The Dollar and the Debt Ceiling. Excerpt:
The dollar is the world’s go-to currency. But for how much longer? Will the dollar’s status as the only true global currency be irreparably damaged by the battle in the US Congress over raising the federal government’s debt ceiling? Is the dollar’s “exorbitant privilege” as the world’s main reserve currency truly at risk?
To be sure, the purveyors of dollar doom and gloom have cried wolf before. When the subprime-mortgage crisis hit, it was widely predicted that the dollar would suffer. In fact, the greenback strengthened as investors seeking a safe haven rushed into US Treasury bonds. A year later, when Lehman Brothers failed, the dollar benefited from the safe-haven effect yet again.
Speaking from personal experience, the one thing that’s great about the U.S. dollar is that it’s spendable pretty much anywhere in the world. I’ve spent them in Iraq, Kuwait, Saudi Arabia, Japan, China, France, Germany, South Africa and probably a few other places I’ve forgotten.
That’s a status the dollar may not be keeping. Our sitting President has doubled the national debt, and he wants more. And Congress, feckless and indecisive as they are, may give it to him. And that debt is killing us – and maybe killing the dollar’s status as a de facto global currency.
The article linked above concludes:
Sane governments do not default when they have a choice – especially not when they enjoy the “exorbitant privilege” of issuing the only true global currency. We are about to find out whether the US still has a sane government.
Is our government sane? Let’s look at some objective evidence. During the current shutdown, our Imperial Federal government has:
GOP Agrees to Raise Debt Limit.
Beijing and Tokyo Calling The Shots On U.S. Debt.
White House, IRS Exchanged Confidential Taxpayer Info (Illegally.)
That last piece of evidence is particularly egregious, as it’s a Federal crime that could send some folks to jail; excerpt:
The emails provided to Oversight investigators by the IRS had numerous redactions with the signifier “6103.”
Section 6103 of the Internal Revenue Code forbids a federal employee from “disclos[ing] any return or return information obtained by him in any manner in connection with his service as such an officer or an employee.”
Federal employees who illegally disclose confidential taxpayer information could face five years in prison.
Is it time for some kind of revolution? I’m not (necessarily) talking about open rebellion, but it’s plain that the Imperial Federal government has sunken into a pit of corruption and fiscal insanity. Could it be that a taxpayer revolt is in order?
Now there’s a problem with that idea; the percentage of the U.S. population that actually pays Federal income taxes has dipped to near 50%. If it drops below 50%, we’re fucked. Finished Pau. Over. Fini. <30>. There’s no coming back from that; the tax dollar recipients will continue to vote themself largesse at the expense of a shrinking portion of producers, and eventually those producers will increasingly go Galt – and that’s the end.
One way around this? Do away with withholding. It makes taxes too painless. Make everyone that earns a dollar fill out an estimated tax form every quarter, as we self-employed folks and small business owners have to do – make them write a check, every three months, to the order of the Imperial Federal government. Maybe then people will start paying attention to the state of the fiscal train wreck that is Washington.