Editorial
Economy Squeezed As Debt Accelerates
Senator Jeff Sessions, ranking member of the Senate Budget Committee, has pointed out that our per capita government debt is already larger than Greece's. Per person, our government owes over $49,000 compared to $38,937 per Greek citizen. Our debt has just reached 101% of our Gross Domestic Product. Our creditors see this and have quietly slowed down or stopped their lending to us. As a result, the Federal Reserve has been outright monetizing debt as a way to patch things together and keep the economy on life support a little longer. There is rapidly shrinking demand for our debt, and confidence in the dollar is falling. This phenomenon is hidden only by the fact that confidence in all other fiat currencies is falling faster.
None of this seems to really alarm the administration, obviously, as they have just released a budget that accelerates spending and borrowing. The reason the debt and deficits plague the economy, according to this administration, is that the American economy is not taxed enough. Therefore, hidden in the fine print of the budget is a provision that ramps up the corporate dividends tax rate from its current 15% to 39.6%. In addition, certain deductions and exemptions will be phased out; an additional 3.8% Obamacare investment tax surcharge will be tacked on, bringing the effective dividend tax rate to 44.8% in 2013. Keep in mind, this is not just a tax on big business, this is a tax on anyone who depends on dividend income to live − retirees will be hit hard by these changes and dividend yielding stock prices will adjust downward rapidly to reflect their decreased value.
Not only this, but the Obama administration is worsening the uniquely American policy of taxing income of US based companies earned overseas. No other country presumes to tax globally in this manner, so it amounts to a huge penalty for basing a company in the US. Companies have been able to manage this penalty by deferring taxation until it is repatriated or by paying dividends. What will happen to US based businesses with strong international ties if these allowances are abolished as the Obama administration proposes? A massive wave of permanent capital flight will undoubtedly cause the already high levels of unemployment to rise.
Businesses are struggling and failing in this economy. The government ultimately depends on a healthy business climate to provide jobs and a tax base. It is penny wise and pound foolish to add to business tax burden in a misguided attempt to close the colossal gap between our government's revenue and spending. Rather than crippling and absorbing more of our shrinking economy, government needs to be drastically cut − not in 10 years, but immediately.
Those who understand the underpinnings of the dollar and how the Federal Reserve works have known for some time that we are on an unsustainable course, that major chaos is in store if nothing is done quickly to reform things. Politicians pay lip-service to reforms that never materialize or turn out to be at best small and meaningless, or at worst actively harmful. It seems more and more inevitable that because the necessary changes would be too inconvenient for the elites to enact now, we will get them later Greek-style, through collapse and chaos.
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Posted by rossbcan on 03/01/12 07:16 AM
"So help me God."
"they" are in the process of discovering that behaving to the contrary (actions) must, and will result in defensive consequences by "we, the people", asserting our inalienable "rights to choose life", driven by non-negotiable survival imperative of life.
... and, since "they" have chosen to open Pandora's Box by forcefully decreeing their right to determine "who gets what" (no property rights), they have forcefully redefined our once peaceful "division of labor" civilization to a conflict driven "division of spoils" barbarism. That also, has consequences:
Click to view link
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Posted by thomdd1959 on 03/01/12 03:42 AM
Ron Paul,
C'mon Get Real! Please stand up tall for Our Great Constitution! Do NOT Compromise!
Do NOT let U.S. down!!! You have 'standing'.
Do Not remain Complicit and allow 0bama on the 2012 ballot. If you do and compromise Our Beloved Constitution then you are no better than 0bama. If so, then your 35 year record of serving with Honor and Integrity is all in vain.
Our Beloved Constitution Matters!
0bama (042-68-4425) can NEVER be POTUS or Commander-In-Chief.
This most obvious charade must End.
Enough Is Enough!
0bama is the Number One National Security Threat to Our Great U.S.A.
0bama Must Step Down Now !!!
Truth Is Truth!
Article 2 Section 1 Clause 5 of the Constitution of the United States says:
'No Person except a natural born citizen, or a citizen of the United States, at the time of the Adoption of this Constitution, shall be eligible to the Office of President;'
Everyone in Our government knows the Truth that 0bama does Not qualify to be POTUS.
Can ANY of Our entrusted representatives stand with Honor and Integrity and shout the very obvious Truth?
