"It is not enough to know that there is a shadow government pulling the strings of the visible government- we must also act to expose it, and defeat it!"-Mark Matheny
If the ubiquitous voice of Homeland Security Secretary Janet Napolitano in the metro (or Walmart, etc) demanding that you say something if you see something wasn’t frightening enough, if TSA’s cancer rays and gropings were not outrageous enough, if Homeland Security military vehicles on US soil were not disgusting enough, Obama has a real treat in store for you.
His pick to lead the currently headless DHS is called Jeh Johnson. He was, according to the Washington Post, the Pentagon’s top lawyer. In that capacity he and a team of Pentagon experts concluded that the president did indeed have the right to use drones to kill American citizens without charge or trial. Thanks to Johnson’s determination, at least three American citizens have been killed without trial by their government.
Now he will be in charge of the “homeland.”
Chew on that next time you ponder “opting out” at the airport!
Wall Street Journal October 17, 2013 Matheny's Note : Remember the words of the Messiah : "But when ye shall see the abominationofdesolation, spoken of by Daniel the prophet, standing where it ought not, (let him that readeth understand,) then let them that be in Judaea flee to the mountains:" -Mark 13:14
Six days after the death of former Nazi commander Erich Priebke, the furor over his burial continues, with Italian and Vatican officials refusing a funeral. Priebke had been serving a life sentence in Italy when he died at age 100. (Photo: Getty) Click here to see video
ROME— Pope Francis plans to visit Israel as soon as next year, the Vatican said, in what could be a landmark visit for a pontiff who has already won plaudits from the Jewish community for his strong condemnation of anti-Semitism.
On Thursday, the pope also met at the Vatican with Palestinian President Mahmoud Abbas, who invited him to visit Palestine as well. Israeli President Shimon Peres had already extended an invitation to the pope to visit the Holy Land shortly after the pontiff's election in March.
Following the invitation from Mr. Abbas, "we can now start thinking in a more concrete way regarding the planning of the visit," said Vatican spokesman Rev. Federico Lombardi, adding that it could take place in 2014.
Market Watch October 18, 2013 Insurers say the federal health-care marketplace is generating flawed data that is straining their ability to handle even the trickle of enrollees who have gotten through so far, in a sign that technological problems extend further than the website traffic and software issues already identified. Emerging errors include duplicate enrollments, spouses reported as children, missing data fields and suspect eligibility determinations, say executives at more than a dozen health plans. Blue Cross & Blue Shield of Nebraska said it had to hire temporary workers to contact new customers directly to resolve inaccuracies in submissions. Medical Mutual of Ohio said one customer had successfully signed up for three of its plans.
The flaws could do lasting damage to the law if customers are deterred from signing up or mistakenly believe they have obtained coverage.
“The longer this takes to resolve . . . the harder it will be to get people to [come back and] sign up,” said Aetna Inc. AET-3.41% Chief Executive Mark Bertolini. “It’s not off to a great start,” he said, though he believes the marketplaces are “here to stay.”
RT News October 16, 2013 Gerald talks about the Senate deal ending the US government shutdown and the threat to the world economy due to upcoming US default.
Is the U.S. Government working on a program to…well…program the way you view religion?
A whistleblower who has worked on that program says yes and he wants you to know exactly what has been going on.
The first towards truth is to be informed.
If I told you that the Defense Department was using taxpayer dollars to learn how to influence people with religious beliefs in order to control those beliefs, would it really surprise you?
Would you think that I am a tin foil hat wearing conspiracy theorist?
Would you care if I told you that the program was aimed at controlling fundamentalist Muslims?
How about fundamentalist Christians?
Here’s the backstory. In 2012, Arizona State Universityʼs Center for Strategic Communication or CSC was awarded a $6.1 million dollar research grant by DARPA or the Defense Advanced Research Projects Agency.
The goal of the project according to ASUʼs website is to “study the neurobiology of narrative comprehension, validate narrative theories and explore the connection between narrative and persuasion.”
