamney, Peres, Olmert lifeline. The latest to back Bibi is Obama adversary the Donald [Trump]. I'm guessing the rest of '73 is about to get very interesting.
...and for ya'll who were into '72 - Rosh Chodesh Nissan is officially '73 in the counting of Kings, and 1 of the 5 valid Rosh Hashana's.
[Tu' b' Shvat is another one of the 5; the others being Rosh Hashana proper, Rosh Chodesh Elul and Shevuot]
Thus the +/- of "2 years" ratio moves on, as we dwindle out of the lingering '72. Perhaps the end of '72 will provide serious fireworks; Elections finally over, Iran, etc. coming into high focus.
|Tu B' Shvat: '73|