Nobody in America hardly pays any attention to the debt ceiling but recently our bloated unsustainable debt is floating to the top of the radar of some concerned citizens and fiscal conservatives. Our nearly $17 trillion pile debt is an alarming number, especially since the US is a walking default because there is no way that the debt can ever be liquidated except through default.
As Congress once again contemplates raising the debt ceiling by a trillion, two or three, hardly anybody is much concerned with reigning in un-affordable spending on steroids. From the viewpoint of serious financial pundits, the debt is justifiably a hugely important issue because, well, America is broke and bankrupt.
In 1913, progressive Woodrow Wilson succeeded in getting Congress to pass the Income Tax (16th amendment) and the Federal Reserve Act. It was no coincidence that WW I broke out in 1914. The Democrats created what is known as the modern welfare-warfare state that facilitated massive government power grabs as well as endless wars. Who got us into WW I, WW II, the Korean War, Vietnam and the Balkan Wars? All warmongering progressive Democrats - Wilson, Roosevelt, Truman, Johnson and Clinton. The War on Terror was started by Bush and the Republicans but Obama has owned it since he was sworn into office.
The history of the debt ceiling is very interesting because until 1917, Congress approved all debt incurred by the Federal government through the issuance of bonds. But Wilson didn't like asking Congress for approval to issue debt to spend money so he got Congress to pass a law nullifying the responsibility of Congress to directly approve new debt and transferred that congressional constitutional function to the Executive branch and specifically the Department of the Treasury. The debt ceiling was born. Wikipedia explains:
Prior to 1917, Congress directly authorized the amount of each borrowing. In 1917, in order to provide more flexibility to finance the US involvement in World War I, Congress instituted the concept of a "debt ceiling". Since then, the Treasury may borrow any amount needed as long as it keeps the total at or below the authorized ceiling. Link here.The debt ceiling has been an addiction for the spendaholic warmongers in Congress and raising the debt ceiling has never been a problem. Sure, the Republicans and Democrats PRETEND to fight over raising the debt ceiling but it's all political posturing to appease their respective bases.
Ronald Reagan, the darling of the Republican Party who is much loved and revered by the GOP base raised the debt ceiling 18 times, here. George W. Bush raised the debt ceiling 7 times. The idea that Republicans are fiscal conservatives is pure 100% fiction.
Until 1917, Congress was restricted in its spending because it was accountable on some level in that it also had to issue the debt under the assumption that the debt would have to be paid. But after 1917, Congress could spend into oblivion because the Treasury would just issue the debt 'no questions asked'. A combination of the 16th amendment, the Federal Reserve Act and transferring the responsibility to issue debt to Treasury are all factors that have resulted in the slow and agonizing death of America.
At the end of the day, not only is the debt never repaid, it grows, devalues the dollar and sucks the life right out of an economy that no longer serves the middle class. The money was spent on the welfare-warfare state, defense contractors, bankster bailouts and other assorted special interests lined up at the congressional feeding trough to trade campaign contributions for favors and monopolies. The debt chart starting with Reagan:
Image source, Wikipedia, here.
The worst of the damage to America and the American middle class commenced in 1971 when Nixon de-tethered the dollar from gold and rendered the dollar a 100% fiat paper currency. What has been the effect of abolishing gold and silver currency?
There once was a time in America when somebody earning a $1.25 an hour minimum wage could survive rather decently. But minimum wage workers today are largely entitlement dependent and receive food stamps and Medicaid.
When we think about fiat currency, the national debt, the cost of the wars and the Federal Reserve we also need to remind ourselves that just about every bad thing that has happened in America is attributable to the welfare-warfare state and the warfare state actually spawned the welfare state.
War is always about keeping the power elites rich and the power elite in America has always been the banksters. We created the Federal Reserve and income tax to bailout America's wealthiest financial family elites. In fact, the government and wealthiest families in America were willing to murder to protect bankster war profits.
Few folks understand the link between Banksters and wars, largely because naïve Americans can’t bear the thought that they’ve been duped and lied to by the media and the government. Even worse, the thought that their loved ones died in foreign wars for nothing more than defense contractor and Bankster profits is a brutal truth that’s like a dagger straight through their souls – it’s so damn painful that they refuse to believe it. It’s an ongoing problem.....So as America is seriously committed to raising the debt ceiling to infinity in much the same way Bernanke's quantitative easing is also QE to infinity for banksters and hedge fund operators, we are in so deep that it's just not possible to extricate ourselves from the ravages of the welfare-warfare state. Rolling back a century of horrific depredations and crimes against middle class and working class Americans just is not possible or even feasible at this juncture.
“The Morgan group had floated one-and-a-half billion dollars in loans to Britain and France. With the fortunes of war turning against them, investors were facing the threat of a total loss. As Ferdinand Lundberg observed: “The declaration of war by the United States, in addition to extricating the wealthiest American families from a dangerous situation, also opened new vistas of profits”.”
It couldn’t be more clear – war is always about money, bailing out the wealthy and the prospect of more profits from more and more war.
President Woodrow Wilson, a progressive Democrat who dreamed of one world socialist government, was also heavily connected to Wall Street. In fact, it can be stated that Wall Street owned Wilson.
The pain required to reverse course would be excruciatingly unbearable, but not nearly as excruciating as the profound agony of a monetary collapse. Meanwhile, Americans remain largely clueless and for the most part they trust that their government will be there to take care of them. They are in for the shock of their lives.