Libertarian ping! Click here to get added or here to be removed or just reply to this post!
Posted on 10/20/2008 7:34:51 AM PDT by do the dhue
How much longer can the United States continue to spend more money than it takes in, and how much longer can we continue our spendthrift ways before something literally gives? The numbers are getting so big that they are beyond comprehension.
For example, billions and trillions of dollars are almost impossible to understand. Generally, we seem to know what a million dollars can buy. We see the number in the prices of real estate and homes, or perhaps the statistics about various businesses. But, we rarely see big numbers illustrated in terms that are easier to visualize. For example, a billion dollars is 1,000 times one million, and a trillion is a million times a million.
Considering a billion dollars in terms that may be easier to grasp, at an average of $1,000 per month, based on U.S. Social Security Administration statistics, it would cover the social security benefits for over 83,000 seniors (age 65 and over) for one year, and a trillion dollars could pay social security benefits for every senior in America, a total of about 36.8 million, for over two-and-a-quarter years.
America's politicians are rapidly spending our way into oblivion. Almost a trillion dollars for the Bailout package, including 25 billion for the auto industry, 150 billion for the Federal Deposit Insurance Corporation (FDIC), an 85 billion loan to insurance giant, A.I.G., along with millions of dollars of "pork" for Hollywood producers, stockcar race track owners, Caribbean rum producers, Alaskan fishermen, and who knows what else. Remember, this bill was about 450 pages of text, and since it was handed to Congress only about one day before it was approved, it's obvious that no one read it or really knew what was buried in it.
In addition, two bills sponsored by Barack Obama are currently working their way through Congress: the Jubilee Act (S. 2166) would cancel as much as another $75 billion worth of Third World Debt and the Global Poverty Act (S. 2433), at an estimated cost of $845 billion.
All this adds up to about two trillion dollars, enough to pay Social Security benefits to the entire senior population for more than four-and-a-half years. We are told the money comes from borrowing, which amounts to putting more currency into circulation.
The ultimate result is inflation. How much and how fast is anyone's guess, but history is clear about what happens to governments that increase the supply of their currency without appropriate controls and corresponding increases in production. It's simply a matter of too much money chasing too few goods.
Argentina experienced chronic inflation from 1949 through the 1980s. Hyperinflation exploded to almost 5,000 percent in1989, when government expenditures reached 35.6 percent of GDP (Gross Domestic Product) and subsequently topped out at over 20,000 percent.
A more contemporary example is Zimbabwe, where hyperinflation reached 12,000 percent in 2006, then increased to the point where a single Zimbabwean dollar was eventually denominated as about $10 trillion. The government was finally forced to lop ten zeros from their currency so the calculators could handle the numbers.
When this happens, people refuse to hold their own nation's currency and convert their money to other assets that they believe will hold their value as their currency continues to rapidly depreciate. In Argentina, wealthy citizens tried to deposit their money in American banks or they bought stock in American companies. The less wealthy attempted to hold U.S. $100 bills or bought houses or gold or commodities, such as rice -- anything to get rid of their pesos. They also tried to offset the consequences of unbridled inflation by indexing contracts, which adjusted payments to compensate for the rise in prices over time.
The bottom line is that the currency of a nation that is experiencing runaway inflation becomes worthless, productivity decreases, capital takes flight, and there are a variety of other consequences, such as the government refusing to redeem the bonds it has issued, etc.
The U.S. is rapidly headed down this track. Running continuous deficits and issuing bonds far in excess of our ability to pay is the beginning of the cycle. We've been doing this since WWII, and Americans instinctively know that it's not right. They may not be financial experts, but they know a con when they see one, and most of them seem to recognize what's happening now with the "$700 Billion Bailout" and have been protesting very vocally. Unfortunately, only a few members of Congress have been listening.
It's not too late to stop the train, if common sense is allowed to prevail. If not, we can only look forward to more and higher inflation, just as in Argentina or Zimbabwe, with all the consequences that go with it.
