THIS COUNTRY DEFAULTED LONG AGO

60 comments

Posted on 31st July 2011 by Administrator in Economy |Politics |Social Issues

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“There is no means of avoiding a final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion or later as a final and total catastrophe of the currency system involved.”Ludwig von Mises

The final collapse of our credit expansion boom approaches. We have a choice over the next week. We could voluntarily abandon further credit expansion by voting for a Balanced Budget Amendment to the Constitution or we can raise the debt ceiling, pretend to cut spending far in the future, and allow our currency system to experience a catastrophic final collapse.

We’ll take what’s behind door #2 Johnny. The vested interests in Washington DC and Wall Street only care about power and wealth. They will never abandon credit expansion. It’s their drug. They must have it. They are addicted to it. They will keep injecting it into our system until they overdose America.

The mainstream media acts as if not raising the debt ceiling by next Tuesday will result in America defaulting. This is a crock. America chose to proceed on a path to default decades ago. We are just finally reaching our destination. Below are the choices we made as a people and a country to default on our obligations and eventually destroy our country:

  • The enactment of the 16th Amendment to the Constitution in 1913 allowing the government to impose a tax on your income, thereby opening Pandora’s Box to a 60,000 page tax code and allowing politicians to sell their votes to the highest bidder.
  • The signing into law of the Federal Reserve Act by Woodrow Wilson in 1913, transferring control of our currency system to Wall Street banks. The man made inflation created by the Federal Reserve has reduced the purchasing power of the USD by 97% since 1913 and has allowed politicians to promise $100 trillion of benefits to Americans, that can never be delivered.
  • The Social Security Act signed into law by Franklin Delano Roosevelt in 1935, supposedly to help widows and orphans, morphed into a giant ponzi scheme used by politicians to make Americans think it was a retirement plan and the money was in a lockbox. The scam continues, but ponzi schemes always collapse.
  • Fannie Mae was created in 1938 as a government agency and Freddie Mac was created in 1970 as a quasi-government agency. By promoting home ownership and subsidizing loans to people who should have never gotten loans these agencies caused hundreds of billions in mal-investment. As tools of politicians, they were used to push social agendas. The result will be in excess of $300 billion in losses to the American taxpayer.
  • The Korean War set a precedent where the President did not need to seek Congress to declare war as required under the Constitution. This has allowed the President the freedom to fight undeclared wars around the world for decades, while spending trillions, with no approval from Congress.
  • LBJ’s Great Society programs such as Medicare and Medicaid were sold to Americans as cost saving programs that would improve healthcare for all Americans. We now spend 17% of our GDP on healthcare and these two programs have an unfunded liability of almost $100 trillion.

  • Nixon closing the gold window in 1971 removed all restraint on the Federal Reserve, banks and politicians. With a fiat currency backed by nothing but promises, it was only a matter of time before the greed and corruption of bankers and politicians overcame any self imposed fiscal responsibility. The result has been the National Debt going from $400 billion in 1971 to $14.4 trillion today, a 3,600% increase in 40 years. Meanwhile, GDP only increased 1,350% over this same time frame.
  • The embrace of consumer debt by the Baby Boom generation beginning in 1980 created an atmosphere of living for today and not worrying about the future. This attitude has left 50% of all the households in the country with a net worth of $70,000 or below.
  • The repeal of the Glass Steagall Act in 1999 unleashed the hounds of hell upon America, as the soulless blood sucking vampires on Wall Street proceeded to rape and pillage the American economy with their financial derivatives of mass destruction and marketing of debt to the clueless masses. The housing bust and impoverishment of the middle class can be laid at the feet of these evil greedy bastards.
  • Bush’s unpaid for wars of choice, his reckless tax cuts, and his foolish expansion of a bankrupt Medicare program in the midst of two wars turbo charged the country on its path to default.
  • By bailing out Wall Street on the backs of the middle class in 2008/2009, the politicians in this country showed their hand. They will protect their fellow power brokers and contributors and throw the American people under the bus. Wall Street controls Congress.
  • The Keynesian schemes rolled out by Obama and his minions have just added trillions of debt while depressing the economic system and doing nothing to help the average person. The Fed created inflation has inflamed revolution through out the world and further impoverished the middle class who need to eat and fill up their cars.
  • In the midst of a Depression Obama chose to create a brand new healthcare bureaucracy, add 30 million people into the government controlled system, and commit the US taxpayer to trillions of future healthcare costs.

As you can see, next Tuesday means nothing. The debt ceiling means nothing. We chose to default as a nation many years ago. The destination was certain, only the timing was in question. Time to step on the gas.

“Credit expansion is not a nostrum to make people happy. The boom it engenders must inevitably lead to a debacle and unhappiness.”Ludwig von Mises

60 Comments
  1. Kill Bill says:

    TEOTWAWOI

    Well-loved. Like or Dislike: Thumb up 8 Thumb down 0

    31st July 2011 at 10:48 am

  2. Kill Bill says:

    ….by voting for a Balanced Budget Amendment to the Constitution…

    Jeebus on a crutch, the tihtute singers and dancers of new-edo [DC] would see the constitution become 12,000 pages.

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    31st July 2011 at 10:53 am

  3. bluestem says:

    Jim, I always love that picture of the car. John

    Like or Dislike: Thumb up 5 Thumb down 1

    31st July 2011 at 11:03 am

  4. Sparrowhawk says:

    The phoenix must crash and burn to rise from the ashes. I hope that the US will eventually do so.

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    31st July 2011 at 11:18 am

  5. Welshman says:

    Can you imagine what the first term Tea Baggers are going through. I’ll bet some will cave.

    Hot debate. What do you think? Thumb up 10 Thumb down 20

    31st July 2011 at 11:34 am

  6. Wyoming Mike says:

    Great piece Jim! I’ll be taking your article to work today to share.

    Well-loved. Like or Dislike: Thumb up 14 Thumb down 0

    31st July 2011 at 11:40 am

  7. Administrator says:

    “At some point in the possibly near future, perhaps in the next recession and the next spate of bad bank loans, it might dawn upon the public that 1.5 percent is not very safe either, and that no such level can guard against the irresistible holocaust of the bank run. At that point, ignoring the usual mendacious assurances and soothing-syrup of the Establishment, the commercial banks might be plunged into their ultimate crisis. The United States authorities would then be faced with two stark choices. One would be to allow the entire banking system to collapse, along with virtually all the deposits and depositors in that system. Since, given the mind-set of American politicians, and their evident philosophy of “too big to fail,” it is certain that they would be forced to embrace the second alternative: massive, hyper-inflationary printing of enough cash to pay off all the bank liabilities. The redeposit of such cash in the banking system would bring about an immediate runaway inflation and a massive flight from the dollar.”