A lot of technical talk there, so lets dig into the details.
The CSC program is actually about creating narratives. Using effective communication, largely video, to control the thought process of groups of people. And ultimately to be able to trigger narratives through magnetic stimulation. At its core, the program is focused on how to win the narrative against Muslim extremism. It’s a fairly interesting concept.
According to documents leaked to us, this project integrates insights from three mutually-informing theoretical terrains.
In short, the goal of the program is to combat and change religious narratives because of their role in “extremist behavior.” The whistleblower who revealed this program to us, worked for several years on the program. They asked not to be identified.
Ben: What were you told about the proposal as you began working through it?
Whistleblower: Yeah, I thought that it was benign. They told me it was about trying to figure outwhat parts of the brain are affected by narrative persuasion. Just to figure it out just for academic reasons. So we looked at narrative transportation which is basically how an individual is transported into a narrative, how they understand it…kind of like when you read a good book you get really enthralled with it.
At its core, the program attempts to map the brain to determine which portions of the brain allow you to accept a narrative presented to you. It’s called narrative theory.
Mapping this network will lead to a fuller understanding of the influence narrative has on memory, emotion, theory of mind, identity and persuasion, which in turn influence the decision to engage in political violence or join violent groups or support groups ideologically or financially.
You see, the project is focused on the belief that the reason Muslims in the Middle East are swayed to religious violence is not because of the reality of what is going on around them per se, but because they are believing a local or a regional narrative.
Ben: The local and regional narrative then is that the brain automatically assumes things because of a narrative we’ve been taught since our childhood, is that it?
Whistleblower: Right yeah that’s true. We call those master narratives. So in America we have this “rags to riches” master narrative where if you work really hard you can become successful and make a ton of money. So in the Middle East, they always use the example of the Pharaoh. That’s the master narrative that’s in the Qur’an, where there’s this corrupt leader that, you know, is really bad for society. And they use the example of Sadat who was assassinated. When
the assassin killed him, he said, “I have killed the Pharaoh, I have killed the Pharaoh.” So they assume that he was relying upon this Islamic master narrative to fuel his actions.
So how does the program change this? Again a lot of technical speak here so stay with me. But it’s broken into three phases.
Phase I is to map the Narrative Comprehension Network using a set of stimuli designed from the point of view of two different religious cultures.
Phase II will test hypotheses generated in Phase I, adding two additional manipulations of narrative validity and narrative transportation.
Phase III, it investigates possibilities for literally disrupting the activity of the NCN through Transcranial Magnetic Stimulation.
Ben: Phase III is fairly interesting. I noticed in the documentation it says lets not talk too much about this because who knows if we’ll ever get there. But when you do read what Phase III is it is a little surprising, it’s called Transcranial Magnetic Stimulation. This is not something that’s science fiction, it’s not something they’ve cooked up. This is a real technique that’s already been used in the past, correct?
Whistleblower: Yes, it started out in the psychiatry field when people were depressed and when you’re depressed certain parts of your brain are not functioning correctly. So they created this technology, which is basically a big magnet, and you put it on their brain and it turns off that part of the brain that’s bad or wrong and it would help them with their depression for several weeks to a month and they’d go back and do it again. So this technology has been around for ten
or fifteen years.
Ben: So it’s very high tech propaganda, what we’re talking about.
Whistleblower: High tech and validated propaganda, yes. So if they’re able to turn off a part of the brain and get rid of that master narrative that will make you not believe in a particular statement, they would have validated this propaganda. So if they turn off portion X, they know that the propaganda is going to work and the individual is going to believe whatever is being told to them.
So why do all this? Because the project is based on the idea that despite the good work of the U.S. in the Middle East, the message of the work is not being received.
“The frequent rejection of US messaging by local populations in the Middle East, despite US insistence on the objective truth of the US message, illustrates the narrative paradigm at work. The well documented ‘say-do gap’ between US messages and US actions is seen by some as contributing to a lack of narrative validity in stories produced by the US. Similarly, stories of US aid do not ring true in a culture wherein Christian foreigners, since the 11th Century, have been invaders and sought to destroy and rule.”
