Welcome, welcome, welcome to Writerz Block, also known as “The Block”.
This is the inaugural blog post, since it’s Monday that means it’s a Media Monday blog. Media Mondays are blogs where we write about anything that is a hot topic in the media at the moment. Hopefully it keeps you non-news watchers current with worldly topics and those that do follow the news, it should give you a different spin on whatever they’re talking about. Plus it’s a great way to start off your work week!
So What’s the D*mn Deal? At long last, a deal on raising the debt ceiling and cutting spending has been reached. The agreement, which the White House is calling “a Win for the Economy and Budget Discipline,” includes: a $2.1 trillion increase in the debt ceiling and 10-year discretionary spending caps generating nearly $1 trillion in deficit reduction (balanced between defense and non-defense spending) over ten years. What’s more, a “special” Congressional committee will come up with a package of $1.5 trillion more in cuts and/or revenue enhancements that’s guaranteed an up-or-down vote by December. And if Congress can’t agree to a package, automatic cuts will commence in 2013, split 50/50 between domestic and defense spending (exempting entitlement programs like Social Security and Medicare).
By no means am I one of those guys that follow politics, because it’s only going to make me angry….you won’t like me when I’m angry! But after years and years of being in the automotive industry, watching the process of people rationalize additions to their already enormous debt, just the word debt has become a sensitive subject to me. Our economy, our culture, our entire world, is built upon debt. No one ever asked us if that’s how we wanted it, it is simply how the system was designed when we came into it. Many of us have lived our entire lives under the assumption that debt is a necessary function of daily commerce and a valuable driver of successful society. Most households in America operate at a steep loss, trapped in constantly building cycles of liability and interest. Of course, debt can be very useful if you are the controller or determining overseer of a system, especially if you wish to centralize and maintain power over that system. The tactical distribution of debt has been used by elites for centuries as a means to imprison the masses, or to create an atmosphere of endless dependency. Job well done.
So how does this deal effect us, by “us” I mean the regular non-elite tax paying American. At first, there was great concern that a debt crisis would cause interest rates to spike and ignite inflation. That prospect now seems unlikely. In fact, interest rates remain extraordinarily low. For those with jobs and decent credit scores who want to borrow, the deal is likely to be a plus. Because of its lack of tangibility, debt can be packaged and repackaged into whatever form banks like. Derivatives are a perfect example of the phantom nature of debt; securities which have no real value whatsoever yet are rated and traded as if they are a solid commodity. This brand of commerce is, at its very root, a kind of fiscal time bomb. Tick, Tick.
Maybe this blog was too serious for the first run, maybe you’ve learned something that you didn’t know, or maybe this blog has served it’s purpose by helping get through another Monday on the J…be sure to check back daily for the new blog post. Tomorrow’s topic is Trending Tuesday which the blog will be about whatever is currently trending on Twitter! Get your minds correct.
Thanks for tuning in……