I am mad and I want change too. And I believe we need change, but I don't want socialized health care. Our founding Fathers once said something like, millions by charity but not one penny by tribute. I feel that way about health care. Americans are the most giving people on the planet. I'll give from my heart, but I wont be forced to give. I say we should set up a Red Cross program that gives to a American Health Care plan. The Government is not very good at fixing problems. The Government likes to manage problems. This gives them a purpose in life. Let the Red Cross handle our money. And let the Hollywood elites who want Nationalized Health Care give to a charity to help their own. The rock stars could even hold concerts for American instead of people on the otherside of the globe. And we would feel good giving to a cause rather then letting the government steal it from us.
I want change. I want to make it treason for our elected officials to accept funds or gifts of any kind from foriegn interest groups.
I want change. I want to make our tax code simple and fair. Right now, it is a eight million word mess. It is complicated and unfair. You have to hire a team of people who can tell you how to file. You want to help the economy? Get rid of income tax and April 15th. Put in a sales tax and collect the necessary funds for the government (please note, necessary because that means we dont fund rain forrests in Iowa).
I want change. I want change in Hollywood. I want a change of college professors. I want a change in our media. I want to change some of our judges. I want to see a change in the deomratic party too. I would like to see their leaders act like true Americans and not cheese eating Frenchmen.
I want change, but just because a person says they are going to change things for you, doesn't mean they are on the same page as you. Obama says he is for change, but what kind of change will he bring? Well, his voting record indicates that he wont be helping guys like me. The friends he associated with in the past says he is not going to help folks like me. Either I have fallen behind or some people have been bamboozeled. It does not look good, at the moment.
I will stop this rant by saying this: Our system is great and it does not need to be changed. We need to change the people from within our system.
ping
This is scare mongering nonsense! Keep spending America. Shop shop shop, consume consume consume! Whatever you do DON’T SAVE! It hurts the economy! We can never spend enough money and debt is a GREAT thing! /sarc
Why would anyone think the GOP is against spending?
McCain is a big spender.
The GOP is the Democrat ‘Go Slower’ party.
I'm sorry, I dont’ believe the GOP on spending. At all.
I asked an Obam-butt how they would pay for all the stuff their savior is promising after the big bailout. Well, you see, that was Bush’s fault!
sigh
My 11 yo son was at the dinner table last week and volunteered that he was "for change". I asked him where he heard that and he told me in Social Studies. I asked him why we wanted change, and he said "because change is good". So I got up and moved his dinner to his little sister's play table. I told him to eat his dinner there. He of course objected, and I said "But it's change, right? Change is always good, right?" He got the point. Smart boy.
Great reaction and story!
Question for freepers: what reductions to Federal spending do you support that would hurt you personally but are good for the country overall?
Here are some of mine:
1. Raise the eligibility for Social Security and Medicare to age 75, which would hurt me in the long run. Nevertheless, if I’m healthy at age 70, who says I have the right to make others work to pay for my leisure?
2. Freeze cost-of-living increases for Federal employees for one year, as a start. The good employees get merit pay increases anyway.
Anyone else care to add to that list?
Now, if we could teach that to the rest of the 11 yo er I mean teach that to the demoratic voters.
and I will use it in a sentence: Beaver learned his lesson.
It is almost like those in charge are purposely trying to spend us into oblivion. It is true, Republicans have not been good stewards of spending. I still trust Republicans more then I do demorats. Hopefully, one good thing came from 2006. Maybe some Republicans learned a lesson.
Plus, Obummer plans to tax us into prosperity.
That's why I'm not worried(too much).
It's just that the GOP credibility and trust as far as spending and taxes is destroyed.
Frankly, I feel very annoyed when they ever bring it up. It's like as if I have no memory. Since, I know, by and large, the GOP is run by better educated, more lawyered up’d people then me, and have a better command of the english language, I can not but feel they are out and out right, for decades, lying.
I can think of no other explanation.
There is an answer to all of this that makes me very uneasy—its that the average American isn’t really conservative. He is a populist who is OK with taxing the rich to provide benefits to the poor and middle class. He’s OK with the government bailing people out when they make bad decisions.
