RWWNL 2011 (May – July)
Wednesday, July 27, 2011
The Sky Is Falling! Only 6 More Days
The Sky Is Falling! We are running out of time. That is what we are being told anyway. If we do not raise the debt ceiling, we will enter into a crisis mode. It will be just like Y2K, except for real. It will be a calamity. It will be a disaster. It will be a catastrophic event. In other words, it will be very bad. What does it actually mean?
To answer that question, let us make it into a simple story. Let us pretend that dollar bills were actually flies, and our house the federal government. I think that most people would agree that the last thing we really want in our house is fly’s. We cannot control them getting into other peoples houses, but we can do everything in our power to keep them out of our house.
One morning you wake up and find your house full of flies. You notice that the front door is wide open, and that is the source of the infestation. Something has to be done. We have a problem, and we need a solution. You have four people living in your house, so you ask each of them to come up with a plan to rid the house of the invading hoard. The four people each offer their solution.
H immediately heads for the cabinet where the fly swatters are kept. You notice that the front door is still open. You ask him why he does not close the front door. He tells you that his approach is a balanced approach, and that it will be necessary to let more flies in, in order to solve the problem.
W heads for the front door, and immediately closes it. He heads for the place where the fly swatters are kept when he notices that the meal from two weeks ago is still in the sink. He decides to clean that up first.
J says that he had previously closed the door, but you noticed that he did not get it all the way closed. When you asked J what he proposed to do with all the flies in the house, he said that he planned to wait until the crisis was over.
The fourth player in the room said that we actually need a long-range plan. The plan will be comprised of several ideas. It will take all four of us to pull it off. He immediately closed the front door. Two of us have to go to the hardware store and purchase an automatic door closer. We need to install one so that the door does not come open and stay that way in the future. We need to cap the other places where the flies can get into the house, and we need to reduce the fly infestation every year from now on. We need to get busy with the fly swatters to eventually reduce the number of flies in the house to as few as possible.
The fourth player realized that he may need to compromise on some of his ideas, but he stood steadfast in their being implemented. He knew that if he did not get his plan accepted, that the fly control manager might institute a plan to require larger fly swatters to eliminate the flies in the house. This created the illusion of a pending crisis.
I hope you now have a better understanding of our impending debt crisis and the solutions that have been put forth. For a more detailed understanding of that, I offer the following.
You own a house. You agreed to pay for it over the next 30 years. The amount that you owe for the house is debt. You have 4 kids. The husband makes $40,000 a year. What you pay for the house, clothes, energy, and all other expenses each year amounts to $50,000. That means that you have an annual deficit of $10,000 a year. This is the problem that needs to be addressed with our governmental spending. Until the deficit is taken care of, there is no hope of paying off the debt. We currently have a deficit problem. That comes first. We cannot spend our way out of this problem. We cannot offer plans that will take 10 or 20 years to implement. It must start and it must start now. Will it be pretty? No, it will not, but the longer we wait, the uglier it will get. It will be bad enough now. The fly control officer should have done his job years ago. The best solution is to close the door first, and to prevent it from opening in the future. Does our President and Congress have the fortitude to accept this job? We do not get many chances to demonstrate our integrity. Let us not waste this one!
Until Next Time
Editor in Chief, RWWNL
Monday, July 25th, 2011
Eight Days Left
No problem, H has plenty of time. he has a more than a week to dither and tell the American people that it is not his fault. He has only been dithering and spending money for 2-1/2 years after all. I am sure he is glad, it was not his money.
I guess the Daddy plan is off the table. H wanted more money to spend and the other side would not give in to him. They are just a bunch of penny pinchers and will not give him the investments that he needs to get this economy going again. If H could spend more money everything would be all right. We are facing a disaster after all. We have been deficit spending for the past 10 years and now we have to pay the piper. I know it has been over 100 years, but that does not made it sound like it’s all W’s fault.
If H can get the other side to agree to a big enough deal to get him through the next election, he will be home free. That is his plan, and he is sticking to it. H hopes that his plan is good enough that if even if we do get an increase in the debt that the voters will blame the other side and vote them out of office. All that matters is that H gets re-elected.
