Hedging the Debt Ceiling

The politicians are willing to have a “showdown” over raising the debt ceiling but not much discussion on where all this debt is coming from, other than the policies of this president. There’s a lot more to it than that, but making a simplistic answer it’s more easily acceptable to the public.

Wall Street has failed the country. In June 2011 the AP reported that “JP-Morgan Chase & Co. agreed to pay $153.6 million to settle fraud charges that it misled buyers of complex mortgage investments just as the housing market was collapsing.” And “J.P. Morgan Securities a division of the powerful Wall Street bank, failed to tell investors that a hedge fund helped select the investment portfolio all the while knowing and betting that the portfolio would fail.”

In July 2010 The Securities and Exchange Commission has

reached a $550 million settlement with Goldman Sachs in its case accusing the company of misleading investors in mortgage-backed securities, the agency said in a statement ."

The role of Wall Street is to channel investment money into activities which create jobs. Instead two of the biggest banks pay millions for rigging the system while funneling billions into their pockets. In 2010 Wall Street bankers took in $20.8 billion in bonuses.

Where’s the showdown over this failure of Wall Street? There isn’t one, and despite this gargantuan failure, the Republicans refuse to raise taxes on these same hedge fund managers (who pay less in taxes than the working stiff).

If the Republicans are so concerned over government spending then why don’t they increase the income by taxing these hedge fund billionaires who set people up to fail then bet they would fail? And why aren’t the banksters doing jail time for what they’ve done?

According to book “Thirteen Bankers” by Simon Johnson banks today have more power over President Obama than he has over them. And if they have more power than this president, they’ll have even more power over the next president. Just blaming Obama isn’t going to reduce their strangle hold over the economy.

Then, to add insult to injury, Standard & Poor’s said if the debt ceiling wasn’t raised and the US government only paid the interest on it’s debt, then this would result in a lowered credit rating. Well some of the “investments” picked by hedge funds were made up of interest only mortgage loans. And these same credit ratings agencies were paid to lie about these risky securities, and gave them triple ‘A’ ratings, which investors bought in droves due to the high credit rating.

And now they’re going to lower our credit rating after they helped spark the economic tsunami engulfing the world? What an affront. They should be facing jail time not giving out credit ratings. The reality of the situation is that Wall Street and the bankers are rewarded for letting the country down and transferring responsibility to the citizens through bail outs and blame for the housing crisis. All which has been achieved through decades of bipartisan submission, resulting in monstrous gains for the few and massive suffering for the many.