Yesterday, I checked my post office box and, as usual, there was no response from Senators Pat Toomey, and Bob Casey. And there was no response from Congressmen Tim Murphy, Mike Doyle, Jason Altmire, Mike Kelly and Pennsylvania State Representative Jesse White.
Senator Toomey has refused to acknowledge my December 10, 2010, letter, my February 6, 2011, e-mailed copy of that letter and my February 7, 2011, phone call confirming that his Washington, DC, office received the e-mail. I would like to remind Senator Toomey that I have a Constitutional right “to petition the government for a redress of grievances.” To date, he has denied me this right. The same charge applies to the other six politicians. This is a clear case of taxation without representation.
I am reluctant to fall into the trap of sending follow-up letters, faxes and of making dozens of fruitless, long distance phone calls. After seven years of frustration, I have learned that all that effort was a waste of time and money.
I believe this stonewall of silence reveals something very important: Politicians have an agenda that is framed and controlled by campaign contributions. This, of course, is old news. However, I don’t think the true consequences of this situation are fully understood. For the people who are concerned about the turmoil in “the markets,” the partisan slugfest in Washington and the bi-partisan attack on social security, Medicare and Medicaid, this is my view of the “The Big Picture.”
First of all, I would like to encourage everyone to research and verify everything that I say. The easiest way is to go on line and “Google” key words like “capital strike” and key concepts like “cutting taxes increases tax revenues.” You will usually find thousands of articles on virtually any subject. It is important to read articles on both sides of the issue. That way you can make an objective judgment. I recommend the articles on this web site as a starting point. Just click the articles on the right side of this page. These articles are my campaign platform from my 2010 run for the Pennsylvania state legislature. Please click on my article “Taxation” to get a counter argument to the notion that cutting taxes increases government revenue. For the record, I would like to state emphatically that I have no intention of running again for public office.
It is truly remarkable that after more than seven years and my two political campaigns, not one politician, media pundit or academic will engage me in a serious public debate on this web site. Who are the people who won’t debate me? You name them, and I’ve probably called, written, faxed or e-mailed them. Seven glaring examples of the stonewall of silence are in bold type in the first paragraph of this UPDATE.
To examine the Big Picture, let’s start with the above mentioned term, capital strike. This is a polite way of saying economic blackmail. The primary reason the Great Depression dragged on for ten miserable, disastrous years was that the banking and business communities imposed a capital strike on the American economy. They did this to punish President Franklin D. Roosevelt for the New Deal. To be blunt, I’m sick of listening to conservatives and Republicans blaming the New Deal for the Great Depression. This is a myth created to discredit the truth that the government can fix problems that are caused by the private sector. And, the Great Depression was not caused by the Smoot-Hawley tariff legislation. This is another myth, created to justify unregulated, free market globalization, which is one of the main causes of our present economic and fiscal problems. I bring up the issue of a capital strike because the American economy, and the American people, are currently the victims of a new capital strike. Apparently, campaign contributions from banks and corporations have mandated that the Democrats never acknowledge this fact. But, before I explore the issue of the capital strike, I want to, once and for all, set the record straight with regard to the Great Depression.
The seeds of the Great Depression were sown, in 1919 (after World War I), when crushing reparations were imposed on Germany by the Treaty of Versailles. Then, in 1929, the stock market crash wiped out the cash reserves of the American banking system (and exposed the fatal flaw of our fractional reserve system). In the spring of 1931, Austria’s Creditanstalt, the biggest bank in Central and Eastern Europe, failed. This triggered the collapse of the entire European banking system. Without credit, the global economy went over a cliff. This is exactly what happened in 2007/2008. This time, however, the trigger was the massive fraud and greed on Wall Street. That, the product of deregulation, destroyed the global housing market and the banking system. Believe it or not, it was the actions of former Treasury Secretary Henry Paulson, Federal Reserve (Fed) Chairman Ben Bernanke and Treasury Secretary Tim Geithner, under the authority of President Barack Obama, that prevented another Great Depression. Unfortunately, nobody in the public or private sectors did what was necessary to prevent the mortgage meltdown disaster and the global credit crisis.
It has been said that the Great Depression was caused by the Smoot-Hawley tariff because it restricted global trade flows. This is total nonsense. Millions of Americans were out of work and destitute. They owned nothing but the clothes on their back. Why didn’t the American private sector economic system put these people to work producing the goods and services that they desperately needed? Two reasons: one, the banking system and stock market destroyed a large part of our money supply. And two, after President Roosevelt, that is, the government, recapitalized the banks; they went on strike to punish FDR for being a great president. The similarities to today’s “jobless recovery” are undeniable.
In 1937, thanks to government intervention, the economy had recovered significantly. However, on the advice of his supply side economic advisors, President Roosevelt drastically cut government spending in order to balance the budget. The result was the Second Great Depression. Too bad President Roosevelt didn’t have better economic advisors. He should have followed the Constitution (Article 1, Section 8, Paragraph 5) and example of President Abraham Lincoln. As Lincoln did in 1862, Roosevelt could have had Congress authorize the Treasury to issue debt free United States Notes (Greenbacks) and put that money directly into the economy. That would have been a debt free, tax free, economic stimulus. The money injection would have countered the capital strike and quickly ended the Great Depression. For an explanation of how Treasury-issued, debt free money can solve our economic and fiscal problems, please click on my article The Legal Basis for Lincoln/Kennedy Monetary Reform.
Today, Governor Rick Perry’s statement, that Fed Chairman Ben Bernanke’s actions were “almost treason,” may have unintended consequences. Mr. Perry, in a peculiar way, endorsed the idea that “printing more money” stimulates the economy. But, apparently, Rick Perry doesn’t want Ben Bernanke to stimulate the economy until after the 2012 election. This might be good for the Perry Campaign but it would be hell for the American people.
Of course, increasing the money supply, aka “printing more money,” stimulates the economy. That was the lesson we learned the hard way from the Great Depression. The notion that printing more money devalues the dollar and causes inflation is debunked in part three of my article Social Security/Pensions. I don’t want to give a long dissertation on monetary theory now. I just want to make a few points. Right now, we are in an economic trap. Globalization has created a permanently weakened American economy. The Bush/Obama tax cuts drastically reduced tax revenue. Factor in the $14 trillion national debt. The result: the government doesn’t have and can’t borrow enough money to stimulate the economy. And the capital strike, apparently, means the private sector will sit on its hoard of cash until they get a Republican in the White house. It all adds up to (or subtracts to) the “New Normal” of permanent austerity for workers, the poor, the sick, the disabled and the elderly.
The new deficit commission has a mandate to cut $1.2 trillion from the federal budget. How much good, useful and necessary spending will be cut? The Constitution gives Congress and the Treasury the authority to issue enough debt free money to “promote the general welfare” and “ensure the domestic tranquility” of the American people. In light of this fact, to eliminate good, useful and necessary spending to “balance the budget” is the height of stupidity. A perfect example of this stupidity is the politician’s attack on NASA. This is a classic Washington/Wall Street squeeze play: politicians underfund the space program because of the national debt and reduced tax revenue. The private sector and foreign governments then happily fill the void left by what is a precious national asset. As a result, the American people will have to pay the private sector and foreign governments a fortune for what our government can do for free! This isn’t fiscal responsibility; this is fiscal stupidity. We will have privatization rammed down our throats no matter how stupid or destructive it is. If the private sector wants it, the politicians will force us to take it.
When it comes to economic data, you can’t believe the numbers or the people who put them out. If you factor a deliberate capital strike into the economic data, all the numbers suddenly become meaningless. For example, Unemployment is 9.2 %. This proves the economic stimulus didn’t work, and President Obama’s policies kill jobs. Wrong. What would the unemployment rate be without the capital strike? (And what would the unemployment rate be without the stimulus?) Another example: The Gross Domestic Product is an anemic (pick your number) %. This proves President Obama’s economic policies are a failure. Wrong. What would the GDP be if there was no the capital strike? (And what would the GDP be without the stimulus?) The capital strike has been literally and publicly acknowledged by prominent media fixtures, Larry Kudlow and John Fund. And a capital strike has been blatantly implied and threatened by the famous Tea Party leader, Dick Armey, and many other conservative pundits. But, for some unexplained reason, it seems that the Democrats haven’t noticed the capital strike. I guess they would rather lose another round of elections than be accused of “bashing corporate America.” To read how we can create good jobs without government borrowing or raising taxes, please click on my article Rebuilding American Manufacturing.