Does this not make you want to be a politician? I think that I want to be the next president. My full name is Terence Ray Wilken, so I could be known as R. Then I could golf and play basketball whenever I wanted. Yes, that sounds like the best choice. We need to start on a road to give our politicians the common sense necessary to run our government. It is apparent they did not teach that in school, and we were not raised in the proper family environment. Otherwise they would understand what it took to stick to a budget.
Next week is when the disaster setting will be set. The congress will have to vote on whether or not to raise the debt ceiling. What would happen if they decided not to do that? That is the $64,000,000 question. Or I guess it would now be the $64,000,000,000,000 question. I sure hope that is not too many 0’s. I guess that it would be time for H to actually do the job that most families have to do. He would have to decide on which bills to pay. They are telling us that that is his job. He and Geitner will have to hole up in the oval office and decide who will be paid first. After they have done this for a month or two, they may decide it is best to reduce spending. Would that not be special? I do not think he can pass this job off to Michelle. No more golf. No more basketball. No more campaigning. It would actually be time to do the people’s business. We better hurry. The debt rating agencies say they may get involved. We could suffer a downgrade. We could lose our financial reputation. This should happen in either case, but have they ever bellied up to the bar in the past?
The senate has nixed the plan that would have been effective. Cut spending! Cap expenditures! Pass a balanced budget amendment. This was called a silly plan because it would take to long to pass a BBA and it might never happen. Well it would not cost much to find out, and it would get H what he says that he wants. Let us see if it is possible. Our government has demonstrated that they do not have the will to balance the budget on their own.
Until Next Time
Editor in Chief, RWWNL
Sunday, July 24th, 2011
No Hurry, We have 9 days left!
Yes, we have plenty of time. No sense getting in any hurry. That might bring on a panic attack. We have plenty of time to come up with a plan. We are talking about a plan to solve the debt “crisis” so that we can pass a bill to raise the debt ceiling. Now that sure makes sense. We are spending to much money, so the answer is to pass a bill to allow us to spend more.
We have so much time on our hands that we can come up with numerous plans that we know will never come to a vote. Even William Jefferson Clinton has a plan. I will call him J to be consistent and for ease in writing the newsletter. The plan that J has arrived at would provide for a whole series of cuts to the government spending while raising the debt ceiling. The only caveat that he would have is that the cuts would not occur until the recession had come to an end. Now that sure makes sense. Since over spending got us into the recession, it only makes sense to wait until after the recession ends to cut back on the spending. I think I will take that plan for myself. That way I can overspend, and now can continue overspending until I am in better shape. That sure sounds like my kind of plan.
The way the government works is that they will change the way recessions are shown on the books, and we will be in a recession for the next 29 years. That way we can keep on doing what we have been for quite a while. They have changed the way inflation is calculated already. So what is the difference? Where did he get his economics training? From the same school that W and H went to? Oh yes, he is also a politician. I should have thought of that.
We now have several plans on the table. We have a baby plan, a Mommy plan, and a Daddy plan. Plus several others that shall remain nameless, This is a family newsletter after all.
We must tackle this problem now, or the world will come crumbling down. Have we not heard that before? This happened over two years ago, and now we have added a few more trillion dollars to our debt. The issues were not resolved. In fact, the problems may have gotten worse. We waited until the last day to resolve the last problem. The bill that was passed was huge. We were even told that the bill had to be passed so that we would know what was in it. No congressman or senator that I saw on TV or read about in the paper had the time or patience to read the bill to see what it said.
Are we going to go through the same cycle again? I for one, certainly hope not. We need to cut spending. That is priority one. The spending needs to be cut now. Not in 10 or 20 years. Once we have cut the spending, we can get on to other issues. We can start by not spending what is left in the stimulus bill; if there is anything left. Then we can stop earmarks. Then we can cut every item in the budget by a certain percentage, and leave it there until we recover. Am I dreaming? I am sorry, but I got rational there for a minute. I will take a break and try to recover. I need to rest for a week or two. Maybe this was just a bad dream.
