Three times in one week, the world almost ended.<\/p>\n
Joplin, Missouri<\/a> was wiped out<\/span> by a tornado<\/a> on Sunday. Our sympathies<\/span> go to the residents, some of whom are known to our staff.<\/p>\n In California, an 89-year-old Bible enthusiast had predicted the Rapture<\/span> for the day before. Afterwards, he said<\/a> he was “flabbergasted<\/span>” that this didn’t happen. He’s now rescheduled<\/span> it for October.<\/p>\n And on the previous Monday, the United States reached the credit limit<\/a> approved by Congress \u2014 the so-called “debt<\/span> ceiling”. Most politicians are now seriously worried that no one will continue to lend the US money. This would have serious consequences for the world economy.<\/p>\n America is now $14.294 trillion<\/span> in debt \u2014 more than $46,000 for every man, woman and child \u2014 equivalent to 98 percent of annual GDP<\/span>. The US is borrowing<\/span> $2 million per minute, or 40 cents for every dollar it’s spending.<\/p>\n Treasury Secretary<\/span> Timothy Geithner says he can keep the creditors<\/span> at bay<\/span> until August 2. These include countries like China, Japan, and wealthy oil states, which in turn<\/span> expect privileged access to the American market. America’s collateral<\/span> is its vast<\/span> natural resources, the size of its workforce, its share<\/span> (more than 20 percent) of world GDP (measured in dollars), and the accepted notion<\/span> that the dollar is the world’s currency<\/span> and should therefore be worth something.<\/p>\n Why is such a powerful country in debt at all? The simple answer is war. Wars cost money. The Revolution and the Civil War<\/span> each took half a century to pay for. World War I and especially II left the US with a permanent debt. It didn’t matter, though, because America’s ability to manufacture and export most of the world’s goods (then) was collateral enough.<\/p>\n (Deficit) military spending brought the US out of the Great Depression<\/span>. So during a recession in 1980, Ronald Reagan tried this and it worked again. The problem was that he reduced revenue<\/span> as well. Tariffs came off imported goods in the hope that US goods would be allowed into more markets abroad. Tax cuts to corporations and the wealthy reduced revenue even further.<\/p>\n Bill Clinton raised taxes a little and managed in the late 1990s to stop adding to the debt. It might have been possible to pay off the entire $4 trillion debt within a couple of decades. But George W. Bush took the budget surplus<\/span> and gave it to the rich, then started two long, expensive wars. Barack Obama even agreed<\/a> to extend<\/span> the Bush tax cuts<\/span> in an act of political horse trading<\/span>. So now we’re at $14 trillion and in a real pickle<\/span>.<\/p>\n Most of the budget is sacrosanct<\/span>. Sixty percent of it is for the “big four” things that private industry could not offer reliably<\/span>: medical care to low-income citizens, medical care to senior citizens, social insurance to senior citizens, and military activity. Senior citizens are a powerful (and reliable) voting bloc that no one wants to upset<\/span>. Also, reducing government programs would put people out of work.<\/p>\n So Congress’s budget showdown in April led to cuts of only 1 percent. A few Republicans who will be candidates for president in 2012 have made various radical suggestions, none of which have widespread<\/span> support. And no one is talking about raising taxes, which would be the logical thing to do.<\/p>\nHow did this happen?<\/h2>\n
Time for an Americathon<\/h2>\n