The Republican “jobs plan” is to cut taxes on businesses and to destroy government regulation and oversight. This will, supposedly, dispel the “fear and uncertainty” that has, supposedly, paralyzed the business community and caused high unemployment. The Republicans and conservatives carefully avoid any mention of the New Normal economy that has been crippled by globalization and deregulation. I doubt that anything, including the Republican jobs plan, will induce the business community to abandon the maximum profit/global supply chain business model. The merchants and shareholders are demanding a transition to a China/India economic model.
The Democratic plan isn’t much better: borrow more money to build and rebuild the national infrastructure. Why can’t the private sector build and rebuild the infrastructure on its own? Why do the taxpayers have pay to hold the private sector’s hand? Meanwhile, the Right Wing plan to destroy government regulation and oversight is rolling along just fine. In all the talk about jobs, there is no mention of vitally important government jobs. When are we going to clean house at, and fully staff, the Securities and Exchange Commission? When are we going to clean house at, and fully staff, the Commodity Futures Trading Commission? Have we learned nothing from the financial disaster of 2007/2008!? The Right Wing wants to dismantle the Environmental Protection Agency. Now, that’s a really stupid idea: let’s poison the air and water. But, the Republicans counter that they were elected to deregulate. In reality, the Republicans were elected because of the massive Republican/talk radio/Fox News spin machine. And, they won because there was little or no opposition from the shockingly weak Democratic Party and their Soros-funded “progressive” allies. The Republicans won by default.
I said there is a bi-partisan attack on social security, Medicare and Medicaid. How is this possible? Aren’t the Democrats supposed to be the defenders of these vitally important government programs? When Democrats call for a “payroll tax holiday,” they are reducing the amount of money that to goes into the social security trust fund. That sounds like an attack to me. This is the only thing I can think of where the Republicans agree with the Democrats. The Democrats claim the lost trust fund revenue will be made up out of the general fund. The problem with that idea is that the extra general fund money will be borrowed, thus, increasing the national debt. Apparently, the Democrats have adopted Dick Cheney’s idea that “Deficits don’t matter.”
To explain the bi-partisan attack on our social safety net, I’m afraid another history lesson is in order. After the terrorist attack of September, 2011, the Federal Reserve made a series of interest rate cuts. This was supposed to prevent the economy from going into a recession. According to some revisionist historians, this was the cause of the disastrous housing bubble. This claim is more self-serving nonsense. Low interest rates should have resulted in low interest rate fixed rate mortgages. But the banks, and Wall Street, did exactly the opposite with adjustable rate mortgages, securitization and predatory lending practices. At the same time, mortgage brokers made fat fees for originating mortgages to just about anybody who would sign on the dotted line. Rating agencies sold AAA ratings for junk mortgage backed securities. And appraisers and real estate agents hitched a lucrative ride on the runaway mortgage freight train. All of this pumped air into a gigantic housing bubble. When the bubble inevitably collapsed, it wiped out the fictitious part of our money supply that was composed of mortgage backed securities and bogus home values. This was very similar to the credit crisis of the early 1930s.
And, much like the 1930s, after the housing bubble burst the global economy instantly plunged into the Great Recession. This, too, is old news. However, this disaster has a direct bearing on the bi-partisan attack on social security, Medicare and Medicaid. And, this disaster is a good starting point for a new Wall Street Conspiracy Theory.
Briefly, the conspiracy theory goes like this. From the minute Democratic President Bill Clinton signed the Republican Gramm, Leach, Bliley deregulation legislation in 1999, the economic and financial disaster of 2007/2008 was inevitable. It didn’t take long for most, if not all, of the Wall Street fat cats to figure this out. But, they knew that in the run up to the collapse, there was tons of money to be made. And, they also knew that when the bubble inevitably exploded, the government would pick up the pieces and bail them out. The government had to bail them out because, if they weren’t bailed out, the global economy would have collapsed, and it would be the Great Depression all over again. Don’t believe the conservatives and Republicans who dispute this historical fact. They are just plain wrong (or worse).
Although Bernanke, Geithner and President Obama saved us from another Great Depression, they couldn’t save us from the subsequent Great Recession. The Great Recession ushered in the “New Normal.” The New Normal is: high unemployment; stagnant or falling wages; record corporate profits; a structurally weakened American economy and, most important, drastically reduced government revenue.
Conservatives and Republicans hated social security, Medicare and Medicaid from the minute they were created. Their ongoing efforts to destroy these programs can be found in the historical record. Now, with a $14 trillion national debt and the Astroturf Tea Party Movement as their weapons, Wall Street and their allies finally have their big chance to destroy our social safety net. Corporate profits are at record levels but social security, Medicare and Medicaid are all on the chopping block. Conservative pundits say “There can be no economic recovery until the entitlement issue is resolved.” And, in a touching display of bi-partisan cooperation, both Democrats and Republicans agree – “cuts must be made to save these programs.” Remember, the seeds of the Great Recession and the bi-partisan attack on our social safety net were sown when Senator (Foreclosure Phil) Gramm, Congressmen Jim Leach and Thomas Bliley and President Bill Clinton deregulated the financial services “industry.”
Conspiracy or not, the fiscal mess in Washington and the national debt are now the justification for targeting another thing that conservatives and Republicans despise -- government regulation. After the disaster of the 2007/2008 mortgage meltdown, how can anybody in their right mind call for more deregulation with a straight face? The housing debacle was the result of deregulation and a lack of government oversight. That’s a fact.
Here is the question we must ask: was it stupidity or conspiracy? Lots of smart people on Wall Street and in Washington knew exactly what was going on in the housing market and where it would lead. Some people made huge amounts of money and some people positioned themselves to be out of the way when the house of cards came crashing down. I know Alan Greenspan publicly confessed to his low interest rate “mistake” that, supposedly, caused the crisis. But is that what really happened? Is this so-called mistake actually a cover story designed to absolve the FIRE sector of the blame for the crisis? (The FIRE sector is: Finance, Insurance and Real Estate.) Coincidence or conspiracy, the results of the crisis are just what Wall Street, conservatives and Republicans wanted all along: Social security, Medicare, Medicaid and government regulation are going to be whacked thanks to the mess caused by the housing bubble, the Great Recession and the national debt. Coincidence? It sounds like a PLAN to me. When you connect the dots, a conspiracy theory is born.
To learn how we can make social security, Medicare, Medicaid and the Pension Benefit Guarantee Corporation permanently solvent, without raising taxes or borrowing money, please and read my article Social Security/Pensions. For a detailed explanation of how the politicians are raiding the social security “trust fund” and how we can replace the missing money without raising taxes or borrowing money, please scroll down to the article “The Social Security Trust Fund” in my 2010 campaign web site located at the bottom of this site.
Finally, I would like to examine the problem of the national debt. After millions of words have been spoken and written about the debt, the debt ceiling and cutting government spending, there is still one important thing that is missing from the debate, the truth. The truth is that the national debt is a scam and a scandal.
It is a scam because the U.S. Constitution gives Congress, and only Congress, the authority to issue our money. This fact was proven during the Civil War when President Abraham Lincoln prevailed upon Congress to authorize the Treasury to issue $449,338,902 worth of debt-free United States Notes (Greenbacks.) I have covered the issue of debt free money extensively on this web site so I won’t labor the point beyond asking one simple question: If the Treasury can issue our money debt free, why do we have a $14 trillion national debt? After more than seven years of trying, I have yet to find anyone who will answer that question.
So, I guess it’s up to me to answer my own question. The national debt is a $14 trillion shakedown of the American people. Our politicians are so negligent and irresponsible that they have let the entire global financial system become dependent on our federal government debt: The Federal Reserve (Fed) creates money by buying federal government debt securities. Without the debt, there is no money. And, since the dollar is the world’s reserve currency, the American taxpayer is on the hook for the global money supply.
I know this sounds crazy but we learned the truth the hard way during the 2007/2008 global credit crisis. In late 2008, in order to fix a “global dollar shortage,” the Fed pumped $4.5 trillion into the global money supply. Does this make Fed Chairman Ben Bernanke a bad person? No. He had no choice. Without that emergency infusion of dollars, the global economy would have collapsed into a second Great Depression. The real villains are the Wall Street banksters who wrecked the global financial system that Ben Bernanke had to fix. My point is this: under our current economic/financial/monetary system, we can’t pay off the national debt.
Congress could legally authorize the Treasury to pay off the entire national debt in one crack with United States Notes. If they did that, what would happen? According to a newspaper editor that I wrote to, the entire global bond market would instantly collapse. I don’t agree with that doomsday scenario but, needless to say, the global bond market wouldn’t like it if their “benchmark debt” suddenly disappeared. And all those poor defenseless investors all over the world would lose their safe haven -- “the flight to safety” -- when the global financial markets are in turmoil. We don’t even charge them rent when they park their money in nice, safe U.S. government debt. In fact, we pay them. What a racket!
