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First of all, politicians need to understand that without real change default is inevitable. In fact, default happens every day through monetary policy tricks.
Every time the Federal Reserve engages in more quantitative easing and devalues the dollar, it is defaulting on the American people by eroding their purchasing power and inflating their savings away.
The dollar has lost nearly 50% of its value against gold since 2008. The Fed claims inflation is 2% or less over the past few years; however economists who compile alternate data show a 9% inflation rate if calculated more traditionally. Alarmingly, the administration is talking about changing the methodology of the CPI calculation yet again to hide the damage of the government's policies.
Changing the CPI will also enable the government to avoid giving seniors a COLA (cost of living adjustment) on their social security checks, and raise taxes via the hidden means of "bracket creep." This is a default. Just because it is a default on the people and not the banks and foreign holders of our debt does not mean it doesn't count.
Politicians also need to acknowledge that our debt is unsustainable. For decades our government has been spending and promising far more than it collects in taxes. But the problem is not that the people are not taxed enough. The government has managed to run up $61.6 trillion in unfunded liabilities, which works out to $528,000 per household. A tax policy that would aim to extract even half that amount of money from American families would be unimaginably draconian, and not unlike attempting to squeeze blood from a turnip. This is, unequivocally, a spending problem brought about by a dramatically inflated view of the proper role of government in a free society.
Perhaps the most abhorrent bit of chicanery has been the threat that if a deal is not reached to increase the debt by August 2nd, social security checks may not go out. In reality, the Chief Actuary of Social Security confirmed last week that current Social Security tax receipts are more than enough to cover current outlays. The only reason those checks would not go out would be if the administration decided to spend those designated funds elsewhere.
It is very telling that the administration would rather frighten seniors dependent on social security checks than alarm their big banking friends, who have already received $5.3 trillion in bailouts, stimulus and quantitative easing. This instance of trying to blackmail Congress into tax increases by threatening social security demonstrates how scary it is to be completely dependent on government promises and why many young people today would jump at the chance to opt out of Social Security altogether.
We are headed for rough economic times either way, but the longer we put it off, the greater the pain will be when the system implodes. We need to stop adding more programs and entitlements to the problem. We need to stop expensive bombing campaigns against people on the other side of the globe and bring our troops home. We need to stop allowing secretive banking cartels to endlessly enslave us through monetary policy trickery. And we need to drastically rethink government's role in our lives so we can get it out of the way and get back to work.
First of all, politicians need to understand that without real change default is inevitable. In fact, default happens every day through monetary policy tricks.
Every time the Federal Reserve engages in more quantitative easing and devalues the dollar, it is defaulting on the American people by eroding their purchasing power and inflating their savings away.
The dollar has lost nearly 50% of its value against gold since 2008. The Fed claims inflation is 2% or less over the past few years; however economists who compile alternate data show a 9% inflation rate if calculated more traditionally. Alarmingly, the administration is talking about changing the methodology of the CPI calculation yet again to hide the damage of the government's policies.
Changing the CPI will also enable the government to avoid giving seniors a COLA (cost of living adjustment) on their social security checks, and raise taxes via the hidden means of "bracket creep." This is a default. Just because it is a default on the people and not the banks and foreign holders of our debt does not mean it doesn't count.
Politicians also need to acknowledge that our debt is unsustainable. For decades our government has been spending and promising far more than it collects in taxes. But the problem is not that the people are not taxed enough. The government has managed to run up $61.6 trillion in unfunded liabilities, which works out to $528,000 per household. A tax policy that would aim to extract even half that amount of money from American families would be unimaginably draconian, and not unlike attempting to squeeze blood from a turnip. This is, unequivocally, a spending problem brought about by a dramatically inflated view of the proper role of government in a free society.
Perhaps the most abhorrent bit of chicanery has been the threat that if a deal is not reached to increase the debt by August 2nd, social security checks may not go out. In reality, the Chief Actuary of Social Security confirmed last week that current Social Security tax receipts are more than enough to cover current outlays. The only reason those checks would not go out would be if the administration decided to spend those designated funds elsewhere. It is very telling that the administration would rather frighten seniors dependent on social security checks than alarm their big banking friends, who have already received $5.3 trillion in bailouts, stimulus and quantitative easing. This instance of trying to blackmail Congress into tax increases by threatening social security demonstrates how scary it is to be completely dependent on government promises and why many young people today would jump at the chance to opt out of Social Security altogether.
We are headed for rough economic times either way, but the longer we put it off, the greater the pain will be when the system implodes. We need to stop adding more programs and entitlements to the problem. We need to stop expensive bombing campaigns against people on the other side of the globe and bring our troops home. We need to stop allowing secretive banking cartels to endlessly enslave us through monetary policy trickery. And we need to drastically rethink government's role in our lives so we can get it out of the way and get back to work.
You are right, there is enough in SS to sign checks to senior citizens however the fact that our government relies on SS to float other government programs isn't new. This has been going on for as long as there has been SS. That is the reason why SS has no real money but treasury bunds (basically IOU’s). Yes we do have a spending problem, but did it just spontaneously happen? No. One could argue that we have had a spending problem from the very beginning. The very reason why many Virginia planters sided with the American cause on separation from Britain dealt mainly with the debt they had accrued in subsidizing their economy, namely the tobacco plantation.