So how to fix this?
Ben: How do you move someone from simply watching a video or seeing a video all the way down that line to behavior? It’s a pretty powerful tool if you’re able to do that.
Whistleblower: Right, so they think that maybe an extremist statements or a video like Al Qaeda puts out will lead to some individuals doing a suicide bombing, for example. So they’re trying to look at this video or the statements and take away a part of your brain that will think that it fits in with your culture or master narrative and that will hopefully lead you to not do these extremist, violent acts.
So what you need to know is that this program boils down to one central idea. If people aren’t reaching the conclusions the U.S. government would like them to reach, there must be a way to force them to accept these narratives.
Remember that the claim is that the U.S. despite giving aid is viewed in the Middle East as invaders. That, according to the program research is the product of embedded narrative, not a result of action.
So the view of the U.S. as invaders in countries where we have standing armies, dozens of military bases, the U.S. paying off drug lords in Afghanistan or regional warlords in Iraq or where we consistently bomb via drone strike in Yemen, Pakistan and Somalia or where we fund dictators until those dictators are overthrown and then attempt to fund the rebels, who end up becoming dictators.
All of that has nothing to do with the U.S. view of Muslims in the Middle East because clearly they are missing the fact that the U.S. gives aid.
The next step, control the narrative and if necessary, use magnetic stimulation to force people to accept the view of the U.S. that we desire them to have.
After all, aren’t extremist Muslims dangerous? Extremist Christians? See the problem with the question is who gets to define extremist? Who decides if religious beliefs are inherently dangerous?
And if we believe that government should have the power to control how the extremist thinks… wouldn’t they have the authority to decide how and what we all think?
Sources:
We cannot post the leaked documents from the program here because ASU has claimed intellectual
property infringement.
“You are all sons of the devil,” stenographer shouts as she is dragged away
Paul Joseph Watson Infowars.com October 17, 2013
A stenographer staged a bizarre performance on the House floor near the end of the debt ceiling vote last night, ranting about Freemasons before she was quickly dragged away by security guards.
Moments before House members passed a bill to raise the debt ceiling, a woman later identified as stenographer Diane Reidy approached the microphone at the Speaker’s Lobby in a trance-like state and began to shout.
“He will not be mocked, don’t touch me, he will not be mocked,” Reidy ranted, adding, “The greatest deception here is this is not one nation under God, it never was.”
Officials begin to remove Reidy as she screamed, “It never was, had it been, it would not have been….the Constitution would not have been written by Freemasons, they go against God, you cannot serve two masters.”
“Praise be God, Lord Jesus Christ,” she added.
Reidy also reportedly said “A House divided cannot stand — you are all sons of the devil!”
According to Rep. Joaquin Castro, the woman “had a crazed look” on her face. “It was very disturbing for the members of Congress,” he said.
“I had passed her obviously all the time on the House floor, and she smiled a few times, she seemed nice, and according to other members who have been around longer, she seemed nice,” Castro told reporters.
According to the Washington Post, House floor staff were “visibly shaken” by the incident and police are currently investigating the matter.
“I think there’s a lot of sympathy, because something clearly happened there,” said Rep. Gerry Connolly.
What makes the incident even more strange is that Reidy is not someone who showed up on the job recently, she has been working as an official stenographer with the Office of the Clerk for over 20 years.
According to presiding officer Rep. Ileana Ros-Lehtinen, Reidy approached the platform and asked if the microphone was turned on.
“I hammered to get control and hush her up. She said something about the devil. It was sudden, confusing and heartbreaking. She is normally a gentle soul,” said Ros-Lehtinen.
Reidy was taken to a local hospital for a mental health evaluation. It is not known whether criminal charges will be filed.
“For that one short tiny moment we actually had some sanity and bravery on the House Floor!” joked Daniel McAdams, labeling Reidy “the last sane person on Capitol Hill.”
