The Global Superpower Has Shut Down!

Posted by Admin On Friday, 4 October 2013 0 comments
Causing Economic Disruptions in Other Countries By Trade Sanctions and Various Measures are coming back to Haunt the U.S. as its government inches closer to ACTUALLY running out of money!
US Government ShutdownImagine a single country that has so much economic and military power that it is recognized across the board – even by its detractors and open enemies – as the most powerful nation on earth since Alexander the Great, since Genghis Khan’s empire, even since the zenith of the British empire, on which the sun never set (until after World War II, when Nazi Germany’s Operation Bernhard practically bankrupted the British economy by printing enough counterfeit pound currency notes that were equivalent to four times the amount of actual currency holdings in the Bank of England reserve at the time). Imagine that this single country, one nation above all, which has the power to make and break governments anywhere in the world, and engage in overt as well as covert military action in the world (and even in space!), was faced with a military engagement that made it retreat with its tail between its legs, but allowed it to rise up again after rebuilding its economy and modernizing its military even further; ref Vietnam, the implosion of the Soviet Union in the early 1990s and “Western support” to emerging “democracies” in eastern Europe (when they all forgot about emerging quasi-Soviet dictatorships in Central Asia, but eventually ended up on good terms with them and supported them), and the creation of the Internet and modern technologies to the extent that everything, including social relationships and monetary transactions (especially those in the millions and billions), happens electronically. Suppose that if such a country existed, and created such a technology, and made it cheaply (or freely) available to the world (but still retained proprietary control over it) in order to decrease distances and transform the international community into a “global village”, it would also be aware of a certain novelist who used the pen name “George Orwell” and wrote a book called “1984″ where the world is under the watchful eye of the government, and no action is private. Suppose this superpower already came up with the term “Big Brother” to refer to its invasion of personal privacy and, in fact, the very individual freedoms that its Constitutional and legal framework was made – and is still designed – to protect, preserve, promote and uphold.
Suppose that the biased and globally hated policies of this superpower led to it being metaphorically “slapped in the face” by an unknown radical group belonging to a specific brand of a specific religion, which hijacked some planes and hit targets on the superpower’s homeland – especially economic (World Trade Center) and military (Pentagon) targets, without causing major damage to either the superpower’s economy or the military (at the time, and with that particular attack), but causing enough perceptual damage to its economic and military prestige – and that this superpower, in a fit of rage and bloodthirsty for revenge, declared war on a backward, landlocked country with practically no central government, no standing army, and definitely no established institutions, just so it could “hunt down, kill or capture those responsible” for the slap in the face. Suppose it did that – succeeded in the invasion, but failed to achieve the objectives of its mission, i.e. to kill and/or capture those responsible – and without knowing it, landed in one of the richest places on earth (in terms of mineral deposits and natural resources that remained undiscovered till the superpower arrived with its cutting-edge technology and its need to feed its hungry economic machine). Suppose it also came up with an international agenda where it could dictate terms to all the other countries, saying that they were either with the superpower (and would incur massive benefits for being so) or against the superpower (and would suffer immensely for choosing this path), playing hardball with those on the fence. Suppose that this international agenda had targeted a specific religious group in a specific region, and – given its success in military engagements worldwide, where it would face virtually no opposition anywhere it would put boots on the ground – came up with the idea that it could “create” threats and intelligence reports to justify attacks on other countries: even countries that were ruled by dictators initially installed by the superpower itself (albeit, in previous regimes, of course, even if it was the same political party). Suppose it uses arguments like “this country has dangerous weapons which pose an existential threat to us” or “it is our responsibility as the undeclared global policeman to extend the freedoms and liberties of the free world to the people who are suffering under this despotic dictator”, but still doesn’t get enough international support, and goes it alone without a “coalition of the willing”. Suppose its military – the finest in the world – makes such a huge mistake that its overall operational theme betrays the main reason why the military operation is taking place: Operation Iraqi Liberation, acronymed to O.I.L., or oil, a natural resource deeply coveted by the U.S. and whose top four producers in the world include Iraq, the country occupied by the U.S. under the pretext that its former President, Saddam Hussein, had weapons of mass destruction (particularly nuclear weapons – which remain to be found even as of today). Suppose the superpower invades both these countries – who have the same religion as the radical extremist group that attacked and “slapped” the superpower – and achieves quick initial victories, and establishes its military bases over the vanquished nations, only to be met with asymmetric warfare and guerilla insurgencies that erupt with a quantum and momentum that even the finest of the superpower’s military forces are unable to deal with. Forget the collateral civilian damage incurred by the populations of these two conquered countries: the number of soldiers killed by insurgents, militants, and terrorists (who might be fighting for their country’s independence from a foreign invader/occupier, as the U.S. did against the British in 1789) reaches epic proportions, and causes political problems for the superpower’s regime leadership back home. They plot and plan, they grapple and grab, they gather the best minds in the world (the ones that they already have, and enlist the ones that they didn’t have yet) so that they are rescued from the quagmire – they all recommend that the superpower has already caused enough of a mess by disturbing the regional status quo over the past decade, and that the superpower’s real intentions – to militarily encircle a particular country within what it calls the “axis of evil”, not only because it has the same religion which is being targeted, but also because it has huge amounts of oil reserves (which, thanks to multilateral sanctions imposed and enforced by the superpower and its crony international governmental organizations (IGOs) – it has not been able to exploit, utilize or export in large quantities).