I believe that Ron Paul has a ton of great ideas, however to ignore our country’s obligations to the banking sector would prove disastrous to all of us. Don’t forget that if we default the interest rates on the debt that we currently have will rise and this rise would not only affect the public sector, but private. Debt service on state debt would rise, along with federal, and then guess what your mortgage rate would increase, along with that car note of yours. State governments already squeezed by a diminished tax base would collapse. Additionally let’s not forget the the role that our default would play in the global economy. Our default would inevitably cause already wobbly Greece and Italy to default along with the implosion of their respective economies. Round and round the dominoes fall and the ultimate situation. A collapse of everything, anarchy. This very action could cause the entire thing to crumble around us… We are currently dealing with an economic situation unlike any in recent memory. As such kid gloves are still needed.
Another thing to keep in mind is that a devalued American currency isn’t always a bad thing. Right now as the currency lingua globally we suffer from the euro zone syndrome. Because the rest of the globe prefers to invest their monies in our dollar, the value of it remains artificially high. This artificial rate has two negative consequences for American citizenry, 1) it encourages the off shoring of our manufacturing jobs as producing locally proves expensive 2) it destroys the pressure valve mechanism of quantitative easing as the dollar never corrects at a level that would prove beneficial to our economy (namely through increased manufacturing and consumer spending).
This situation quite a doosey. Do one thing and risk collapse while doing another may precipitate that very collapse. Never forget, however that servicing our debt remains a real issue. Ignoring it will only facilitate a worse outcome.
You are right, there is enough in SS to sign checks to senior citizens however the fact that our government relies on SS to float other government programs isn't new. This has been going on for as long as there has been SS. That is the reason why SS has no real money but treasury bunds (basically IOU’s). Yes we do have a spending problem, but did it just spontaneously happen? No. One could argue that we have had a spending problem from the very beginning. The very reason why many Virginia planters sided with the American cause on separation from Britain dealt mainly with the debt they had accrued in subsidizing their economy, namely the tobacco plantation.
I believe that Ron Paul has a ton of great ideas, however to ignore our country’s obligations to the banking sector would prove disastrous to all of us. Don’t forget that if we default the interest rates on the debt that we currently have will rise and this rise would not only affect the public sector, but private. Debt service on state debt would rise, along with federal, and then guess what your mortgage rate would increase, along with that car note of yours. State governments already squeezed by a diminished tax base would collapse. Additionally let’s not forget the the role that our default would play in the global economy. Our default would inevitably cause already wobbly Greece and Italy to default along with the implosion of their respective economies. Round and round the dominoes fall and the ultimate situation. A collapse of everything, anarchy. This very action could cause the entire thing to crumble around us… We are currently dealing with an economic situation unlike any in recent memory. As such kid gloves are still needed.
Another thing to keep in mind is that a devalued American currency isn’t always a bad thing. Right now as the currency lingua globally we suffer from the euro zone syndrome. Because the rest of the globe prefers to invest their monies in our dollar, the value of it remains artificially high. This artificial rate has two negative consequences for American citizenry, 1) it encourages the off shoring of our manufacturing jobs as producing locally proves expensive 2) it destroys the pressure valve mechanism of quantitative easing as the dollar never corrects at a level that would prove beneficial to our economy (namely through increased manufacturing and consumer spending).
This situation quite a doosey. Do one thing and risk collapse while doing another may precipitate that very collapse. Never forget, however that servicing our debt remains a real issue. Ignoring it will only facilitate a worse outcome.
The American people's money and a sound money system is what should have been in place. Corporations and or a bankers money and goverment working to destroy our dollar and our labor costs have destroyed this nation. It is when our government turned it over to the bankers and criminal acts against the people's money and our debt which has given us this outcome. One thing is for sure the only people looking to save the system are those who created the system for their benefit. In 2009 to big to fail banks should have failed and a great service to Americans everywhere would have been corrected. Instead the criminals got away with stealing and now look for new ways to continue this madness.
The American people's money and a sound money system is what should have been in place. Corporations and or a bankers money and goverment working to destroy our dollar and our labor costs have destroyed this nation. It is when our government turned it over to the bankers and criminal acts against the people's money and our debt which has given us this outcome. One thing is for sure the only people looking to save the system are those who created the system for their benefit. In 2009 to big to fail banks should have failed and a great service to Americans everywhere would have been corrected. Instead the criminals got away with stealing and now look for new ways to continue this madness.
Too big to fail is exactly what it is, too big to fail. You think things are bad now? Try seeing what things would have been like if the institutions we bailed out had instead gone under. The depression of 1929 would look like sunny days in comparison. Please take a closer look at the mechanisms in play at that time. The whole house would have come done around all of our collective necks not only crushing these “greedy” that you speak of alone, but the collective lot of us. Every banking institution the world over would have collapsed closing every government and private office and business. Why, because without capital the world does not turn. Again, this is not a simplistic scenario where one action bespoke the ruin of many. This scenario evolved from numerous miscalculations, scenarios of blind greed, and blatant ignorance. I agree in a major way, the collective future of our country has been given to Financial institutions, however this turnover has been gradual and taken the form of deregulation. Financial reform and a role back of previously repealed regulation is a necessity at this point, to prevent this very thing from happening again. We also must listen to our financial gurus when they speak Yes what these institutions did is bad, however one must refrain from throwing the baby out with the bath water, or cutting one’s nose off to spite one’s face. By turning our backs on these institutions we would have all suffered tremendously.
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