Paul Joseph Watson is the editor and writer for Infowars.com and Prison Planet.com. He is the author of Order Out Of Chaos. Watson is also a host for Infowars Nightly News.
Michael Bloomberg underground at the secret location under Central Park today.
Washington lawmakers finally reached a deal to re-open the government just hours before the debt ceiling deadline, but Mayor Michael Bloomberg isn’t celebrating yet.
“All of what they’re talking about is simply kicking the can down the road,” Mr. Bloomberg told Politicker this afternoon.
The mayor was responding to a request for his take not long before Republican lawmakers had officially conceded their fight. But Mr. Bloomberg, sounding confident a short-term deal would be reached, predicted another standoff soon.
“It is true it would be after the Christmas holiday shopping season, I suppose, but we’re gonna have the same problem come January. We’ve got to stop all of this stuff and come up with a rational system,” he argued at the press conference, which was called to announce the activation of a giant new back-up water tunnel, which was officially switched on at 5 p.m. this evening.
Activist Post October 16, 2013 Matheny's Note: I couldn't have said it any better,.....
Thank God the government shutdown crisis is over. Not because it averted economic catastrophe, that's still coming, but because the phony narrative was destructive.
It dragged even the most open-minded people into a designated political camp. People who lean right blamed the poor and needy on food stamps, while "progressives" blamed the Tea Party conservatives who must be racist for opposing Obamacare.
It was predictable and disgusting theater. And most of you bought into it. You may have noticed that we did not post very many articles related to the shutdown, because why feed such nonsense?
As seems to be the new theme among the ruling elite, "Do not let a fake crisis go to waste." Below are the lessons that we should have learned from this charade. Don't let it go to waste.
Divide and Conquer Theater: Americans put aside petty political differences to stop another war of aggression in Syria. That cohesion was threatening to topple the flimsy facade of left-right politics for good. Nothing like a phony crisis to get people to break out their political war paint and chant partisan slogans like zombies. Perhaps next time more will see it for what it is, theater to divide and control them.
Government is Way Too Big: 800,000 non-essential employees! Seriously? And the best you can do to make people feel their loss is to close public parks and taking a few websites offline? Didn't it cost money to hire private goons to block park access and to remove those webpages which remain hosted (the domains are still live)? And these aren't the million-plus people employed to spy on us. Apparently, they are considered "essential" in a bi-partisan tyranny. Read the entire article
The Senate is ending the government shutdown. By the time you read this, the Senate will likely have voted on a bill to fund the government through January 15 of next year and to raise the Federal debt limit until February 7. The only GOP “win” in the Senate bill involves new requirements that Obamacare buyers seeking government subsidies must prove their qualifications by demonstrating low income.
With a House vote expected later in the evening, President Barack Obama is expected to sign off on the bill before the Thursday debt limit “deadline,” as forecast by the U.S. Treasury.
House Speaker John Boehner (R-Ohio) is not expected to delay or attempt to amend whatever the Senate is passing. “We fought the good fight; we just didn’t win,” he said Wednesday on a Cincinnati radio show. “There’s no reason for our members to vote ‘no’ today,” he said later.
Boehner’s full capitulation comes just a day after House Republicans attempted to counter the Senate bill by cobbling together their own last-minute plan before realizing the votes to see it through simply weren’t there.
Even Senator Ted Cruz (R-Texas), who had stood firm against the debt limit deal unless Congress voted to defund Obamacare, stood aside Wednesday to allow the Senate to expedite a vote – even though Senate Majority Leader Harry Reid (D-Nev.) cannot bring the measure before the full Senate for consideration today without unanimous consent.
Judging from conservative comments across the internet, there’s a great deal of ambivalence among Republicans as to whether Cruz is to be praised or blamed for his role in the shutdown debate – including Wednesday’s go-along.