Now, after all the above, suppose the world’s most-powerful-ever superpower’s economy is built like a large casino, where people place bets on the bets that other people place, and the outcomes of those bets – and these secondary bets are yet again placed on the outcomes of bets that people make at another, different level of betting. Suppose that the fiscal and monetary values, upon which the economic might of this superpower is built, start collapsing because the government intervenes in one scenario where this betting megastructure fails because people weren’t making the right bets, weren’t hedging on the right bets or right outcomes, and in fact, were playing with other people’s money, and actually losing that money – which people had earned and trusted these “financial experts” to handle, save, and if possible, multiply. When the government stepped in and “bailed out” this failing financial firm, the classic economic principle of “moral hazard” became a clear and present danger to the entire socioeconomic fabric of the superpower, and also to the value of its currency, which was accepted as legal tender all over the world. “Moral hazard” means that if a person makes a mistake, and is not punished for it, he or she will continue to make that mistake. By bailing out this financial firm, the superpower proved to all the betting “financial wizards” on its markets and throughout its economy – particularly Wall Street and Main Street – that moral hazard is no longer a hazard, and that if you make a mistake (no matter how big) the government will step in and “bail you out of it”. But after financing two wars (in which the superpower failed miserably and incurred catastrophic financial and personnel costs) the government was not able to prop up – or “bail out” – any other financial firms that would fail.
But the problem was that many firms – most of them interconnected to each other through different kinds of bets, or hedged bets, or “common stock portfolios” or other fancy jargon used to describe the same things that are now called “toxic assets” because they have a very low or continuously decreasing value – were about to go bankrupt. They were sure that the government would bail them out. The government was sure that they would not, because they could not. And in 2008, the entire world faced a financial crisis that can only be compared to the Great Depression of the 1920s and 1930s. The superpower – with a firm belief in the free market and the “invisible hand” that corrects all economic distortions – had to go back on its fundamental principles, and buy up all the “toxic assets” that these firms and their financial experts and CEOs had created, to the extent that the government ended up owning major corporations, and became blamed for being socialist in essence: it was this very superpower that competed with another, avowedly socialist/communist superpower, from 1945 till 1991, and emerged victorious after engaging in proxy warfare and bleeding its adversary military, economically, and politically, to death by implosion and dismemberment. While the superpower – and the rest of the world – is still dealing with the economic slowdown caused by the Global Financial Crisis (GFC) of 2008, it (the superpower) has made a list of massive economic firms which it has designated the bedrock of its economic might, and has labelled them “too big to fail”: that no matter how badly they perform in the open market, no matter the size and significance of the moral hazard (or moral turpitude in economic handling and financial dealings), the government has a legal obligation to bail these companies out, because if it doesn’t, the entire economy would collapse.
By now, in 2013, the superpower has been cut down to size in economic and military terms – but only metaphorically. While it still holds on to its unipolar moment, there are many political, economic, and foreign policy experts who have gone on the record – and even written books to the effect – saying that the superpower is now in decline.
This superpower, the United States of America, is now headed towards a “government shutdown” as October 2013 starts. The government shutdown essentially means that the American legislature – the Congress – fails to pass legislation that allows the disbursement of government expenditures: it can first withhold general government expenditure, and later, withhold “essential” government expenditure, thus bringing government operations of the world’s only superpower to a standstill (particularly because this means government employees won’t be paid their salaries, no matter how high the rank). This is not the first time that the U.S. government is being shut down by the Congress – it has happened seventeen (17) times before. For 21 days between December 15 1995 and January 06 1996, President Clinton’s Administration faced a government shutdown voted by the opposition Republican party (which controlled both the Senate and the Congress) until a compromise budget was agreed on and passed.
