In the worldview of Geithner and like-minded economists, credit, rather than savings, is the central figure in the economic equation. Therefore, he sees anything that eases the process of lending to be an effective economic policy. With such a view in mind, the centerpiece of Geithner’s plan is the commitment of up to $1 trillion to revive the collapsed market for securitized debt. In the lead up to the Crash of 2008 securitization, more than anything else, permitted Americans to borrow more than they had ever borrowed before. FULL ARTICLE

Ron Paul on MSNBC 01/27/09

“You have to understand how we got into this mess. We got into this mess by spending too much, borrowing too much and inflating too much.

So what is the proposal? Spend more money, borrow more money, print more money…it makes no sense whatsoever.”

Barack Obama has spoken often of sacrifice. And as recently as a week ago, he said that to stave off the deepening recession Americans should be prepared to face “trillion dollar deficits for years to come.”

But apart from a stirring call for volunteerism in his inaugural address, the only specific sacrifices the president has outlined thus far include lower taxes, millions of federally funded jobs, expanded corporate bailouts, and direct stimulus checks to consumers. Could this be described as sacrificial? Continue reading →

The only way fiscal stimulus could “work” is if the flow of real savings (i.e., real funding) is large enough to support (i.e., fund) government activities while still permitting a positive rate of growth in the activities of the private sector. (Note that the overall increase in real economic activity is, in this case, erroneously attributed to the government’s loose fiscal policy.) FULL ARTICLE

The financial damage inflicted on Americans by their own government is as great as would be expected from foreign conquest.  While Washington “protected” us from terrorists by fighting pointless wars abroad, the US economy collapsed.  FULL ARTICLE

The economic situation continues to deteriorate this week as past and future bailouts were discussed on Capitol Hill.  The debate was over the accountability of already disbursed TARP money, and on whether or not to release remaining funds.   Banks that had already been bailed out before are looking for more money to fill the black holes that are their balance sheets, warning that they are simply too big to fail. However, whatever ‘devastating’ consequences these banks are dreaming up and pushing on Capitol Hill regarding their own collapse will be nothing compared to the collapse of our currency if we keep debasing it through these foolish bailouts.  It should be that they are too big to bailout.  The world will not come to an end without this or that bank.  The most troubling thing to me is this rhetoric that only government can save the economy, and must act.  This is so counter-productive. FULL ARTICLE

The unpleasant reality is that years of bad monetary and fiscal policy have over encumbered our economy with debt and undermined our industrial capacity. The sooner we can begin to repair the damages, the sooner we can right the ship. If instead we merely administer more of the same, the ship will sink in a sea of inflation.  FULL ARTICLE

If foreigners cease buying and instead start selling from their existing holdings–China alone holds $500 billion in Treasury debt–a deluge will fall on an already flooded market.  The  Federal Reserve could move to monetize the debt.  In other words, the Treasury prints bonds and the Fed purchases them by printing money.  The supply of money thus expands dramatically in relation to goods and services, and high inflation, possibly hyperinflation, would engulf America. FULL ARTICLE

The time is nearing when a cluster of demands will be placed on government that it is entirely incapable of meeting. The American people will turn away from government-as-they-know-it and necessarily seek alternatives. When that time arrives, I hope that they abandon their long-held model, which is Government as Guarantor. This model has never worked. It has always caused negative effects that people overlooked as they attempted to shift the cost of guarantees (insurance) onto others and away from themselves. FULL ARTICLE

Here’s some important questions to consider in light of the news of soaring US debt in 2009:

Question No. 1:  What happens when our de facto fascist government can no longer finance its operations by incurring more debt?

More specifically:

Question No. 2: What happens when they can no longer finance its ongoing wars of aggression in Iraq and Afghanistan? Continue reading →