Why are All Our Supreme Court Justices a bunch of traitorous Cowards?
This complete lack of respect to 'We the People' and Our beloved Constitution is both disgusting and repulsive. They make me sick!
Corruption, deception, fraud, lies and lack of Integrity can no-longer be tolerated.
Our Beloved Constitution solves ALL of our problems and must be Enforced, Respected and Restored.
0bama, you don't belong in 'We the People's' White House, Now Get Out!
Truth Is Always Truth!
The 'Chain of Command' is broken at the Top!
0bama Broke the 'Chain of Command'.
0bama Must Be Arrested as a Terrorist to 'We the People' and Our Beloved Constitution for charges including Treason, Espionage, Sedition and Fraud.
A Traitor's signature is Null and Void on ALL Executive Orders, Legislature, Treaties, Laws, and Appointments.
Stand by your oath……………The oath is simple and reads:
'I do solemnly swear that I will support and defend the Constitution of the United States against all enemies, foreign and domestic, that I will bear true faith and allegiance to the same, that I take this obligation freely, without any mental reservation or purpose of evasion, and that I will faithfully discharge the duties of the office on which I am about to enter: So help me God.'
Click to view link
Posted by Danny B on 02/29/12 11:27 PM
"Debt accelerates" Gee wiz.
Debt can only be serviced with cash-flow. When you service debt with more debt, debt accelerates.
Click to view link
After the Latin America crash, GOV allowed the banks to keep bad debt at face value until the banks could grow profits and take the write-downs.
GOV tried to do a replay on mortgage debt. The quantity was just too big,,, the contagion just spread too far. The banks have no chance of producing the required profit.
The fed gave them free money that bought them a bit of interest by re-depositing it as excess funds. It just isn't enough. Out of desperation, the banks raised fees to generate a bit of cash. Depositors left. They have a huge overhead. Cash is nowhere to be found. NOT a big surprise when the whole system is based on debt.
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Posted by Bischoff on 02/28/12 09:07 PM
LOL... it would be like paying a penny on a billion dollar debt.
Posted by Cognizant on 02/28/12 08:16 PM
I have an idea, lets take all of the wealth that congress people accumulated during their time in office, and use it to help pay down the debt. And if their spouse and any of their friends who benefitted from it, lets take thiers too. They rob us, why can't we rob them?
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Posted by rossbcan on 02/28/12 06:38 PM
"What's to worry? "
your attitude, based on the false assumption that "have wealth EQUALS criminal"
try elite CRIMINALS, profitting by "proceeds of crime", including debasing the currency and counterfeiting can pay both restitution and, triple reparations.
That, I can buy into, but, THEY will have to be "convinced".
Posted by jkluttz on 02/28/12 05:05 PM
The one percent can pay it. That's only $4.9 million or so each. They can also pay the government's unfunded liabilities. That's only $25 to $50 million each. What's to worry?
Posted by laceja on 02/28/12 04:48 PM
I'm with you Frank. The problem is your list of "reasons" are simply "excuses". There is only one real reason Americans continue to vote for the bankster controlled politicians and that is, because they continue to believe in the tooth fairy promises of those politicians. Running for office has become a contest of who can promise the people more and make it sound possible. Americans are about to walk through a door that leads right over a shear cliff.
Posted by Frank on 02/28/12 03:45 PM
It bothers me to no end that most Americans still dismiss Ron Paul as best candidate for POTUS. Most tell me:
1. He's too old
2. He's amoral
3. He's an isolationist
4. He can't get anything done (never passed significant legislation in 30 years)
Wish we all had started to listen to him 30 years ago. Even if elected, it may now be too late to avoid a financial meltdown.
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Posted by Bischoff on 02/28/12 03:36 PM
"As long as the USD can be used to buy food and gasoline, there will be confidence in the USD."
The USD will only be accepted for food or refined petroleum products, as long as Saudis continue to quote crude oil in USD, and as long as the U.S. military can guarantee the free flow of oil out of the Persian Gulf.