Until Next Time
Editor in Chief, RWWNL
Thursday, July 7th, 2011
Back to Energy
Now we have to talk about energy to H. He has shown that he does not know anything about economics, but who knew that he knew nothing about energy either. The same can be said for the congress. Let us get to the congressional decisions first. It is interesting that both issues bring us to Oklahoma. First a senator wrote a bill to fix Medicare, and it was turned down, and then Tom Coburn wrote a bill to eliminate subsidies from being applied to Alcohol as a fuel. It banned the government from paying to use corn to incorporate into the fuel used for automobiles. The government would no longer subsidize methanol. They said that the farmers needed the subsidy. This is an interesting statement when you understand that the farmers were never paid to grow more corn. The subsidies were paid to the blenders. They are the people that mixed the methanol with the gasoline. The blenders are the Companies that provide gasoline to the gasoline service stations. Wait a minute. Are not these the evil oil Companies that are making way too much profit? Well let us not have a good government program go to waste.
To add insult to injury, we are also assessing a tariff on the importing of corn. This again is to protect our own farming industry. We cannot import that cheap corn from other countries, because that might lower the cost of fuel for our cars. We could not complain about the cost of gas at the pump then. What would we do if we could not have a good rant about the evil oil Companies. Does this make sense to you?
The answer to the high cost of fuel for our cars is not to get the government out of the way. The answer is to release oil from the strategic oil reserve. This reserve was intended to be used in times of national emergency, but I guess that temporary high oil prices are a national emergency. Has anyone thought about the price or where we would purchase the oil that would be required to refill this reserve? The price could go even higher in the future. Let us not bother with thinking ahead. We must only live for the present, and besides we have a campaign to run.
Let us see what we have accomplished. We can now obtain oil from Canada and bring it south to Cushing Oklahoma to be distributed to the gulf coast to be refined. We can now obtain gas from the gas shale in Oklahoma. Oklahoma could become one of the major producers of natural gas in the US. The two Companies most responsible for this are located in Oklahoma City, Oklahoma. I did say that Oklahoma was key.
We figured out how to obtain oil from a geologic formation in Canada. We reverse pipelines to get the oil to the US. But how can we stop the oil from getting to the refiners. We learned from our lessons in the Gulf of Mexico. Hold up the permitting. We can stop the pipeline from being built to transport the oil from Cushing Oklahoma to the gulf coast.
Why go through this exercise? The primary reason is to show that what we do or start today will affect things in the future. We need to learn the consequences of our decisions. We can make decisions to make us feel better, or to get us reelected, but as time passes we have to live with those decisions. This is why we need to make the right decisions today about our energy and our economic policy. We need to put both the congress and the President into one room and lock the doors. We can release them when they have solved both problems with a dollop of common sense.
Until Next Time
Editor in Chief, RWWNL
Tuesday, June 07, 2011
Let Me Pound the Table
We have come to the end of our options. It seems that our leaders will just stay with the status quo. That sure seems like a good option. Every idea is immediately turned down. It just so happens that the dollar is losing its value. What are we to do? I think that the answer is to change the currency to bitcoins.
Bitcoins have increased in value while all other currencies have gone down in value.
But then I realized if I were a real congress person, I would have to say NO! NO!
We cannot have bit coins as our new currency. Think of all the little people that we would offend. We cannot have that. A little bit of nothing. That sounds bizarre. We cannot have that. It is too confusing. I would vote NO.
Remember when W started bailing out the auto industry, or at least GM and Chrysler? H took all the credit, but then who would question him. When it happened, I called the White House and asked for H. He was not available, but I told them that since I was now an investor in these auto industries, that I wanted to apply for my stock certificates. I explained that I was a taxpayer and stockholder, and that I thought I should have a say in how they did business in the future. They took my address and told me that they would send me an application if one became available. I still have not seen one yet.
If I had been asked about the taxpayer car business, I would have voted NO on this issue. It might have prevented this.