On one hand, Cruz mobilized whatever conservative support might have been latent among Congressional GOP leaders and their constituents. He did strike early and often – when tapping into public opinion to defund Obamacare and pressuring Congress to listen to the people’s will would have mattered. He had little GOP support, as the ensuing weeks proved.
On the other hand, there’s no denying that Cruz kept up his tough talk while dialing down his walk, once it became clear that he and Mike Lee (and maybe Rand Paul) were becoming an increasingly isolated three-man army within their own party’s Senate bloc. He or Lee or anyone could filibuster today’s Senate vote and bide more time for leveraged compromise, if leveraged compromise were in the offing.
But the majority of spineless Senate Republicans simply wouldn’t sit at Cruz’ table. A unified pushback against the Democrats never stood a chance of coming together from the balkanized ranks of Republican Senators.
And it’s important to remember there’s little gain in vilifying the few Congressmen who put up a principled fight, when the entire charade was perpetrated from the far left. If Obama and Reid and lock-step Democrats weren’t hell-bent on borrowing more money – Obamacare concessions be damned – there would never have been a fight between the GOP-controlled House and the Democratic-controlled Senate in the first place.
Instead, we’re on track to make debt-ceiling history once again. Now that Obama and the Dems have carte blanche, we should be ticking past the $17 trillion threshold any day now.
2012 came and went with many feeling that nothing happened but is it possible that events occurred that mark the beginning of the end? Gary Stearman and Tom discuss this and much more in this information packed episode of Prophecy in the News. http://www.prophecyinthenews.com
The “shutdown” of the US government and the financial climax associated with a deadline date, leading to a possible “debt default” of the federal government is a money making undertaking for Wall Street.
A wave of speculative activity is sweeping major markets.
The uncertainty regarding the shutdown and “debt default” constitutes a golden opportunity for “institutional speculators”. Those who have reliable “inside information” regarding the complex outcome of the legislative process are slated to make billions of dollars in windfall gains.
While Wall Street exerts a decisive influence on policy and legislation pertaining to the government shutdown, these same major financial institutions also control the movement of currency markets, commodity and stock markets through large scale operations in derivative trade.
Most of the key actors in the US Congress and the Senate involved in the shutdown debate are controlled by powerful corporate lobby groups acting directly or indirectly on behalf of Wall Street. Major interests on Wall Street are not only in a position to influence the results of the Congressional process, they also have “inside information” or prior knowledge of the chronology and outcome of the government shutdown impasse.
They are slated to make billions of dollars in windfall profits in speculative activities which are “secure” assuming that they are in a position to exert their influence on relevant policy outcomes.
It should be noted, however, that there are important divisions both within the US Congress as well as within the financial establishment. The latter are marked by the confrontation and rivalry of major banking conglomerates.
These divisions will have an impact on speculative movements and counter movements in the stock, money and commodity markets. What we are dealing with is “financial warfare”. The latter is by no means limited to Wall Street, Chinese, Russian and Japanese financial institutions (among others) will also be involved in the speculative endgame.
Speculative movements based on inside information, therefore, could potentially go in different directions. What market outcomes are being sought by rival banking institutions? Having inside information on the actions of major banking competitors is an important element in the waging of major speculative operations.
From Facebook photo post: My apologies. I misreported. My last post said I witnessed a woman get whacked with a night stick. What I should of said was “several women.”
How about supporting this page. I don’t ask for much, but a LIKE would be nice Facebook.com/DMLdaily
From Facebook photo post: Another woman. She was peaceful. Video shows it. Tomorrow I will be on Megyn Files. 9p ET. They should have me on all week with what I saw today. On a positive note, as I told thousands of people today when I opened the ceremonies… America is back. No more sleepwalking.
Susan Lindauer, 49, was the first woman and the second non-Arab American to be charged with violating the Patriot Act, was arrested on March 11, 2004, by the Federal Bureau of Investigation (FBI) and charged with "acting as an unregistered agent of a foreign government," accepting $10,000 from the Iraqi Intelligence Service, and accused of meeting with an FBI agent posing as a Libyan.