    Murray Rothbard – 1991

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    31st July 2011 at 11:46 am

  8. Wyoming Mike says:

    Welshman, We real Americans are offended by that remark. Please make it to some of my fellow Americans in person, not gutlessly on an internet blog. Chickenshit.

    Hot debate. What do you think? Thumb up 14 Thumb down 16

    31st July 2011 at 11:48 am

  9. Colma Rising says:

    Welshman: You know it. They will cave. S soon as the administration selectively and strategically choose not to send entitlements to the fsa, the hordes will terrify them…

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    31st July 2011 at 11:50 am

  10. Boooomer says:

    Hidden due to low comment rating. Click here to see.

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    31st July 2011 at 12:07 pm

  11. Chuck says:

    Huh?
    A Balanced Budget Amendment to the Constitution? Remember the Gramm-Rudman-Hollings Balanced Budget and Emergency Deficit Control Act of 1985? Long forgotten and ignored, this federal “law” outlawed deficit spending by “CON”gress. How did that joke work out?
    Now, some of these same self serving bastards want a Constitutional Amendment to outlaw deficit spending? And some gullible Americans believe them! Get a grip.

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    31st July 2011 at 12:08 pm

  12. THIS COUNTRY DEFAULTED LONG AGO | The Matrix Sentry says:

    [...] http://www.theburningplatform.com/?p=19304 [...]

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    31st July 2011 at 12:18 pm

  13. Administrator says:

    Booomer

    It appears, like most Boomers, you didn’t pay attention in English class. If you were capable of writing a complete sentence that we could understand, you might convince someone you weren’t a fucking retard. I think we’ve reached PEAK DUMBASS, and it is you.

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    31st July 2011 at 12:28 pm

  14. AwholeDr says:

    Booooomer:

    Your generation is the most obese in the history of the world, ate every bit of consumer credit thrown at them, invented living beyond your means, invented obese houses and cars for your obese bodies, and now, having destroyed your health and the wealth of this country, are sliding into retirement without any savings. You had better hope Gen X (or whatever fukking “gen” you are) continues to pay into the SS/Medicare ponzi scheme, or you and all your fat ass friends are going to be living in a tent with all the other people your generation fucked in the ass. Your generation is Shiva, the destroyer of worlds…

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    31st July 2011 at 12:36 pm

  15. Colma Rising says:

    BBES

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    31st July 2011 at 12:42 pm

  16. The dollar has no intrinsic value III « The Righteous Investor says:

    [...] “There is no means of avoiding a final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion or later as a final and total catastrophe of the currency system involved.” – Ludwig von Mises (hat tip Jim Quinn) [...]

    Like or Dislike: Thumb up 3 Thumb down 0

    31st July 2011 at 12:46 pm

  17. S.Quade says:

    Sooner please. What can be do to speed the process?!

    Well-loved. Like or Dislike: Thumb up 6 Thumb down 0

    31st July 2011 at 12:51 pm

  18. Send me my SS check says:

    I want to take this opportunity to thank all you disgruntled little boys and girls of the Gen Kids generations that will be struggling for years to pay my SS and Medicare bills, especially considering
    you won’t get squat when you reach the new retirement age of 80 or 90. You’re screwed kiddies.
    Have fun bagging groceries when you’re 75.

    Hot debate. What do you think? Thumb up 10 Thumb down 9

    31st July 2011 at 12:59 pm

  19. S.Quade says:

    16 years between fiat currency and 1929 stock market crash.
    A mere 12 years between repeal of Glass-Steagall and now, with economic collapse and default looming.
    At least the time is getting shorter between collapses.

    Is there ever a “final” final collapse. What happens then?

    Well-loved. Like or Dislike: Thumb up 13 Thumb down 0

    31st July 2011 at 1:00 pm

  20. AwholeDr says:

    Boooomer/Send me my SS check:

    Oops, SS went bankrupt, as did Medicare. Oh, too bad. Maybe we can start a collection to buy and send you a case of pet food and a cardboard box, ya fat fuck, you can live off your blubber for two years.

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    31st July 2011 at 1:06 pm

  21. Kill Bill says:

    Since, given the mind-set of American politicians, and their evident philosophy of “too big to fail,” -JQ

    Capital is required to absorb losses. The titutes in DC seem to think that capitalism means making an indebted public bare the losses to save the ‘too big to fail” lack of capital [over-leveraging]

    Like or Dislike: Thumb up 4 Thumb down 0

    31st July 2011 at 1:06 pm

  22. Kill Bill says:

    Good point Chuck.

    Like or Dislike: Thumb up 0 Thumb down 1

    31st July 2011 at 1:08 pm

  23. Sparrowhawk says:

    Of course, I meant that I hope the US does rise from the smoking heap. I think the eventual crash and burn is a given.

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    31st July 2011 at 1:16 pm

  24. IvantheTerrible says:

    Hidden due to low comment rating. Click here to see.

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    31st July 2011 at 1:46 pm

  25. Administrator says:

    Go fuck yourself Ivan the Fuckwad.

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    31st July 2011 at 1:47 pm

  26. Administrator says:

    Don’t you love when Trolls like IvantheFuckwad feel the need to write a meaningless sentence and then crawl back into their hole. Nothing useful. No facts to dispute my article. Nothing. Nada. It is pieces of shit like Ivan that have allowed the country to get into this mess.

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    31st July 2011 at 1:50 pm

  27. Colma Rising says:

    Ivanthenardskin:

    Please… just shut the fuck up!

    It never sank into your prozac-pickled brain that we’re fucking broke did it?

    Well-loved. Like or Dislike: Thumb up 11 Thumb down 2

    31st July 2011 at 1:56 pm

  28. AwholeDr says:

    Ivan theTerrible didn’t crawl back into his cave. They only let the patients at the state-run psych. hospital use the internet for 5 mins. per day. Then he crawled back into his padded cell.

    Like or Dislike: Thumb up 3 Thumb down 1

    31st July 2011 at 2:27 pm

  29. Administrator says:

    The Road to a Downgrade
    A short history of the entitlement state.

    Even without a debt default, it looks increasingly possible that the world’s credit rating agencies will soon downgrade U.S. debt from the AAA standing it has enjoyed for decades.

    A downgrade isn’t catastrophic because global financial markets decide the creditworthiness of U.S. securities, not Moody’s and Standard & Poor’s. The good news is that investors still regard Treasury bonds, which carry the full faith and credit of the U.S. government, as a near zero-risk investment. But a downgrade will raise the cost of credit, especially for states and institutions whose debt is pegged to Treasurys. Above all a downgrade is a symbol of fiscal mismanagement and an omen of worse to come if we continue the same habits.

    President Obama will deserve much of the blame for the spending blowout of his first two years (see the nearby chart). But the origins of this downgrade go back decades, and so this is a good time to review the policies that brought us to this sad chapter and $14.3 trillion of debt.