The Saudis are the lowest cost (marginal cost) oil producers. As long as they can pump oil and ship it without interference, they set the "price" (value) of a bbl of crude oil which is in fact the "world price" of all crude oil pumped anywhere. The Saudi fix determines the oil price for Russian, Indonesian, Nigerian, Iranian, Iraqi, North See, Texas, Alaskan, Canadian, Brazilian, and any other crude in the world. Price differences of a particular crude oil has only to do with the quality of that crude and with the point of delivery.
The interesting phenomenon is that, if you plot the value of Saudi crude against the value of Gold, you obtain a graph where the Gold value is perfectly synchronous with Saudi fix of crude value.
The point... ??? Gold is the standard. The Saudis, in cooperation with the American oil majors, only adjust the value of Gold by adjusting the value of Saudi crude oil. This is only possible, because every currency in the world has been demonetized, meaning there is no gold standard left for any currency in the world.
You can buy food and gasoline, because there is "gold value" to the USD by the way the Saudis fix the value of crude oil. Stop the quote of crude oil in USD, or prevent the free flow of oil out of the Persian Gulf, and you knock the legs out from underneath the USD.
Of course, eventually the Fed's QEs will ruin the USD anyway, unless of course they are stopped. However, if they are stopped, the USD collapses.
The answer... ??? Get rid of the "legal tender" protection of the USD/FRN, and let private banks create a "redeemable" currency under the Real Bills Doctrine. This will avoid a total collapse of the USD/FRN, and it will allow time for markets to sort out the mess.
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Posted by dave jr on 02/28/12 01:51 PM
"by destroying all competetion, leaving no choice"
Yes, monopolization. A term I use often, is running rampant in all sectors. Not from freedom of choice for excellence or value, but from coercion by crony regulation.
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"The internet has destroyed the ability to mount frauds of any longevity."
The internet has only scratched the surface. Barely a nuisance, but with the educational attribute of conversation, it is in the right direction.
Posted by speedygonzales on 02/28/12 01:13 PM
The government and the troika are inflicting a strategic and violent redistribution of income off the backs of the weakest; the welfare state (health, education, social security and public utilities) is going to fully collapse, and Greece will be turned into a colony with German Gauleiters as governors. The Greek Debt Audit Campaign, together with other social groups had foreseen this as a raw class conflict that will sink society into misery, demolishing rights which took decades to instate.
Click to view link
Support Greek Debt Audit Campaign as 'Greece is a laboratory for the policy of austerity' and Greece is a smokescreen to hide the mother of all bank bailouts.
Posted by speedygonzales on 02/28/12 12:56 PM
I do not like 2be pesimistic, Mr. Paul. But. We will C what Debt audit in Greece say. As we all C 4 now there is lotta toxins and DCS's in it. The game is not like this: We gave U money and U give us back, let say like home mortgage. This not the game in centralized entities. Game is: We give U some money and some toxins. U get some money @ offshore account if you hide those toxins in government budget. And folx will pay. What I see pesimistic is, that the bottle with toxins opened Bill Clinton. And R Made in USA. Ok with help The City, Deutsche Bank, as empire. But I see as main point with 'em to export 'em. If nobody takes 'em they stays home. And what is home it counts. Just BofA sits on toxins 5X US debt. So what those smart folx will try to hang 'em on ams noses as 2big2 fail.
Rules of the game: They ain't got no money, but they got papers in hands and guns pointed aginst us in our hands. But there is high posibility they stay with papers in hands but without guns. Thats what happened in Greece.
*Greek President rejects aggressive German power grab over country; 'default better than a German pistol at head'
*GREEK POLICE SAY THEY WILL ARREST TROIKA FOR JEOPARDISING SURVIVAL OF GREEK PEOPLE AND UNDERMINING DEMOCRACY
*Former NATO General Harald Kujat threatens Greek military over putsch, warns Greeks to capitulate to Troika jackboot or face NATO Stormtroopers
Click to view link
Hope U win, Mr. Paul
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Posted by rossbcan on 02/28/12 12:16 PM
... and, any alternatives such as Iraq's euro "oil bourse", Libya's "African, gold backed Dinar" and, Iran's "oil bourse, trading for anything but $US" are to be severely smited. And, Hitler's Germany, prior to aggressions was engaged in trading manufactured goods for raw materials (barter), internationally, cutting out "monetary interests" completely.
thus, "demanded to be accepted" requires destroying all alternatives.
