Saturday, October 12, 2013

US Debt: The Nuclear Option

The "nuclear option" in President Obama's confrontation with Congressional Republicans over the budget and statutory debt ceiling was supposed to be the threat that Social Security checks would not be sent out if the current deadlock is not broken before 17 October.

He suggested such a possibility after the Republicans forced a government shut down, but instead of the expected mushroom cloud over Congress there was only the tiniest "poof" of a damp squib.
The small band of Tea Party Republicans holding Congress hostage obviously don't care if they lose the Senior Citizen vote.

They also don't seen to care that a US default on its debt could destroy the role of the American dollar as the world's reserve currency.

The New York Times just carried a story headlining the lack of influence of major financiers of the Republican Party; it quoted business leaders mystified at their sudden lack of weight.

No one seems to have an explanation for the behavior of the Republican leadership.

It seems unbelievable that they would trash the party's political viability to derail popular health reforms that have been adopted, signed into law and upheld by the Supreme Court; yet that is exactly what is happening.

The explanation, it seems to me, is that the Tea Party gang is not in the same game as the rest of America. To understand what they are doing we have to look to the developments in American politics I noted in Making Sense of Syria

The clique that enabled a British-sponsored unconstitutional power center in Washington is making a last-ditch effort to prevent its own demise.

If that is so, we should not expect a last-minute deal to avoid a US default. The Tea Party's elite transatlantic clientele stand to gain enormously from global economic chaos and the demise of the dollar as the world's reserve currency. There would  be little to prevent Bitcoin from filling the gap and taking the global financial system into money laundering heaven.

For those heavily invested in the global black market that would be a fantastic turn of luck; instead of worrying about how to safeguard their assets from increasingly assertive bank regulators in the US and Europe, they could pursue their criminal agendas without a thought of the money police.

For everyone else, it would be unmitigated disaster. Among the End Times scenarios being examined is an economic collapse far worse than the Great Depression of the 1930s combined with hyper-inflation.

Nuclear option indeed!     

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