And, of course, the Wall Street wheelers and dealers need a place to park their money when they pull “The Big Short” and crash the global stock markets. It must be nice to get paid interest while you sit on your cash in nice, safe U.S. government debt and wait for the last sucker to “capitulate” and sell at the bottom. Then, the “value investors” can rush in and bargain hunt through the wreckage of the IRAs and 401 Ks. All this thanks to the American taxpayers and the $14 trillion national debt. What politician would dare to stand in front of that gravy train? The only one I can think of is me. But, I lost two elections, and I’m not running again. Oh well.
So, that’s the scam. We have a $14 trillion dollar national debt for no reason other than to benefit the financial services “industry.” Yes, yes, I know, the 401 Ks and IRAs have made us all investors and tax avoiders. What a master stroke! Now we’re all Wall Street banksters. We’re all riding the gravy train to wealth and prosperity, Right?
Not necessarily. Once upon a time the Japanese Nikkei stock market was 38,957.44. It crashed to 7054.98 but it “recovered” to 8963.72. The NASDAQ at one time was 5,132.52. It crashed to 1,108.49 but it “recovered” to 2,182.05. Believe it or not, some analysts have said that in the worst case meltdown, the Dow Jones “Industrial” Average could hit 1000! People who play the markets aren’t investors. They’re actually speculators. But there is always the “safe haven” of gold, right? In 1980, gold was $850 an ounce. In 1999 it was $251.70. Here are some fun facts for the Goldbugs (speculators): We can’t go back on the “gold standard” because there isn’t enough gold in the world to support a gold-backed currency. Gold is not money because gold is not legal tender. Only dollars -- Federal Reserve Notes and debt-free United States Notes are legal tender, that is, money. Some economists say gold is in a historic bubble, and the actual, intrinsic value of gold is $250 per ounce.
I always disliked the idea of speculating in gold because you are betting against your own country. When conservative fear mongers predict the decline and fall of America, the Goldbuggers rush out and buy more gold. Conservative talk show hosts who slam our “worthless dollar” are just pumping up the gold price. What a coincidence that these conservative talkers are sponsored by the same people who sell you the gold. I recommend an Internet search of the expression “pump and dump.” This will explain how financial markets work. What would happen if Congress totally fixed America’s fiscal and economic problems by issuing debt free United States Notes? Would gold crash to $250 per ounce? Like I said, the Goldbuggers are betting against their own country. Sometimes I wonder if the financial markets are all either Ponzi schemes or taxpayer shakedowns.
When will we pay off the $14 trillion national debt? Under our current economic/financial/monetary system, as I explained above, the answer is never. Without the issuance of debt free money, not only is it impossible to pay off the debt, it is becoming impossible to service the debt. I know, I know, all we have to do is tax the rich, close the loopholes, stop all foreign aid, shut down corporate welfare and bring the troops home, and the budget crisis will be solved. Good luck with that. Speaking of debt free money, the conservative economic geniuses tell us that foreign markets will refuse to accept Treasury issued United States Notes. This is more self serving nonsense. Foreign markets will have no choice but to accept United States Notes. They are legal tender just like Federal Reserve Notes. What’s the problem? For an explanation of why United States Notes are a legal and practicable solution to our fiscal and economic problems, please click on my article The Legal Justification for Lincoln/Kennedy Monetary Reform.
Conservatives, Republicans and some Democrats tell the American people that we are “living beyond our means.” Wrong. Our economic problems are caused by a defective economic/financial/monetary system. It is a system designed to produce debt. The historical record and current events prove that creating jobs is, obviously, a secondary consideration. Whether the means is provided for the American people to live is irrelevant. This ugly truth was revealed by the Great Depression and the current Great Recession.
So, how do the politicians plan to service our totally unnecessary $14 trillion national debt? The plan is to impose austerity on the people who can least afford it, of course. The politicians will punish the most vulnerable Americans just to protect the sacred national debt and the bond market parasites aka the Bond Vigilantes. Every politician takes an oath to uphold the Constitution. The Constitution mandates that every politician “promote the general welfare” and “the domestic tranquility” of the American people. Instead, they act as enforcers for the cruel demands of the financial markets.
That’s the scandal.
Thursday, June 23, 2011
Today I began mailing letters to seven politicians: Congressmen Tim Murphy, Mike Doyle, Jason Altmire and Mike Kelly, Senators Pat Toomey and Bob Casey and PA State Representative Jesse White. Other than a few minor differences necessary to personalize them, the letters are identical to the 6/21/2011 letter that I sent to the Senator Pat Toomey. The Toomey letter is located below this UPDATE. I also plan to send a mass mailing to many other politicians in order to get them to publicly state their position on the issue of Treasury issued debt free money.
I would like to emphasize three extremely important facts that completely discredit the current public “debate” regarding the federal budget deficit, the national debt and raising the debt ceiling.
1. The $4.6 trillion that has been raided from the social security, Medicare, civil service retirement, military retirement and other trust funds, has been added directly to the national debt. This scandal is never mentioned in the public “debate.” This is why politicians can claim that they must cut social security and Medicare to deal with the national debt.
2. The raided $4.6 trillion is what the politicians call intergovernmental debt. They say: “This is money that the government owes to itself.” This is not true. This is money that the politicians owe to the American people.
3. This money can be repaid in full without raising taxes or borrowing money from the credit markets. This can be accomplished by using the provisions stated in the United States Constitution: Article 1, Section 8, Paragraph 5, and the law: the Legal Tender Act of 1862.
We must DEMAND that our political leaders address these three points. The fact that politicians, the media and academia suppress the truth compounds this monumental and historic scandal. The truth is revealed in my letter to Senator Pat Toomey.
Post Office Box 815
Coraopolis, PA 15108
June 21, 2011
Senator Pat Toomey
502 Hart Senate Office Building
Washington, D.C. 20510
Washington, D.C. 20510
Dear Senator Toomey,
You have refused to acknowledge my December 10, 2010, letter, my February 6, 2011, e-mailed copy of that letter and my February 7, 2011, phone call confirming that your Washington, DC, office received the e-mail. I would like to remind you, Senator, that I have a Constitutional right “to petition the government for a redress of grievances.” To date, you have denied me this right.
My grievance has to do with the $4.6 trillion intergovernmental debt. As you know, the intergovernmental debt is the money that politicians have raided from the trust funds and spent. These trust funds include social security, Medicare, federal civil service retirement, and military retirement. In the current public “debate” regarding the budget deficit and the national debt ceiling, the fact that this $4.6 trillion is owed to the American people is rarely mentioned. Until this money is returned to the American people, in the form of cash, (not IOUs), the money is stolen. Politicians claim that they will repay the missing money out of future tax revenue. This will only perpetuate the theft. You don’t repay the taxpayers with their own money. The money must come from a source other than the victims of the theft.
You should know that you can repay the $4.6 trillion to the American people without raising taxes or borrowing from the credit markets. And you can use the same revenue source to solve the budget deficit and national debt problems. How? Simply follow the instructions in the United States Constitution. Article 1, Section 8, Paragraph 5, states: “Congress shall have [the] power to coin money [and] regulate the value thereof.” The word “coin” can also mean create, as in the expression “to coin a phrase.” Thus, Congress can create money. There is nothing in the Constitution about the Federal Reserve or a central bank.
As you know, in 1913, in defiance of the Constitution, Congress gave the power to issue money to the Federal Reserve. Some scholars believe this action was illegal because it was done without a Constitutional amendment. I agree, but I am not recommending the abolition of the Federal Reserve. My objective is to tell the American people (and to remind you) that Congress and the Treasury still have the authority to issue debt free money without involving the Federal Reserve. There is an extremely important distinction between money issued by the Federal Reserve and money issued by the Treasury. Money issued by the Federal Reserve is based on debt. In fact, the Federal Reserve Notes we spend every day are responsible for our $14.3 trillion national debt. Treasury issued United States Notes (Greenbacks) are based on the law as stated
in the Constitution above. And, unlike federal Reserve Notes, United States Notes carry no debt.
In 1862, at President Abraham Lincoln’s request, Congress directed the Treasury to issue $60 million worth of United States Notes. Under the authority of the Legal Tender Act of 1862, during the course of the Civil War, $449 million worth of this legal tender currency was issued (The Federal Reserve didn’t exist in 1862.) This caused no inflation even though the money supply was increased by 25%. After President Lincoln was assassinated, Congress reduced that amount to $300 million and froze it at that level. Subsequently, Congress refused to authorize the issuance of any more debt free money. However, the original $300 million is still an uncirculated part of our national money supply. The $300 million amount can be increased by Congress and put into circulation immediately.
