Saturday, July 30, 2011

Parties Agree on US Debt Ceiling: Don't Raise It

News media may be engaged in distorted reporting regarding the US debt ceiling. In fact, but not reported by the media, Democrats and Republicans appear to agree that the debt ceiling should not be raised. Why is this not reported as a clear fact? Instead, all we hear is words to the effect of "failure to compromise". Compromise on what? The two parties are obviously already in complete agreement -- to wit, the debt ceiling should not be raised. Further, the two opposing political parties are engaged in every conceivable effort to ensure that the debt ceiling will not be raised. All this "need to compromise" talk in media reporting may be just a diversion to hide this complete agreement from the public.

This unreported agreement seems to have been set in motion over at least several months and may have been orchestrated by elites behind the scenes controlling key players in both the Democratic and Republican parties. With each passing day, the basic clauses of this under-the-table agreement become increasingly clear.

1. The Democratic-controlled Senate will generally not even discuss much less vote on any act raising the US debt ceiling passed by the Republican-controlled House of Representatives of Congress. This is the Senate's script to carry out their part of the agreement. There can be no increase in the US debt ceiling unless both the Senate and House agree on some enabling law to be sent to the US President for signature.

2. The Republican-controlled House in Congress likewise has agreed to vote down any US debt increasing legislation passed by the Senate. The result would be the same -- no enabling law passed by both the Senate and House to send to the President. This is the scripted role of the House and its leadership to accomplish the agreed objective of not raising the US debt ceiling.

3. US President Obama also has his role to achieve the goal of this clandestine agreement -- no increase in the debt ceiling. The President's role is to veto any enabling legislation that might arrive at his desk. His script is basically a back-up in case something goes wrong and as a result, the Senate and House do agree on legislation to increase the debt limit. Should strategy components #1 or #2 above fail, the President is scripted to "save the day" for the clandestine objective, his veto preventing a debt limit increase.

Notice that the hidden agreement implements a well-crafted plan to achieve its objective. Success by only one of parties #1 or #2 -- Senate or House -- in blocking enabling legislation is sufficient. In the event of failure of both House and Senate to play their role in the agreed script, player #3, the President, can pull victory for the agreed plan from the jaws of defeat by vetoing any debt increase legislation, as the President has carefully established a multitude of reasons which can be invoked to justify his veto. Why do you think the President is on TV almost every day? He must have a wide variety of rationales for an upcoming veto, if needed, on the public record. The under-the-table plan, of course, hopes to avoid any legislation on the matter from reaching the President's desk. But if enabling legislation does arrive, we can hear the words justifying a veto already, "As I have said repeatedly, [fill in one or more pre-established rationales here]".

Of course, this agreement cannot be reported to the public since considerable economic pain will result if the debt limit is not increased. The above roles of Senate, House and President provide each with a cover story to justify their actions to carry out the pre-determined plan to stop any further increase in the US debt limit. In each case, the cover story involves principles which each party purports to uphold -- all the blather reported in the media -- such as no new taxes vs new taxes or revenue increases, amendments to the US Constitution, and the like.

As of this writing, Saturday evening, each of the three parties listed above to this clandestine agreement are playing their roles with news media following every blow in this cover-story melodrama, intended to hide the existence of a firm plan to prevent any further US debt limit increase.

Obviously, the cover stories are needed since none of the three players above want to be seen as intentionally causing substantial economic suffering for the general population, even though each player is no doubt aware that severe economic pain is in the cards and that the only real question is just how deep and prolonged it will be.

Why would the powers-that-be, apparently able to control both major political parties and the President in the US, want to orchestrate events resulting in the pain that no debt increase would entail? The short answer is that this short-term pain is perceived to be better for the net profits of this powerful elite than the greater pain that would eventually result if further US debt was added resulting in an even greater and longer pain and financial collapse at a somewhat later time.

Ironically, the premise of this article asserts, in effect, that the power elite may indeed have come to agree with most observers that a shorter-term pain involved in clearing unpayable debts off the books, letting the chips fall where they may, followed by a true, robust recovery perhaps with an improved gold/silver-backed monetary unit, is better than a greater and more prolonged economic collapse associated with further increase in unpayable debt. Of course, the powerful, behind-the-scenes designers and orchestators of this plan made their choice -- no more US debt vs more US debt -- based on a single criterion: which option would be more profitable for them in the longer run. Nonetheless, if this analysis is correct, happily, this plan and the resulting under-the-table agreement may not only be most beneficial for the super-wealthy, but also for the general public.