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June
03
2023

America Speeds Headlong Into an Unimaginable Fiscal Disaster
Justin O. Smith

I haven’t been worried about this debt ceiling “crisis” shutting the government down. I remember the shutdown that went on for three weeks during the Clinton years, and we survived it just fine.

What everyone should find troubling is the spending that has grown so large it accounts for much more than the receipts the U.S. takes in each year. And if it grows too much larger, it will eventually make it near impossible to even service the interest on the debt.

Defaulting on the debt would be a mixed bag. We’d still have the largest world economy, but the International Monetary Fund would demand some restructuring on how we handle our debt and how much more, if any, we could accrue, not to mention that many nations would grow reluctant to trade with us further. We see this already as many nations are currently moving to align with the BRICs nations, dealing in Chinese yuan for now. 

It could eventually make the IMF remove the U.S. dollar as the global reserve currency, which would create an immediate call for the dumping of the U.S. dollar and chaos in our economy over the short term, probably hastening our final economic collapse. It would force our government to actually stay within a budget and spend only what it takes in, and it would force our government to stop overextending itself in every way, as our people worked to rebuild the economy from the ashes of its destruction.

In the meantime, the raising of the debt ceiling is good news for the wealthy. In the face of extravagant congressional spending, the Fed will eventually have to relent and make a return to monetary easing, which will reinflate bubbles in the stock and residential housing markets. And due to them holding a higher percentage of disposable income for investment, the wealthy will naturally benefit disproportionably, as wealth inequality grows exponentially between the poor, the middle class and the wealthy, with the wealthy becoming wealthier than ever – again. ~J.O.S.

McCarthy Surrenders to the Democratic Communists

Speaker Kevin McCarthy and The Fiscal Irresponsibility Act of 2023

Speaker Kevin McCarthy and every House and Senate Republican who voted to pass the recent debt deal may as well join the Democratic Party and stop acting like they have any real intent to stop the federal government’s out-of-control spending. They have revealed themselves to be cowards with shit for brains and all too willing to betray the American taxpayer rather than take a principled stand that would actually help the country and our people, by raising the debt ceiling without any strings attached and doing nothing to change the status quo. Republicans were within days of breaking the iron grip of America’s destructive fiscal and economic juggernaut, but McCarthy inexplicably tucked his tail between his hind legs and snatched defeat from the jaws of victory, accepting a mess of fiscal crap.

The Turd Sandwich!

If this wasn’t criminal, I don’t know what is. It sets the country on a more destructive path and places the future of the next generations in jeopardy and under an existential threat that’s been manufactured by our own government.

Prior to the vote, Representative Chip Roy (R-TX) called Speaker McCarthy’s and Joe Biden’s debt agreement a “turd sandwich“, because it didn’t include the $4.5 trillion in spending cuts in last month’s debt-ceiling bill that passed the in the House. He was also concerned that minor work requirements were next to nothing regarding the welfare programs, since the new bill includes many loopholes throughout it, and neither was there any mention of overturning student-debt relief.

Roy added:

“It is a bad deal. No one sent us here to borrow an additional $4 trillion to get absolutely nothing in return.”

I didn’t need Roy’s affirmation to know this was a bad deal. Seeing the happy, gleeful smirks of so many Democrats was a dead giveaway that the Republicans got rolled again.

Understand, three-quarters of the American people wanted any debt limit increase stopped dead in its tracks, with twenty percent willing to accept a flat out default to be said and done with it all. Well over half of all Americans didn’t want any debt limit increase without significant spending cuts. Most Americans supported the original House bill or more extreme measures, and yet McCarthy returned waving the white flag with a sorry-ass Democrat give away surprise package.

Oh Yes. The talking points sounded really good to those ignorant, uninformed potential voters, but the folks paying attention see McCarthy and his RINO ilk as retarded traitors, making all the right noises to give themselves political cover.

Americans should recall that President Trump signed every massive spending bill sent to his desk, each with higher deficit spending. Moreover, Republicans offered next to no resistance to Trump’s $2 trillion spending spree focused on combatting covid in 2020, and those who did complain were loudly attacked by Trump. And while Governor DeSantis may be able to balance the state budget, to date, the virtues of doing this at the national level seem beyond his grasp to the extent he can’t articulate why a balanced budget is necessary for liberty and prosperity.

For a point of reference, Americans should also note the national debt was $9 trillion in 2007, up from $5.6 trillion in 2000. America’s current national debt stands at $31.8 trillion, with interest approaching $900 billion this year, exceeding defense spending.