On June 4, 1963, President John F. Kennedy signed Executive order 11110 (amending E.O. 10289) authorizing the Treasury to issue billions of dollars of United States Notes. Although the actual amount and the function of the E.O. are debated, the fact that Kennedy was responsible for the issuance of debt free money is not questioned. After President Kennedy was assassinated, the United States Notes were withdrawn from circulation and no more debt free money was issued. In 1966, Congress repealed the original 1933 legislation that gave Kennedy the authority to issue E.O. 11110. In 1987, President Ronald Reagan repealed E.O. 11110 with E.O. 12608.
I don’t want to promote or endorse the conspiracy theories. However, I mention these historical facts to prove that issuing debt free money is legal and practicable. The only thing preventing debt free money from reentering our currently debt based national money supply is the United States Congress.
Therefore, I am publicly calling upon Representatives Tim Murphy, Jason Altmire, Mike Kelly and Mike Doyle to introduce legislation authorizing the Treasury to issue United States Notes. This will be the same currency that was issued by Abraham Lincoln in 1862 and by John F. Kennedy in 1963. This legal tender currency can be used to pay off the entire $4.6 trillion intergovernmental debt: $2.6 trillion owed to social security; $317 billion owed to Medicare; $780 billion owed to the federal civil service retirement fund and $308 billion owed to the military retirement fund. At the same time, the $23 billion funding shortfall of the Pension Benefit Guarantee Corporation (PBGC) can be eliminated.
In addition to this, I am asking you and Senator Bob Casey to support this legislation. If you choose to withhold your support, please explain your reasons, in writing, and send them to me at: Ray Uhric, Post Office Box 815, Coraopolis, PA 15108. I will put your letter on my blog site www.rayuhric.com along with my response to your objections. Then, the public can judge who is really following his Constitutional mandate to “promote the general welfare of the American people.”
The financial markets have nothing to say about repaying the trust funds with Treasury issued debt free money. This is money that is owed to the American people. Supplementing our debt based money supply with debt free money is perfectly legal. And, there is no reason for this action to cause inflation. The notion that dollars are just another commodity and that increasing the supply reduces the value is nonsense.
Commodities are things with intrinsic value, such as corn, wheat or copper. Dollars are just paper. They get their value from the law as stated in the Constitution above. The fact that currency speculators can attack the value of the dollar is a clear violation of the Constitution. That our political leaders would let them get away with it is a scandal. The size of our money supply and the value of the dollar are determined by Congress. It’s the law. It may be ignored by the politicians, but it is still the law
Forgive me if I am highly suspicious of the motives of conservative politicians who claim that they must attack social security and Medicare in order to deal with our massive national debt. It sounds like the same old “starve the beast” game plan to me. A quick check of the historical record will illustrate the fact that Republicans, conservatives and the financial markets have despised and opposed social security and Medicare from the first day these programs were proposed. Why would the financial markets and the financial services “industry” want to see social security and Medicare destroyed? That would eliminate the competition, of course. They want ALL the money for themselves and their shareholders.
Apparently, the conservative “starve the beast” strategy to destroy social security and Medicare began with the Reagan administration. Of course, this plan backfired when Congress simply borrowed more money to offset the lost revenue from the tax cuts and to fund the various wars and other government expenditures. But now, with a $14.3 trillion national debt and the national debt ceiling looming, it looks like the government haters have the so-called “beast” by the throat. But to the millions of people whose very survival depends on social security and Medicare, calling these great and vital programs “the beast” is a despicable example of conservative Republican spin.
It is interesting to note how the Cold War, tax cuts, the Iraq war, the mortgage meltdown, the global credit crisis, Dick Cheney’s idea that “Deficit don’t matter,” and other policy blunders have put social security and Medicare right where the government haters want it. The “privatizers” and the financial markets must have been delighted as the politicians, year after year, weakened social security and Medicare by raiding the trust funds. Then, in a vicious and diabolical act of cruelty, they added every penny of the stolen money onto the national debt! Is this scandalous economic policy really a legitimate way to conduct our nation’s fiscal business? Is this a viable monetary system or a scam designed to fleece the taxpayers with debt?
Replacing the missing $4.6 trillion with debt free United States Notes can be accomplished in a matter of days. Supplementing our current debt based money supply with debt free United States Notes will instantly solve the contrived budget crisis and eliminate the “need” to raise the debt ceiling. Who could be opposed to that? Obviously, the funding to make social security, Medicare, Medicaid and the PBGC permanently solvent is at the fingertips of Congress. Politicians say we must endure austerity and slash social security and Medicare to send a signal to the markets (the bond vigilantes) so they will loan us more money and get us deeper in debt. The only message we should send to the bond vigilantes is: Article 1, Section 8, Paragraph 5, of the United States Constitution.
This letter will be posted on my blog site www.rayuhric.com. If you have any objections to my debt free monetary reform proposals, please send them to me at Ray Uhric, Post Office Box 815, Coraopolis, PA 15108. I will put your letter and my response to it on my blog site. This will make our debate a matter of public record. The American people can then judge the relative merits of our respective arguments.
Thank you for your attention to this vitally important matter. I await your timely reply.
Sunday, June 5, 2011
On April 15, 2011, I received a response from the Federal Reserve (Fed) to my February 13, 2011, letter. (To date, there has been no acknowledgement of my correspondence from Senator Pat Toomey, Treasury Secretary Timothy Geithner, MoveOn.Org or Democracy for America.)
The letter from the Fed was written by a director at the Federal Reserve Board of Governors. Although the content of letter was predictable and disappointing, I give the Federal Reserve credit for taking the trouble to answer my correspondence. Their response is important because they have put their position into the public record. This is rare. I wish Senator Pat Toomey and Treasury Secretary Timothy Geithner had the courage to publicly state their position regarding the matter of Treasury issued debt free money.
It was no surprise that the Fed official rejected my proposal to supplement our debt based money supply with Treasury issued, debt free United States Notes. Undeterred, I quickly composed a letter rebutting his position and mailed it on April 19, 2011. To date, there has been no response. At the end of my letter, I asked for permission to put the Fed’s letter, with my rebuttal, on this blog site. It has been more than a month since I sent the letter. Because I have no way of knowing if I will ever hear again from the Fed, I will publish only my rebuttal.
When you factor in the Constitutional provisions for the issuance of debt free money, the current debate regarding the federal budget deficit and the national debt becomes a scandalous exercise in stupidity. I say this because our national debt is nothing but a slush fund for the global bond market and Wall Street speculators. It is a $14 trillion taxpayer shakedown. This diabolical scheme to back our money supply with federal government debt is an insult to the intelligence of the American people.
Here is a question that no politician, including Senators Pat Toomey and Bob Casey, Representative Tim Murphy and many, many others, will not dare to address: How can we pay off the national debt when our money supply, our “savings” and our pensions depend on the existence of Treasury bonds, bills and notes? Who dreamed up this ridiculous system? It was the Federal Reserve, Wall Street and their agents in our government. Here is another vitally important question. Why can’t we follow the Constitution and increase our national money supply without piling more debt on the backs of American taxpayers?
We have been suckered into perpetual dependency on a national debt that threatens to destroy social security, Medicare and our standard of living. This is the trap that the financial markets and our political “leaders” have thrown us into. My rebuttal to the Federal Reserve letter below explains how we can escape this trap of debt slavery:
PO Box 815
Coraopolis, PA 15108
April 19, 2011
Federal Reserve System
Washington, D.C. 20551
Dear Mr. ///////////////:
Thank you for responding to my letter.
Yesterday, Standard and Poor’s downgraded the outlook for United States Treasury debt. This action spooked the markets and provoked an immediate reaction from the White House. It’s a mystery why anyone would pay attention to S&P considering their culpability in the housing bubble disaster. However, the message of the downgrade was clear. Reduce the budget deficit or else. Setting aside the policy blunders that produced a $1.5 trillion budget deficit and a $14.1 trillion national debt, it is obvious that revenues to the Treasury have not kept up with government expenditures. And there isn’t much chance of this situation changing any time in the future.
States and municipalities across the country (thanks to fraud and blunders on Wall Street) have revenue shortfalls because of reduced tax revenue. Important government programs are threatened because of budget constraints: Medicare, Medicaid, the Veterans Administration, NASA, the SEC, the CFTC, the EPA and the Pension Benefit Guarantee Corporation are all underfunded. $2.5 trillion, raided and spent by the politicians, is owed to the social security trust fund. And more liquidity is still needed in some areas of the private sector economy. I could go on at length but I’m sure you get the point: Our country needs more money in order to function for the benefit of the American people.
