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Reader comment on: So Long, Supercommittee

Submitted by Fast Eddie (United States), Nov 21, 2011 20:32

The purpose of the so-called supercommittee was to act as a ruse to get both political parties safely out of the debt ceiling fiasco for the time being and it did just that.. It did not fail; It performed as expected and desired and can now fold up its tents and go back to business as usual. The media loved it because it gave them something to pontificate about and the politicians loved it because it gave the appearance of governance while actually being no such thing.

We are only a few years, maybe less, behind Europe on the slippery slope to defaulting on some major debts, at least at the state and local levels, just as Europe is within sight of default by several of the weakest of the Eurozone countries. In Europe, the Euro is the default 'reserve' currency and it will be used as needed (actually created from thin air as needed) to prop up these economies indefinitely if that is possible; This will be combined with draconian fiscal and monetary policies imposed by the EU authorities, led by the Germans, which will transfer an increasing measure of political control in these countries from their elected governments to these EU policymakers/money lenders.

In the U.S., since the dollar is our reserve currency, the Federal Reserve has the power to create as much money as it wishes to prop up our impoverished governmental sector, including the federal sector, as shown by the creation already of some $2 Trillion in additional 'assets' on the Fed's ledgers. Given that it is entirely possible that the U.S. Congress and President 'voting present' Obama are not only unable but totally unwilling to take the steps needed to bend the spending curve to start getting us out of this immense morass of overspending and overborrowing, the Fed is the only tool left in the toolbox that can do anything meaningful and Bernanke appears to be ready to continue on his current course of wholesale money and debt creation under the rubric of promoting GDP growth and economic recovery. If the Fed's policies fail, as they have so far to a large extent, another recession is inevitable, only much much worse than the one that supposedly ended over a year ago. The weakest of the EU countries are already headed into their double dip and even Germany may not be strong enough to bend the curve enuf to rescue them.

For us, the outlook is the same irrespective of the actions of this supercommittee and any such contraptions that may arise in the next year. Virtually no politican is going to risk his/her reelection by taking on the AARP and all of the other entrenched lobbies (farming, highway, defense, greens, banks, blue states, red states, and on and on and on) by actually pushing spending cuts that are meaningful. This being the case, the Fed under Bernanke or anyone else will be forced (as EU is now forced) to both monetize massive amounts of debt but to also impose conditions for obtaining bailouts which will be untouched and untouchable by Congress which, in its heart of hearts, will be more than happy to see the blame for offending all of these special interest groups be aimed at an agency which is secretive and essentially unaccountable. That scenario is playing out in EU and it will happen here unless there is a sudden and immense reformation in the actions and motives of our two political parties.

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