    With former President Truman at his side, LBJ signs the Medicare bill into law, July 30, 1965.
    FDR began the entitlement era with the New Deal and Social Security, but for decades it remained relatively limited. Spending fell dramatically after the end of World War II and the U.S. debt burden fell rapidly from 100% of GDP. That changed in the mid-1960s with LBJ’s Great Society and the dawn of the health-care state. Medicare and Medicaid were launched in 1965 with fairy tale estimates of future costs.

    Medicare, the program for the elderly, was supposed to cost $12 billion by 1990 but instead spent $110 billion. The costs of Medicaid, the program for the poor, have exploded as politicians like California Democrat Henry Waxman expanded eligibility and coverage. In inflation-adjusted dollars, Medicaid cost $4 billion in 1966, $41 billion in 1986 and $243 billion last year. Rather than bending the cost curve down, the government as third-party payer led to a medical price spiral.

    LBJ launched other welfare programs—public housing, food stamps and many more—that have also grown over time. Last year, the panoply of welfare programs spent about $20,000 for every man, woman and child in poverty, according to Robert Rector of the Heritage Foundation.

    Social Security’s fiscal trouble began in earnest in 1972 with bills that increased benefits immediately by 20%, added an annual cost of living adjustment, and created a benefit escalator requiring payments to rise with wages, not inflation. This and other tweaks by Democrat Wilbur Mills added trillions of dollars to the program’s unfunded liabilities. Believe it or not, these 1972 amendments were added to a debt-ceiling bill.

    None of these benefit expansions were subject to annual budget review and thus they grew by automatic pilot. They are sometimes called “mandatory spending” because Congress is required by law to make payments to those who meet eligibility standards, regardless of other spending needs or tax revenues.

    According to the most recent government data, today some 50.5 million Americans are on Medicaid, 46.5 million are on Medicare, 52 million on Social Security, five million on SSI, 7.5 million on unemployment insurance, and 44.6 million on food stamps and other nutrition programs. Some 24 million get the earned-income tax credit, a cash income supplement.

    By 2010 such payments to individuals were 66% of the federal budget, up from 28% in 1965. (See the second chart.) We now spend $2.1 trillion a year on these redistribution programs, and the 75 million baby boomers are only starting to retire.

    We suspect that in the 1960s as now—with ObamaCare—liberals knew they had created fiscal time-bombs. They simply assumed that taxes would keep rising to pay for it all, as they have in Europe.

    On Monday night Mr. Obama blamed President George W. Bush’s “two wars” for the debt buildup. But national defense spending was 7.4% of GDP and 42.8% of outlays in 1965, and only 4.8% of GDP and 20.1% of federal outlays in 2010. Defense has not caused the debt crisis.

    Many on the left still blame Ronald Reagan, but the debt increase in the 1980s financed a robust economic expansion and victory in the Cold War. Debt held by the public at the end of the Reagan years was much lower as a share of GDP (41% in 1988 and still only 40.3% in 2008) compared to the estimated 72% in fiscal 2011. That Cold War victory made possible the peace dividend that allowed Bill Clinton to balance the budget in the 1990s by cutting defense spending to 3% of GDP from nearly 6% in 1988.

    Mr. Bush and Republicans did prove after 9/11 that the Washington urge to spend and borrow is bipartisan. Republicans launched a Medicare drug benefit, record outlays on education, the most expensive transportation bill in history, and home ownership aid that contributed to the housing bubble. The GOP’s blunder was refusing to cut domestic spending to finance the war on terrorism. Guns and butter blowouts never last.

    Then came Mr. Obama, arguably the most spendthrift president in history. He inherited a recession and responded by blowing up the U.S. balance sheet. Spending as a share of GDP in the last three years is higher than at any time since 1946. In three years the debt has increased by more than $4 trillion thanks to stimulus, cash for clunkers, mortgage modification programs, 99 weeks of jobless benefits, record expansions in Medicaid, and more.

    The forecast is for $8 trillion to $10 trillion more in red ink through 2021. Mr. Obama hinted in a press conference earlier this month that if it weren’t for Republicans, he’d want another stimulus. Scary thought: None of this includes the ObamaCare entitlement that will place 30 million more Americans on government health rolls.

    This is the road to fiscal perdition. The looming debt downgrade only confirms what everyone knows: Congress has made so many promises to so many Americans that there is no conceivable way those promises can be kept. Tax rates might have to rise to 60%, 70%, even 80% to raise the revenues to finance these promises, but that would be economically ruinous.

    Yet Mr. Obama and most Democrats still oppose any serious reform of Medicare, Medicaid and Social Security. This insistence on no reform reinforces the notion that our entitlement state is too big to afford but also too big to change politically. This is how a AAA country becomes AA, the first step on the march to Greece.

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    31st July 2011 at 2:32 pm

  30. Administrator says:

    PICTURE OF IMMINENT COLLAPSE:

    ED-AN973_1downg_G_20110727155102.jpg

    ED-AN975_1downg_G_20110727155108.jpg

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    31st July 2011 at 2:34 pm

  31. Kill Bill says:

    The media would have me believe that chart is an EKG and those peaks and valleys are the signs of recovery.

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    31st July 2011 at 2:37 pm

  32. howard in nyc says:

    offended by a prediction that some politicians will cave in?

    damn, wyoming. you’re pretty easy to offend. unless you think there is something special or sacred about the ‘tea party’ label.

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    31st July 2011 at 2:38 pm

  33. Administrator says:

    howard

    I think he was offended by tea Bagger. That is a Chris “Tingle” Matthews term.

    Like or Dislike: Thumb up 2 Thumb down 1

    31st July 2011 at 2:49 pm

  34. Max says:

    Fiat money, yet another violation of our rights. Add it to the list of gov’t violations of our rights:
    They violate the 1st Amendment by placing protesters in cages, banning books like “America Deceived II” and censoring the internet.
    They violate the 2nd Amendment by confiscating guns.
    They violate the 4th and 5th Amendment by molesting airline passengers.
    They violate the entire Constitution by starting undeclared wars for foreign countries.
    Impeach Obama, vote for Ron Paul.
    (Last link of Banned Book):
    http://www.iuniverse.com/Bookstore/BookDetail.aspx?BookId=SKU-000190526

    Like or Dislike: Thumb up 2 Thumb down 0

    31st July 2011 at 2:53 pm

  35. howard in nyc says:

    admin~

    this is a very nice, concise summary of the major events/decisions/mistakes that are now coming due.

    i’m reposting this one. it should at the very least provoke thought in anyone who cares to think. even the most ardent ideologue who has not completely abandoned thinking.

    Like or Dislike: Thumb up 4 Thumb down 0

    31st July 2011 at 2:54 pm

  36. howard in nyc says:

    oh, lord.

    hope he isn’t a santorum man.

