UPDATE 1-26-2013

It’s the Stupidity, Stupid

Part 3

[Clarification: In my last Update I said: “The [underfunding of social security] problem is our greedy, selfish, deregulated, globalized, financialized, free market, economic system.  Over the years, workers weren’t paid enough money to properly fund the social security and Medicare systems.”  Please note that I said …economic system.  I didn’t mean to imply that every businessman or businesswoman is greedy and selfish.  Many small and medium size business owners would love to pay good wages and offer generous benefits.  But they can’t afford to do that and stay in business.  I personally know what it’s like to work in a struggling small business where hard work, long hours and competence aren’t enough to make the business model work.  I also know that the same business model can be very lucrative in a more prosperous area of the country.  The key difference is the amount of money in circulation in the local economy.  This brings us right back to the issue of Treasury issued, debt-free money.  If the banks don’t put enough money into circulation, the government has to do it.  And the government can do it without raising taxes, inflation or borrowing money.  I’ve been explaining this, and people have been ignoring me, for eight and a half years.]

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Actually, I’m not calling everyone who reads this blog Update stupid (despite the attention grabbing title).  My objective is to warn people about the consequences and dangers of accepting stupid ideas as revealed wisdom.  After more than eight years of stonewalling and silence, it is obvious that I have to try harder to get the attention of the politicians, the pundits, the mainstream media (MSM) and the general public.  Calling people stupid will usually get their attention.  I am not running again for public office (calling people stupid is not a good way to get votes). As a non candidate, I don’t have to pander to anyone.  I have a populist message, that is: economic and social justice based on the U.S. Constitution and existing law.

I hope that everyone who reads this blog will write or call their Congressperson and ask him/her this question: If the U.S. Constitution and existing law give Congress the authority to direct the U.S. Treasury to issue debt-free legal tender currency: United States Notes (U.S. Notes) why do we have a $16.4 trillion national debt?   Please click on this link to the U.S. Treasury Department web site: U.S. Treasury - FAQ: Legal Tender Status of Currency.  There you will learn that everything I say about debt-free money is true.

On October 14, 1947, U.S. Air Force test pilot Chuck Yeager broke the sound barrier.  On the day I get a politician to discuss Treasury issued, debt free legal tender United States Notes (Greenbacks), I will have finally broken through the Stupidity Barrier.  There is no better illustration of America’s Stupidity Crisis than the current viral debate about minting trillion dollar platinum coins.  This whole discussion hinges on the myth that: “The U.S. Treasury can only ‘coin’ money” and “Only the Federal Reserve can 'print' money.”  I’ve debunked this myth so many times I’m starting to feel like an intellectual babysitter.  If you click on the link to the U.S. Treasury Department web site above, you will learn that the Legal tender act of 1862 gives Congress the power to authorize the Treasury to issue debt free, legal tender paper currency, called United States Notes, in any amount.  The worthless politicians, the shill “pundits” and the sold out “academics” have been stonewalling me and suppressing this truth for eight and a half years. 

If you check the historical record, you will learn that United States Notes have been issued by the Treasury twice in the past.  Under President Abraham Lincoln, $449,338,902 worth U.S. Notes was issued under the Legal tender act of 1862.  Under President John F. Kennedy, $4 billion worth of U.S. Notes was issued in 1963.  These were the famous silver certificates authorized by Executive Order 11110.  (Don’t believe the disinformation put out about this E.O.  I debunked this nonsense elsewhere on this site.  The fact is silver certificates were issued.) It is also a historical fact that, after these two great presidents were murdered, Congress reversed their debt free monetary policies.  Why did President Kennedy authorize debt-free money with an Executive Order?  The explanation is obvious to me.  He knew that Congress would never authorize the U.S. Notes under the Legal tender act of 1862.  Members of Congress have stonewalled me on this issue for eight and a half years.  I know exactly what President Kennedy was up against!

At the Treasury web site above, you will also learn the most stunning and most explosive fact of all.  Three hundred million dollars worth of debt-free, legal tender, United States Notes are currently an unissued part of our national money supply.  And it is Congress that controls the issuance and the amount!  That’s why I say, the national debt is a scam and a scandal. 

I won’t waste time explaining again why U.S. Notes are not unconstitutional.  I will just say, per the U.S. Constitution, Congress can “coin” money.  The word coin can also mean “create.”  This is the logical justification for the Legal tender act of 1862.  I cover this in detail elsewhere in this site.  (All this necessary repetition is why these Updates are so “rambling.”)  These are the historical facts that justified the original issuance of President Lincoln’s United States Notes.  In 1862, while the Civil War was raging, the United States could no longer afford to back the dollar with gold or silver and the supply of these metals was insufficient to back the dollar anyway.  The cost of the war caused a massive increase in government spending.  Government debt quadrupled in one year.  There was a bank panic.  America was out of money and there were no buyers for U.S. government bonds.  Without a new source of money, the war would have been lost, and the United States would have ceased to exist.  President Lincoln’s brilliant solution to this existential crisis was U.S. Treasury issuance of UNITED STATES NOTES.  During the course of the Civil War, in several installments, he induced Congress to increase the national money supply by twenty-five percent with no inflation. 