And he wants to have an easy a life as possible with someone else paying for it and he has figured out that he can vote himself subsidies from Uncle Sam. Give me more benefits and pay for it by either deficit spending or taxing the rich—just don’t take my money. And if I get in over my head with my mortgage or spending—let me out of my obligations. Bash the banks and CEOs instead of holding me accountable. Its a recipe for Socialism and decline but the average American thinks “hey, we’ll all be dead before it gets too bad so why not live the good life now?”
Conservatives have to stop fooling themselves that the average American is some individualist. He isn’t anymore.
I am seriously thinking about moving to Costa Rica or Panama. No matter who wins, because congress still has the purse strings, are in denial and its both parties spending us into oblivion.
THE FOUNDING FATHERS GAVE US THE TOOLS TO PREVENT THIS IDIOCY BUT WE’RE TOO BLIND — OR COWARDLY — TO SEE IT!
(I wrote this a number of years ago when things were NOT going well with the economy. Trust me: They WILL get ugly once again as man — or certain men — cannot resist playing God. We continue to violate the universal, immutable laws of economics at our great peril.)
Despite the apparent economic strength of the American economy, history proves that EVERY house of cards eventually comes down. And the higher the card house, the harder the fall when it finally comes. And when it does, the more freedoms we will voluntarily surrender to “restore order.” It was the Founders’ concern about this historically valid problem which prompted their attempt — now ignored — to keep American “money” sound and honest.) Dick Bachert 1998
* * * * * * * *
The Forgotten History of Money
This is the fascinating story of the efforts by certain of the Founding Fathers to prevent the economic distress we find all about us today. It is also a sad story on the basis that modern, “sophisticated” Americans have abandoned the corrective institutional mechanism that remains in place to this day. As you read it, think about a world with many fewer S&L, banking and political scandals and economic problems now considered the norm.
“Blood running in the streets. Mobs of rioters and demonstrators threatening banks and legislatures. Looting of shop and home. Strikes and unemployment. Trade and distribution paralyzed. Shortages of food. Bankruptcies everywhere. Court dockets overloaded. Kidnappings for heavy ransom. Sexual perversion, drunkenness, lawlessness rampant. The wheels of government are clogged, and we are descending into the vale of confusion and darkness. No day was ever more clouded than the present. We are fast verging on anarchy and confusion. (George Washington in a 1786 letter to James Madison, describing the effects of fiat paper money inflation then ravaging America in the pre Constitutional period.)
“The annihilation (of the paper money) was so complete that barber shops were papered in jest with the bills; and sailors, on returning from cruises, being paid off in bundles of this worthless money, had suits made of it, and with characteristic lightheartedness, turned their loss into frolic by parading through the streets in decayed finery which in its better days had passed for thousands of dollars.” (Contemporary writer, Breck, 1786)
“Paper money polluted the equity of our laws, turned them into engines of oppression, corrupted the justice of our public administration, destroyed the fortunes of thousands who had confidence in it, enervated the trade and husbandry, and the manufactures of our country, and went far to destroy the morality of out people.” (Peletiah Webster, 1786)
At the drafting of the U.S.Constitution, there were many “Friends of Paper Money” present. On August 16, 1787, when the discussion arose on Article 1, Section 8, the proposed wording was this: “The Legislature of the United States shall have the power to...coin money...and emit bills of credit of the United States.”
A hot argument ensued on the power to emit bills of credit, which is another way of saying “printing paper money”.
Here are the actual words James Madison wrote describing the debate in his diary: “Mr.G.Morris moved to strike out *and emit bills of credit.* If the United States had credit, such bills would be unnecessary; if they had not, unjust and useless.
MADISON: Will it not be sufficient to prohibit the making them a tender? This will remove the temptation to emit them with unjust views. And promissory notes in that shape may in some emergencies be best.
MORRIS: Striking out the words will leave room still for notes of a responsible minister which will do the good without the mischief. The monied interest will oppose the plan of the Government, if paper emissions be not prohibited.
COL.MASON: Though he had a mortal hatred to paper money, yet as he could not foresee all emergencies, we was unwilling to tie the hands of the Legislature [Legislature = Congress].