    Like or Dislike: Thumb up 4 Thumb down 1

    31st July 2011 at 2:57 pm

  37. netvet says:

    It’s very disturbing for me as a disabled Viet Vet who spent 2 tours in war and who has become disabled because of it, that these people in DC would even consider cutting my VA disability pension…for those of us who gave so much ( some everything) for this country and now to be betrayed for our sacrifices for some ridiculous political leanings are the great treasons in our country’s history… you don’t screw the very patriots who made these sacrifices for America….

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    31st July 2011 at 3:04 pm

  38. Administrator says:

    netvet

    You are the people that the social net is supposed to help. Your benefits should not be cut. The ethanol subsidies and thousands of other corporate loopholes should be cut and our troops brought home from the Middle East to cut our expenditures. Thanks for your service.

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    31st July 2011 at 3:12 pm

  39. Administrator says:

    howard

    Mike in Wyoming is 1000% for Ron Paul.

    Like or Dislike: Thumb up 1 Thumb down 1

    31st July 2011 at 3:13 pm

  40. Administrator says:

    I WONDER WHAT HAPPENED IN 1913 TO MAKE THIS CHART GO PARABOLIC? ANY GUESSES?

    outlays-GDP.png

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    31st July 2011 at 3:14 pm

  41. Kill Bill says:

    I WONDER WHAT HAPPENED IN 1913 TO MAKE THIS CHART GO PARABOLIC? ANY GUESSES?

    I guess it was when a bank that puts no limits on how much it will loan the government was signed into law by the spendthrifty barrators themselves.

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    31st July 2011 at 5:15 pm

  42. THIS COUNTRY DEFAULTED LONG AGO · Bizarre – Oddities says:

    [...] Continued here: THIS COUNTRY DEFAULTED LONG AGO [...]

    Like or Dislike: Thumb up 0 Thumb down 0

    31st July 2011 at 7:28 pm

  43. Economy | The Aussie Digger : Home of all Australian Veterans ex Service and Serving members says:

    [...] THIS COUNTRY DEFAULTED LONG AGO [...]

    Like or Dislike: Thumb up 0 Thumb down 0

    31st July 2011 at 8:05 pm

  44. Viet Vet-70 says:

    Net Vet:
    One tour here, that was enough and welcome home brother; here is to not messing with your bennies nor any vets bennies.
    Peace

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    31st July 2011 at 8:12 pm

  45. StokeyBob says:

    When I started looking into where the money was coming from to buy off the politicians and subvert the immigration laws of the world, I came across what may be the root of many of our problems. Fiat Money.

    No matter how much real money people can put together to build their countries the way they want there are those that can print up what ever it takes to get their way.

    Supersingle500X.jpg

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    31st July 2011 at 10:19 pm

  46. Opinionated Bloviator says:

    I’l take door 3 Print and Spend to infinity and beyond…

    Economic Collapse – Yes we can…

    Like or Dislike: Thumb up 3 Thumb down 0

    31st July 2011 at 11:19 pm

  47. Fred says:

    The financial problem can be corrected, but it will require sacrifices for years. Unfortunately, every American prefers to keep their special spending in tact. Too many publications keep blaming Social Security for the problems, when it is not the real problem. Social Security has a surplus of 2.6 trillion dollars, but the US Government has spent it over the last 30 years. The Trust Fund is holding 2.6 trillion in US Treasury bonds, which of course cannot be sold on the open market. As it relates to Social Security, this trust fund needs to be broken off from the Federal Budget like it was before President Johnson made it part of the overall budget. The Social Security Trust Fund should have a Board O Directors, consisting of nine people, three from labor, three from corporations,and three from the government, who will be responsible for managing the trust fund for the benefit of the members.

    So what’s the real problem with the Federal Budget. Well its the 36.3% of all tax filers who do not pay one dime in Federal Income Taxes. It is the corporations that pay little or no corporate income taxes because of various tax credits like individuals. It is the earned income tax credit that give away 77 billion dollars of free money every year to millions of families earning less than $45,000 a year who do work. It is the $1,000 per child tax credit that miilions of families used to get back free money in addition to the Earned Income tax credit. I could go on and on in this area.

    Now on the spending side, there are thousands of spending items that should be repealed to save money. There is the 20 billion dollars spent every year for farm subsidies that is not necessary. There is the 57 billion dollars spent by the State Department for foreign economic and military aid to other countries. There is the military budget with its billions of dollars wasted every year, plus the extra 135 billion dollars spent every year to fight the war in Iraq and Afghanistan. There is the billions of dollars in grants that universities apply for to do all sort of studies. Most of which is of no value, like a study to find out why people make more right hand turns, than left hands turn in a car. Then there is the 20 billion dollars spent every year under the SSI program to provide a pension to many old people who were brought here from other countries as refugees or their children brought them here after they became US citizens. I could go on and on, but I think there is plenty of room to cut or terminate many of these programs and bring the Federal Budget into balance.

    Now you understand why we are in a financial mess. No one wants to pay taxes, but none want to have their favorite spending programs either cut or terminated. That is the way it is right now.
    Either everyone is ready to make sacrifices or just let the United States go down the tube.

    Have a nice day.

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    31st July 2011 at 1:45 am

  48. Novista says:

    Fred

    Social Security is not the real problem — just one of many. We already have Fannie and Freddie ‘off the books’ and creative accounting doesn’t cut the mustard. Ask Lehman Bros.

    As the federal government is de facto bankrupt, what good is a $2.6T IOU?

    In any case, the Supreme Court decided in Flemming v. Nestor (1960), that “entitlement to Social Security benefits is not a contractual right”.

    You’re right that a lot of unproductive cuts could be made. Or suggested, every congresscritter would have some vested interest in seeing them not happen. Once a country starts down the road of special interests, entitlements, and subsidies, it’s one way — downhill until the crash.

    Like or Dislike: Thumb up 4 Thumb down 0

    31st July 2011 at 9:58 am

  49. GHung says:

    Not mentioned, but certainly part of the mix, is the issue of ongoing depletion finite resources, (you know,, the ones that economic growth is utterly dependent upon), not to mention massively increasing global competition for said declining resources. The US is pretty well screwed, as our entire system is based on high levels of consumption of these things. It’s likely the real reason we’re in Afganistan, “where empires go to die”. We just haven’t figured that part out either.

    See you at the bottom…..

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    31st July 2011 at 11:59 am

  50. rjs says:

    debt for the US treasury is an asset for someone else….treasuries bills & notes are just like money… if the treasury would suddenly stop borrowing, the world would find itself with a dearth of safe assets; without government bonds to invest in, where else could the social security trust fund or state and local pension funds park their savings that would be safe? real estate? the stock market?

    similarly, those nations that run a trade surplus with us accept treasury notes and bonds as a safe store of value; that’s the function of the dollar as a reserve currency…thus short term US government debt has become, at least in part, the worlds money supply; a million dollar Treasury bill is used as money by a sovereign wealth fund in the same sense that you use a ten dollar bill in your wallet…thus, a contraction of the supply of the reserve currency (our treasury debt) would have a negative impact on the world economy in the same manner that a contraction in the domestic money supply would impact our nation’s economy…

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    31st July 2011 at 12:02 pm

  51. FlatCat says:

    Good article Jim,
    This country has been run by fools and liars. They have hidden the true cost of government services under a mountain of cheap financing. They exported our jobs to China, and used the trade surplus to finance ever expanding government. Americans never would have accepted the necessary tax rates to pay for it all. As the nation’s economy sagged, they borrowed more money to “help” us! This became a self feeding circle.
    Pay day is coming….along with a police state.

