Claims by the main stream media, and politicians at the Federal level, that raising the government debt limit is necessary to save the economy, is a lie.

We’re being told that people will lose jobs.  People ARE losing jobs.  Since the beginning of the year dozens of companies have announced job layoffs.  The latest is British company HSBC, which says it will layoff 25,000 employees around the world, by 2013.  Raising the U.S. government debt limit will not stop that.

By raising the debt limit, the U.S. Treasury can issue more bonds (which means taking on more loans/debt).  The Treasury can then loan that money at ridiculously cheap rates to U.S. corporations.  Those corporations are not using that money to hire more people, they’re using it to pay their own debts!

We’re also being told that without a debt limit increase interest rates on our loans will go up.  So what!  Many of us little people lost our credit back in 2007/2008!  Many of us little people that still have credit saw our rates skyrocket already!  What our leaders really mean is that U.S. corporations, and the government, will finally have to pay higher rates on their loans!

The latest reports are that the debt limit increase will come with the slashing of $2.1 trillion in government spending.  That can only happen with thousands of government employee layoffs!  So how does raising the debt limit prevent job layoffs?

A debt limit increase will not stop cuts to government programs!  We’ve already seen huge cuts to social programs, and we’re going to see more cuts to government services, because you can’t cut $2.1 trillion in spending without drastically cutting funding for programs!

And don’t think you’re not going to be paying more taxes.  It’s the only way the government can pay down its increasing debt.  But our leaders are ignorant of the fact that as more people lose their jobs, that’s less people that can pay the higher taxes!

The bottom line is that a debt increase will not save the economy.  We are seeing people continue to lose jobs, and it’s clear that people will continue to lose jobs even with a debt limit increase.  There can be no economic recovery with such huge and continuing job loses!   We’re just picking up speed in our economic downward spiral.