Not to worry, let’s bring back the suprime loans. If you thing subprime loans are not happening, then guess again. Remember when the housing market needed a kick from behind, so Congress said that the banks had to loan to everyone. Even if the borrowers had no money and bad credit. It created a banking crisis to end all banking crises. The government then bailed out the banks, but they forgot to bail out the homeowners.
Remember TARP? It was supposed to do away with all the toxic assets. The non-performing house mortgages. They just gave the banks money to strengthen their balance sheet. They did not fix anything. Now it is starting all over again. It is good business practice to loan to people that cannot afford to pay you back. Is not this true?
So let’s try subprime auto loans. That sounds like a great idea to me.
No what we need is more QE added to our moribund dollar. That will certainly get the economy moving. All we need is for the government to get busy voting for new stimulus spending or investing in new projects. They can ask the Fed to add more dollars to the mix. That will certainly fix everything. If you thought the Fed was going to quit QE, Then guess again. The Fed cannot stop QE. If they do, interest rates will go up. This will lower the value of their bonds, and not do a good thing for the banks either. If no one wants to buy what you are selling, even if it is money, it is hard to stay in business. Learn more here!
So if you elect me to congress, I promise to vote NO!
I will refuse to come up with any ideas of my own. I will just vote NO. It is better to just pound the table. If I do it right, I will not even hurt my hand.
Sorry about all the reading, but you needed something to do. It is important to keep the mind busy. I have three more points to make.
One has to do with the health system. I had an interesting talk with my primary care physician. It was a routine visit, so we happened to get on to other topics. The health care industry came up. I asked him if the Medicare system could be fixed. He said that it could be fixed if we only paid for those to whom it was originally intended. If we would quit adding people to the system, we could afford to treat the ones for which it was intended. SSI (supplemental security income) was a big culprit) he said. They have tapped Medicare to pay for the health side of the equation. We talked about other things, but it is interesting what you can learn if you ask and show that you care about what is being said. I found his observation very interesting, and thought I would share.
The second issue is banks. There are three types of banks. The Fed banks, Investor banks, and local banks. It is the investor banks that I am talking about in my column.
The third issue is what will the congress do if they cannot agree to raise the debt ceiling? I guess they will have to sit around the dinner table and decide what is important. Let us hope they make the right decisions.
Now that this newsletter is wrapped up, I guess I will get back to pounding the table. That is more enjoyable than having to get things done.
Until Next Time
Editor in Chief, RWWNL
Thursday, June 02, 2011
Back To Economics
If I hear one more time why the national debt does not matter, I think I am going to go on a rampage.
Why is it a good thing for the government to spend money they don’t have, but a bad thing for the rest of us to do the very same thing?
Is it OK if someone spends money on our behalf, but not OK if we do it ourselves?
If that is the case, I guess I will have someone else buy everything that I need, and let them go into debt. Then I can just tell everyone else that debt does not matter, and the rise in the debt of the person buying everything I want is not harmful. I think I have figured out how it works.
This type of economics can’t work, but somehow we will all feel good about the final results. I certainly hope so. Is going into debt the answer to having the good life?
Today, we are being encouraged to believe that the government can spend us into utopia. That is sure important to know. I thought that the government was going to do the right thing and pass a bill that drove the deficit down in a big way. Instead they decided that we needed all that spending. No one had any fortitude.
Was the plan a bad one? No, but it was designed not to pay for something that we will not have the money to pay for when it comes time to pay for it. I am glad that I have the choice of not being paid now or not being paid in ten years. That certainly sounds like a choice I am happy to make. What kind of gamesmanship do we think we are playing? This is for real and our future is at stake.
Do you need to be told again that if you had put a dollar in the drawer in 1913 when the Fed was formed that it would be worth 3 cents today? Are you aware that the dollar is getting weaker? This is not really worth noting unless you happen to be one of those people who shop at Wall Mart. They happen to buy their products from overseas and now they will become more expensive. It is not good to be of retirement age either. The government has figured out a way to manipulate the inflation rate so that it no longer exists. That is unless you want to eat or drive somewhere. You do not do that do you? You certainly will remain on a fixed income if the social security administration has anything to say about it.
