It would be nice to think the Republican Party has the best motives in refusing to increase the debt ceiling limit. The reasons could include the comments made by leaders, including keeping spending down, fiscal responsibility and a host of important reasons.
The true reason the Republicans, and a number of Democrats, are working to stall the passage of increasing the debt ceiling is self-interest and helping out the same businesses that pushed this country into a major economic depression.
Every day that the debt ceiling debate continues means increases, admittedly small, in the amount of interest paid in the U.S.
Why is interest important? People, but mostly businesses, buy U.S. debt bonds, and the holders earn interest on these bonds. The interest rates have been extremely low, but the rates have been increasing daily as a direct result the delay in passing the new debt ceiling increase.
Interest rates increase as a result of economic uncertainty and the stock market declines due to a lack of confidence -- both linked to the current debt ceiling crisis.
If the U.S. defaults on the debt after the U.S. Congress refuses to increase the debt ceiling, interest rates will increase dramatically.
Just who benefits?
This group held more than $1 trillion, that's correct, trillion, in government bonds. A tiny fraction of interest on a trillion dollars is a fortune a day for these companies. They have more to gain in interest rates than any other action the U.S. Congress could do in the current economic environment.
Investors with money market, mutual funds and closed-ended funds also make major increases in interest profit when the interest rates increase. The number of people holding these investments is relatively small compared to the U.S. population and the group holds over $637.7 billion of the funds. This group is making major money as interest rates increase. They also have every reason to hope the government defaults.
Insurance companies hold $261.8 billion in federal bonds. As with the other bond-holding groups, an increase in interest rates means more profit for this group.
This group holds money for secret investors. Under the laws of the Bahama, British Virgin Islands and the Cayman Islands, the banking is secret for all residents and any other person putting money in the bank in these countries. This group invests an estimated $146.3 billion in U.S. federal debt bonds. They have every reason to want interest rates to increase. Why would the members of the U.S. Congress want to help foreign banks, many have stakes in companies with money in these Caribbean banks. Many also have personal money in the banks.
Even a small increase in the interest rate on federal bonds means millions a day to these groups. Following the money involved in congressional legislation is the easiest way to trace the reason for the legislation -- or the opposition to the legislation.
The U.S. Congress over the past two decades has supported acts to benefit big business and this current debt ceiling problem is simply an example of the representatives protecting interests providing capital to pay for their reelection, and in many cases, line their own Republican (and many Democratic) pockets.
The current delay is lining the pockets of big business, Wall Street banks and the insurance industry.
select one here...