Administration hypes depression and collapse if debt deal not reached, tells banks the opposite
Paul Joseph Watson
Wednesday, July 27, 2011
While publicly fearmongering about a new great depression, the sun failing to rise, and the sky falling if the debt ceiling is not hiked, the Obama administration has been secretly telling big banks that there’s no chance of a default, echoing how the 2008 bailout was sold on hyped threats and intimidation of lawmakers.
The rhetoric was heightened yesterday when White House Communications Director Dan Pfeiffer warned that the GOP’s inability to compromise “could potentially put us towards a depression,” adding, “we are seven days away from an unprecedented financial event in this country’s history.”
Treasury Secretary Tim Geithner, who has been busy hyping the inevitability of a default for weeks, again told news shows Sunday that the government would be unable to pay its bills if an agreement is not reached, a talking point that has been enthusiastically parroted by President Obama.
However, that tone doesn’t quite match with what the Obama administration is simultaneously telling top executives at major U.S. banks, assuring them that “such an event won’t happen.”
“In a series of phone calls, administration officials have told bankers that the administration will not allow a default to happen even if the debt cap isn’t raised by the August 2 date Treasury Secretary Tim Geithner says the government will run out of money to pay all its bills, including obligations to bond holders,” reports Fox Business.
Once again, while striking fear into lawmakers and the American public by stoking fearmongering about the inevitability of a catastrophic collapse, the administration is fully aware that the system, maintained as it is by a fraudulent debt-based fiat money system, can always be kept artificially inflated for that bit longer.
Indeed, the doomsday rhetoric is likely to be nothing more than a ploy to increase the administration’s bargaining power and its bid to seize the power of the purse from Congress. We saw an almost identical tactic used during the 2008 bailout debate, which was eventually rammed through on the back of bellicose threats about martial law and economic armageddon.
- A d v e r t i s e m e n t
As Senator James Inhofe revealed, then Treasury Secretary Hank Paulson told members of Congress the crisis would be “far worse than the great depression” if Congress didn’t authorize the bill to buy out toxic debt, a proposal “which he abandoned the day after he got the money,” added Inhofe, referring to how immediately after it was approved, Paulson announced that the bailout money would not be used to buy up toxic debt but would instead be injected directly into banks like Goldman Sachs, of which he was a former CEO.
Lawmakers were strong-armed into passing the bailout after being threatened that they would be responsible for a financial holocaust, a crisis of unimaginable proportions. Nearly three years later, we’re hearing the same rhetoric.
As former Treasury Secretary Paul Craig Roberts has outlined, the whole debate over raising the debt ceiling is largely a punch and judy puppet show. As top global ratings agencies have confirmed, the U.S. is already technically in default because it has deliberately depreciated the dollar against other currencies as a means of artificially keeping its head above water.
Labeling the whole process “political theater,” Roberts warns that the outcome of the debacle could be Congress losing the power of the purse, which is enshrined in the constitution.
“The consequences would be that the power of the purse would transfer from Congress to the President. It would be the end of the power of Congress. Congress, Republicans and Democrats alike, have already given away to the President Congress’ Constitutional right to decide whether the country goes to war. Now Congress would lose its power over debt, taxes, and the budget itself,” writes Roberts.
Given the fact that lawmakers like Republican Senator Mitch McConnell have openly advocated the idea of handing such powers over to the President in the name of solving the debt problem, a proposal Senate Majority Leader Harry Reid has said he will seriously consider, many in Washington would see this fallout as a useful way of expanding the power of the executive branch.
Paul Joseph Watson is the editor and writer for Prison Planet.com. He is the author of Order Out Of Chaos. Watson is also a regular fill-in host for The Alex Jones Show.