It is true that there is a way to continue increasing the money supply and not raise interest rates. We have already started down that path with QE2 and 3. Other countries have lived with doing this for years. Japan has almost reached the debt to their gross domestic product (GDP). We Americans still have a way to go to get there. We can feel secure in the knowledge that the debt does not really matter. Of course, the Japanese are happy to be in a position of only receiving 1 per cent interest on their money. They are a group of people that also happens to be the biggest savers in the World.
This is true as long as we maintain our economy in a recessionary mode. If we start getting back to full employment and the economy improves, we will start to see inflation coming back into the economy. Not to worry though. I am sure that the government will come up with a fix for that.
Until Next Time
Editor in Chief, RWWNL
Tuesday, May 24, 2011
Pardon Me; I have to get back to my Campaign
I am too busy to do the peoples’ work. I am busy at work in an election campaign. That is what we have to look forward to for the next couple of years. The candidates do not have time to worry about the deficit or to do anything but worry about getting reelected. If only they would not pass any further spending bills.
If you have not heard, the gang of six is now the gang of five. One has decided that he did not want to be a member. The gang of six was a group of congressmen that was trying to come to an agreement to reduce or eliminate the deficit. That has now been delayed. Not to worry, I heard on the news that the deficit that we are accruing was not going to do any harm to the economy anyway. If we wanted to reduce the debt, we could always tax the rich. Nothing else matters but that I get reelected. I hope that Tom Coburn did not bow out for this reason. We may never find out. That news cycle is behind us.
I remember when I was little and dreamed that one day I would be rich. If only I could reach the level of being a millionaire, I would achieve my goal. Now I find out that one million dollars will not get me even close.
Now it will take at least a billion dollars to achieve the goal I once dreamed of. That is a 1,000 times the money I originally thought I needed. What a bummer.
Do you realize that if the government took all the money from the 400 billionaires in this country, we would still have a deficit. Taxing the rich would not achieve the goal of eliminating the deficit. Is it really important that these people really are elected again?
I once gave hats off to H and the government when they came up with a plan to tighten the purchase strings on the mortgage market. I have thought long and hard about doing the same for the killing of Osama Bin Laden. In my opinion, the death of Bin Laden was indeed a good thing. Carrying it off in secrecy was even better. Not maintaining this secrecy was a serious mistake. Can you imagine what could have been done to the terrorist network if we had maintained secrecy? Would the seal team and their families have been safer? Was it worth the bump in the polls to release the information when we did? I think not.
How could we have insured the secrecy? That is an easy one. WE would have to account for the downed helicopter. H could release Nancy Pelosi to announce to the American people that we had sent in a rouge helicopter to learn what was in Pakistan. The only way to find out was to pass the border. He could have sent out Barbara Boxer to announce to the American people that she did not know what H did, but he was right in doing it. I am sure that H could even get Alan Colmes to support this assertion. If you think that this sounds like a dumb answer and that no one would believe it, look at what happened to the 9/11 memorials. After over 10 years and a 500,000,000-dollar budget they forgot the bathrooms. I hope they were not out campaigning.
Some things are more important than getting reelected. Being in campaign mode on a continuing basis is not necessarily the person who we want running our country. We need someone who is willing to do the right thing because it is the right thing. We do not need a person whose only goal is being the next President or Congressman. No hats off to H.
Until Next Time
Editor in Chief, RWWNL
Monday, May 16, 2011
Should We Let Common Sense Prevail, or
Stay the Course?
We have to come to our senses. Does not anyone realize that we are headed to the precipice? According to the press, we have until August to come to our senses and increase the debt ceiling. May 16 is the official date, but we all know that the government and the Fed can do wonders with accounting principals. It is a mystery that we understand anything at all with what we hear on the news these days. The most important story is that we do not have to listen to Charlie Sheen any more. We are hearing everything but the truth about what is really happening in the world of finance. It is more important to blame or talk about something or someone else.
