The not so “Super Committee Failure” ended with a whimper and finger pointing on Monday without so much as cutting a single penny in the bloated federal budget. Not only that, but these reckless jokers didn’t even bother to negotiate up to the wire to give a deal their best shot. They just gave up two full days before the deadline. I guess getting home for Thanksgiving is more important than fixing a country teetering on calamity. The words “pompous, self-centered, and arrogant” come to mind. This boneheaded move is classic party politics. It puts political gain and posturing above the good of the country. We have no statesmen, just bag men.
I’ll bet members of the Tea Party who voted for $2.4 trillion in more spending a few months back feel sold-out right now. With tax receipts falling and employment dropping, some predict the $2,400 billion freshly created cash will not last until November 2012. Yes, there is a very good chance the country will, once again, run out of money. That alone will be a coming catastrophe because the “spend now, cut later” cards are now all used up. Long before that, the country will slide into trouble. Of that, there is no doubt. Sure, some of the ratings companies have said they won’t cut U.S. credit ratings, but how long is that going to last with mountains of red ink piling up.
According to Martin Weiss Ph.D. of MoneyandMarkets.com, America’s true total government debt outstanding is “118.3 percent of GDP (including U.S. government agencies).” In his most recent report that came out the day the “Super Committee” failed to reach a reduction deal, he warned, “Do you truly think the three largest credit ratings agencies are going to simply ignore Congress’ failure? I think that’s a pipedream! The rating agencies have flatly stated that their next likely step is to downgrade the U.S. government. That’s the specific, unambiguous definition of their “negative outlook” for the United States. But we’re not the only ones pointing this out. Even Merrill Lynch agrees that a downgrade is imminent: “The credit rating agencies,” writes Merrill, “have strongly suggested that further rating cuts are likely if Congress does not come up with a credible long-run plan. Hence, we expect at least one credit downgrade in late November or early December when the Super Committee [failure] crashes.”
I think Democrats and Republicans feel if they can hold out until next November, their party will win. Then, they can fix the deficit the way it will benefit their party and their campaign donors the most. I guess they figure that the so-called automatic cuts really do not kick in until 2013, so there is plenty of time to change things with a new Congress and, maybe, a new President. I think this political brinkmanship will blow up in their faces. The economy could easily get out of control and the U.S. could start looking like one of the PIIGS (Portugal, Ireland, Italy, Greece and Spain.)
If the EU debt crisis implodes, there is no way the U.S. is not going to get sucked under. Congressman Ron Paul says U.S. banks have “$1 trillion in exposure” to the European debt crisis. I heard Jim Cramer say this week that he thinks EU banks have “a minimum of $10 trillion in bank debt.” With an enormous land mine in Europe ready to be stepped on, how can our politicians take this big of a risk with our national debt and economy? We need to get our financial house in order, or at least start to! Now, it looks like Congress will get absolutely nothing done on the deficit until after the next election. I say fire them all for putting the country in jeopardy and not doing their jobs.