As was the case with the Great Depression, in 2007/2008, an unregulated financial sector destroyed a large part of the national money supply. This happened, of course, when the housing bubble burst. The Federal Reserve valiantly tried to recapitalize the banks and revive the financial markets with low interest rates and “quantitative easing.” Unfortunately, the result has been mixed at best. High unemployment and persistent economic problems clearly expose the limitations of conventional monetary and fiscal action when faced with a severe credit disruption.
We are told by politicians and pundits that the solution to this lack of money is for the American people to make painful sacrifices. We are told that we must submit to the austerity demanded by the “bond vigilantes.” And we are told that “America is broke.” Since it is the Federal Reserve that controls our money supply, I will ask you. Why is America broke?
The obvious solution to our economic problems is more money in the national money supply. But every time I propose increasing the money supply with Treasury issued, debt-free money -- United States Notes -- I get the same knee jerk reaction. “That will cause inflation and destroy the value of the dollar.” If there is not enough money, but increasing the money supply will destroy the value of the dollar, apparently, there is something terribly wrong with our monetary system. This is the essence of my argument.
I believe the Federal Reserve has painted America into an economic corner with its debt-based, fractional reserve financial system. Money is scarce but increasing the money supply will increase our already massive $14 trillion national debt. Is this is a hopeless dilemma? Fortunately, there is an alternative to this unstable, self-destructive system. Increasing the money supply with Treasury issued debt-free United States Notes is the only logical solution to our current fiscal crisis and economic problems. Issuing U.S. Notes is perfectly legal. This fact is confirmed by the law as stated on the Treasury Department’s web site.
The main stumbling block preventing sensible monetary reform is the foolish notion that dollars, our medium of exchange, are just another commodity. This blunder exposes our money to manipulation by the currency markets. The United States Constitution, (Article one, Section eight, Paragraph five) clearly states that only Congress has the authority to issue, and control the value of, our money. Of course, in 1913, Congress, in defiance of the Constitution, gave this power to the Federal Reserve. This blunder is responsible for our $14 trillion national debt.
In his May 11, 2010, speech, Chairman Bernanke quoted the economist David Ricardo: "It is said that Government could not be safely entrusted with the power of issuing paper money. Abuse by the government of the power to issue money as a means of financing its spending inevitably leads to high inflation and interest rates and a volatile economy.” First of all, this statement flies in the face of the United States Constitution. Second, this statement is an insult to intelligence of Abraham Lincoln (see below.) And third, the crash of 1929, the Great Depression, the recent housing bubble, the crash of 2007/2008, the Great Recession and many other financial disasters over the years, proves that the ability of the private sector to manage a country’s finances is wildly overrated.
What does the historical record tell us about the relationship between the money supply and inflation? Beginning in 1862, Abraham Lincoln increased the money supply by 25% with United States Notes, and there was no inflation.
To counter the disastrous “deleveraging” brought on by the 2007/2008 global credit meltdown, central banks around the world pumped multi trillions of dollars worth of liquidity (money) into the global financial system. Not only was there no significant inflation, monetary authorities were worried about the threat of ruinous deflation. It is true that the banks did not, to any great extent, loan this money out into the broader economy. However, the general consensus among economists and business pundits was that this liquidity injection was highly inflationary. The lack of significant inflation would seem to discredit the commodity theory of money.
Many people point to the hyperinflation experienced by Germany in the 1920s as a reason to limit our money supply. This is a flawed interpretation of history. War reparations imposed by the Treaty of Versailles and a large external debt weakened the German currency and started the downward cascade in the value of the mark. Uncontrolled, rampant speculation in commodities caused price inflation. A small segment of the population actually profited from the hyperinflation. People with access to strong foreign currencies could buy assets at bargain prices. Internal and external economic forces (the Great Depression), social instability and the possibility that the Weimar government might be overthrown also drove up prices. The German government printed more money in a vain attempt to maintain adequate liquidity in the economy. The massive amount of money in circulation was the result of the hyperinflation, it was not the cause. Strong government intervention and regulation could have stopped the hyperinflation in its tracks.
Of course, the Nazis had their own interpretation of events. They claimed that there was a conspiracy by international bankers (with the complicity of the Weimar Government) to steal the wealth of the German people. And they rode this conspiracy theory right into power in 1933.
Today, our inflation is not caused by an increased money supply. The amount of money in the hands of the general population has remained flat. Today’s inflation is caused by the demand for commodities in emerging market economies and the actions of the speculators who control prices in the commodity markets. The notion that the Fed is causing the inflation by “running the printing presses” is a myth. The Federal Reserve’s quantitative easing money went directly to the banks and the financial sector. It is the speculators in the large money center banks who drive up the price of food, oil (gasoline), gold and other commodities. And at the same time, they lower the value of the dollar. For the average American, the money supply remains the same, but his or her dollar buys less. You might say the Fed is the enabler, but it is the banks and the speculators who cause the inflation.
Chairman Bernanke, in his May 25, 2010, speech, stated: “We expanded the scale, scope, and maturity of our lending to provide needed liquidity to financial institutions.” Unfortunately, Chairman Bernanke’s good intentions have backfired. The Fed’s actions were a bonanza for the financial sector but they caused a bigger burden for the taxpayers and consumers. This brings up the question that I have been asking for close to seven years: Why can’t we increase the money supply (liquidity) without loading more debt on the backs of the American people? Nobody will dare to respond to this question because the answer is too explosive: Our money is based on debt. The money supply is increased by increasing the national debt. This occurs when our government issues more U.S. Treasury debt securities. This is why the national debt will always increase and will never be paid off under our current monetary system.
Increasing our money supply with debt-free U.S. Notes will not monetize our national debt. Monetizing the national debt occurs when the Federal Reserve buys U.S. government debt from the private sector in order to increase the monetary base. Of course, the national debt must be increased in order to provide the initial government debt securities to the private sector. This peculiar and illogical arrangement reflects the false choice that has made debt slaves of American taxpayers. Increasing the money supply with Treasury issued, debt-free, U.S. Notes does not monetize the national debt because no debt for currency swap is involved. Government debt is not a part of the transaction.
The problem of monetizing the debt is at the heart of the current debate over raising the national debt limit. The government needs more money, but it has to sell debt to the private sector to get it. In order to make our debt more attractive to the “bond vigilantes,” austerity must be imposed on the American people. This is a stupid, false choice. The national debt will never be paid off because it is government debt that backs our money supply. The austerity and cuts in government spending are just a way to bleed more money from taxpayers and weaken the government. If Congress and the Treasury would have followed the example of Abraham Lincoln and John F. Kennedy, raising the debt limit wouldn’t be an issue at all: The government could finance itself, just as the Constitution intended. Abraham Lincoln and John F. Kennedy had the wisdom and courage to issue debt-free, U.S. Notes. Tragically, their brilliant monetary reforms died when they were assassinated. And their deaths cleared the way for our $14 trillion national debt.
The Federal Reserve is the subject of severe criticism since the housing bubble collapse and the disaster of the Great Recession. A recent Rolling Stone article: “The Real Housewives of Wall Street” has given the growing number Fed critics even more ammunition for their attack on the central bank. Fortunately, there is a way for the Federal Reserve to redeem itself: The Constitution-based, debt-free monetary reform that I propose is the perfect opportunity for the Fed to show that it can do more than load enormous debt on the backs of American taxpayers.
My proposal is simple. Congress can use the Legal Tender Act of 1862 to authorize the Treasury to replace the $2.5 trillion raided from the social security trust fund with United States Notes. U.S. Notes can also be used to make up the funding shortfall in the Pension Benefit Guarantee Corporation. These actions are of no concern to the currency markets because the U.S. government owes this money to the American people. I understand that this action is the responsibility of Congress and the Treasury department. However, since no politician or anyone at Treasury will respond to my correspondence and address this issue, it is up to Chairman Bernanke to bring this matter to their attention. Issuing United States Notes is the only way that the federal government can repay the debt owed to the social security trust fund without raising taxes and increasing the national debt. (Using future tax revenue to “replace” the money raided from social security only perpetuates the theft.) Issuing United States Notes will be a precedent setting starting point that will open the door to America’s emancipation from debt slavery.
I read your April 11, 2011, letter and Chairman Bernanke’s May 25, 2010, speech carefully and objectively. These are arguments that I have heard (and rejected) many times. You cite a Congressional mandate to maintain price stability as the justification to restrict the money supply to its current arbitrarily low level. However, you ignore the fact that Wall Street speculators, using their enormous hoard of cash, can drive up the prices of commodities and manipulate the value of currencies simply to produce huge profits and blackmail the government. History as shown that this, largely unregulated, free flow of capital has caused tremendous damage to society. While, at the same time, this blatant manipulation produces no benefit whatsoever. This dreadful (and at times deadly) situation reflects the shocking weakness and complicity of the political class around the world. Currency exchange rates, and thus the value of the dollar, are negotiated at economic summits. And central banks “intervene” in the currency markets, by buying and selling currencies, to gain a trading advantage. All this illustrates the fact that the value of the dollar and inflation can fluctuate wildly with no increase in the money supply. The money supply/inflation myth is a red herring designed to keep the world to mired debt.