They’ve taken a bill that originally allowed for a $1.4 trillion dollar extension to the government debt and turned it into a $4 trillion dollar monstrosity between now and January 1st of 2025, and it could be more given this bill essentially abolishes the debt ceiling until 2025, especially if some new economic or geopolitical “emergency” presents itself in some form or fashion, real or imagined. They’ve taken the debt ceiling off the table during an election year, and the world’s nations are poised to dump U.S. treasuries like Joe Six-Pack dumps a man in drag at the local bar.

The original House bill was set to halt funding for 87,000 new IRS agents, but now, only $1.8 billion was removed from the $80 billion earmarked to fund the weaponized IRS. That’s a mere rounding error, and WOW, a hole three percent decrease. The Republicans really have something to brag about now on Fox News, as they point to the $1.8 billion shouting “See, see … we really are for the working man“.

Even Goldman Sachs suggests the deal’s budgetary impact is next to nil:

“The spending deal looks likely to reduce spending by 0.1-0.2 percent of GDP in 2024 and 2025, compared with a baseline in which funding grows with inflation.”

The Congressional Budget Office’s most recent analysis projects new deficits of $20.3 trillion over the decade long budget window, in a best case scenario that discounts any recession, with inflation significantly decreased and only gently rising interest rates. However, more realistically, back-out the huge tax increases and spending cuts built into the out-year baseline, which will never be permitted to actually see the light of day, and one finds the country will have a defacto public debt of some $50 to $55 trillion by the early 2030s – more than 200 percent of the current GDP.

Unfortunately, the reality of our situation reveals that only a small minority of the population really does want the federal government to spend less on its various programs, whether we speak of Social Security, education or poverty relief and an array of others. Several recent polls indicate that six in ten U.S. citizens say the government spends too much money. However, when those participants are asked to get more specific, they actually want more spending in areas they most important to them, and they want less spending on the programs they don’t like.

The Swamp Creatures of Congress are well aware of this dynamic, so consequently, they aren’t too motivated to cut the total amount of federal spending. They are most focused on funneling money to their own favored special interest groups, whether those are pensioners, weapons contractors or the more than 42 million Americans currently receiving food stamps. Most politicians, both Republican and Democrat, don’t see any positive side of spending cuts, when it comes to retaining their power. And while a very few Congressmen are proving to be the exception, such as Chip Roy and Nancy Mace (R-SC), a majority of Congress sees apathetic, complacent average voters happy to accept more government spending, so long as they get their cut of the “Free Stuff“.

Most conservatives and many independents expect destructive spending practices from the Democratic Party Communists who are doing their dead level best to collapse the system and usher in full blown communism in the aftermath, but for many decades, the American people looked to the Republican Party to ensure economic prosperity for everyone. And now it’s hard to distinguish “the Loyal Opposition” from the Democrats and our enemies-from-within.

Once one looks at how beneficial actual conservative policies are for a host of American people from all walks of life, it’s simply unfathomable that Republican leadership can’t get it right in realigning the party, as the party of opportunities for the working poor and middle class who would benefit from a stronger capitalist system and the prosperity it would generate rather than our current economic fascism. Such a move would benefit senior citizens and all Americans desiring safety and security, too.

But No! Every vile thing on the Democrat Marxist-Maoists’ wish list is moving along as easily as you please, with conservative, Christian parents regularly targeted for attack and the Marxist indoctrination in public schools moving full steam ahead under the direction of the Department of Education that should be eliminated. And federal funds are still being utilized to keep LGBTQ recruitment high and sexual deviancy spreading everywhere, increasing funding for Planned Parenthood and the Frankenstein Medical Alliance between doctors and pharmaceutical companies anxious to receive lifetime profits from disfiguring young people through the transgender mutilations they call “surgeries”.

Prosperity is a thing that seems to no longer be supported by Republicans for poor and middle-class workers, and a balanced budget isn’t one of their concerns either. And every anti-American agency has still retained its full funding, including: the EPA which is dedicated to anti-humanism and environmental radicalism; the Department of Energy which is dedicated to a nation killing energy policy based in fantasy; the Department of Commerce, dedicated to globalism; and, the Department of Health and Human Services, dedicated to the destruction of the intact nuclear family.