But, in 1863, according to some historians, the U.S. Congress coerced President Lincoln into signing the totally redundant, totally destructive National Bank Act.  (If he didn’t sign, they would authorize no more U.S. Notes.)  This sellout of America and the American people led ultimately to the Federal Reserve and our $16.4 trillion national debt.  President Lincoln let it be known that, after the Civil War was won, he would push to repeal the National Bank Act.   Lincoln’s assassination killed any chance of a debt-free monetary system being established in America at that time.  The clear similarity to the debt crisis of 1862 and today’s debt crisis is obvious.  And the debt-free money solution to the current crisis is also obvious.  Are our politicians too stupid to see this or are they too corrupted by campaign contributions and the prospect of six and seven figure “jobs” when they leave the government?   

The current “debate” about raising the debt ceiling is scam.  The politicians have to know that the dollar is backed by U.S. government debt (Treasury bills, bonds and notes).  This fact is explained on the U.S. Treasury web site: U.S. Treasury - FAQ: Legal Tender Status of Currency.  As the population expands, the economy will expand and, of course, the money supply must expand with the economy.  Thus, as the money supply expands, the national debt must expand as well.  This is why the debt ceiling will always be raised and the national debt will never be paid off under our current debt based monetary system.  The Republican/conservative debt alarmism is just a ruse to “justify” attacking social security, Medicare, Medicaid and other necessary and beneficial functions of our government.  If they really wanted to do something about the national debt, the Republican controlled Congress could authorize the Treasury to issue U.S. Notes, and we could start PAYING OFF the national debt.  They could stop borrowing money from the worthless bond vigilante parasites, and they wouldn’t have to waste time arguing about raising the debt ceiling.  And, they could stop bleeding the taxpayers to pay the enormous principal and interest of the national debt.  But, if they did that, would the campaign contributions from Wall Street and the bond vigilantes dry up?  Would there be no more useless six and seven figure “jobs” at Goldman Sachs and other investment banks offered to the politicians?  Would there be no more phony “jobs” at worthless conservative “think” tanks offered to politicians?  This insidious revolving door also applies to the so-called “bureaucrats” the politicians put on, and in charge of, policy making bodies and government agencies.  Two perfect examples of these nests of Wall Street and private sector moles are the Council of Economic Advisors and the Securities and Exchange Commission.  No wonder America’s financial situation is a disaster.     

Let me repeat again, the national debt is a scam and a scandal!

Today, the talking heads on the cable “news” shows are, as usual, rambling on endlessly about the fiscal cliff, sequestration and the debt ceiling.  As I explained previously, the whole “debate” is a scam.  One aspect of the scam is the so-called “payroll tax cut.” A liberal “journalist” was talking about how important the payroll tax cut is for American workers.  But, he failed to mention that the “tax cut” is robbing money from the so-called social security trust fund.  I really hate to keep explaining this over and over, but someone has to counter the disinformation put out by the politicians, academics, pundits and news media.

Let me repeat, again, the FICA (social security) payroll deduction IS NOT A TAX!!!  FICA stands for Federal INSURANCE Contribution Act.  The deduction is a premium payment to a government administered insurance program.  Anybody who calls the FICA deduction a tax is either ignorant, stupid or a liar.  I think, years ago, the social security payroll deduction was labeled FICA on the W-2 form.  I know it is called FICA on worker’s pay stubs.  How convenient for the privatizers and government haters that, thanks to some mole, it now says “social security tax” on the W-2 form.  This disinformation/lie is a good illustration of how the Stupidity Barrier works.  The FICA deduction is supposed to go into a separate trust fund.  But the FICA money instead goes into the general revenue fund and whatever money isn’t paid out in benefits is spent by the politicians.  The amount that is spent by politicians becomes the infamous IOUs (intergovernmental debt) and is added to the national debt.  The IOUs are government bonds that “earn interest.”  But, it is us taxpayers who are liable for the debt and interest!  Is this not theft of trust fund money and extortion of the taxpayers?  This is the part of the story that is almost never discussed.      

