Why the Debt Ceiling Deal Will Cause a Great Depression

Update 8/7/2011: As of this morning 24/7 WallStreet Posted an article stating that 9 more states were slashing unemployment benefits…as I predicted last week. Here is the article link: http://247wallst.com/2011/08/04/the-nine-states-slashing-unemployment-benefits/

I don’t care what your politics are. The debt ceiling deal last Tuesday was a disaster of Biblical proportions. Here is why in a couple of easy to understand lessons.

The Tea Party, owned and operated by the Koch Brothers (multi Billionaires who pay no taxes) held America hostage. This meant that there could be a). no new revenues from the multi-billionaires or mega-corporations and b). (and more importantly) no extension of unemployment benefits at the Federal level. The latter means that as of 1.1.2012, even subsistence payments to over 4 million Americans will end, throwing these Americans and, shortly thereafter many millions more, on the mercies of their families and private charities.

Here is what this will cause.

1). All of the money that comes from unemployment immediately buys things. These things will not be bought.

2). As less is bought, stores will have to lay off more people. This will cause greater unemployment, making it harder for the unemployed to find jobs.

3). This means an ever-increasing number of hard-core unemployed, which means less will be bought.

4). Return to #1 and repeat cycle.

5). This will cause less taxes to be collected by all governments causing….

6). Layoffs at the municipal, state and Federal levels…meaning…

7). Return to #1 and repeat cycle…causing…

8). More foreclosures and further erosion of the housing market causing…

9). Further layoffs, and repeat, etc., etc.

This all will cause a further stock market crash, which will cause further erosion of all of the above. This will cause a further erosion of America’s credit rating, making it harder to borrow. This will cause:

10). An increase in credit card and other loan interest rates to the consumer as the Fed passes on higher interest rates to our “dear friends” the evil bankers who got us in this mess in the first place who, of course, pass these rates (plus a lot!) on to us…meaning..

11). It is harder for businesses to get credit, meaning…

12). They have to lay people off meaning…

13). Go back to #1 at the top of the page…

Translation: We’re screwed. Thank you Mr. Obama. Thank you Tea Party. Thank you Republicans. Thank you Democrats. Thank you Bankers. Thank you you corrupt politicians who run Congress. Thank you CEOs of corrupt mega-corporations. Thank you all of your 1/10th of 1% of Americans who own the vast majority of America’s wealth and who pay NO taxes and yet control our nation while shafting our people! If you aren’t outraged, you haven’t been paying attention.

This is simplistic and is meant to be. Of course it is more complex than this, but this is an outline and gives you the broad strokes. Have fun, folks!

6 Responses to Why the Debt Ceiling Deal Will Cause a Great Depression
  1. Not it
    August 5, 2011 | 9:27 pm

    You are completely clueless. kthanksbai.

    • John Heckers
      August 5, 2011 | 10:23 pm

      Yeah, OK. Please tell me why. “You are completely clueless” is not really helpful to the discussion. Are you saying this because you’re a Republican? A Tea Party member? An Obama supporter? One of the 18% of people who support this deal? Please enlighten us, O Wise One, as to your logic, if you have any. Or are you just spouting nonsense like the Tea Party?

      • Paul W. Smith
        August 12, 2011 | 3:46 pm

        As always when it comes to money, it is a question of priorities. It is best to judge the values of a person (or a country), not by what they say, but by where they put their resources. The U.S. spends around $50B annually on foreign military and economic aid. We have invested $1T or so in wars in Iraq and Afghanistan. As you point out, John, we are about to stop investing in the welfare and economic recovery of our own citizens. Often you have to hit bottom before true recovery can begin. We will soon find out…

  2. Kristie Lara
    August 11, 2011 | 6:20 pm

    I do not believe the depression you describe culminates from lack of unemployment funds. Much of A depression ocurrs when people are not working. These days many have been not working and relyying on umemployment for funds. However, unemployment is only suppose to be temporary –6month or I’ll grant you, one year. However, many people are over doing it and taking 99 weeks–two years and want more! All the tea party (and Im not all around supporter of them) is doing by cutting off unmeployment is saying its time to stop over doing it, get off the couch, and find some work. What we are seeing now is working people funding the non-working and of course this will never work! Even in one of articles you mentions how so many unemployed dont show up for networking events, return calls, or even own job interviews!! They’re over doing it. Thank yu.

  3. John
    September 17, 2011 | 12:01 am

    I know I’m a little late to this party. But people like Kristie is all too typical of the LUCKY ones who have not lost their main job yet. This current economy of the last 3 years is filled with millions and millions of people who have lost great and good paying jobs. The jobs in majority that are left don’t pay a mortgage or even rent to a studio apartment here in New York. I suggest everyone read a great book by Chris Hedges Called: Empire of Illusion. This book gives great insight into our decaying empire. The fact of the matter is unless people are willing to take it to the streets in protest, nothing is going to change. America’s government has been sold to the highest bidding corporation. There is no Democrat or Republican party in politics, only one party and they serve corporations and the elites. The words Consent of the Governed has become an empty phrase.

    • John Heckers
      September 17, 2011 | 1:40 am

      @John — I agree with you on several points. Those who complain about the “lazy” who are not working or who are “overdoing it” do not work with the unemployed as I do, nor have they had to suffer unemployment themselves, for the most part. While some of my clients over the past few years have had a great cushion and, therefore, haven’t worked terribly hard at getting employed, most would give anything (even with a cushion) to get back to work. Let’s say that 10% of those on unemployment are “dogging” it and milking the system. That still paints the 90% who are desperate to work with a terrible brush. I also agree that Americans need to take to the streets, and protest…aggressively if necessary. Remember that the Black Civil Rights movement only succeeded when there were riots. People need something to slap them out of their complacency. However, Americans probably won’t protest or riot until they’re hungry, homeless, desperate, cold, etc., etc. Unfortunately, at that point protests normally turn very violent…..and often civil war results. But….we’re probably headed for civil war anyway if the Right keeps up their bigotry and support for the very wealthy at the expense of everyone else.

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