For anyone who doesn’t yet realize that our federal government has been turned into a kleptocracy, this debt deal might open your eyes to how this debt deal works against us all, the poor taxpayers, and in favor of the wealthy. We’re set up as the marks of these confidence games at the end of the line and taking it where the sun don’t shine.

All Speaker McCarthy had to do was stick to a hard “NO” on raising the debt ceiling and demand a bill that focused on actually balancing the budget for a change, and the U.S. Treasury would have been forced to forgo scheduled vendor or beneficiary distributions in order to preserve cash collections for interest payments and other mandatory spending. Simply doing this would have obliterated the debt “default” canard finally and for all times, paving the way for a nascent fiscal opposition to regain control of the nation’s miserable public finances, that are fucked up beyond all recognition (FUBAR).

Secretary of Treasury Janet Yellen‘s warning, delivered on Meet the Press, suggests the Republicans were damned close to actually achieving a real victory. Yellen stated that absent a debt ceiling increase, the Treasury Department would have to prioritize payments and leave some bills unpaid.

McCarthy and his “negotiating” team should have demanded a detailed list of scheduled payments by the day for the first few weeks in June and deferments for all bills that could be put off to later. This bill should have been focused solely on ensuring payment of scheduled interest on the national debt, Social Security, military pay and Veterans pensions, along with military preparedness, postal services and the like, to buy time for reforms to be made to many of the current entitlement programs, over the next few years.

Essentially, McCarthy had China Joe over a barrel, but instead of beating his political ass good and hard with a hickory paddle, McCarthy dusted off Ol’ Joe’s coat and helped him to stand upright again, as he praised his elitist cronies in the process. Like his two Republican predecessors, he surrendered to the Democratic Party Communists’ destructive economic juggernaut, because he works to ensure the survival of the Establishment UniParty and the Deep State agents behind the curtain. He sure as hell isn’t working for America’s patriots or future generations.

Sixteen years ago, our debt to GDP ratio stood, at sixty-two percent and today it stands at 124 percent, as inflation is raging due to the foolish economic policies of Joe Biden who surely knows the damage he is doing to the country, despite all his rhetoric and outright lies. Personal debts total $25 trillion, while U.S. unfunded liabilities total $188 trillion, as Ol’ Joe stays true to the plan to collapse our system with a breathtaking fiscal irresponsibility that’s unsustainable and ultimately fatal to this America we love so well.

The deal doesn’t do one damned thing to keep America from speeding headlong into an unimaginable fiscal disaster, because not one red cent of built-in spending has been removed for defense, entitlements and other mandatory spending, Veterans and net interest, even though these items account for 89 percent of the $80 trillion of built-in spending over the next decade.

This isn’t simply about politics as usual in America or a cut and dried argument over debt and spending. All around the globe our allies and enemies alike are watching America trying to figure out how to deal with so large a debt, far in excess of our GDP – an offense worthy of a life sentence in prison or perhaps even the death penalty — which demands the removal of all current members of the House and banning them from ever holding office again, due to the eventual international ramifications. Our entire economic system is on track and quite likely to be destroyed by this complete lack of discipline and fiduciary accounting to those who have invested in our debt and treasuries in the past. It’s the height of irresponsibility and a slap in the faces of all Americans.

And all the while, the true globalist agenda of America’s Democratic Party Communists and their RINO allies rolled along at an accelerated rate, as they keep trying to convince us that we can somehow own nothing and still be happy, taking us all for fools. The fiscal sustainability of America is in dire straits, and they full well know it, while they continue to act in a reckless manner that imperils America with the very real potential for a civil war in the not too distant future.

Justin O. Smith has lived in Tennessee off and on most of his adult life, and graduated from Middle Tennessee State University in 1980, with a B.S. and a double major in International Relations and Cultural Geography – minors in Military Science and English, for what its worth. His real education started from that point on. Smith worked 8 years for the LaVergne Fire Department – two years as their clean-up boy – and became a working fireman at age 16, working his way through college and subsequently joining the U.S. Army. Since then he primarily have contracted construction and traveled – spending quite a bit of time up and down the Columbia River Gorge, in the Puget Sound on Whidby Island and down around Ft. Lauderdale and South Beach. Justin currently writes a weekly column for The Rutherford Reader in Murfreesboro, TN, which he calls home, in addition to being a frequent contributor to the Federal Observer – and spend as much time as possible with his two beautiful and intelligent daughters and five grandchildren. Justin Love God, Family and Our Majestic and Wonderful America, and am a Son of Liberty.

www.federalobserver.com