America now over $14 trillion in debt

For the first time ever, the US national debt has topped $14 trillion, officially passing the threshold on the last day of 2010.

In a mere seven moths the debt jumped from $13 trillion to $14 trillion, which means the debt is approaching the ceiling of $14.294 trillion set by Congress and President Barack Obama this past February.

This means the US will either have to raise the ceiling, make sever spending cuts and/or default on its financial obligations. Over the past three years that ceiling has been raised six times.

Economist Michael Hudson said the debt is really a non-issue; the US does not truly have a debt problem since the Federal Reserve prints money to cover the debt, as opposed to barrowing the funds.

He argued the crisis is hype, and that the real issues at hand are not being discussed.

The Government doesn’t really barrow, it creates money,” argued Hudson. “The whole issue about whether the United States has a debt problem is largely fictitious.”

Whether Congress raises the debt ceiling is really not important. The more important political decision about what the Republicans and possibly Obama would like to do.

Cure the budget by abolishing the regulatory agencies, emptying out the FBI, stopping the Securities and Exchange Commission from regulation, firing all the central bank regulators, and essentially letting the financial criminals have a free way,” he said. “I don’t think that’s really going to happen, but the ideal is to dismember the regulatory system and essentially turn the united states into a Kleptocracy where anything goes.”

Hudson argued the government, via the Republicans, pretends there is a crisis to convince people it is necessary to abolish the system.

To the contrary, White House economic adviser Austan Goolsbee has warned it would be "catastrophic" if the US fails to raise the debt ceiling and defaults on its debts, referring to the issue as one of highest importance.

It would be like stepping on a piece of gum and having to get it off your shoe,” argued Hudson. “It would be a zero problem. People who talk like that are trying to frighten you and when a politician tries to frighten you, you can think of, what is it he wants me to do? How am I being manipulated? This is pure ignorance.