“Knowledgeable people in finance are aware that the US Federal Reserve has been buying 70 per cent of all new Treasury paper”

A quote from the UTTER dead center of american politics,Mort Zuckerman, Editor of US News & World Reports

That is not the only risk: the economists Carmen Reinhart and Kenneth Rogoff have shown that economic growth deteriorates as total government debt exceeds 90 per cent of gross domestic product. America is already in that range. Indeed, the real facts are even worse, for we are also now in the midst of the familiar Washington game of kidding ourselves about the size of the deficit. It is already at $1,645bn for the next fiscal year. The Congressional Budget Office concludes that President Obama’s most recent budget underestimates spending while also overestimates revenues.

Today, Moody’s who said they might lower the USA’s credit rating if we have no deal and ANY federal agency failed to meet its obligations on time, told the world they might lower our rating ANYWAY if their analysts (who brought you the AAA ratings on the mortgage backed securities which ate the world) think the debt deal doesn’t help the USA financial position (and indeed HOW CAN IT WITHOUT A LONG TERM REALISTIC PLAN?). Then why not DEFAULT and allow the govt to be PREVENTED from spending because no one will take a promise to pay from them?Why not COMPEL them to figure out how to pay the bills with some desperation? Why not FORCE department heads to reevaluate their personnel to see who could be eliminated and who could shoulder more … and increase… productivity?

If the US Press Secretary called a failure to reach a deal, which included down-rating of US credit “ARMAGEDDON”, then a compromise deal which includes the usual silliness of wincing prayers, will also be “ARMAGEDDON” as Moody downgrades US promises to pay, followed by S&P and the other bitches.

Financial Times:

As the equanimity in financial markets is signalling, some deal to avoid default will probably be cobbled together; the consequences for America and for the world of failing are just too great.

But even if the talks succeed, the outcome will do far less to address America’s fiscal problem than was hoped when the formal discussions were launched under vice-president Joe Biden’s leadership in April.

Austerity indeed. Since our income, which is based 100% on small businesses, is now becoming more and more constrained, I have decided to handle this situation by coming up with a plan to increase my DEBT while visiting the electric company, the town tax collector, XM, Time Warner, and DirecTV to explain my plan based on things I hope will happen. In the meantime, I will keep going by using our hires printers to create EPA-SCRIPT which I hope the supermarket will accept.

The amazing thing is that the morons in DC think this PRECISE plan will affect the world. In the end the suspicions and fear of those holding capital will then determine our future.