MR.MERCER:(A friend to paper money) It was impolitic...to excite the opposition of all those who were friends to paper money.
MR. ELSEWORTH thought this was a favorable moment to shut and bar the door against paper money. The mischiefs of the various experiments which had been made, were now fresh in the public mind and had excited the disgust of all the respectable part of America. By withholding the power from the new Government, more friends of influence would be gained to it than by almost anything else...Give the Government credit, and other will offer. The power may do harm, never good.
MR.WILSON: It will have a most salutary influence on the credit of the United States to remove the possibility of paper money. This expedient can never succeed whilst its mischiefs are remembered, and as long as it can be resorted to, it will be a bar to other resources.
MR.READ thought the words, if not struck out, would be as alarming as the mark of the Beast in Revelation.
MR.LANGDON had rather reject the whole plan than retain the three words *and emit bills*”.
The motion for striking out carried.
Historian George Bancroft later wrote: “James Madison left his testimony that *the pretext for a paper currency, and particularly for making the bills a tender, either for public or private debts, was cut off.* This is the interpretation of the clause, made at the time of its adoption by all the statesmen of that age, not open to dispute because too clear for argument, and never disputed so long as any one man who took part in framing the constitution remained alive.”
(Bancroft – founder of the U.S.Naval Academy at Annapolis among other accomplishments – wrote a book on this very subject entitled “A Plea for the Constitution of the United States: Wounded in the House of Its Guardians.” During WWII, FDR – a serious friend of paper money – ostensibly to supply the war effort, ordered the printing plates for many historical books smelted. Bancroft’s book was among them. A photocopy of one of the remaining originals can be found here
ROGER SHERMAN(1721 1793)should be a name familiar to every American. As familiar as Washington, Madison, Jefferson and Adams. He is the only man to have signed all 4 documents surrounding the formation of the United States of America: The Continental Association of 1774, The Declaration of Independence, The Articles of Confederation and The United States Constitution. He was a Judge of the Superior Court in New Haven, Connecticut, serving that office with distinction from 1766 until 1788. He served as Treasurer of Yale University from 1765 to 1776. He was renouned for his high intelligence and unswerving honesty and was described by John Adams “as honest as an angel and as
firm in the cause of American independence as Mount Atlas.” He served in the U.S.Senate from 1791 until his death in 1793.
Why is Roger Sherman*s name unfamiliar? HE WAS AN ENEMY OF PAPER MONEY!! In 1751, Roger Sherman and his brother William sued James Battle for paying a debt to their shop in New Milford, Connecticut, in depreciating paper currency. Over a period of 15 months, Battle had charged “divers wares and merchandizes” amounting to 129 pounds of what
Sherman assumed were pounds of Connecticut “Old Tenor”, a stable currency whose value were well preserved by taxation taking it out of circulation. But Battle assumed the debt was denominated in pounds of ever depreciating Rhode Island currency, tendered in same, and the Shermans took a beating in the payment and sued for recovery of loss by depreciation. The Shermans lost when Battle argued that he was merely following the accepted custom of the day. In 1752, Sherman wrote his book “A Caveat Against Injustice or An Inquiry into the Evils of a Fluctuating Medium of Exchange” indicting UNBACKED PAPER MONEY.
It was this experience that Sherman brought to the Constitutional Convention and prompted him to rise on August 28,1787 and propose new, more restrictive wording to Article 1,Section 10. The standing version under consideration was worded this way: “No state shall coin money; nor grant letters of marque and reprisal; nor enter into any Treaty, alliance, or confederation; nor grant any title of Nobility.” (From Madison’s Notes of the Convention) “Judge Sherman and Mr. Wilson moved to insert the words *coin money* the words *nor emit bills of credit, nor make any thing but gold and silver coin a tender in payment of debts* making these prohibitions absolute, instead of making the measures allowable with the consent of the Legislature of the U.S. Mr. Sherman thought this a FAVORABLE CRISIS FOR CRUSHING PAPER MONEY. If the consent of the Legislature could authorize emissions of it, the friends of paper money would make every exertion to get into the Legislature in order to license it.” Mr. Sherman*s and Mr. Wilson*s motion was quickly agreed to and became the supreme law of the land.
