Beyond the Cusp

October 19, 2013

The President’s Newest Power

There will be talk of the President’s victory over the shutdown and still the biggest win over the United States Constitution and the complete abandonment of their responsibility by the Congress will likely not get the attention it deserves. The agreement to push the real debate over the debt ceiling off until early February may or may not have been a desired result from the entire debate. But that is neither here nor there as it will prove to be the least of the problems resulting from the compromise, or whatever the real conservatives allowed to pass rather than continue the fight. The disaster that will prove to be possibly catastrophic is the abdication of their Constitutional right to control the debt ceiling limit to the President until February 7, 2014. As the agreement reads, if the President desires to raise the debt ceiling all he is required to do is inform the Congress that he is raising the debt ceiling and unless they override his decision by voting with two-thirds majority in both houses to prevent the adjustment of the debt ceiling then the President has raised the debt ceiling. Since the likelihood that either house, let alone both houses, would actually veto such a move with a super majority is virtually nil, then for all intents and purposes the Congress has abdicated their Constitutional responsibility to control the purse strings of the government. When you hear that the conservatives lost the budget battle and that they did not get anything after making a stand and forcing the shutdown, that is only half the story, they not only lost the fight over Obama Care and the debt ceiling fight, they abdicated even being part of the conversation through until February seventh of next year.

 

So, we are now looking at an Imperial Presidency but one who is also in total control over the debt level and who has shown no desire to limit spending. It is bad enough that the first day after the end of the budget battle and end of the shutdown that the United States Federal Government established more debt than had ever been incurred in a single day in our entire history. Additionally, out of every dollar the government spends we are currently borrowing forty cents. That is right, forty percent of the money spent by Washington is borrowed money. Additionally, the Federal Reserve has committed to continue to print three trillion dollars of new currency every year into the foreseeable future. Add to that the fact that the new nominee to head the Federal Reserve, Federal Reserve Vice Chair Janet Yellen, is a devotee of Keynesian Economics and will be more inclined to increase the rate of printing money than to rely on the market to recover and dictate control of the money supply.

 

This will only serve to make the eventual pain felt when interest rates eventually begin to rise in order to ward off inflation. This will lead to a point where the choice will be runaway inflation, higher taxes, or both as the catastrophe that would result from trying to ignore the problem would lead to a situation not seen since the Presidency of Jimmy Carter and the miracles of stagflation. Whatever the choices made going forward, the monetary policy the United States has been following since the last three years of the last term of President George W. Bush and through the continuation of that policy with the added effect of steroids under President Obama and the future has some painful reckoning in the offerings. The amount of pain that will strike as soon as inflation starts to push the decisions of the Federal Government and the Federal Reserve is already going to be significant, and that is assuming that there will be sufficient economic growth that will allow payment on the interest of the debt not to totally consume the budget and make almost all other expenditures become unaffordable luxuries. Imagine a budget where over seventy-five percent of the money must go to pay for the interest on the debt. There would be insufficient funds left for Social Security, the Military, Food Stamps, Welfare, Medicare, Medicaid, or virtually anything beyond minimal levels of support for keeping the government running at a minimal level. Even the salaries for the President, Vice President, Congress People, Cabinet Positions and virtually every other high position would no longer be affordable and the people taking these positions would, by necessity, have to volunteer and work without receiving any salary. On the positive side, at least we would finally get people in these positions who would have the best for the nation at the heart of their considerations instead of the rabble we have now who are mostly in office to serve their own gathering of wealth and they could not care less about their actual obligations as representatives of the people or the Constitutional definition of their positions, as long as they get in on the next big insider deal. That eventuality might actually prove to be the saving grace by which the nation receives salvation because the current majority are useless when it comes to serving the people and the nation. Mind you, they serve themselves quite well.

 

Beyond the Cusp

 

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