She was locked up for one year at United States prison Federal Medical Center, Carswell in Texas without trial or hearing, "and threatened with indefinite detention and forcible drugging to shut her up." "During her incarceration she won the right to refuse forced anti-psychotic medication which the United States Department of Justice (DoJ) claimed would render her competent to stand trial." On January 16, 2009, after nearly five years of being under indictment with no conviction or guilty plea, the DoJ dismissed all charges.
Ms. Lindauer discusses her early years, and touches on her memoir, EXTREME PREJUDICE: The Terrifying Story of the Patriot Act and the Cover-Ups of 9/11 & Iraq, in this interesting interview (26:14).
The world risks making a 'historic mistake’ if it eases the pressure on Iran over its nuclear programme, Benjamin Netanyahu, the Israeli prime minister, warned on the eve of crucial negotiations to resolve the crisis.
The world risks making a “historic mistake” if it eases the pressure on Iran over its nuclear programme, warned Benjamin Netanyahu.Photo: AFP
The world risks making a “historic mistake” if it eases the pressure onIranover its nuclear programme, Benjamin Netanyahu, the Israeli prime minister, warned last night on the eve of crucial negotiations to resolve the crisis.
Talks resume in Geneva for the first time in six months today with expectations high for a compromise deal that could see Britain, America and other Western countries abandon crushing sanctions in return for Tehran accepting strict controls on its atomic facilities. Iran’s chief negotiator even suggested yesterday that a “road map” for a peaceful solution to the impasse could be agreed by tomorrow.
But Mr Netanyahu warned that it was only the crippling economic pressure of sanctions that had forced Iran back to the negotiating table in the first place and that it would be foolish to relax them now. “It would be a historic mistake to ease the pressure on Iran a moment before the sanctions achieve their objective,” he said. “Particularly at this moment we must not give up on them, we must keep up the pressure.”
Any move to let up would strengthen Iran’s “uncompromising elements” around the supreme leader, Ayatollah Ali Khamenei, who would be “perceived as the winner”, Mr Netanyahu said.
Mohammad Zarif, Iran’s foreign minister and chief negotiator, is expected to present the five permanent members of the UN Security Council plus Germany, the so-called P5+1, with new terms at today’s talks.
Rattled by Pope Francis’s admonishment to Catholics not to be “obsessed” by doctrine, his stated reluctance to judge gay priests and his apparent willingness to engage just about anyone — including atheists — many conservative Catholics are doing what only recently seemed unthinkable:
World War II veteran Mike Lauriente accepts thanks for his service from demonstrators at the World War II Memorial on Sunday. (WTOP/Jamie Forzato)
WASHINGTON - Thousands of people converged on the World War II Memorial on the National Mall on Sunday morning and tore down the barricades blocking it off, protesting the closure of the memorial during the federal government shutdown.
Beginning at about 9:30 a.m., Sens. Mike Lee, R-Utah, and Ted Cruz, R-Texas, as well as former Alaska Gov. Sarah Palin, were among the luminaries in a crowd that chanted "Tear down these walls!" and sang "God Bless America" as well as other patriotic songs as they entered the memorial, which has been closed since the government shutdown that began Oct. 1.
Tractor-trailers headed down 17th Street toward the Mall, blaring their horns. The Metropolitan Police Department blocked off the street, prompting the crowd to head up the street, shouting at the police to move their vehicles.
Palin said that closing the memorials was disgraceful, and that President Obama "could be here today, saying 'Yes, we can tear down these barricades."
Cruz said that President Obama was using veterans as political pawns in the shutdown. Lee shouted, "The sons and daughters of the United States of America are meant to live in liberty."
By 11 a.m., the group had headed back to the memorial, and dozens congregated around World War II veterans, shaking their hands and thanking them for their service.
October 13, 2013
Reports yesterday on many alternative websites said that EBT transactions were down due to some type of failure that occurred across the United States. As of around 11 pm last night, the system was operational once again.
