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WHAT SHOULD WE DO TO SAVE THE AMERICAN ECONOMY?
Darrell L. Castle
Is the current tactic being employed to save the American financial system, the bailout, working? The answer to that question depends on your definition of the word “working”. If by “working” you mean the transferring of the nation’s wealth from working Americans to the bankers; the exponential accumulation of debt that must be repaid with interest by future generations; the destruction of the value of the dollar and with that destruction the lowering of the standard of living of working and retired Americans, creating the conditions that make martial law inevitable and with that declaration of martial law a world currency and world central bank; the nationalization of the American financial system; the ensconcing in positions of power, privilege, and dominance over the system of the very people who caused the crises in the first place, it has worked in spectacular fashion.
If you define “working” as ending the credit crises and freeing credit for business to put people back to work; allowing stable and profitable banks to emerge and lead the system back to stability; the avoidance of taxpayer money being used to pay huge bonuses and salaries to executives who have led their companies to failure; the avoidance of taxpayer money being used by banks to acquire stable, profitable companies including those not in the financial industry; avoidance of economic depression and with it the conditions of civil unrest and chaos, then it has been an abject failure.
The bailout and the coming economic stimulus follow what Keynesian economic theory dictates that we do. Keynesians believe that recessions are caused by a drop in aggregate demand. The Keynesian answer then is to increase demand by lowering interest rates. When interest rates are lowered to zero, which they now have been, without a corresponding increase in demand, it is because we are not squandering our money fast enough and thus the government must step in with a “stimulus” and squander it for us. This theory and tactic has worked in the past but will it work now? Not only will this tactic not work, it can’t work because for the first time in history debt, both public and private, has reached exponential growth. A problem caused by too much debt and credit that is too loose cannot be fixed by piling on more debt and more loose credit. More importantly, it can’t work because the underlying productive economy has been destroyed. Our manufacturing has been taken off shore to China, and Mexico. Our information technology has been taken off shore to India. Our financial system is obviously bankrupt.
Is there anything that can be done then to save this economy? Yes, there are many things that we could do which collectively would bring economic recovery very quickly.
End The FED. Monetary reform and economic recovery are not possible unless Congress is able to recover its Constitutional authority over our monetary system. The growth of debt must be stopped and reversed, and the debt based system of monetary creation through interest bearing bank credit must be reversed if we are to recover. The Federal Reserve Act of 1913 should be rescinded and the FED banks liquidated and their assets turned over to the US treasury. It would be acceptable for them to continue under a different name as independent clearinghouse banks. Once Congress regains its Constitutional authority over money, it could issue money based on the full faith and credit of the United States or said another way, based on the labor and productive capacity of the American people. This money and credit would keep the economy functioning and prevent depression while we transitioned from our present debt based system to the gold standard. Some type of income restitution should be considered to replace money stolen from the American people through the FED’s 95 years of fraud and theft. It could be called a negative income tax or income restitution, or simply a people’s dividend. This people’s dividend could be paid from Congress directly to the American people on a monthly basis for a temporary period of two years. The payments, which would assist with the government’s transition to a gold standard would replace much of our current welfare system and would go equally to all citizens who are eighteen years of age or older and who are not in prison, on parole or on probation. The two year time period would give Congress plenty of time for the transition as well as time to evaluate the dividend’s effectiveness.
Withdraw From Both Wars Immediately. Our nation has never been able to pay for these wars except through massive debt or massive inflation. Immediate withdrawal would save at least a trillion dollars.
Secure Our Borders. Securing our borders would relieve pressure on the social systems of state and local governments which are now asking for bailouts of their own. The Federal Government should perform its constitutionally mandated duty under Article 4, Section 4 and protect the states from invasion. All immigration, even legal immigration, should be stopped until our borders are secure and our social systems and economy are under control. Immigration laws should be enforced within the United States. This would save several hundred billion dollars per year.
Repeal All So Called Free Trade Agreements Such As NAFTA, WTO, and GATT. These agreements serve the interests of international mega corporations and foreign governments at the expense of the American people by encouraging manufacturing jobs to locate off shore. These agreements also serve to destroy small farms and small businesses in favor of those same mega corporations thus rendering the American people dependent on the whims of government for the necessities of life. This would save several hundred billion dollars per year.
Withdraw From All Foreign Alliances and International Organizations. These agreements and organizations such as the UN and NATO continually seek to destroy American sovereignty and tend to lead us into foreign wars that have little or nothing to do with the defense of America. A free and independent people should have no part in such agreements and organizations. This would save hundreds of billions of dollars per year and would allow for the rebuilding of our military for the true defense of the American people and our way of life.
Close Down Much Of The Federal Government. Many federal departments such as the Department of Education, Department of Energy, Department of Transportation, and the Department of Commerce serve no useful purpose and should be closed and their assets liquidated and returned to the US treasury. The primary effect of these departments seems to be the increase of government power and control over the lives of the American people. This would save at least several hundred billion dollars per year.
Abolish The IRS And The Income Tax. The cost saving ideas previously listed and discussed would allow for a balanced budget and the American economy would rebound very quickly. The government, then reduced to Constitutional size, could easily be funded by a small, non-punitive, tariff. There should be no direct federal tax on the American people. This would save untold amounts of money.
Repudiate All Public Debt To The Banks. Public and private debt are very different in that a private debtor voluntarily pledges his own assets, income, etc. in return for a loan and thus the creditor foregoes the use of present money in expectation of being repaid with interest. A public debtor, on the other hand, pledges other people’s future income and assets which that public debtor must take from those people by force. None of them had direct say in the making of the debt. In addition, much public debt to the banks was incurred through fraud and extortion of the kind that occurred when Congress was intimidated into voting for the bailout with threats of civil unrest and martial law. These tactics would land most people in prison if used in private business deals. Foreign governments who hold American debt should be assured of repayment and their investments should be protected as much as possible thus foreign trade could continue and government could continue to be funded. There should be plenty of money available to redeem our bonds, etc. from foreign governments and this would have the additional benefit of reducing our dependence and vulnerability to blackmail.
The Portion Of The Public Debt Owed To Other Federal Agencies Should Be Written Off. The federal government carries a large amount of debt owed to various departments of the Federal Government and this debt should be written of and stricken from the books.
If the Federal Government would take the steps outlined in this article the American economy would not only recover but would unleash a new era of innovation and production. Do Congress and the new President care enough about the American people, their lives, their families, their liberty, their security and their peace to do these things? So far the answer appears to be no, but time will tell. If the Federal Government were to take these steps, it should then back off and leave the economy alone. As someone once said, “there is no problem that government can’t make worse”. Personal and business debt would be shaken out through payment, write-offs, bankruptcy, and other methods. There would be a quick recovery and balance sheets would soon return to normal. Instead, our government has reduced interest rates to zero and will soon “stimulate” the economy with hundreds of billions of dollars of borrowed or created money which will make the problem worse, a lot worse. What happens when the government’s tactics do not work? Well, I suppose that is one reason why all those Federal troops have been assigned to Northern Command.