To make matters worse, because of the irresponsible, and allegedly, fraudulent actions of Wall Street bankers, people in the real estate business and the financial services “industry,” social security went into the red when the economy crashed after the 2007/2008 mortgage disaster/global credit crisis.  This means there is not enough FICA money coming in to pay full social security benefits.  Wall Street’s and the private sector’s responsibility for the FICA deficit and America’s current financial crisis is another taboo subject.  FICA in the red means the deficit in social security benefit payments will be made up from the government’s general revenue fund.  Since the federal government is running a trillion dollar plus deficit, money to make up the shortfall will be borrowed from the global credit markets.  This rotten situation gives the conservatives and Republicans just what they want: the opportunity to denounce social security as a “welfare program” that adds to the budget deficit and national debt.  The “socialist” Democrats and the “socialist” President Obama could denounce Wall Street and the private sector for wrecking the economy.  They could denounce the deregulated, free market, globalized, private sector for not paying the workers enough to properly fund the social security and Medicare systems.  Do those “socialists” do that?  Not so much. 

On the subject of disinformation, every time I hear the Democrats talk about the non-existent trust fund “surplus,” I think about the American Stupidity Crisis.  The surplus has been spent.  The mythical surplus is just an authorization to borrow more money from the global credit markets (and add that amount to national debt) or to steal money from us taxpayers to “replace” the money that was stolen from the trust fund and spent by the politicians.  I’m getting so sick of explaining this over and over and over again. 

In the future, if we ever break through the Stupidity Barrier, we can replace the stolen money and make up the funding shortfalls in social security, Medicare, Medicaid and the Pension Benefit Guarantee Corporation (PBGC) permanently with Treasury issued, debt-free, United States Notes.  The funding crisis inflicted on federal, state and local governments by Wall Street and the private sector can only be fixed with Treasury issued debt free money.  The barbaric tax and debt system that funds our governments dates back to the Dark Ages.  It didn’t work then, and it doesn’t work now.  A perfect illustration of this fact is the pitiful response to the hurricane Sandy disaster.  Why do New Jersey politicians have to publicly beg for disaster relief?  Where is our for-profit, private sector insurance “industry”?  Obviously, the government has to step in.  Tragically, the Constitution reading Republican hypocrites are holding up the relief funding because of their purported concern about the budget deficit and “bloated government.”  If they really cared about budget deficits and the national debt, they would vote to authorize the Treasury to issue debt-free, legal tender, U.S. Notes and pay off the national debt.

I’m so sick of hearing Republicans and conservatives squawk about “…getting back to the Constitution and limited government.”  Let me repeat again for the ignorant, government hating, private sector shill Republicans and conservatives: NOWHERE IN THE CONSTITUTION DOES THE TERM “LIMITED GOVERNMENT” OR EVEN THE CONCEPT OF LIMITED GOVERNMENT APPEAR.  THE CONSTITUTION DEFINES OUR GOVERNMENT.  IT DOES NOT SET LIMITS.  TWENTY-SEVEN CONSTITUTIONAL AMENDMENTS PROVE THIS POINT!!!

Another insidious piece of disinformation is the percentage of anything to Gross Domestic Product (GDP).  (Two examples are the national debt or government spending relative to GDP.)  The GDP went over a cliff after the 2007/2008 crash and resulting Great Recession.  The fact that Wall Street and globalization caused the low GDP is largely ignored.  Now, the politicians and pundits, instead of demanding that the private sector fix the economy and raise the GDP, use the low GDP as a phony excuse to attack social security, Medicare, Medicaid and anything good that the government does.  I won’t spend a lot of time debunking the myth that GDP is a relevant economic yardstick.  I will just point out that businesses and corporations were/are making record profits, paying gigantic salaries, bonuses, perks, spitting out massive amounts of money in dividends and stock buybacks while the GDP was/is in the tank.  It is also true that the GDP can be up and moving higher while workers wages and benefits are down and moving lower.  The GDP number is meaningless in terms of what is good for America and the American people in general.  In fact, the man who invented the GDP equation, Simon Kuznets, warned against using GDP as a measure of the general welfare of the American people.

However, even though GDP is a flawed measurement, it can be raised, the economy revived and unemployment virtually eliminated by the “jobs bill” that I proposed in my 2-11-2012 Update.  That jobs bill requires no legislation from our catatonic Congress or tax dollars.  The jobs bill that I proposed would be a New Deal type full employment program funded totally with debt-free, U.S. Notes.  The jobs that I listed in that Update are just a starting point.  Many, many more good, useful and well paying jobs can be created in this way.  President Obama would only have to direct the federal agencies to start hiring more people. It’s as simple as that.  Tragically, our politicians are, apparently, too stupid and corrupt to even discuss my proposal.

