ABOUT OUR DEBT LIMIT CRISIS

by Lloyd Streeter
The downgrade of the credit and bonds of the US is inevitable and has been inevitable for a long time now, as long as we keep spending money that we do not have, spending at this great rate and borrowing over a trillion dollars every year. There will be a down grade but not a default on our debts, because the Fed is going to print enough money to cover all of the government’s obligations. The US will pay the interest on US debts with devalued dollars. This means that there is a gargantuan inflation of our money coming.Obama has known all along that a downgrade is coming and he is glad that the present debt limit crisis has surfaced because it gives him the opportunity to blame the downgrade on the Republicans. To Obama anything is preferable to stopping the spending. The only way to redistribute the wealth is by spending, and redistribution is Obama’s major goal. He is hell-bent on redistribution, even if it means that the monetary system of the U.S. is ruined and we have to start over with an entirely new system.

This is just my opinion, and I hope I’m wrong, but I don’t think I am.

I want to make it clear that I do believe that there is a way out of the looming default and super inflation future, but I do not think that the Dems or the Repubs in Congress will go for it. We can cut a lot but we can not cut enough to avoid the crises; after all, we can not cut the Fed budget by 1/3. And there does have to be a raise in revenue, but I do not believe Repubs are going to allow a rise in the income tax rates. The answer, I believe, is to cut all that we can cut, institute a national 2% sales tax, and eliminate most, if not all, income tax deductions, and institute a lower flat-like individual income tax with only two tax rates, 10% for incomes of $40,000 -$150,000 and 15% for incomes over $150,000. Business and corporate incomes should keep most of their deductions, and maybe have them increased for hiring new U.S. workers. Some reforms need to be made in SS and medicare, too. And Obamacare should be repealed because we can not afford it.