The U.S. Congress – with the Senate controlled by the Democrats with a thin majority, and the House of Representatives (the driver of the budget and fiscal appropriations) firmly in the Republicans’ control – has been in deadlock over the budget because of President Obama’s healthcare plan, which is definitely directed towards providing quality healthcare to many American citizens who do not have access to top-notch facilities so far, but has become a focal point of controversy with the Republicans, who have raised all kinds of opposition to the monumental legislative effort of the incumbent White House Administration. Republicans in the U.S. House of Representatives still insist that any temporary measure to fund the government ought to include a delay of “Obamacare”, as it is now known – but the GOP knows that it would be rejected by the Democratic-controlled Senate, as it was Monday afternoon for second time in a week. There was little doubt how the stalemate would end without a last-minute compromise – as a shutdown would leave some essential functions like national security intact, but cut many regulatory agencies back to a skeleton staff. Americans are split over whether funding for Obama’s signature healthcare law should be linked to measures that pay for U.S. government operations, but obviously, many more will blame the Republicans if the government shuts down, which it already has. Moreover, many believe that the Republicans are playing hardball with President Obama after his historic overture to Iranian President Rouhani, when a phone call between the two took place – the first communication between the Presidents of both countries since 1979. Since the House of Representatives is the main institution that has precipitated the shutdown (even though it is telling the American people otherwise, and laying the blame elsewhere – particularly on President Obama, and the Democratic party), it makes more sense that the shutdown could be linked to the detente between the U.S. and Iran through the phone call between both Presidents: the two biggest AIPAC enforcers in the House of Representatives, Majority Leader Eric Cantor and his Democratic counterpart, Democratic party Whip Steny Hoyer, are fierce AIPAC members who lead the Jewish lobby in the lower house of Congress. Therefore, links between the Iran-Israel strife and the U.S. government shutdown are not difficult to connect.
When asked late on Monday by Reuters if the Republicans would send an anti-Obamacare version of the funding measure back to the Senate for a third time, Representative Marsha Blackburn of Tennessee said, “Oh my goodness gracious, we’re going to keep going. We’re keeping the government open”. However, the deadlock caused by the Republicans has already resulted in the government shutdown, rendered Representative Blackburn’s statement hollow and useless.
U.S. President Barack Obama blamed “the extreme right wing” of the Republican party for the government shutdown – in an overt reference to the “Tea Party” – but acknowledged that the shuthdown would be akin to throwing “a wrench into the gears of our economy.” But government shutdowns in the U.S. don’t always happen on partisan lines – President Carter faced five government (three in 1977 alone) shutdowns precipitated by a Democrat-controlled Congress and Senate (his own party), lasting 12 days in 1977, 18 days in 1978 and 11 days in 1979. Whether the legislature is controlled by one party and the executive by another, or whether both pillars of the state are controlled by the same party, a government shutdown can always happen in the United States. The problem is that with the withdrawal of international troops from Afghanistan commencing next year, a three-year-long insurgency in Syria that shows no signs of abating, an economic crisis in Europe that has yet to be stabilized (and has been given a lifeline thanks to the German economic powerhouse, but is deemed to have deeply damaging repercussions for the European Union and their common currency, the Euro – the clearest sign of this was the ascension of the Socialist François Hollande to the Presidency of France, defeating Nicolas Sarkozy in 2012), and the rise of China as an economic and military counterweight without any of the problems that the U.S. is facing (in fact, the China owns at least US$1 trillion in U.S. treasury bonds, making China a creditor of the U.S.; and China is proactively protecting and projecting its economic interests in terms of profit-sharing – rather than aid and interest repayment, as has been the modus operandi of Western powers now in decline – throughout Central Asia, the Middle East, and even Africa and South Asia).
What impact does a government shutdown have on the United States itself? Russia Today has listed ten major ways in which the government shutdown would impact the operations of the U.S. government and the White House administration.
If U.S. government operations are halted by Congress due to non-passage of the budget for the coming fiscal year, the primary impact would fall on the economic and on the economic recovery that the U.S. has been struggling to maintain since 2008: a government shutdown would push the U.S. – still the world’s largest economy – “closer” to bankruptcy, and if no budget deal takes place, the U.S. government will run out of money for its daily operations by October 17, 2013. Treasury Secretary Jacob Lew has estimated that by then, the U.S. government will only have U.S.$ 30 billion cash on hand. Failure to raise the U.S.$ 16.7 trillion debt ceiling by mid-October would force the United States to default on some payment obligations – an event that could cripple its economy and send shockwaves around the globe.
The government shutdown would also lead to at least 800,000 government employees being laid off, while others will be put on “furlough” – a general term used especially when government shutdowns are expected, which means that government employees will be put on non-paid leave according to the regulations of various departments under which they function and operate. These figures exclude the halt in salary payments to ALL federal government employees who receive monthly paychecks – DoD officials, for instance, receive two paychecks each month, and may receive their October 01 paycheck while their October 15 paycheck depends on a Congressional agreement on the passage of the budget. All this would negatively impact the projected growth of the U.S. economy (currently 2.5%) by roughly 0.32 percentage points; if the shutdown exceeds the previous record of 21 days – set in the 1995-96 Clinton era – and continues throughout the month of October, the loss to U.S. gross domestic product would rise by 1.4 percentage points, according to Mark Zandi of Moody’s Analytics.