However, the deadline for the debt ceiling to be reached on October 17 is significant, but in my opinion not a doomsday date. The reason for this is that the Fed will continue it's money printing in order to satisfy its debts. In otherwords, it will simply devalue the currency even more in order to pay its creditors, putting more of a burden upon the American people in the form of inflation.
As I talked with a friend last night, we both came to the same conclusion. The EBT failure may have been a warning from the White House telling it's loyal dependent followers "not to bite the hand that feeds them".
Possibly more fear tactics from the Obama Administration.....
"IN DEBT WE TRUST" should be what is printed on the Federal Reserve Notes we pass off as money........
All the talk has shifted from the government shutdown to the US actually defaulting on outstanding debts. The markets were in deep fear but the last couple of days rumors that the debt ceiling would be raised put the rocket boosters on the stock market. Of course, the majority of Americans have little money in stocks so this was more of a spectacle. Yet what isn’t discussed is the US is already in a long-term soft default on outstanding debts. That is, through various financial wizardry, the US is going to devalue the amount it owes through inflation by digitally printing enormous amounts of money. The Fed already has a balance sheet above $3.6 trillion when prior to the recession, it was below $800 billion. The end result of course is that debt based purchases like housing, college, and cars have soared in the amount they cost even though the typical household makes what they once did in 1987 adjusting for inflation. A soft default simply means that debts will be paid but with inflated money.
Total debt markets balloon after printing money era begins
We are addicted to debt. The total US debt markets are now approaching $60 trillion:
This wasn’t always the case. Starting in the 1970s as the US and many other nations moved away from the gold standard to fiat systems, central banks were unleashed to print as much money as they wished. For decades we have been on a tremendous spending spree. There is no way we can payback our outstanding debts. Similar to the household that takes on too much debt at some point, even servicing the debt becomes more problematic (i.e., more continual debt ceiling battles).
While the US does have the largest economy in the world the amount of debt we carry is jaw dropping. In many ways, the US dollar has taken on the brunt of this pain over the decades.
US dollar collapses
The US dollar has lost 50 percent of its purchasing power over the last generation:
This impact is a result of devaluing our dollar but also inflating our way into spending. There is a specific reason why items like housing, healthcare, cars, and college education are now completely out of reach for households without gigantic financing. There was a time when someone was able to work a part-time job and pay their way through college. Try doing that today with the current costs of higher education. Is it any wonder why student debt now tops $1.1 trillion?
A soft default simply means that the US has no choice but to inflate its way out of this debt. GDP is now growing much slower as we are a mature economy. Yet debt is growing at a much faster pace making up for the gap that we are seeing. Government spending has far outpaced government receipts:
The big jump in receipts recently was built on the back of debt based maneuvers (i.e., QE, bailing out the banks, and massive injections of debt into the economy). This is the reason why receipts increased while government spending remained elevated.
The debt we will never payback
We will never payback the debt that is owed:
This is an interesting situation. Most people realize that this debt will not be paid back. In fact, the markets completely get this. Take for example the Fed’s unprecedented purchasing of mortgage backed securities. Why would the market lock in rates of 3.5 to 4 percent for 30 years with all the incredible amounts of risk present? The answer to that is the market has no appetite for that and that is why the Fed is essentially the biggest player in the mortgage market. Yet the law of unintended consequences rears its head. Because of this setup banks are now leveraging easy access to debt to eat up real assets in the economy in the form of single family homes (and inflating the cost of homes once again for regular Americans).
The interest expense on the debt is already up to $415 billion per year:
We owe $16.74 trillion. If this were an interest only loan the rate would be 2.4 percent per year (who else can command a rate that low?). What is interesting is The Treasury is already using extraordinary measures to avoid a default. The debt ceiling was raised to $16.699 trillion on May 19, 2013 but we are beyond that. Of course the October 17 date is a big one because we simply cannot be operating in emergency mode for much longer. It is very likely something will be done but a soft default, that is, inflating ourselves out of this debt is likely to happen no matter what occurs in the next few weeks.