The global debt burden is a lash across the backs of the poor and the workers of the world. This evil explains why loaning money for interest is condemned in both the Old and New Testaments of the Bible and the Koran. How can this fact be reconciled with the debt/interest based global financial system? Obviously, there is a moral imperative for government regulation of finance.
It is said that inflation must occur when the money supply is increased because “there are too many dollars chasing too few goods.” This is another false notion that must be debunked. Of course, the point at which there are actually “too many dollars” is never specified. It is true that inflation can occur when producers and merchants raise prices when there is increased money in circulation. This is what I call “greed inflation.” Greed inflation can be controlled by government action. Space does not permit a detailed description of what form this government action would take. However, I have explained it in past web site articles. My proposals reflect government actions that were recommended by Abraham Lincoln.
Some people will recoil at the thought of government intervention to control greed inflation. However, letting producers and sellers have complete discretion in pricing, irrespective of labor or other cost factors, is problematic. This “freedom” is a major cause of inflation, poverty and weak economic growth. Our current economic problems are a perfect illustration of this fact. The American people and the American economy need more money. But the fear of greed inflation prevents the Federal Reserve or the federal government from increasing the money supply. Greed inflation benefits producers and sellers, but it harms the rest of the population and the country. You don’t have to be a brain surgeon or a rocket scientist to realize that this is a problem that must be resolved in order to have true prosperity in America.
I prefer not to engage in a protracted debate about debt-free monetary reform. I’ve wasted nearly seven years already trying to explain the obvious to people who should know better. The monetary status quo has led to our current and ongoing fiscal and economic difficulties. The national debt, our hollowed out economy and the blunders of our business and political leaders are much more of a threat to the dollar than increasing the money supply. In fact, increasing the money supply with Treasury issued, United States Notes is the best way to strengthen the dollar.
Please give my monetary reform proposals serious consideration. The disastrous events that began in the summer of 2007 have glaringly exposed the flawed nature of our debt-based, fractional reserve financial system. Thank you for your attention to this vitally important matter.
Would you mind if I put your letter and this response to it on my web site? The debt-free monetary reform issue is too important to remain hidden from the American people. Please respond to this letter in a timely manner. Thank you.
Saturday, May 7, 2011
Ray Uhric - former Democratic Candidate for the Pennsylvania House Of Representatives
2016 Presidential Candidacy Declaration.
In my last blog update (11-3-2013/11-13-2013), I said, “I am not running again for public office.” Well, after the midterm Democratic Party election disaster, I have come to the conclusion that we a leadership problem in the Democratic Party. Therefore, I feel it is my civic and patriotic duty to declare myself as a Democratic Party candidate for President of the United States. Today, April 6, 2015, I learned that there are five declared Democratic Party candidates for president in 2016. Hilary Clinton has not yet declared her candidacy. None of the declared candidates are what I would consider nationally known politicians. So my running for president really isn’t that outlandish.
In my two previous campaigns for public office, I despised asking for money. As a result, my political activities have caused me spend thousands of dollars of my own limited financial resources. Despite this, I will not ask for political contributions. I will try to finance my campaign and my living expenses through the sale of my art. I will accept contributions if they are offered but I will do no political fundraising. Below is the main plank of my campaign platform:
I am running on a Full Employment (with just compensation and benefits), Low Tax, Low Debt, Debt-Free Money platform.
The main plank of my platform is a permanent U.S. Constitution-based (article 1, section 8, paragraph 5), debt-free monetary solution to federal, state and local government funding problems. My proposal will require no tax dollars or government borrowing. Social security, Medicare, Medicaid, the Pension Benefit Guarantee Corporation (PBGC) and the Veterans Administration will all be fully funded and made permanently solvent using United States Treasury issued debt-free money. This legal tender currency is called United States Notes or U.S. Notes.
Today, government funding is such a disaster that several private sector charities are making television appeals for money for our wounded and disabled veterans. Wounded and disabled veterans have become charity cases! This is a national disgrace! For years I have been badgering our democratically elected politicians telling them to use unlimited United States Treasury issued debt-free money to fund ALL of the needs of our veterans. Tragically, I have been stonewalled and ignored by the dozens of politicians that I have contacted. United States Notes are the same currency that was issued under Presidents Abraham Lincoln in 1862 and John F. Kennedy in 1963. Incredibly, all of their debt-free currency was withdrawn from circulation by Congress after these great presidents were assassinated! And, shamefully, Congress never again permitted the Treasury to issue debt-free money. The result is an $18 trillion national debt. When I first proposed issuance of debt-free money to more than a dozen politicians in June of 2004, the national debt was $7 trillion. Since then, $11 trillion of unnecessary debt has been loaded on the backs of American taxpayers.
Despite the stupidity of Congress, $300 million of this debt-free money is currently an unissued part of our national money supply. Under the authority of the Legal Tender Act of 1862, Congress can increase this $300 million to whatever amount is needed to solve America’s fiscal and economic problems. The U.S. Notes can be put directly into the federal trust funds to replace the trillions of dollars that have been stolen since the federal budget was unified in 1969. Treasury issued debt-free money is the perfect, legal and practicable solution to America’s fiscal and economic problems. This link to the U.S. Treasury web site: U.S. Treasury - FAQ: Legal Tender Status of Currency will verify that what I say about United States Notes is true and based on existing law.
I have populist, AMERICA FIRST positions on all of the issues facing America, both domestic and foreign. Most of my platform is already stated plainly on this web site. As a presidential candidate, the politicians can no longer refuse to acknowledge my correspondence and throw my letters in the trash. And, when I request an interview in the media, they will have no choice but to comply. The “establishment” has refused to debate the issue of debt-free money with me for more than ten years. So, in the spirit of reciprocity, I will refuse to debate any national or international issue until the issue of U.S. Treasury issued United Stated Notes is resolved. My proposals for a U.S. Note funded full employment economy (outlined elsewhere on this web site) are inextricably linked to the debt-free money debate. Thus, that will also be part of the debate. Compare my no tax, no debt, full employment proposals on this web site with the pie-in-the-sky “jobs bills” that are proposed by Congress and the president.
This post will serve as my formal declaration of my intention to run for the office of President of the United States. Because much of this web site was written for my 2006 and 2010 campaigns for the Pennsylvania General Assembly, some of the text is out of date. However, nothing in my policy proposals has changed. This web site will be reformatted and updated to be more timely and relevant for the 2016 presidential election. In the meantime, I challenge all presidential candidates, any politician, any reputable pundit, any academic, any government or Federal Reserve official, any business leader and any banking spokesperson to find anything that is in error, illegal or impracticable on this web site. (Typos don’t count.) All legitimate rebuttals should be sent to PO Box 815, Coraopolis, PA 15108.
Ray Uhric April 6, 2015
THE TRUTH ABOUT SOCIAL SECURITY “REFORM”
The Republicans say social security must be cut in order to reduce the deficit. But, by law, social security is prohibited from adding to the deficit. The Democrats say the social security “trust fund” has a $2.5 trillion surplus, and the system can pay full benefits until 2027. But, conservatives say that social security is a welfare program that costs taxpayers money. It has been claimed that the Baby Boomers did not “prefund” their benefits. What is the truth?
Back in 1970, in order to pay for the additional costs of the Vietnam War, politicians started raiding the social security system. By 1979, the trust fund was $2 billion in the red. When the Vietnam War ended, stagflation in the private sector economy during the 1970s became the major cause of the shortfall in social security funding. The Reagan/Greenspan Commission “fixed” the problem by cutting benefits, making benefits taxable and raising the amount of the FICA payroll deduction.
Today, as in the 1970s, war and a lousy private sector economy have pushed the social security trust fund back into the red. Contrary to conservative and Republican disinformation, the problem isn’t that benefits are “too generous.” The problem is that our economy doesn’t produce the revenue necessary to properly fund the social security system. This isn’t the fault of the workers or the people collecting social security checks. It is the fault of our political leaders, the business community and especially the banking “industry.” The 2007/2008 financial crisis, the Great Recession, the wars, globalization of our economy and wealthy tax dodgers are the reasons for our fiscal and economic problems and the reason why social security is in the red.
