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Friday, May 27, 2016

National Debt & Mutually Assured Economic Destruction

~ A still shot from Frankie Goes To Hollywood's 1984 music video 'Two Tribes' where an actor playing Reagan is going all Tyson on the Russian Premier's ear..

Most people can vividly recall things like first time they kissed or fully did the 'deed' or the first time they heard a swear word in a movie, etc.., and certainly I can as well..

But can you remember the first time you remember ever hearing about National debts and deficits?

Generally speaking, for me it was during the election of 1984
I only remember off hand references that the debt was spiraling out of control at $1 Trillion thanks to Reagan's military buildup which really was his attempt to outspend the Soviets until they went bankrupt and ceased to be, thus ending the Cold War..

And the only reason I even recall that was they used my favorite TV show at the time, Saturday Night Live as the venue to harp upon it..

I was too young back then to fully realize how politically one-sided the show was or how they never met a conservative in office they liked or respected.   It took their mean-vicious coverage of Dan Quayle in 1988 to understand SNL's writers and those who make the show tick were losers...
But back to the topic at hand..

For over 30 years regarding the national debt we've been told a lot of lies of course but among the biggest were the following:

1)  Democrats in the White House would keep the debt in check.. 

Wrong - both parties since 1980 are equally to blame, mainly because the last "real" Democrat as we at A&G call them was Carter and while he was not a good President, he was sincere to the ideals of his party unlike the trash who soul the party's soul to Wall Street (Bill Clinton was a major force)
A lot of people believe while in office Bill Clinton lowered the national debt...

No.. He lowered the deficit which is completely different.
In 1993 when Clinton took office, the debt was at $4.064T ..  This is what was inherited from Reagan and Bush..

When Clinton left office in 2001, the debt was at $5.8T..

So give the dog his due in that the debt only went up $1.7 Trillion compared to war-mongers Bush and Obama, but it still went upward..
2) Constant fear mongering that the nation could not handle a debt of another Trillion

We are at near $20T and no one has called in a debt yet.

It certainly helps that our own Federal Reserve is holding onto a large chunk of it (more than what we even owe China) and that we're the reserve currency (for now) so we can print and print and it affects others more adversely than us..

It also helps that the System and global banking apparatus set up global debt load like the military arms race build up so that if any lender nation ever had the gall or balls to call in the debt on a lendee, it would assure mutual economic (and societal) destruction
For instance, lets' say China wanted its debt repaid now and was actually able to get that money in hand, what would happen?

Well the Fed would have to direct the Treasury to quickly print up a couple Trillion dollars which would make both the US dollar and the Chinese paper worthless.  In addition China would essentially kill off its #1 consumer..

We Americans buy more Chinese crap than anyone else, so how can you sell when you killed off your biggest buyer..
Now on the other hand, let's say a President Trump storms into Oval Office and passes legislation that successfully brings back tens of thousands of once-closed factories, thus millions of jobs back to the US and all the products once bought in China are now bought here..

Our unemployment rate would drop and in the short term, the US worker would have it good again, but then China's unemployment rate would explode from factory closures and no major buyer, and then there's no reason Not to call in the debt...

See how messed up it all is?

That is why Trump focuses a lot of his ire on NAFTA and Mexico rather than China..
The System as a million and one devious tricks up its sleeves to save itself but it does not mean everyday individuals will feel any benefit if/when things get bad..

It is always us that pays for their mistakes.

Sorry its not the happiest of pre-Memorial Day posts

To make it up to you, here... Have a kabob and a 'dog'

See you next week..  :-)