Cloud9 wrote:There are three sources of government money. 1. Taxes: At the present time roughly half of us pay federal income tax and half of us don’t. You can take the last shred of income from the half that pays taxes and it still will not be enough to cover the cost of Social Security, Medicaid and Medicare. Having taken every shred of income from the producers, there is nothing left to pay for the running of the bureaucracy or fighting of our wars. 2. Borrowing: The chief purchasers of our debt, China and Japan have recently shown a lack of interest in purchasing anymore American paper. The Federal Reserve is now functioning of the lender of last resort and soon will become the largest holder of national debt. There is no limit as to how much money the Federal Reserve can lend to the government. Which brings us to the final choice: 3. Printing money: The bank that prints the money with a mouse click is now covering government’s daily operational expenses. So the real truth is the people of the United States are not even close to paying for the operational costs of our government in the form of taxes.
What has happened is that the politicians have opted for a stealth tax in the form of inflation. Anyone with a basic understanding of economics knows that when more dollars are chasing the same amount of goods the price of those goods goes up.
Who will this tax in the form of higher prices impact the most, the rich or the poor? The answer is the poor. It is the poor that spends a larger portion of their base income to cover the necessities of food, fuel and housing. The top ten percent can pay ten dollars a gallon for gasoline and not even blink. The rest of us will ride bicycles.
So, which would you rather have, an orderly planned reduction in programs and services or a collapse?
Great post.
When the economy contracts, someone gets less because there is less to be had. Clearly those in government think they should not receive less, hence their failure to spend less, so if they are taking an equal or larger share of the contracting economic pie, someone else must suffer an even greater reduction in what they get. How the federal government manages to fund taking their larger share you have described.
Clearly the powerful financial interest on Wall Street, in the banking industry, and in corporate America do not want to see a reduction in their own standards of living and also are pulling the strings of politicians to insure their own comfort by taking a larger share of the contracting pie. So who is left to suffer the effect of the contraction? Everyone else.
If we had followed the US Constitution Article 1, Sections 8 and 10, our money supply would be gold and silver coins and/or certificates in circulation (dollar bills) that represented a 100% backed claim on these coins held in the vaults of the US Treasury. This coupled with a 100% reserve requirement for commercial banks would insure a secure and stable money supply, and would limit government spending to what they could tax or borrow from the existing money supply. The stealth transfer of wealth to government and special interest, open fraud, would not exist.
The present unconstitutional, unstable, unsustainable, predatory monetary system transfers wealth from the majority into the pockets of special interests on Wall Street and banks. It creates boom/bust cycles. It makes it possible for government to take on massive debt that ultimately cannot be repaid and will probably result in the collapse and end of the federal government.
We clearly are in the bust phase of the monetary cycle. But this bust phase, unlike the last major bust in the 1930's, is superimposed on the plateau phase of the industrial age expansion. The industrial age expansion began in the 18th century and is ending in the current century. Those who have been in power were able to get away with all sorts of manipulation and fraud during the expansion phase of the industrial age, because even as those in power increased their share of the expanding pie, the majority still saw a generally improved standard of living on their progressively smaller share of the bigger pie. But now that the cold and hunger is at our doorsteps, the current system of plunder and control will no longer be tolerated. We face civil disorder, whether it will be civil war or revolution is yet to be seen, but the pain and suffering being dealt out by those in power will certainly bring us to violence.
I see the US as being comprised of three factions. Those in power who gladly use that power to rig the economy in their own favor at the expense of the rest of us. This group includes the politicians and bureaucrats of the federal and state governments and those powerful corporate interests who pull their strings. The second group is those out of power who want to continue the system of government plunder and control, but want to direct the largesse to themselves instead of to political and corporate thieves. This group includes the Republican and Democrat voters who have a fundamental belief in the sanctity of government, and who hold the delusion that all we need to do is send better people to rule us. The third group is those out of power who do not want to continue with government plunder and control and prefer to live in a free society. This group includes Libertarians and anarchists, and to a limited degree, some of those in the Tea Party movement. When the violence comes, it will be a struggle among these three vaguely defined factions. I say "vaguely defined" because at this point, I think many people do not even understand themselves where they stand, but soon circumstances will force greater factionalization, and just as during the American Revolution of 1775 or the Civil War of 1861, people at their own peril will be forced to take sides. If you think this will not happen, I remind you that we are just at the beginning of both the cyclical monetary contraction and just the beginning of the down leg of the industrial age. Incorporated into the die-off is the competitive struggle to survive, just as nature commands.
