Are you happy that the debt ceiling debate is over? Did you breath a sigh of relief when it became official that the US will not default on its world wide debts?
So much fuss was made about this debt crisis that you would have thought that if the limit on the government’s borrowing capacity was not raised by August 2 deadline we will all become homeless and would be forced to use worthless dollar bills as our source of dietary fiber. Although everyone in the government and news media hyped up the debt’ocalyse (plagiarism) to Jerry Bruckheimer-ical proportions, the real pulse of the situation was coming from Wall Street. Throughout this whole episode, the markets barely showed any sign of faltering. In fact most of the financial sectors remained fairly constant with very little downward movement. All major indices closed with no marked dip in their numbers on Friday of last week when so called 11th hour negotiations where happening in Washington. I am not a financial expert, or a political expert; In fact, my only expertise is in coming up with ingenious ways to safely store those tiny screws used in do-it-yourself furniture. Having said that, to me, it almost feels like everybody in Wall Street knew that the debt ceiling would be raised. All the players in the world of finance were sure that there is no way that the government would screw with them. There was no reason for them to panic, even though every one from the President of the US of A to the Junior House Representative from Delaware kept issuing threats after threats that this is the greatest national catastrophe since the Charlie Sheen epidemic. It was only on Monday, Aug 1st, that the markets showed little concern about the way the negotiations were going, and of course, everyone in congress quickly came together and passed the contentious bill that has left everyone, except Vice President Joe Biden, unsatisfied. Its important to notice that Mr.Biden can be satisfied easily with anything, even with a Popsicle wearing a hat. Funny thing is, 24 hours since the passage of the bill, Wall Street is not showing any signs of rebounding. As of market close today, all 3 major indices were down significantly.
Not to be a downer, but the real people who got screwed over with this deal are the country’s most vulnerable demographic right now, the unemployed. The bill that has been passed by Congress and signed by Obama has no provisions to extend the unemployment benefits which are scheduled to cease by the end of this year. According to Ezra Klien’s blog in The Washington Post, close to 4 million people are dependant on these benefits as their single source of income and by cutting these lifelines these people would be pushed into even deeper financial strains. Since the unemployed spend all the money from the allowances instead of saving them for later, it is estimated that for every dollar spent on unemployment benefits, 1.06 $ is returned to the economy due to increased market circulations and without these benefits the unemployed actually cause a drag on the economy.
The bill also mandates more than one trillion dollars in further cuts and stipulates that any more increase in debt limit has to be matched by spending cuts dollar for dollar. As I said before I am not an expert in policy making, but my guess is that the next round of budget cuts will be on teachers’ salaries, worker’s pension and baby food. Already the FAA has asked its inspectors to work without pay until Labor day. In case you are curious- Yes, the Bush tax cuts for the richest 2% of the population will remain intact. Looks like soon working class people will have to sustain their living by selling organs to the super rich to continue our leaders’ quest to make them immortal.
The saddest thing about this whole catastrophic-doomsday-fake-orama is that it showed what kind of politician Obama actually is. I used to believe in Obama. I thought the dude was one of those leaders we see in great political movies. Turns out he is just one of those usual politicians.
Politicians and the media are proclaiming “Crisis Solved”. I think its more like “Crisis Accomplished”.
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