Monday, March 07, 2011

Broken, not broke

Our political system may be broken, possibly beyond repair, with full time campaigning having long ago superceded actual responsible governance, but as Bloomberg details today, the United States is most definitely not broke despite how many times Speaker Boehner repeats that false mantra like a broken record.

We know this to be true because the bond traders, who are routinely inserted into the narrative to scare us into acting against our own common good, aren't scared at all of US debt.
The U.S. today is able to borrow at historically low interest rates, paying 0.68 percent on a two-year note that it had to offer at 5.1 percent before the financial crisis began in 2007. Financial products that pay off if Uncle Sam defaults aren’t attracting unusual investor demand. And tax revenue as a percentage of the economy is at a 60-year low, meaning if the government needs to raise cash and can summon the political will, it could do so.
In fact, debt insurance stats make "U.S. government debt the fifth safest of 156 countries rated and less likely to suffer default than any major economy, including every member of the G20."

Being in debt is not the same as being broke, particularly when you have available sources of revenue that aren't being tapped. Like billionaires being taxed at ridiculously low rates, corporate tax loopholes you could fly a 747 through and government subsides to industries regularly reporting record breaking profit margin returns.

The only thing "broke" in America right now is our ruling political class who apparently have broken the last thread of their connection to reality in their endless quest for party dominance and the payola that comes with it.

[More posts daily at the Detroit News.]

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