I hear that the answer to the debt crisis is to raise taxes. We need to raise taxes on the top one percent of earners so that we can afford to spend money on infrastructure projects. After all, we need a rapid transit system. If we spend more, it will fix the deficit. Now, that is a new concept. We also need to raise taxes. We are just not taxing enough. Of course, we will only do this on the wealthy Americans. For the poor Americans, we will find a place to spend the new money.
We have done such a good job managing the Social Security and Medicare system that it will last forever. That is what we were told. Please do not go back on your word.
It is true that we need to revise the tax system, and it could result in higher taxes for some. The current tax system works so well as it is. Is that not what we have been told.
This has nothing to do with what got us into this mess to start with. It was the free spending that got us into this mess. If a program was good, than a bigger program has to be better. Let us solve what got us into this situation before we start on new ideas. We should cut spending first before we decide what to do with the tax code. Now where have we heard that before.
We have two choices. Congress could resolve the solution, or we could just not pass a debt ceiling increase. The Congressional solution should take place over a 2-4 year time frame to make it easier for citizens, but more than likely will take place over 10 or more years, so that the congressmen and women can get reelected. They feel that we can do this without any pain. Not passing a bill to raise the debt ceiling would get the same results, but would expedite the process. Neither would resolve the debt issue, but if done properly, would solve the deficit problem. Once that is solved we can then look at the debt problem.
There is one person that says that we need to address the debt ceiling now. It is Mr. Bernanke.
Of course, he does not tell you that if the government does not increase the debt limit, his employer would no longer be required. He would fall in the ranks of the unemployed. That would not prejudice your decision would it? Why would you need the Fed if you could no longer spend more than what you receive from the taxpayers. Maybe that would be the best solution.
What an idea. If you disagree with this solution or agree with it, please let me know. If I have not scared you, than I will go out and buy a bigger hammer. Now back to the news and see what I should be eating or what that reverse merger thing was all about. I may need more money with the way things are going.
Until Next Time
Editor in Chief, RWWNL
Monday, May 09, 2011
Just One More Rant
Now that we have solved the deficit problem, I guess that the debt problem will have to take care of itself. We have taken away the elixir that feeds the government. They will have to come up with their own way to feed the fire. The Fed will no longer be able to defend either the regular or the investment banks. The banks will have to depend on their own sources to survive. The government and the Fed will no longer be able to depend on each other. The symbiotic relationship is over. The days of Big Banks are not going to be able to depend on the Fed to bail them out.
We only wish that it were true. We have to come back to the real world. The Fed and the government have been so close for so long that it will take a lot to separate them. The only way that the Fed can be eliminated is for the government to eliminate their power. To do that would also eliminate the government’s power, and that is the problem that needs addressed. Getting started will be a major hurdle.
Currently both sides of Congress, and the President are battling over how to address the budget issue. One side of congress says cut spending. The other side of Congress says stay the path. H is telling us to cut a little and invest the rest. The only problem with that is are we cutting enough, and where do we invest?
There is a minimal number of ways to set us on the right path.
1 Let the government solve the issue.
2 Pass a balanced budget amendment.
3 Eliminate the Fed and provide a valuable exchange for our dollar.
The government is working on a plan. It involves cuts in spending, tax reform, and changes in entitlements. It could work if it could be passed and maintained. The down side is that it is really only a short-term solution. Another political change could reverse it in the future. We need a long lasting solution, and one that has to be honored.
A balanced budget amendment would be the answer, but it would take two or more years to get it done. We would have to have the political will and the fortitude to stay on this course. The individual states have to have a balanced budget, so why not the federal government?
We could ban the Fed. This would not balance the budget by itself, but it would cut off the funding of the government except through taxation. They would not have a secondary source of money. They would be limited in what they could spend by the money that came into the system. This is in theory. This has not stopped individual citizens from over spending. The government could still head us down the wrong path, but now would be responsible to the citizens. That is why we need to have something valuable to exchange for dollars. This would not only give the government pause to overspend, but it would also assist in stopping regular banks and investment banks from engaging in high risk economic decisions.
We need to stop the clock if we’re are to have a stable future!