    Well-loved. Like or Dislike: Thumb up 6 Thumb down 0

    31st July 2011 at 6:23 pm

  52. Contractor says:

    I have only givin to this gov NEVER took anything from those crooks. The debt belongs to those who have taken. TAKE CARE OF YOURSELF OR BE ON THE HOOK!

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    31st July 2011 at 10:03 pm

  53. Fred says:

    Novista:

    You are right regarding the Supreme Court decision. I suggested to my Senator the following to keep Social Security solvent for me, you, and future generations:

    1. Raise the minimum age to collect Social Security from 62 to 63.
    2. Raise the maximum for full pension benefit from 67 depending on when you are born to 68, regardless of when you are born.
    3. Keep Medicare benefits starting at 65. Increase the cost for Part B to $110 from $96 now.
    4. Cost of living could be the CPI or 2% whichever is less.
    5. Increase the Social Security tax from 7.65% to 8% with the increase allocated to Medicare.
    6. Put the Senate and House of Representative on the same Social Security plan as the rest of us. No special pension and retiree medical plan for them.
    7. Add addtional people to investigate Medicare fraud which is costing billions of dollars every year. Increase the penalty for fraud to a mimimum of 15 years without parole.

    These are the sacrifices that Seniors would have to make to help balance the budget.

    I did not receive a reply. I guess item number six was to much for them.

    As for the 2.6 trillion you mention that is owed to Social Security, they probably will not be able to pay back all of it. A possible compromise would be to cancel one trillion dollars of that debt, but issue new bonds for the other 1.6 trillion dollars that are marketable. Meaning the bonds could be sold on the open market when the Trust Fund needs to do so. Also, the interest rate should be at least 4.5% for the other 1.6 trillion dollars. The benefit for the government would be an immediate reduction in the national debt from 14.3 trillion to 13.3 trillions dollars.

    Have a nice day.

    Like or Dislike: Thumb up 1 Thumb down 3

    31st July 2011 at 1:08 am

  54. Johnny Rebel says:

    The popular thing to do is blame the Fed for our problems when the facts state otherwise. Over 80% of the devaluation of the dollar has happened since 1972. Does anyone remember what happened in 1972? The removal of gold as a backing of the dollar. The only other big devaluation ocurred in 1933 when all of our gold was confiscated by our presidential hero FDR. These two events caused the 1900 dollar to now be worth 2 cents. We have yet to see the final results of the trillions given away to the banks but there is not much left for them to take. How much of the two cents is left? If they take half and the prices of everything doubles, we are almost there. The Fed did a great job until our congress and senate decided to open the printing presses to warp drive. There is only one way out now and that is to start over, default and use Constitutional money. Little to none of this mess can be directed at the Fed. FDR and Nixon destroyed our dollar and no vote was cast or debate ever held yet this country is alleged to be a republic or now a democracy. Without anger or malice, look at the charts of the dollar from 1800 until 2008. Completely take politics out of the equation and look at two years-1933 and 1972 and the aftermath.

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    31st July 2011 at 6:23 am

  55. flash says:

    Johnny Reb – The Fed did a great job until our congress and senate decided to open the printing presses to warp drive.

    Hmmm…..lets see.

    The Federal Reserve was created in 1913 under the auspices of breaking-up the monied trusts and once and for all stabilizing the monetary system by centralizing the issue and control of debt…er, I meant money.

    Yeah, no more boom and bust cycles …right?

    But , right out of the gate the FED engineered a gigantic easy credit bubble which gave rise to the golden giddy daze of the roaring 20′s right up until 1928 when the FED suddenly shut the happy money spigot off and the hangover formally known as the Great Depression began and lasted until we the US went to to Europe and aided the British Imperialists and the Russian Communist in burning down all the manufacturing centers of Europe leaving the US at the top of the shitpile in the industrial/western world – and for sometime after 1945, up until Nixon and crony capitalism discovered that there former commie enemy ,China had more mouths to feed than they could kill and consequently were willing to do the work of the well paid American factory workers fora few grains of rice a day with no vacation or overtime pay.

    But I digress.

    Now that Act II of the Great Pilfer or if you prefer Great Depression v 2.0 is upon the US and all the Others roud -n-about as well, yet no monetary stability in sight.

    What was the FED’s mission statement again?

    Oh yeah to provide the nation with a safer, more flexible, and more stable monetary and financial system.

    Well how’s that working out fer ya’, Bub.

    Was it the lack of a Gold Standard or the lack of morality that allowed the Federal Reserve to turn the entire global financial system into one all encompassing raging shitstorm that will leave a stain on humanity for generations that even atomic strength ajax won’t remove.

    You’re a little late for the party , but thanks for coming.

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    31st July 2011 at 10:19 am

  56. flash says:

    FYI ,Johnny Reb

    See Graphs here:
    http://theeconomiccollapseblog.com/archives/19-reasons-why-the-federal-reserve-is-at-the-heart-of-our-economic-problems

    19 Reasons Why The Federal Reserve Is At The Heart Of Our Economic Problems

    Most Americans do not understand what the Federal Reserve is or why it is at the heart of our economic problems. When Americans get into discussions about the economy, most of them still blame either the Democrats or the Republicans for inflation, for the housing crash, for our rampant unemployment and for the national debt. But the truth is that the institution with the most power over our economic system is the Federal Reserve. So exactly what is the Federal Reserve? Most people would say that it is an agency of the federal government. But that is absolutely not true. In fact, the Federal Reserve itself has argued in court that it is not an agency of the federal government. Rather, the Federal Reserve is a privately-owned banking cartel that has been given a perpetual monopoly over our monetary system by the U.S. Congress. This privately-owned central bank has been destroying the value of the U.S. dollar for decades, it has run our economy into the ground and it has driven the U.S. government to the brink of bankruptcy. The Federal Reserve operates in great secrecy, it has never been subjected to a comprehensive audit and it is not accountable to the American people. Yet the decisions that the Federal Reserve makes have a dramatic impact on the lives of every single American citizen.

    If you really want to understand what is causing our economic problems, it is absolutely crucial that you understand exactly what the Federal Reserve system is and how it is systematically destroying our economy. Once you understand the truth about the Federal Reserve, you will view economic issues a whole lot differently.

