Must read from former Reagan Treasury official: "An Economy Destroyed --The Enemy Is Washington".

[Elwood P Dowd]

http://www.economicpopulist.org/content/economy-destroyed-enemy-washington

An Economy Destroyed -- The Enemy Is Washington
Submitted by Paul Craig Roberts on Fri, 07/22/2011 - 08:49


Originally published by OpEdNews.com
by Paul Craig Roberts, former Assistant Secretary of Treasury under Ronald Reagan

Recently, the bond rating agencies that gave junk derivatives triple-A ratings threatened to downgrade US Treasury bonds if the White House and Congress did not reach a deficit reduction deal and debt ceiling increase. The downgrade threat is not credible, and neither is the default threat. Both are make-believe crises that are being hyped in order to force cutbacks in Medicare, Medicaid, and Social Security.

If the rating agencies downgraded Treasuries, the company executives would be arrested for the fraudulent ratings that they gave to the junk that Wall Street peddled to the rest of the world. The companies would be destroyed and their ratings discredited. The US government will never default on its bonds, because the bonds, unlike those of Greece, Spain, and Ireland, are payable in its own currency. Regardless of whether the debt ceiling is raised, the Federal Reserve will continue to purchase the Treasury's debt. If Goldman Sachs is too big to fail, then so is the US government.

There is no budget focus on the illegal wars and military occupations that the US government has underway in at least six countries, or the 66-year old US occupations of Japan and Germany and the ring of military bases being constructed around Russia. The total military/security budget is in the vicinity of $1.1-$1.2 trillion, or 70% -75% of the federal budget deficit.

In contrast, Social Security is solvent. Medicare expenditures are coming close to exceeding the 2.3% payroll tax that funds Medicare, but it is dishonest for politicians and pundits to blame the US budget deficit on "entitlement programs."

Entitlements are funded with a payroll tax. Wars are not funded. The criminal Bush regime lied to Americans and claimed that the Iraq war would only cost $70 billion at the most and would be paid for with Iraq oil revenues. When Bush's chief economic adviser, Larry Lindsay, said the Iraq invasion would cost $200 billion, the White House Moron fired him. In fact, Lindsay was off by a factor of 20. Economic and budget experts have calculated that the Iraq and Afghanistan wars have consumed $4,000 billion in out-of-pocket and already incurred future costs. In other words, the ongoing wars and occupations have already eaten up the $4 trillion by which Obama hopes to cut federal spending over the next 10 years. Bomb now, pay later.

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[BeyondGeography]

1. Says the guy who worked for the Laffer Curve guy

Thanks, dude.

[OHdem10]

2. He has written volumes on how Trade Policy is making us a

Banana Republic. I agree with him, no matter his
ideology.

[reformist2]

3. So is he saying we should call their bluff???

Forgive me for being leery.

[girl gone mad]

4. k & r

He's absolutely right and I'm glad to read this.