Some additional quotations to ponder:
“All the perplexities, confusion and distress in America arise not from defects in the constitution or confederation, nor from a want of honor or virtue so much as from downright ignorance of the nature of coin, credit and circulation” (John Adams in a letter to Thomas Jefferson, 1787)
“I deny the power of the general government to making paper money, or anything else, a legal tender.” (Thomas Jefferson)
“You have been doubtless been informed, from time to time, of the happy progress of our affairs. The principal difficulties seem in great measure to have been surmounted. Our revenues have been considerably
more productive than it was imagined they would be. I mention this to show the spirit of enterprise that prevails.” (George Washington in a letter to the Marquis de LaFayette, June 3, 1790 AFTER the United States Constitution prohibited unbacked paper money at Article 1, Section 10)
“Since the federal constitution has removed all danger of our having a paper tender, our trade is advanced fifty percent. Our monied people can trust their cash abroad, and have brought their coin into circulation.” (December 16, 1789 edition of The Pennsylvania
Gazette)
“Our country, my dear sir, is fast progressing in its political importance and social happiness.” (George Washington in a letter to the Marquis de LaFayette, March 19, 1791)
“The United States enjoys a sense of prosperity and tranquility under the new government that could hardly have been hoped for.” (George Washington in a letter to Catherine Macaulay Graham, July 19,1791)
“Tranquility reigns among the people with that disposition towards the general government which is likely to preserve it. Our public credit stands on that high ground which three years ago would have been
considered as a species of madness to have foretold.” (George Washington in a letter to David Humphreys, July 20, 1791)
“It is apparent from the whole context of the Constitution as well as the times which gave birth to it, that it was the purpose of the Convention to establish a currency consisting of the precious metals.
These were adopted by a permanent rule excluding the use of a perishable medium of exchange, such as certain agricultural commodities recognized by the statutes of some States as tender for debts, or the still more pernicious expedient of PAPER CURRENCY.” (Andrew Jackson, 8th Annual Message to Congress, December 5, 1836)
DESPITE WHAT YOU WERE TAUGHT IN SCHOOL, THE HISTORICAL RECORD IS CRYSTAL CLEAR: AMERICA WAS TO HAVE BEEN SPARED THE DESTRUCTIVE EFFECTS OF AN UNBACKED PAPER MONEY SYSTEM. MOST OF THE PROBLEMS WE FACE TODAY CAN BE TRACED TO WHAT ANDREW JACKSON CALLED “THE PERNICIOUS EXPEDIENT OF PAPER MONEY”.
HISTORY TEACHES THAT AN “ARTIFICIAL” MONEY CREATES AN “ARTIFICIAL” WORLD WHERE THE PRICE FOR SOME ITEM...EVEN OUR MOST POPULAR WELFARE “PROGRAM”...CAN BE DEFERRED TO FUTURE GENERATIONS (OUR $11 TRILLION
NATIONAL DEBT) OR PAID WITH A “MONEY” CREATED OUT OF THIN AIR WHICH ROBS THE VALUE FROM THE MONEY WE MIGHT BE UNFORTUNATE ENOUGH TO HAVE IN OUR POCKETS AT THAT MOMENT (INFLATION). AND ONE THING YOU MUST REMEMBER ABOUT INFLATION IS THAT IT IS NOT AN “EQUAL OPPORTUNITY” DESTROYER: THOSE FIRST IN LINE TO GET THEIR HANDS ON THE NEW MONEY ROLLING OFF THE PRESSES (THE MODERN FRIENDS OF PAPER MONEY) HAVE A CHANCE TO SPEND IT BEFORE IT LOSES ITS VALUE. THE LITTLE PEOPLE (THAT’S US, FOLKS!) FARTHEST DOWN THE LINE ARE THE ONES WHO FEEL THE FULLEST EFFECTS OF THIS DESTRUCTIVE PROCESS.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.