State of the Nation

George W. Bush, President of the United States and pride of some straggling remains in the Republican Party signed a measure on September 28 2007, to increase the limit on the debt ceiling to $9.815 trillion, representing an increase of over a trillion, more than ten percent. Five weeks later the US debt has reached and breached $9 trillion for the first time.

Reuters reports:
In approving the debt limit increase, Congressional lawmakers said the $850 billion increase should be large enough to allow the government to continue borrowing into 2009

The amazing thing is that Congress and the Senate went right along with it and no one is batting an eyelid. Why? Because the way the Republican leadership has structured the fiscal year and the strains of the wars in Iraq and Afghanistan are exerting a monumental toll on the US economy. The Democrats are afraid to pull funding because the Democrats are afraid of pretty much everything these days especially of being called unpatriotic.

Of course the picture still looks rosy, the DOW hovering around 14,000 points threatening again to break records and the NASDAQ is climbing new highs daily. But the stock market is not an indicator of national fiscal health. Especially during the recent developments regarding globalization, US companies have really become Chinese companies or Eastern European companies. There are emerging markets all over the world in which you automatically partake if you invest in an American product. The ever weakening dollar is also allowing the US trade deficit to shrink but at what cost?

This well known graph shows how the National debt, which soared under Reagan and Bush 41 actually dropped under Clinton. It is actually possible to reduce the National debt whilst increasing expenditure on health care and education. It actually works if one isn’t busy pandering to one’s friends in the defense industry.

Quo Vadis America? Of course there will be a gaggle of Neocons who adamantly deny that there’s anything wrong and if one listens to FOX News it would appear that everything was right. But it is not and the collapse of the housing bubble should tell us there is more afoot. But this isn’t a country where introspection has any room to grow. It’s a country where the sub-prime disaster is already treated as a minor ache. The financial catastrophe that is still sending shock waves around the globe has been forgotten by many here.

But who are we forgetting? There are still families floundering in the rough seas of foreclosures and evictions, families left with very little on their backs whilst their properties are snapped up for a pittance by the wealthy. Sure it is everyone’s responsibility when they borrow money to know what they are borrowing at how much and from whom. But many people don’t have the necessary education to make them leery of low interest AMRs and do not understand the mechanics of negative amortization. They were suckered in to purchasing expensive real estate by people promising them the moon. They were coerced into making false income statements by agents only intent on selling. An entire real estate bureau was shut down recently here in the Bay Area in California, the heads led off in handcuffs and all the computers confiscated because they convinced low income families to falsify their income statements in order to qualify them. This may seem like a small thing but it points at a bigger picture. A country obsessed with racing ahead and damn the consequences.

But the consequences are the people of this country. They are being trodden on as the gap between rich and poor yawns open again. Everyone who calls themselves a patriot should be concerned about this because America is not the lump of earth upon which we sit, but the people who populate it and under the Bush Administration’s Fiscal Disaster Tour they are the ones who ultimately will have to pay the balance.