There are only two ways to compete:
"by excellence, in a market of those free to choose", OR, "by destroying all competetion, leaving no choice"
I think it is safe to conclude, along with maintaining command of mankind's productive energies by printing fiat currency "from nothing, backed by nothing", the "issue" of controlling the currency and smiting any alternatives IS our slaver's primary "hot button", because it is their primary strength and weakness if ever successfully challenged.
and, the US, having forsaken free enterprise, honest trade and productivity is locked into force / fraud as alternatives. The internet has destroyed the ability to mount frauds of any longevity. That leaves force for the US, and, they have destroyed the economic base to replace both their military losses and for domestic defense. They are toast and will soon be shedding crocadile "tears of empire".
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Posted by dave jr on 02/28/12 11:48 AM
i.e. the Saudis and OPEC say only the USD (USD demanded). And yes, legal tender law, USD "demanded to be accepted" domestically.
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Posted by rossbcan on 02/28/12 11:00 AM
"Not just accepted, but demanded."
IMHO, clarification: "demanded to be accepted"
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Posted by dave jr on 02/28/12 10:28 AM
Not just accepted, but demanded.
As long as the USD can be used to buy food and gasoline, there will be confidence in the USD. If there is a collapse, it will be a controlled one unless the food and oil production itself collapses.
Obviously the elites are not done yet.
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Posted by rossbcan on 02/28/12 06:45 AM
Whether this is good, or bad is a matter of perspective.
don't worry, be happy. Nobody has to compromize or do anything. The grim reaper of "Mathematics of Rule" (reality) is on the ball:
Click to view link
the Obaminator, as his many predecessor pawns is doing exactly what mankind's predator's want, completely and utterly destroying the hollowed out shells of institutions of freedom and free enterprise and attempting to solidify perception of the false point: "freedom cannot work" (THEY need to be "in control").
Does anybody notice, does anybody care?, DB's wondeful question should be appended to Judge Napolitano's. As in all questions pertaining to mankind, the answer will be by action / inaction, not words.
Posted by Merridth80 on 02/28/12 06:35 AM
I have been hearing disturbing things: That your campaign is a shill for romney,that it is a shadow play for him.
I hope this is propaganda!
Because on so many levels you are totally RIGHT!!!
Are we going to continue to borrow trillions to be able to give Foreign Aid to those who use it to kill our people?
Why doesn't someone Impeach soetoro/obama/soebarakah, or whoever he is?
What has happened to our people? We have become gutless, witless, spineless imbecils!!!
If this is what society is supposed to evolve to, let me go live in a cave & do for myself!
We are living in a time when you cannot trust anyone, I also believe if there is a God, he is sitting there watching this whole specter and letting us destroy ourselves, laughing to tears at us!
Posted by WD on 02/28/12 02:22 AM
Our problem is, since big business/big banking has bought Congress and particularly the regulatory process, no one believes either big government or big business act in the public interest anymore. They're right. There is justice for them, but not anyone else. At this point, most believe collapse is preferable to business as usual. However, it's tantamount to the Watts riots. 'We'll show you! We'll burn down our neighborhood!' (and make things even worse)
The Nazis and the Stalinists are gleefully wringing their hands while the elite dream of a global population of less than a billion, just enough cattle to be their perpetual slaves.
The day will inevitably arrive when we, like Greece, will have to default on loans made out of thin air. At that point, a new system of loans out of thin air will have to be quickly constructed in order to 'save world commerce'. It will either be owned and run by the same banksters that raped us with this system or by government itself. Neither are trustworthy if actual experience is any indication. The only other choice is to permit only loans from actual assets (savings) which leaves the elite still firmly in control although with limited rather than unlimited capital.
The elite who have tasted of unlimited power and capital will never willingly settle for anything less. That means we are in for a very ugly conflict between the interests of the elite and their minions and the interests of everyone else. God helps us if this conflict can not be decided decisively by peaceful means. As long as corporations are 'people' under the law there can be no such decisive resolution as government, including the justice system, will continue to be bought by corporate power. The prognosis, then, is collapse (or a series of collapses) followed by violent chaos, a hell only the elite consider to be desirable. The Republic will not likely survive it. The far left and the far right couldn't be happier. It may be useful to mark now those who so gleefully anticipate and actively hasten the demise of the Republic.
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