The whole debt-ceiling-default debacle is NOT about the amount of debt the US government owes. It is about a fundamental argument about the government should be doing.
The far-right "tea-party" faction of the party formerly known as the Republicans is all about privatizing virtually everything including education, social security, medicare, prisons, roads and based on the current proportion of "contractors" in Iraq and Afghanistan. Do you realize that since 2007, contractors (aka mercenaries) have outnumbered the number of US military forces in Iraq, even during the height of the surge http://articles.latimes.com/2007/jul/04/nation/na-private4 .
Much to the chagrin of those that want to dismantle the social safety net, when confronted with specific measures, most Americans vehemently disagree with the tea party. Now they have found a new strategy by making the national debt the bogey-man. Unfortunately as so often happens when comparing politco-speak with reality, the rhetoric falls short.
Interest rates now and in recent years have been so low, that despite the total amount owed by the US Treasury, the cost of servicing that debt is at its lowest point since the 1970s. At 1.6% of GDP paying the interest is about half of the 3% that it cost during the Reagan-Bush 1 era. That means it actually it costs the treasury less to borrow than pay cash.
Yes the national debt is large and once we get the economy growing again, we need to address it (by slashing military spending for one, do we really need more aircraft carriers?) but that is not what this fight is about.
As usual the mainstream media has done the American people a huge disservice by continuing the facade of "objectivity" and parroting messages from both sides without doing any real analysis of the actual facts.
Balloon Juice » And Now, An Update From Reality
And Now, An Update From Reality. by Tom Levenson. As we head towards either the completely unforced self-immolation of default, or the almost as self-defeating response of belt tightening amidst a rec…
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