    The following are 19 reasons why the Federal Reserve is at the very heart of our economic problems….

    #1 The Federal Reserve system is a debt-based financial system.

    The way our system is designed, normally no money comes into existence without more debt being created.

    But this creates a huge problem, because when a new dollar is created, the interest owed to the banking system on that dollar is not also created at the same time.

    Therefore, the amount money that is created is not equal to the larger amount of debt that is also created.

    This is a Ponzi scheme that is designed to drain wealth from the American people and transfer it to the banking system.

    Today, the amount of debt in our economic system is far, far, far greater than the total amount of money.

    The only way to keep the game going is to create even more money which creates even more debt.

    #2 The Federal Reserve and the bankers have a monopoly on the creation of this debt-based money.

    In the United States today, the only people that can create money are the bankers.

    You cannot create money.

    You would go to jail if you tried.

    Even the U.S. government cannot create money.

    Although the U.S. Constitution specifically gives Congress the power to create money, the U.S. Congress has given that power to the Federal Reserve and to the banking system.

    This gives them an enormous amount of power.

    So how does money creation actually work?

    Most Americans don’t understand this.

    As I have written about previously, the way our system is designed is that all money is supposed to originally come into existence as government debt….

    When the government wants more money, the U.S. government swaps U.S. Treasury bonds for “Federal Reserve notes”, thus creating more government debt. Usually the money isn’t even printed up – most of the time it is just electronically credited to the government. The Federal Reserve creates these “Federal Reserve notes” out of thin air. These Federal Reserve notes are backed by nothing and have no intrinsic value of their own.

    The Federal Reserve then sells these U.S. Treasury bonds to investors, other nations (such as China) or sometimes they “sell” them back to themselves. In fact, the Federal Reserve has been gobbling up a whole lot of U.S. Treasuries lately. Some refer to this as “monetizing the debt”, but that is not quite an accurate statement.

    When the Federal Reserve creates money this way, it does not also create the money to pay the interest on the debt that has been created. Eventually this puts pressure on the U.S. government to borrow even more money to keep the game going. So what this creates is a spiral where the U.S. government must keep borrowing increasingly larger amounts of money, where the money supply is endlessly expanding and where the value of the U.S. dollar is destined to continue going down forever.

    Once “Federal Reserve Notes” are in circulation, there is another way that money is created.

    It is called “fractional reserve lending”.

    Once you or I deposit money into a bank, the bank is only required to keep a very small amount of it actually in the bank. The rest of it the bank can loan out to others (at interest of course). This process can be repeated over and over and over, creating more money and an even larger amount of debt.

    But the important part to take away from all this is that normally money is only created when debt is created, and the amount of debt to be paid back is always larger than the amount of money created.

    This entire system is designed to drain our wealth and to put it into the hands of the bankers.

    #3 The power of money creation and debt creation is in the hands of private individuals – not the government.

    The Federal Reserve claims that it is an “entity within the government, having both public purposes and private aspects.”

    That sounds so reasonable, but the truth is that the Federal Reserve is a legalized banking cartel that is privately-owned.

    In fact, the Federal Reserve is about as “federal” as Federal Express is.

    In defending itself against a Bloomberg request for information under the Freedom of Information Act, the Federal Reserve objected by declaring that it was “not an agency” of the U.S. government and therefore it was not subject to the Freedom of Information Act. It is kind of funny how Fed officials are always talking about how important their “independence” is, but whenever anyone starts criticizing them for being private they start stressing their ties with the government.

    So who owns the Federal Reserve?

    As the Federal Reserve’s own website describes, it is the member banks that own it….

    The twelve regional Federal Reserve Banks, which were established by Congress as the operating arms of the nation’s central banking system, are organized much like private corporations–possibly leading to some confusion about “ownership.” For example, the Reserve Banks issue shares of stock to member banks. However, owning Reserve Bank stock is quite different from owning stock in a private company. The Reserve Banks are not operated for profit, and ownership of a certain amount of stock is, by law, a condition of membership in the System. The stock may not be sold, traded, or pledged as security for a loan; dividends are, by law, 6 percent per year.

    In particular, as we will see below, the banks of the New York Federal Reserve have the most influence over the system.

    So who owns the member banks?

    Well, when you trace the ownership of the member banks to the very top you find that the international banking elite are very strongly represented.

    #4 The Federal Reserve itself is not much of a profit-making institution. Rather, it is a tool that enables others to make obscene amounts of money.

    There are many that think of the Federal Reserve as an evil profit-making machine. But the truth is that the Fed doesn’t make that much money. Rather, the system was set up so that others could make an obscene amount of money from U.S. government debt.

    Many of those opposed to the Federal Reserve point to the record $80.9 billion in profits that the Federal Reserve made last year as evidence that they are robbing the American people blind. But then those defending the Federal Reserve will point out that the Fed returned $78.4 billion to the U.S. Treasury.

    In the end, those numbers are not nearly as important as the hundreds of billions of dollars in interest that are made off of U.S. government debt each year.

    If the U.S. government had been issuing debt-free money all this time, the U.S. government would likely not be spending one penny on interest payments. Instead, the U.S. government spent over 413 billion dollars on interest on the national debt during fiscal 2010. This is money that belonged to U.S. taxpayers that was transferred to the U.S. government which in turn was transferred to wealthy international bankers and other foreign governments.

    This is where the magic of the Federal Reserve system is. It is in getting the U.S. government enslaved to debt and using that debt to transfer hundreds of billions of dollars of our wealth into the hands of others.

    As interest rates go up, this phenomenon is going to become even more brutal. Right now it is being projected that the U.S. government will be paying 900 billion dollars just in interest on the national debt by the year 2019.

    As you fill out your tax return this year, just keep in mind that vast quantities of our money is going to pay interest on debt that the U.S. government never needed to become enslaved to.

    There are some very happy people out there that are becoming fabulously wealthy at our expense.

    What a system, eh?

    #5 The Federal Reserve is a perpetual debt machine.

    As mentioned above, the U.S. government is enslaved to debt.

    So how did it get enslaved?

    Well, instead of printing up and spending the money that it needs, the U.S. government borrows it through the Federal Reserve system at interest.

    In fact, as noted above, the U.S. government cannot create a single new dollar without borrowing it.

    But each new dollar that the U.S. government borrows creates more than a dollar of new debt.

    As a result, the government eventually has to collect more in taxes than what it has borrowed.

    This phenomenon creates an endless debt spiral.

    And is that not what we have in the United States today? In fact, you see this in almost every nation on earth where a similar central banking system has been established.

    Did you know that the U.S. national debt is more than 5,000 times larger than it was 100 years ago?

    That’s right – back in 1910, prior to the passage of the Federal Reserve Act, the national debt was only about $2.6 billion.

