With the U.S. Economy at the Brink, It's Time for Some Alternative Banking

On politics, taxes, and and the looming U.S. default.

obama and boehner.jpg

With the U.S. Economy at the Brink, It's Time for Some Alternative Banking
The ties may be off, but the mood is less than relaxed. (Photo: Yuri Gripas/Reuters)

Exciting isn’t it? Like watching two desperados fighting for control of a stagecoach as it plunges toward a cliff edge. Or a federal agent and a Nazi terrorist struggling for supremacy on a tailspinning jumbo jet as it plummets toward the ground. Or a young captain and a crazed pirate slugging it out, mano e mano, on the bridge of a burning starship as it hurtles toward the sun. Yeah. That’s what all this debt business is all about. Drama.

In short, if the American government is not able to raise its (self-imposed) borrowing limit this August, it will default.

OMG!!!!!! Default???!?!?!?!?!!?!? Nooooooooo!!!!

Yes.

America is $14.3 trillion in debt. In actual noughts, that is $14,300,000,000,000. It’s a sum that makes you want to throw your head back and do that manic, exaggerated laugh beloved of lunatics everywhere. It is a wholly, completely and ridiculously incomprehensible figure. It’s a number designed to make you run through the streets, grabbing strangers by the lapels, screaming “we’ve got to do something!” as they stare back at you with blank incomprehension.

Our politicians claim to have the answers, but they don’t. They just have a best guess, which is why neither side trusts the other. The squabble between the President of the United States and Republican House Speaker John Boehner is like a couple having a screaming match inside their over-mortgaged house, while the bailiffs wait on the porch with baseball bats.

The Democrats want to reign in spending and raise taxes. The Republicans want to reign in spending too, but do it harder, and keep taxes as they are. It’s the endless war of ideological disagreement between America’s two main political parties.

We are being encouraged to take note this time, because the drama, the handbags, the grandstanding, is connected to an Event Horizon. The August debt-repayment deadline. The omnipotent force of global finance is being brought to bear on Uncle Sam. And he is broke.

This episode has laid bare the power-shift in global politics. A nation in debt is not in control of its own destiny. We are in the process of watching the President of the United States, the most powerful man in the world, commander in chief of the biggest economy in the world, kowtowing to the markets.

This might be okay if bankers, credit ratings agencies and financial traders were a benign counterbalance to political ideologies. But they’re not. They’re the reason we’re in this mess.

Since the great crash of 2008, the money men have been looking out for themselves, bullying western economies into rapid debt-reduction programs  and ruthlessly downgrading those who don’t. Contrast this with the banks’ post-crash lack of support for the private sector. They are raking in the cash on the back of low interest rates whilst refusing to offer the loans that businesses need to grow.

It's not just Uncle Sam who's broke, it's the whole system. This is where you come in.

If we all thought a bit more about the way we save, spend and invest, an alternative financial system could at least challenge the status quo. Individuals, companies, even governments could put their money into banks and bonds that eschew the “survival of the fittest” mantra, and recognize a wider social responsibility.

Demanding a proper ethical framework to the global financial system has a much better chance of working if people put their money where their mouths are.

Nowadays there are organizations that can help you make decisions that aren't just good for your pensions and investments, but kinda help everybody out.

The more capital that flows into ethical financial products, away from the existing system, the louder it will talk, and the bigger chance we've got of sticking it to the Man.

Y'see, even if President Obama and his political opponents can agree to a deal over the borrowing limit before next week, the markets might decide to downgrade America’s credit-rating anyway.

The idea that the almighty dollar could become a risky prospect for the global markets would make your house, your car, your food, your life, painfully expensive. And what have you done to deserve that?

So enjoy the drama, but remember, even if someone does manage to get control of the stagecoach, it might be too late to stop it from plunging down the ravine. Time to grab the reins.


'The Grit' is a TakePart series that presents global news, pulverized. The author is a British journalist who has been writing about world events for more than a decade, and still thinks there is a future for the human race.