Lack of National Debt Ceiling May Be "Doable"

Well as you know yesterday House republicans walked out of a conference session with democrats on raising the national debt ceiling. They still don't want to raise taxes on the very rich, and want to cut taxes on giant corporation, who pay almost nothing now. Senator Bernie Sanders and Thom Hartman believe that the democrats should hang tough on this issue and not to give in. And the rationalle is simple. Obama caved at the end of 2010 in granting the rich their continued tax breaks under Bush even though they were scheduled to expire within days. But the way they did it was to grant them two years more of tax cuts, but only granting extension of unemployment benefits for just one year. This means that come the beginning of 2012 that there will be many people whose unemployment checks run out. And the republicans are hoping that the democrats will be blamed for their condition. Dr. Levy would love that. That's why he talks about it so much. So it was really sly of the republicans to work it this way. People will be out of money and all the while big business will have all that extra money for the republican presidential campaign next year. So the thing to do is to not give in to the republican economic blackmail this time around. They think they are holding the nation hostage by their demands. But apparently Bob Packwood made in inquiry in the 1980's when Ronald Reagan was in the process of trippling the national debt. He wanted to know if the government worked under FIFO or last in first out regulations - - or whether the government could pick and choose any program they pleased to de-fund. It turns out it's the latter. So quite simply the government can just choose not to fund pet republican programs in red states, such as highway funds. The red states tend to be takers and run a tax surplus with the government. For every tax dollar they put in they get $1.20 back. Whereas in blue states they put in one tax dollar and may get less than eighty cents back. Having Obama as president hasn't altered this basic situation since the days of George Bush. Quite simply, the republicans will be informed that because of their own actions that they will lose out on funds for their pet projects, whereas all the programs they wanted to cut like student loans and health care for the poor, will continue to go on as usual. Pretty smart, huh?

In the news Whitey Bolgier was arrested in Santa Monica yesterday. He is this Boston crime boss who is being charged with racketeering and murder and all that good stuff. The government has been after him for years. His brother led a very different life and is a prommonent Boston politician. Some wonder whether he was covering up for his brother not telling them information he knew. It seems what they both have in common is that they run their respective organizations with an iron hand. President Obama has decided along with various nations of the world, to release oil reserves to get the price down. This was a desperation political card the President finally found it necessary to play. I don’t think it will affect the price a hill of beans and much more probably the price of oil would have come down due to natural market processes. However if you have a corner on the oil market why not jerk speculators around by dumping oil after they have paid a lot for it and then withholding oil when they get discouraged and decide to sell. If I were the government I could play that game all day. Meanwhile atholete Ron Artess has decided to go into court and change his name to “Meta World Peace”. I bet the judge will just love that one. Well, Grace Slick at one point wanted to change her daughter’s name from China to “God” in the early ‘seventies. For weeks they have been telling us that a certain overpass spanning the San Diego freeway will be torn down and traffic will be completely closed from July 15^th through July 18^th. Supulveda Blvd. will also be closed except for residents in the area. So if you want to get over the Santa Monica mountains you have to traverse these local bendy, curvy mountain streets. I guess I’m wondering why they have been saying it so much over a month in advance. Meanwhile if today is June 24, 2011 then it means “Cars II” is opening tonight. Believe it or not there are people who actually line up to see this movie on the first night. Meanwhile California still doesn’t have a budget so the state legislature is continuing to have their pay docked as the days tick off, one by one. If this is late June there must be all sorts of long awaited Supreme Court decisions coming. Compared to most prior years we’ve hardly had any this year, but they still have another week to go.

The whole problem with the nuclear reactors in Japan isn’t going away. Now they say this accident was definitely worse than Chernobyl. All three reactors melted down completely. They have found traces of radioactivity from the accident in milk of school kids in New York City. They cannot even start the clean-up process because they are nowhere near shutting down the reactors even now. They estimate that sometime next year they will be able to commence the clean-up process. There is no doubt about it now, the Japanese government lied. Scientists here knew they were lying because they did computer simulations of the accident and deduced that the radioactivity and the damage had to be a lot worse than we were being told. Some are even saying there is a probability of an after-shock, which could make things all the worse. I just heard James on the patio saying that Germany has decided to shot down and remove all nuclear reactors from that country and concentrate on coal, wind, and tidal power. That’s nice energy if you can get it. Thom Hartman has oft repeated the phrase that “That’s an awfully expensive process of what amounts to boiling water”. The water is boiling now. I think our President needs to suck in a breath and take a long, hard look at which energy sources will cause major ecological damage and steer twords other sources. The good news is that there seems to be little harmful radiation beyond about fifty miles out. Luckily the tidal wave hit mainly farm land. Clearly if circumstances had been different this reactor melt-down would have killed a lot more people than it did. George Washington’s blog has a lot more details on this whole subject and I recommend you read that.

Ben Vernanke said today that this economic slow-down caught him by surprise. If that’s really true then he’s really not as economically astute as someone in his powerful position should be. Like I say we are headed into a deflationary spiral. People don’t think that’s possible because nothing like it has happened since the ‘thirties. Or in Dylan’s words, “Things like that don’t happen now days, do they?” Yes they do. Oil prices won’t be a factor because they are headed down. What is clearly the cause of this economic downturn is that nobody and especially business wants to put money at risk because they are uncertain they will get their money back on any new capital investment. And if they don’t spend the money they’ll be right, so it will be a self fulfilling prophecy. These corporate manipulators never think about what happens to these businesses they raid and gut and leech all the money they can out of, or how their own “Golden Parachutes” will affect the overall economic climate after they’re gone. The percentage of outright crooks is so high in big business right now, the whole problem is more legal and tax revenue related than it is anything the Federal Reserve does. You can’t blame events in Japan because if this economy has recovered normally, by now in 2011, two years after the so called “bottom” of the recession, we would long since been out of recession by now. Of course all the servicemen return from Afghanistan won’t help matters any because they’ll all need jobs, and so will all the extra people no longer covered by Social Security after age 65. There is a glut of labor. People don’t get paid that much so seek a second and third job, and these people are all competing for the same brass ring. But the worst part will be when the economy really falls apart about 2014 and there are riots in the streets here just like there are in Greece and elsewhere. As it is written, “People are inclined to suffer injustices so long as said injustices are tolerable” but there will come a point when that “natural lubrication” will break down and lose its viscosity, metaphorically speaking. People will lose their traditional civility tword one another. And at that point the tea party “revolt” will seem like pettiness in comparison when the people wake up and realize who the real enemy is- - the banksters and these giant internationalist corporations. Believe med whoever is President then, and it may well be still be Barock Obama, will have to wake up and smell the coffee.