Tuesday, August 02, 2011

Obama's Pig in a Poke

I am not in favor of the Tea Party but there is no purpose in using untruths to argue with them, as it only weakens your own argument when the truth is revealed. one thing we can say is that we have seen the significance of a swing vote. It is not a "hostage crisis". It is a brilliant political tactic that is legal and effective.

As far as defaults go, all lenders have the capacity to accelerate the payments on their loans and demand payment in full. THAT is a default. Giving the U.S. a 'D' rating is a default. Going from AAA to AA is a lowering of the credit rating. Lenders of consumer loans also have the option of accepting payments on the interest to move the account due date forward. People with auto loans often have paid the interest for a month to avoid a more serious delinquency status. Some financial institutions also have the option of moving the payment date forward into the next month. Anyone who pays late consistently loses their excellent credit standing that goes on the credit report. Past payment records impact on future interest rates and may discourage future lenders from approving new loans to higher risk borrowers. Sovereign debt rates have their own criteria but the principle is the same. The more the risk of the lender failing to repay in a timely and consisent manner, the worse the credit score. The credit rating is the result of an extended spending spree and a recent drop in income (revenues).

The drop in rating to AA is not a default. It is a grounding to establish real priorities and not try to prop up the failing urban economies dominated by the Democratic Urban Machines. What's on the plate now? Population growth has exacerbated the capacity of all institutions in the U.S. to function effectively. Too many, too fast. Resources have been taxed to the max. State budgets have been depleted and expenditures have accomplished little while states tread water with the number and severity of the increased demands on all systems.

Greens will lose the respect of voters if appear to be deliberately antagonizing and provoking the situation with rants about "wars on working people" which are straight out of a movement long since receded.. The political process is what it is and has many flaws. The American people do get the government they deserve. The responsibility of elected leaders is to work within that process to address the input of the American people as best they can. As someone who has been unemployed for months I do not accept the rhetoric of any talk show on the radio or TV at face value. I do suggest that we get over the fact that the Tea Party exists. For people who rarely invoke religion in political discussions, there is way too much preaching about the Tea Party being the anti-Christ for my taste.

This is a fiscal crisis and the Fed has taken actions to date with a monetary policy of flooding the economy with Obama dollars. The object is to prevent any increase in interest rates. The market is falling in response to Obama's "solution". This should be taken as feedback. T-notes are being scooped up, as higher interest rates are sure to result. As far as energy plans go- T. Boone has it right. As far as infrastructure goes- the infrastructure banks need to be developed in the states, not by the Federal government. Defense cuts have become modified pork and are long overdue to face the axe. The double dip has come in through the front door. Localization needs to produce sound policies that address the real economy and shift the political center to the center, the Green center.

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