The World's Largest Pyramid Scheme

[Donnachaidh]

http://counterpunch.org/kagarlitsky08232011.html

The United States managed to avert a default, and that is good news. But the partisan battle in Congress sent the stock market plunging, and the decision by Standard & Poor's to downgrade the country's credit rating has made matters far worse.

Party ambitions alone did not cause the bitter standoff in Congress. At stake is not just the size of the national debt or state expenditures but the entire social and political structure of the United States.

Democrats have traditionally championed social welfare programs, while Republicans put more emphasis on private business and the free market. So why do most working people in the Midwest vote Republican and members of the New York financial elite vote Democrat?

The answer lies in the way the U.S. social welfare system is organized. Unlike European countries, where the welfare state is financed with high taxes, the U.S. government keeps taxes comparatively low and goes into debt to finance a large part of its social expenditures.

More at the link --

[xchrom]

1. recommend

[leveymg]

2. Recommend. Wall St loves to feed off public debt and is dependent on it

for basic things such as the T-bills used to balance risks in investment portfolios and the billions in income made off of secondary markets and derivatives from public debt trading.

The U.S. and global financial systems would implode without rising public debt, which is both a stimulant and hedge for investment incomes.