The law states that social security cannot add to the deficit. If this is true, how can conservatives and Republicans say that social security must be cut to reduce the deficit? There is a simple and infuriating answer to this question. The $2.5 trillion that politicians have stolen from the trust fund has been replaced with government bonds (IOUs). These bonds are a liability against the federal government. In other words, the missing $2.5 trillion has been added to the national debt and the taxpayers are stuck with the bill! We are told that “interest” will be paid on these government bonds. But, it is actually the taxpayers who pay the interest out of their own money.
Liberals and Democrats claim that there is a $2.5 trillion trust fund “surplus.” If this is true, why hasn’t money been taken from the so-called surplus to make up the shortfall when the trust fund went into the red? Instead, money is taken from the government’s general revenue fund. This gives social security-hating conservatives an excuse to denounce the system as a “government welfare program.” (It’s odd that conservatives don’t denounce the Banksters who caused the funding problem.) To make matters worse, since government expenditures are partially funded with treasury debt, part of our social security benefits are being funded with money borrowed from China! The trust fund doesn’t exist. That’s the ugly truth. All the money has been stolen and spent by the politicians.
The law states that the $2.5 trillion in government bonds will be “redeemed” with future tax revenues. Taking more taxpayer’s dollars to cover up the theft does not replace the stolen money. It only perpetuates the theft. The money must come from a source other than the victims of the theft. Some of the money should come from the bank accounts and pay checks of the politicians who stole the money. However, the only practicable source for this money is U.S. Treasury-issued, debt-free United States Notes. I have been proposing this solution to our elected leaders for more than six and one half years. The response has been stony silence.
Conservative and Republican actuaries claim that the “Baby Boomers did not prefund their social security benefits.” This is sheer nonsense. The Boomer’s benefits were prefunded by, at least, the $2.5 trillion that was stolen by the politicians. Add to that, all the money that disappeared into the government’s general revenue fund prior to the 1983 Reagan/Greenspan commission. And, remember, it was our globalized economy that caused the declining wages that robbed the Baby Boomers of the ability to totally prefund their social security benefits.
The Wall Street money sponges lament the “low savings rate” of the American people. The trillions of dollars stolen from the trust fund were the savings of the American people. The law states that the IOUs will be “redeemed” with future tax revenue. However, with a $1.4 trillion budget deficit and a $14.1 trillion national debt, it is patently impossible for the politicians, who are responsible for this enormous theft, to replace the stolen money. This is why, when I asked my Congressman to explain why the politicians don’t simply replace the money raided from the trust fund, he said: “I would have to raise your taxes to do that.” The Congressman now claims “he doesn’t remember saying that.” Whether he remembers it or not, that statement is true.
There are budget crises at the local, state and federal levels. This mess was caused by our political leaders. In the name of free markets and deregulation, they let the Banksters and their cronies in the mortgage finance “industry,” spin totally out of control. Now, everybody but the people who caused the problems have to pay the price for an “industry” that ran amuck.
That’s the truth.
Thus far, there has been no response from Senator Pat Toomey, Fed Chairman Ben Bernanke, Treasury Secretary Timothy Geithner, MoveOn.Org or Democracy for America.
My December 10, 2010, letter to Senator Pat Toomey has remained unacknowledged. I called his Washington, DC, office and explained that I wanted a response to my letter before I put it up on this web site. On February 6, 2011, I sent an E-mail copy of the letter to Senator Toomey’s DC office. The next day, I called the office and confirmed that they had received the E-mail. As of February 25, 2011, I have received neither a letter nor an E-mail from Senator Toomey’s office.
The December 9, 2010 E-mail replies that I sent to MoveOn.org and DemocracyForAmerica have also remained unacknolwedged.
Below is a copy of the E-mail that I sent to Senator Toomey's office:
February 6, 2011
The December 9, 2010 E-mail replies that I sent to MoveOn.org and DemocracyForAmerica have also remained unacknolwedged.
Below is a copy of the E-mail that I sent to Senator Toomey's office:
February 6, 2011
Dear Senator Toomey,
On December 11, 2010, I mailed a letter (see below) to your Club for Growth address. I wanted the letter to be forwarded to your Senate office in order to be among the first citizens to contact you. I called the Club for Growth and your Washington office. I was assured by both offices that you would, eventually, get my letter. As of February 3, I have received no response. For this reason, I am sending you a copy of the December 10, 2010, letter via E-mail. Please respond as soon as possible. I will put my letter and your response on my web site rayuhric.blogspot.com so that the public can judge the merits of our respective arguments. If you disagree with my position, I will put my rebuttal to your letter or E-mail on my web site. I expect and welcome a lively debate.
The public has a right to know that there are legal, United States Constitution based, alternatives to the painful austerity that the Republicans (and their Democratic allies) plan to impose on the American people. America’s current fiscal and economic problems are the result of the reckless greed and fraud of the financial “industry” as well as the irresponsible actions of their cronies in our government. I intend to bring the whole truth about our current fiscal and economic problems to the attention of the American people.
December 10, 2010
Club for Growth
Club for Growth
2001 L Street, NW, Suite 600
Washington, DC 20036
Dear Senator-Elect Toomey:
For several years, I have been trying to provoke a public debate regarding the subject of United States Treasury issued debt free money. This legal tender currency is called United States Notes, also known as Greenbacks. Despite my best efforts, for six and one half years, none of my elected representatives would address this issue. Now that you are my representative, I will ask you to address the issue.
Below are two excerpts from my web site, rayuhric.blogspot.com :
How could Congress give up its enumerated power to issue debt free money without a Constitutional Amendment? This power was given to Congress in Article One, Section Eight, Paragraph Five of the United States Constitution. The Constitution did not give this power to the Federal Reserve, a privately owned Central Bank. The creation of the Federal Reserve in 1913 is a national scandal that is vividly exposed by our $14 trillion national debt.
[Please explain] why we have a $14 trillion national debt when our Constitution provides a mechanism for the U.S. Treasury to issue debt free money. This fiscally responsible, and legal, monetary policy was instituted by Presidents Abraham Lincoln and John F. Kennedy. Unfortunately, after they were assassinated, their debt free monetary policies were reversed by the combined efforts of Congress and President Ronald Reagan.
Please address the above questions point-by-point.
The articles on my web site present a direct challenge to the “Club for Growth” economic policies that you represent. This is why I respectfully invite you to debate economic policy on my web site. I am prepared, and eager, to defend my position. We have both taken oaths to uphold the United States Constitution. (I took my oath when I enlisted in the military.) The Constitution requires elected officials to “promote the general welfare of” and “ensure the domestic tranquility” of the American people. The policy proposals on my web site are designed to advance those hallowed objectives. The purpose of the debate that I propose to you is to establish whose policies best conform to that Constitutional mandate.
As an elected official, you are no longer a member of the private sector. You are part of the federal government. You are required, by law, do what is best for the country. The desires of Wall Street and the financial services “industry” are irrelevant to your job. America can no longer afford the “free market” blunders that have brought us to the point of economic and financial ruin.
I await your timely reply. Thank you.
Please contact Senator Toomey and ask him why he has never addressed the issue of United States Treasury issued debt free money. Ask him to give me a point by point response to my correspondence so I can put it on this web site.
Please contact Senator Toomey and ask him why he has never addressed the issue of United States Treasury issued debt free money. Ask him to give me a point by point response to my correspondence so I can put it on this web site.
Senator Pat Toomey’s Washington contact:
B-40B Dirksen Senate Office Building
Washington, D.C. 20510
Phone: (202) 224-4254
Fax: (202) 228-0284
B-40B Dirksen Senate Office Building
Washington, D.C. 20510
Phone: (202) 224-4254
Fax: (202) 228-0284
Below is a copy of the E-mail that I sent to MoveOn.Org and Democracy for America:
Please check out my web site: rayuhric.blogspot.com . Tell me what you think of my economic and monetary reform ideas. I believe the only way we are going to fix America's fiscal and economic problems is to follow the example of Presidents Abraham Lincoln and John F. Kennedy. I explain it all on my web site.
Please respond to this e-mail. I'm trying to find people with the courage to stand with me.
I invite the visitors to this web site to scroll down the page and read the essays that I wrote as my campaign platform. In these essays, I address and offer solutions to a wide range of issues and problems. This invitation is especially extended to Senator Pat Toomey, MoveOn.org and Democracy for America.
Some of the topics covered in my essays include: Lowering Taxes; Reducing Government Spending; Making Social Security, Medicare, Medicaid and Pensions Permanently Solvent; Affordable Healthcare; Building a Strong Economy; Rebuilding American Manufacturing; The National Debt and The Legal Justification for Lincoln/Kennedy Monetary Reform
PLEASE NOTE: I would like to apologize to everyone who tried to link to the U.S. Treasury Department web site from the essays on this web site and were denied access. Because changes were made to the Treasury web site, my links were effectively disabled. Modifications to this web site have now been made in order to restore access to this vitally important information. In the event my links become disabled again, the relevant Treasury information is transcribed below. For convenience, I have highlighted the parts of the articles that I think are particularly important.