A government shutdown also means that while 1.4 million active duty troops across all services of the U.S. military will continue operating, their paychecks would be delayed until the budget is passed. According to the U.S. Department of Defense (DoD), all military personnel will “continue on normal duty status”, but about half of the DoD’s 800,000 civilian employees will be placed on unpaid leave. The Pentagon has said it will “halt military activity not critical to national security”. Officials have said military personnel, who are paid twice a month, would receive their October 1 paychecks but might see their October 15 paychecks delayed if no funding deal is set by October 7. If no deal is reached, they might not see their October 15 paychecks at all. A temporary relief to the DoD may be granted through the “Pay Our Military Act” (H.R. 3210, 113th Congress) introduced by Republican member of the House of Representatives, Mike Coffman, on September 28, 2013. The bill provides for the appropriation of “funds to pay the military at any time in 2014 when [regular budgetary] appropriations are not in effect”, a situation that includes any potential shutdown. It passed both the House and the Senate on September 30, and President Obama signed it into law and recorded a video message for the troops so that their morale isn’t affected by politics in Washington D.C.
The $6 billion Special Supplemental Nutrition Program for Women Infants and Children (WIC) is also threatened by the government shutdown and disagreement over the federal budget, posing a severe risk to pregnant women and mothers who face nutrition risk. In addition, U.S.$ 85 bilion worth of federal programs targeted at alleviating social hardships would be automatically cut; this sequestration would detrimentally affect grants to local organizations and funds that keep those programs running. Social Security and disability checks will be issued with no change in payment dates and field offices will remain open but will offer limited services, the relevant agency said in a communiqué issued with respect to the shutdown.
The impact on U.S. trade relations is also quite significant. The U.S. plans to sign a Trans-Pacific Trade Partnership as President Obama is scheduled to travel to Bali, Indonesia, to seal the deal with America’s Asian allies and economic partners at the meeting of the Asia-Pacific Economic Cooperation nations. The government shutdown and budgetary problems at home would scuttle U.S. efforts to achieve a trade deal at this stage – leaving a vital trade and economic cooperation corridor in China’s backyard wide open for its main global competitor.
Most importantly, the government shutdown would impact the housing market – the main victim of the 2008 GFC as Main Street suffered from Wall Street’s hazardous economic engagements and financial investments. U.S. federal programs now provide for about 30% of all new loans in the housing market – now deemed the backbone of the U.S. economy – and they will be shut down. Government funding of new businesses, as well as workplace health and safety inspections, will also be halted.
Other than that, the NASA space program would have to be put on hold, along with the closure of national parks, museums and zoos to the public. This includes US national parks from Yosemite to the Shenandoahs, as well as Washington’s National Mall, Lincoln Memorial and Constitution Gardens, among other public attractions and national monuments.
According to Reuters, a shutdown would continue until Congress resolves its differences. That could be a matter of days, or weeks. The duration of the “funding gap,” the bureaucratic term for a partial government shutdown, would depend on when lawmakers finally approve a funding bill.
It would seem strange to countries suffering from low tax revenue generation, balance of payments problems, massive amounts of interest payments to donor agencies and IGOs/IFIs, low GDP growth statistics, regular cyclical fiscal problems, economic problems such as uncontrolled inflation and increased unemployed – and all underdeveloped nations for that matter – that the global superpower is now officially on the brink of bankruptcy: not its economy, not its companies or major firms, but the government itself! All because of a petty political dispute over whether American citizens should receive greater health coverage or not, and if so, in what manner and according to what degree of regulation and/or oversight by the government.
But, to citizens of all countries, it is obvious that even in America, politicians serve their own interests (and those instructions issued to them by their parent political party) rather than serving the public interest – and in this case, government employees and American citizens dependant on government support and social security paychecks have been caught in the crossfire between the Republicans and the Democrats over Obamacare. And if the Tea Party – the extreme radical right wing of the Republican Party – is truly to blame for the government shutdown, then it would lose any support it has among the American public in general, and particularly among Republican voters who – no matter how radical they are or extreme-right-wing views they espouse – are government employees or are dependent on federal government programs for their day-to-day living.
And if this is all because of the phone call President Obama made to Iranian President Rouhani, then shame on AIPAC and shame on Israel for making America suffer just because it fears the “existential threat” it faces from Iran (and the rest of the Muslim Middle East, for that matter, who do not acknowledge the existence of this Jewish state – the only state that practices apartheid in the world, but is hailed as “the only democracy in the Middle East” by the hypocritical West, whose economies are ailing on a national level as well as when considered as the capitalist bloc as a whole).
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