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!