    The only way that the U.S. government can inject more money into the economy is by going into more debt. But when new government debt is created, the amount of money to pay the interest on that debt is not also created. In this way, it was intended by the international bankers that U.S. government debt would expand indefinitely and the U.S. money supply would also expand indefinitely. In the process, the international bankers would become insanely wealthy by lending money to the U.S. government.

    However, things did not have to turn out this way.

    If the Federal Reserve had never been created, and the U.S. government had been issuing debt-free currency all this time, it is entirely conceivable that we would have absolutely no federal government debt at this point.

    Unfortunately, we are now trapped in a debt-based system.

    The U.S. national debt simply cannot ever be paid off. U.S. government debt has been mathematically designed to expand forever. It is a trap from which there is no escape.

    Sadly, we have now gotten to a terminal phase of the debt spiral. The Congressional Budget Office is projecting that U.S. government debt held by the public will reach a staggering 716 percent of GDP by the year 2080. Remember when I used the term “debt spiral” earlier? This is what a debt spiral looks like….

    #6 The Federal Reserve system is designed to cause inflation.

    As U.S. government debt expands at an exponential pace, it inevitably causes inflation.

    Most Americans believe that inflation is a fact of life, but the truth is that the United States has only had a major, ongoing problem with inflation since the Federal Reserve was created back in 1913.

    Sadly, the U.S. dollar has lost well over 95 percent of its value since the Federal Reserve was created.

    If the Federal Reserve did not exist, it is theoretically conceivable that we could have an economy with little to no inflation. Of course that would greatly depend on the discipline of our government officials (which is not very great at this point), but the sad truth is that our current system is always going to produce inflation. In fact, the Federal Reserve system was originally designed to be inflationary. Just check out the inflation chart posted below. The U.S. never had massive problems with inflation before the Fed was created, but now it is just wildly out of control….

    #7 The Federal Reserve has decided to play bizarre games with our money supply.

    In a desperate attempt to revive the dying U.S. economy, the Federal Reserve has resorted to chucking gigantic quantities of cash into the financial system.

    Remember how earlier I explained that normally whenever new money is created that more debt is created?

    Well, lately the Fed has been resorting to a trick called “quantitative easing”. What “quantitative easing” means is that the Federal Reserve zaps massive amounts of money into existence out of thin air and starts spending it on anything that it wants to buy. Lately, this has primarily been done to buy up U.S. government debt.

    But isn’t that “monetizing the debt”?

    Of course it is, and it is a blatant Ponzi scheme.

    However, what is even more alarming is what this is doing to our money supply.

    Just look at what has happened to our monetary base since about mid-2008….

    Does anyone in their right mind believe that this is not going to cause horrible inflation?

    Right now most of the new cash is tied up in the financial system, but once it gets out into the regular economy watch out!

    #8 The Federal Reserve is undemocratic.

    In a previous article, I asked the following question:

    “So what makes the central economic planning that the Federal Reserve does different from the central economic planning that communist China does?”

    In both cases, a bunch of unelected elitists run the economy and make important economic decisions for the rest of us.

    So what really is the difference?

    #9 The Federal Reserve runs the U.S. economy.

    Most Americans want to blame Obama or Bush or the U.S. Congress for the state of the economy.

    But the truth is that it is the Federal Reserve that sets interest rates, it is the Federal Reserve that determines the money supply, it is the Federal Reserve that sets the “target rate” of inflation, it is the Federal Reserve that determines if unemployment is too high or too low and it is the Federal Reserve that watches over all of our banks.

    Yes, Obama, Bush and the U.S. Congress all have things to answer for as well.

    But none of them have the direct power over the economy that the Federal Reserve does.

    #10 The Federal Reserve favors the big banks.

    Not all financial institutions are treated equally by the Fed.

    The truth is that the big banks (particularly those on Wall Street) are treated with great favor by the Federal Reserve.

    If the Federal Reserve did not exist, the big Wall Street banks would not have such an overwhelming advantage. Most Americans simply have no idea that over the last several years the Federal Reserve has been giving gigantic piles of nearly interest-free money to the big Wall Street banks which they turned right around and started lending to the federal government at a much higher rate of return. I don’t know about you, but if I was allowed to do that I could make a whole bunch of money very quickly. In fact, it has come out that the Federal Reserve made over $9 trillion in overnight loans to major banks, large financial institutions and other “friends” during the financial crisis of 2008 and 2009.

    Wouldn’t you like to be able to zap trillions of dollars into existence and loan it out to your friends at very favorable terms?

    Sadly, most of the “help” from the Federal Reserve always seems to go to the big boys.

    When “small enough to fail” banks need assistance, they are usually told to go sell themselves to one of the big banks.

    #11 The worse the debt problems caused by the Federal Reserve become, the more money the IRS needs to collect from the rest of us.

    If the U.S. government could issue debt-free money, it is conceivable that we would not even need the IRS. You doubt this? Well, the truth is that the United States did just fine for well over a hundred years without a national income tax. But about the same time the Federal Reserve was created a national income tax was instituted as well. The whole idea was that the wealth of the American people would be transferred to the U.S. government by force and then transferred into the hands of the ultra-wealthy in the form of interest payments.

    If the Federal Reserve was shut down, it is entirely possible that we would be able to shut down the IRS as well.

    But the only way that the current system works is if massive amounts of wealth continue to be drained from the American people.

    #12 The Federal Reserve creates artificial financial bubbles.

    When you look back over the last several decades, you will find financial bubble after financial bubble.

    So who created all of those bubbles?

    It was the Federal Reserve.

    The ridiculous policies of Greenspan and Bernanke have wrought disaster after disaster and yet most of our politicians still will not even consider major changes to the Federal Reserve.

    #13 The Federal Reserve is anti-free market.

    In a true free market system, the marketplace would determine what interest rates are.

    In a true free market system, the marketplace would determine which financial institutions survive.

    In a true free market system, artificial financial bubbles would be far less likely.

    But we don’t have a true free market system.

    #14 The Federal Reserve tells the rest of the our banks what to do.

    Most Americans don’t understand just how much power the Federal Reserve actually has over our local banks.

    For example, just last year Federal Reserve officials walked into one bank in Oklahoma and demanded that they take down all the Bible verses and all the Christmas buttons that the bank had been displaying.

    #15 The people currently running the Federal Reserve pretty much have no idea what they are doing.

    In case anyone has not noticed, Federal Reserve Chairman Ben Bernanke has a very long track record of incompetence. Nearly every major judgment that he has made since taking over that position has been dead wrong.

    If one of us could go down the street and appoint the manager of the local Dairy Queen as the Chairman of the Federal Reserve, it is very doubtful that person would do a worse job than Bernanke has done.

    #16 Even though the Federal Reserve has such extraordinary power over the financial system, the American people are not permitted to examine their books.

    The Federal Reserve claims that they are regularly audited, but when some members of Congress attempted to push through a true comprehensive audit of the Fed last year Federal Reserve officials threw a hissy fit.