Until Next Time
Editor in Chief, RWWNL
Tuesday, May 03, 2011
To Fix the Debt? Create a New Currency!
This is the second part of a two part essay that began with Fire the FED! In addition to firing the FED, we need to start a new system of exchange for goods and services. This new money should be a hard currency, or at least backed by a hard currency.
You did have Donald Trump give Bernanke a call, didn’t you? Now that the FED is fired, we need to create a way to control the new currency that we make the coin of the realm. One approach would involve using a gold standard.
This is only one way to solve the problem. We still have other problems you know. Even with the elimination of the FED, we have not eliminated the business cycle, nor have we eliminated the lack of integrity that is a part of the government and the banking community. The behavior of our government and the banking community have enormous impact on the money issue. It is important to at least put up a barrier to make it harder for them to move over to the dark side. It is important to make the government, the bankers and the investment Companies aware that they might lose something more than a little paper and ink. It is important that they have some skin in the game as is said in most capitalistic transactions.
Is inflation or its fix all that bad? Not always. I can remember when Paul Volker wanted to unwind the stagflation in the economy. He decided to raise interest rates in order to do this. I can remember my Dad saying that he was so happy to be earning 14% return on his money. He was retired at the time. I was paying 22% interest on my house, but then I was employed. I had a job. I guess that put me in the ‘rich’ category. I was certainly happy that this made him happy. As for me, I just had negative amortization for a few years. No problem, I had a job. I had to keep telling myself that every day. I was not part of the uber rich. I just had a job.
We are still dealing with the FED. They are still in control of the money supply. If only we knew what they are doing with all that money. If only we could ask. If only they had to tell us what they did. I guess that we do not have to worry about where they are spending the money; the government will take care of that.
The primary reason that we need some standard to fix the situation is to make it painful to not have a modicum of integrity. If I make a financial bet with you, it is important that I know all the facts. You cannot be held accountable for my ignorance, but you should be accountable for withholding critical information from me, or not divulging all the facts of the bet. This also means that you cannot change the rules in the middle of the game. The purchase of General Motors is a perfect example. The government bought the Company when it appeared on the verge of bankruptcy. They tore up the agreements with the people who had loaned money to the Company. They gave a significant ownership to another group of people, and then they reissued the stock as a new and ‘better’ Company. If this is not bad enough, they are now selling it for a loss. Remember this is not their money. It is ours. We gave it to them in the form of taxation.
Now let us say that we can have the money back. They made a bad bet, and now they want to pay it back. The only problem with that is that they would have to pay us back a lot more in dollars than what they lost on paper. This is due to inflation and the loss in value of the dollar. What did a cup of coffee cost in 1913 when the FED took over our money supply? $.10. What does it cost now? $2.50. That is if you get a good coffee from Starbucks. Since the government promised you a ‘sound’ cup of coffee in 1913, then you should accept 10 cents for that promise. Would that not be fair? What if that cup of coffee cost 1/10 of an ounce of silver in 1913, and the government was required to pay you back in silver. Now you could drink a good cup of coffee. Now you can see the value of having the dollar backed by something tangible that maintains its value over time. It provides you with the security that the money that you have been stashing under your mattress will have the same value today as the day you put it there. Inflation destroys a fiat currency. That is why the government wants it in the system. Inflation will make the practical amount of what you pay for today worth less than what you paid for it 30 years ago. I do not care what we decide the dollar is to be exchanged for. The only qualification that is necessary is that it has the ability to hold its value.
The government needs to be controlled. The FED needs to be stopped. Can you imagine a government that is ready to pass a bill, and they have to consider its cost? That would be unusual, but would change our life to one of less worry. Since we do not seem to be able to change the government to a sane one that works for us, we must come up with a plan that forces them to come to their senses. They have had an unlimited credit card for way too long.
We need to take away the FED’s ability to print money, and we need to take away the government’s ability to devalue its worth. This will not only make the government more accountable to the citizens that elected them, it will also make all businesses more thoughtful in their transactions. It sounds like a win-win to me. What do you think? Write me with your opinion.
Until Next Time
Editor in Chief, RWWNL