On Giving Obama Power to Trash the Debt Ceiling

The topic headlined above is currently being debated on Capitol Hill, pushed by ‘Little Timmy’ Geithner and either ignorantly or duplicitously reported on by the usual apparatchiks: The New York Times, Bloomberg News, The Washington Post, L.A. Times et al.  Lest Obama’s loyal minions embarrass themselves by reflexively supporting this nitwit idea like so many others they’ve embraced in the past, here’s something for them to ponder from The Privateer, one of my very favorite reads.  Editor Bill Buckler drops a well deserved turd in the punch bowl with this trenchant and succinct analysis:

“If the US Dollar was not the world’s reserve currency and U.S. Treasury IOUs were not the world’s preferred holding of reserves behind their own currencies and financial systems, the Treasury’s debt limit would have been done away with a long time ago. But the US Dollar IS the world’s reserve currency so the debt of the US government IS the underpinnings of the global financial system. That being the case, the system stands or falls on the continuing perception that Treasury debt paper is a viable form of ‘reserve’ and that the debt of the US government will NEVER become ‘unsustainable’.  An announcement by the US government that it was getting rid of any ‘limits’ to its debt-generating capacity would put that perception at risk – quite possibly at grave risk.

“That is the reason why the debt limit remains – even though it has not been an impediment to ever increasing Teasury indebtedness for well over half a century. It is easy to laugh at the seeming absurdity of a Treasury ‘debt limit’ and many people do. Take it away, however, and the fiction that sovereign debt is ’sustainable’ – let alone any ‘confidence’ in its eventual repayment – would be MUCH harder to maintain. Absurdities abound in history, and the more abject the absurdity, the more tenacious it tends to be. Today, a US Treasury debt ‘limit’ is a very necessary absurdity. This does not mean that the debt limit will NOT be abolished. But it does mean that the new Congress convening early next year will be very reluctant to take such a step.”

11 comments on “On Giving Obama Power to Trash the Debt Ceiling
  1. gordo says:

    How does Max continue to dig up these know zero right wing fucks. The debt limit is complete bull shit used by the right to screw the middle class. Congress decides on programs and then spends, if the limit is crossed and it really meant anything they should not have agreed to the spending in the first place. GET IT.

    I guess not.

    &&&&&&

    Judging from your post, Gordo, you’ve got a lot of class — all of it low. But then, you weren’t looking for a dialogue, were you? RA

  2. Dr. Richard Head says:

    @gordo – I don’t know if you are trolling or not, but please advise how the debt limit screws the middle class and that it is a part of the right-wing? Both parties have continually raised the debt ceiling since it was instituted. Furthermore, the true screwer of the middle class are the promises the politicians make while deferring the cost through monetary policy of the Fed. The debt ceiling is just a fucking box cover for a really shitty movie.

  3. someoneionceknew says:

    The debt ceiling was originally introduced to limit Woodrow Wilson’s warmongering ways if I recall correctly.
    With a sovereign fiat nonconvertible currency, it is an anachronism.
    It is being used for political kibuki theatre. They’re coming for your social security.

  4. Bob says:

    Yes, if only we had elected fucking Mitt Romney! He would have made everything better! Are you fucking serious?

  5. Diane Alden says:

    Bob and Gordo … you miss the point .. this is not about electing anyone or who is better your team of idiots or mine .. . it’s about monetary and fiscal and economic policy that have RUINED us. YOU two are STUCK in partisan politics . no one is suggesting Romney would make things better OR that republicans have the answer. But it is pretty obvious Obama’s answer is to play fast and loose with economic policy that pushes us towards a fiscal abyss. Your fall back position seems to be .. republicans are worse. sniff sniff. We are NOT talking about who is worse we are talking about the approach of s situation that none of us will want to deal with . if the US loses it’s reserve currency status .. you can put your partisan head between your knees and kiss it good bye. Obama’s answer to the debt ceiling is to raise it some more .. that is unsustainable and you will get that when the world dumps on your head the fact your currency is worthless and we are becoming Greece. For the LIFE of me I do not see what the debt ceiling has to do with the Middle Class except they will be paying the FREEKING bill for all the spending into infinity while their wages are stagnant and job prospects SUCK thanks to policies of this government and every other of the last 40 or 50 years. Polices under BOTH PARTIES. Get your head out of partisan land.. this is not a game between the Cowboys and the Raiders — or Obama and Romney .. this is about whether or not the US economic system is destined to collapse because of stupidity and incompetence of our leaders and the NUTS who run the central banking system.

  6. JonnyJames says:

    Ackerman again exposes great ignorance of international affairs and a child-like understanding of US politics. He must be getting his information from TV

    The fiscal cliff/ debt ceiling is Bullshit (as gordo says). Compare US Fed debt/GDP ratios with the UK, Japan etc. This is a cheap set-up and diversion to steal more of OUR money! Is Ackerman working for the Feds? He is unwittingly (or not) being duped by the official discourse (propaganda).

    If they were serious about the freakin debt, they would not be giving the banksters trillions and not spending over a trillion a year (in deficit spending) on wars, DoD, CIA, FBI, TSA, HSA, NSA, JSOC etc. etc. etc. etc.

    Besides, the world is FORCED to accept our paper at pain of DESTRUCTION. Remember what happens when you want gold (or other non USD) payment? You get BOMBED to the stone age and murdered.

    Is Ackerman that stupid, or is he just woefully propagandized by the idiot box?

  7. JonnyJames says:

    Here are some who know what the f they are talking about
    http://michael-hudson.com/2012/11/fiscal-cliff-trojan/
    http://www.paulcraigroberts.org/

  8. evolutis says:

    @ Jonny James … 2 great links …. thank you

  9. Tom-Tom says:

    It’s time to devalue the currency. Print up $15,000,000,000,000 in 5 dollar bills and then FedEx it to Japan China and all the rest owed USD’s. Declare the debt done and over with and then start a new national holiday — Picnic Day. We all go to the park, eat Potato salad and banana and peanut sandwiches, and rip open some cans of Coors and and just be cool with it all.

  10. gordo says:

    My point still stands.

    Why allocate the spending and then allow an artificial debt barrier interfere with the political process thereby creating a scam crisis. The right always use crisis to drive their anti middle class objectives. Here the objective is to cut ss, medicare etc under the duress of a false crisis in this case.

    Disaster Capitalism.

    Also yes both are doing it as the Democrats demonstrate their ability to get rolled by the rights iron grip on the media and the false economics profession.

    Classic

    RA, you might want to stop taking the blue pill and realize that austerity has never worked and it will not work now. Unless your goal is to destroy the middle witch you seem to think is fine, just as long as you are ok. We are all good.

    *Right*

  11. John Puma says:

    Editor Bill Buckler’s seem not to have dropped “a well deserved turd” but rather has severe constipation.

    The record low interest rates for US debt, accepted world-wide, with and without moveable debt ceilings belies any notion that the world is in any altering its historic and “continuing perception that Treasury debt paper is a viable form of ‘reserve’ and that the debt of the US government” is still “sustainable.”

    Authors of any and all debt and debt ceiling concerns, relative to ONLY Obama, need first point us to their similar concerns when St. Reagan was tripling the debt and Bush Jr was doubling it again.

    Why do those who publicly adore “the fre market system,” which is no less fantastical than other adored entities, usually fail to recognize the messages of their own chosen god?