Today is October 28, 2010. There are only six days left until the election. I have some final thoughts about my campaign. I’m sorry that I didn’t have time to write articles on all the issues I listed on the home page of this web site. Healthcare, taxes and social security were at the top of the list, so I made sure I covered them.
My opponent, Representative Mark Mustio and state Senator John Pippy, are having their annual “Senior Expo” at the Crown Plaza Hotel here in Moon Township, with free food and flu shots. Needless to say, I don’t have the money to match a vote-getting operation like that. Representative Mustio claims to be a cost cutting, fiscal conservative. I wonder how much of this expensive party was paid for with tax dollars.
Attendees of the Expo are offered advice about financial planning, health care and insurance. Does the fact that Representative Mustio inherited an insurance business that represents twenty three insurance and finance companies cause a conflict of interest with his duty as a representative of the people of the 44th legislative district?
I have a good reason for asking this question. My Medicare supplemental insurance premium was raised 45% in 2010. I personally know a woman whose supplemental insurance premium, in 2010, exploded by 150%! This is on top of significant increases in co-pays and prescription drugs. Seniors, like me, received no increase in our social security benefit because we are told “there is no inflation.” Factor in higher prices for food and gasoline and it is easy to see why seniors on fixed incomes are struggling.
If I am elected, I will tear into these issues because I have empathy for struggling older people. Can Representative Mustio say the same? As a representative of the insurance and finance industry, will he fight to lower the cost of health insurance for his constituents knowing that this might lower his profit margin? How will those twenty three companies react if he fights hard to lower the healthcare costs for senior citizens?
There is no guarantee, of course, that I will win this election. If Mr. Mustio remains my representative, can I depend on him to fight to lower my healthcare costs? What will he do about a 150% increase in a healthcare premium? These questions lead to this question: is his position as an insurance company representative in conflict with his duty as a state Representative? Mr. Mustio, the cost cutter, has offered to pay for his state- provided insurance as well as his state car and cell phone. Considering his personal circumstances, this offer is laughable.
Mr. Mustio likes to talk about reducing the size of the Legislature. If a good bill to reduce the size of the legislature comes to the floor, I will vote for it. This issue is a great vote getter during a campaign. But, Mr. Mustio admitted in a recent radio interview, that even with a Republican controlled legislature, the chance of passing legislation to reduce the size of the legislature is remote at best. He likes to talk about what he will cut from government. But, remember, cutting jobs and wages will only make the recession worse.
I take the opposite approach. As I have explained in detail on this web site, we can stimulate the economy and have prosperity by following the example of Presidents Abraham Lincoln and John F. Kennedy. They used Article 1, section 8, paragraph 5 of the United States Constitution as their guiding economic principal. If they had lived, we would never have a thirteen trillion dollar national debt and a debt enslaved national economy.
I won’t reiterate the economic and monetary reforms that I propose elsewhere on this web site. I will simply say they are legal, they will work and the historical record bears witness to the truth of this statement. I sent letters outlining my economic and monetary reforms to both Representative Mark Mustio and State Senator John Pippy. I explained how we can use U.S. Treasury issued debt free money to make social security, Medicare and the Pension Benefit Guarantee Corporation permanently solvent. I also explained how this money could be used to lower taxes, reduce the national debt and stimulate the economy.
Mr. Pippy forwarded my letter to Senator Arlen Specter who never responded. Mr. Mustio never answered my letter. This stonewalling is the reason I decided to run for public office.
The current economic thinking is to impose cuts and austerity on us so that our government debt will be more attractive to foreign investors. Workers must take pay and benefit cuts in order to be competitive with the cheapest slave labor that the world has to offer. This is rubbish. Clear alternatives to this economic doomsday are outlined on this web site.
I have received policy questionnaires in the mail from every interest group imaginable. I apologize to all those that never received a response from me. I simply did not have the time to respond to all of them. Responding to some would slight the ones I omitted, so I left most of them unanswered. Questionnaires are problematic for me. I don’t want to make promises that I can’t keep. Legislation is not cut and dried like questionnaires. Legislation takes the form of complex documents that may or may not reflect my position close enough to warrant my vote. My ideas are clearly detailed on this web site.
Although I am running a state office, I plan to attack the problems facing the people in the 44th legislative district whether they originate in Harrisburg or Washington. I’ve had enough experience with Washington politicians to know that if I can’t depend on them, I will have to depend on myself.
I am not a career politician. I am a retired aircraft technician. I have worked as a welder, steelworker and a factory laborer. I am on social security, Medicare and my pension, abandoned by my employer, is in the Pension Benefit Guarantee Corporation. I am a typical taxpaying citizen. However, I may be atypical in that I have devoted many years of study to understanding how economics, monetary theory and public policy affect the lives of ordinary citizens and the government. If I am elected, I will put this knowledge to good use.
Please vote for me next Tuesday.
|If elected on November 2, Ray Uhric will work vigorously for a sound stable economy in the 44th District, and in all of Pennsylvania .|
PLEASE SUPPORT MY CAMPAIGN
My economic and monetary reform proposals to make social security, Medicare and the Pension Benefit Guarantee Corporation permanently solvent can be successful. The only requirement is the political will. These reforms can also lower taxes, reduce government debt and lower unemployment. Some people may say these are national issues, however, they affect every person in Pennsylvania’s 44th Legislative District.
As an elected official, I will have free access to the media. And, I will take advantage of an existing State legislative mechanism that will put my reform proposals on the table for the United States Congress. The public debate regarding economic policy is incomplete until the American people are made aware of the Constitutional provisions regarding United States Treasury issued debt free money.
If you would like to support my campaign as a volunteer, with a yard sign or a financial contribution, please contact me at
Committee to Elect Ray Uhric
P O Box 815
Coraopolis, PA 15108 - 0815
A message for the voters in the 44th Legislative District
I have begun a door to door campaign of talking to the voters. I am asking each voter to share with me their concerns and what they expect from their elected representative. I have a list of issues that I ask each voter to rank in order of importance. When I have collected a representative sampling of the voter's opinions, I will address each issue on this web site. I will begin with the issue that ranked most important and continue down the list.
By addressing each issue individually, I hope to avoid "information overload." For the voters who have no computer, or who have never used a computer, please visit your local library or a friend or relative who has a computer. Simply tell them to get on the Internet and type in rayuhric.blogspot.com . That will bring up this web site.
This is the list of issues ranked in order of importance to the voters so far:
- An Open Letter To The Post-Gazette
- Lowering Taxes / Reducing Government Spending
- Social Security / Pensions
- The Legal Justification for Lincoln/Kennedy Monetary Reform
- Affordable Healthcare
- The Social Security Trust Fund
- A sensible energy policy
- Building a strong economy
- Rebuilding American Manufacturing
- Good paying jobs
- Strengthening small business
- The environment
- Marcellus shale
- Illegal immigration
Ray Uhric June 30, 2010
BiographyUpon graduation from high school in 1962, Ray Uhric enlisted in the United States Navy and chose the field of Naval Aviation. After training as an aircraft maintenance technician, he was assigned to a radar picket early warning squadron in the north Atlantic. His next assignment was a nuclear attack squadron aboard the aircraft carrier, USS Franklin D. Roosevelt. He completed his military service in a hurricane hunter squadron based in Florida.
After being honorably discharged, Ray was employed as a steelworker and a manufacturing plant worker. He reentered the aviation field as a student at the Pittsburgh Institute of Aeronautics. After graduation and federal certification as a aircraft maintenance technician, he went to work for Allegheny Airlines (later, USAirways). After a thirty-five year career, he retired in 2004.
|A Note For Previous Visitors To This Website|
Thank you for visiting this web site. In the past, this site has dealt primarily with national issues. U.S. Constitution based monetary reform was a solution put forth to permanently solve the under-funding problems of social security, Medicare, and the Pension Benefit Guarantee Corporation. U.S. Constitution based monetary reform was also a solution put forth to stimulate economic growth, lower taxes and reduce government debt.
I have decided to run for the 44th District seat in the Pennsylvania General Assembly. For this reason, this site will now link to my 2010 campaign web site. The campaign site will focus on the issues of concern to the voters in the 44th District, including me. As I campaign and talk to the voters, I will ask them to share with me their concerns and what they expect from their elected representatives in Harrisburg.
I will put these concerns and expectations on the campaign web site along with my recommendations for the best legislative action, or inaction, to be taken. I hope this interactive dialogue will convince the voters of the 44th Legislative District that I am worthy of their support in the November 2, 2010 general election.
Ray Uhric April 17, 2010