    The truth is that the Federal Reserve has never undergone a true comprehensive audit since it was created back in 1913.

    Whenever the subject of an audit comes up, Bernanke and others at the Fed keep repeating the mantra of how important “the independence of the Federal Reserve” is.

    Sadly, Ron Paul’s proposal to audit the Federal Reserve last year, which had previously been co-sponsored by 320 members of the U.S. House of Representatives, ultimately failed by a vote of 229-198.

    Instead, a very, very limited examination of Fed transactions that occurred during the recent financial crisis was approved.

    So what did that limited examination reveal?

    Well, the Federal Reserve was forced to reveal the details of 21,000 transactions stretching from December 2007 to July 2010 that combined were worth trillions of dollars. It turns out that the Federal Reserve was just handing out gigantic piles of nearly interest-free cash to their friends at the largest banks, financial institutions and corporations all over the globe.

    Many members of Congress were absolutely stunned by these revelations.

    So what would a more comprehensive audit reveal?

    #17 The Federal Reserve has way too much power.

    If the Federal Reserve did not exist, we would not have an unelected, unaccountable “fourth branch of government” running around that has gotten completely and totally out of control. Even some members of Congress are now openly complaining about how much power the Fed has. For example, Ron Paul told MSNBC last year that he believes that the Federal Reserve is now more powerful than Congress…..

    “The regulations should be on the Federal Reserve. We should have transparency of the Federal Reserve. They can create trillions of dollars to bail out their friends, and we don’t even have any transparency of this. They’re more powerful than the Congress.”

    #18 The Federal Reserve is dominated by Wall Street and the New York banks.

    The New York representative is the only permanent member of the Federal Open Market Committee, while other regional banks rotate in 2 and 3 year intervals. The former head of the New York Fed, Timothy Geithner, is now U.S. Treasury Secretary. The truth is that the Federal Reserve Bank of New York has always been the most important of the regional Fed banks by far, and in turn the Federal Reserve Bank of New York has always been dominated by Wall Street and the major New York banks.

    The cold, hard reality of the matter is that the Federal Reserve is just another one of the tools that the Wall Street banking elite use to dominate all the rest of us.

    #19 The Federal Reserve has brought us to the brink of economic collapse.

    If the Federal Reserve had never been created, the American people would not be so enslaved to debt. At the very core of our economic problems is debt. American consumers are swamped with debt, state and local governments are facing horrific debt problems from coast to coast and the federal government has piled up the biggest mountain of debt in the history of the world.

    We are living in an absolutely massive debt bubble, and when it bursts the world is going to experience financial chaos like it has never seen before.

    Things did not have to turn out this way. We did not have to adopt a debt-based financial system. We did not have to allow the bankers to enslave us with debt.

    But that is what happened.

    Sadly, most Americans and the vast majority of our politicians are still clueless about these issues.

    In 1922, Henry Ford wrote the following….

    “The people must be helped to think naturally about money. They must be told what it is, and what makes it money, and what are the possible tricks of the present system which put nations and peoples under control of the few.”

    Hopefully this article will help people understand our debt-based financial system a little bit better.

    Until we fundamentally change our system, many of the economic and financial problems we are currently experiencing will never go away.

    Thankfully, it does appear that some Americans are waking up.

    According to a recent Bloomberg National Poll, the number of Americans that would like to see the Federal Reserve held more accountable or even completely abolished is increasing….

    Asked if the central bank should be more accountable to Congress, left independent or abolished entirely, 39 percent said it should be held more accountable and 16 percent that it should be abolished. Only 37 percent favor the status quo.

    Those are very exciting numbers.

    Hopefully we can awaken many more Americans to the dangers of a debt-based economy.

    In the book of Proverbs, it tells us the following….

    The rich ruleth over the poor, and the borrower is servant to the lender.

    Well, by allowing ourselves to become enslaved to debt, we have become the servants of the international banking system.

    Not only that, we have also sold our children and our grandchildren into perpetual debt slavery.

    Thomas Jefferson tried to warn us about this.

    He believed that when the government borrows money in one generation which must be paid back by future generations it is equivalent to stealing….

    And I sincerely believe, with you, that banking establishments are more dangerous than standing armies; and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale.

    In fact, Thomas Jefferson said that if he could add one more amendment to the U.S. Constitution it would be a ban on all government borrowing….

    I wish it were possible to obtain a single amendment to our Constitution. I would be willing to depend on that alone for the reduction of the administration of our government to the genuine principles of its Constitution; I mean an additional article, taking from the federal government the power of borrowing.

    Where would we be today if we had listened to Thomas Jefferson?

    The amount of government debt that we have racked up is a great evil. We have stolen the future away from our children and our grandchildren. We have put them in a position where they will spend the rest of their lives paying off our debts to the bankers.

    We owe it to future generations to fix the problems that we have created.

    That is why so many of us believe that it is time for the U.S. Congress to shut down the Federal Reserve. Our current financial system is a complete and utter failure and we need to start over.
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    31st July 2011 at 10:25 am

  57. chowthen says:

    His argument went well until the part of Bush’s unpaid war. How could it be unpaid when everytime it’s funded they’re issuing money (either electronically or hard cash)? It would be more believable if he said it’s funded with borrowed money and it’s added to the national debt whether it’s subject to debt limit or not. This BS about unpaid only means if it’s defunded now the war is still ongoing and it will have to be stopped cold turkey. Same is true to all unpaid government programs, they can be defunded and closed down. They just don’t want to do this because as the democrat say’s you’re throwing gandma and granpa off the running train.

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    31st July 2011 at 5:31 pm

  58. chowthen says:

    to netvet,

    The government will pay you according to my understanding of the 14th amendment, section 4 of the constitution which says:

    “The validity of the public debt of the United States, authorized by law, INCLUDING DEBTS INCURRED FOR PAYMENT OF PENSIONS AND BOUNTIES FOR SERVICES IN SUPPRESSING INSURRECTION OR REBELLION, SHALL NOT BE QUESTIONED.”

    I believe this would mean promises to servicemen (although this were meant during the civil war) but it still applies today. My interpretation is much better than the Democommies interpreting it to mean the Prez has the power to raise debt ceiling without the congress.

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    31st July 2011 at 5:53 pm

  59. Administrator says:

    chowthen

    Every dime for Bush’s wars was borrowed from future generations. What is it you don’t get?

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    31st July 2011 at 5:55 pm

  60. Buckhed says:

    Chow…the separation of powers is pretty explicit in the Constitution…..CONgress controls the purse strings and the Pres is the Commander In Chief…..he maybe able to wage war for a while without consent for a bit but CONgress can cut off funding at anytime .

    We defaulted when the Federal Reserve was created, we gave up that which many wished to prevent…the issuance of money by a Central Bank.

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    31st July 2011 at 6:18 pm

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