As I’ve explained over and over on this blog, the slow growth, high unemployment, stagnant and declining wages is the New Normal.  The New Normal economy is caused by deunionization, globalization, Wall Street’s subprime mortgage disaster/global credit crisis, and the free flow of capital.  Conservatives and Republicans try to blame “high” taxes and government regulation for the New Normal economy.  This is total hogwash.  All the complaining by the conservatives and Republicans is just a ruse designed to destroy the power of the government, cut taxes, destroy “entitlement” and fatten profits.    

I’m shocked at the level of ignorance and stupidity in the public discussion of job creation, the budget deficit and the national debt.  Why do people listen to anything Alan Greenspan, Robert Rubin, Larry Summers, Time magazine, Bill Clinton, George W. Bush, Arthur Levitt, Harvey Pitt, David Walker, Barney Frank, Chris Dodd, Hank Paulson, John Paulson, Franklin Raines, Phil Gramm, Gudd Gregg, Bob Corker, Jamie Dimon, Sandy Weill, Lloyd Blankfein, Alan Simpson, Erskine Boles, Warren Buffett, rating agencies, Ed Rendell, Pat Toomey, Ron Paul, John Snow, Frederick Mishkin, Art Laffer, Larry Kudlow, Rick Santelli, Joe Kernan, Joe Scarborough, Maria Bartiromo, Nancy Pelosi, Marsha Blackburn, Kay Bailey Hutchison, bankers, CEOs and many, many others have to say?  Their advice is just as self-serving and worthless now as it was before the 2007/2008 crash, mortgage meltdown and global credit crisis, in my opinion.  What do you have to do to be discredited in this country?!  (I don’t blame Ben Bernanke or Tim Geithner because they were just underlings.)         

I really hate to keep recounting my eight and a half year tale of woe about how I have been stonewalled by the politicians, the media and academia.  But, now I have to blame the general public (who I have tried so hard to help) for stonewalling me as well.  I ran for public office twice.  I explained the Constitution based, debt-free alternative to America’s debt debacle to hundreds of people, and lost both elections.  I was on the radio twice.  I put signs on the side of the road.  I put signs in my car.  I put my literature in libraries, rest rooms, stores and rest stops on Interstate highways from Pittsburgh to upstate New York, New Jersey and the Ohio border.  I’ve given my literature to Salvation Army bell ringers, and told them if you really want to help the poor, do what I say on my blog.  I’ve marched and carried my sign at protest rallies.  I’ve given written proposals about debt-free money to dozens of low and high ranking Democrats (and a smaller number of Republicans).  I’ve written to the U.S. Treasury and the Federal Reserve.  I’ve written to liberal think tanks and conservative talk shows.  I’ve contacted groups, including the AARP, that claim to represent the interests of senior citizens.  I tell everybody I know, and even strangers, to read my blog and write or call their Congressperson (who won’t answer my letters, e-mails or return my calls.) 

People in China, Russia, Germany, Indonesia and many other countries are reading my blog.  But, I can’t get Senator Pat Toomey, Senator Bob Casey, Congressman Tim Murphy, President Barack Obama or dozens of other politicians to respond to my correspondence in any meaningful way.  I even wrote to the Justice Department to complain that the worthless politicians are denying me my first Amendment right to “petition the government for the redress of grievances”.  I blew the whistle to the Justice Department on the politicians for stealing trust fund money and extorting money from taxpayers to “replace” the stolen money.  But, after eight and a half years, despite my best effort, the responses have always been the same: a yawn, a blank stare or silence.  Well, I’ve done my part as a responsible citizen.  Apparently, the Stupidity Barrier is impenetrable. 

Speaking of stupidity, I’m sick of hearing young people tell me that they know social security won’t be there when (if is a better word) they retire.  They say: “I’m putting my money in the financial markets.”  I invariably ask them: “Why aren’t you demanding that the politicians stop stealing your social security money?”  Invariably, the response is a blank stare.  Wall Street has these government haters convinced that they will retire and live off their investments.  Remember when young people thought they would make so much money in the stock market that they would retire at 55?  I have to laugh when the business shows crow about the current “bull market.”  Yeah, the markets are up – from the last crash.  The financial professionals tell us there has been “an average 9 % per year stock market gain since 1929”?  Is this true or is this 9% a meaningless number like GDP?   When the markets crashed in 2007/2008, the “smart money” sold out when the Dow was 14,000, stashed their profit in handy U.S. government debt, then bought back in when the Dow was 6600 and made a killing.  Of course, at Dow 6600, most “retail investors” were wiped out and sitting helplessly on the sidelines. 

In the past, on this site, I raised these two important questions: 1. Are the bond markets a giant shakedown operation of taxpayers and consumers?  2. Are the equity markets a Ponzi scheme?  I would love to discuss these questions with entitlement hating, government slashing, financial regulation hating, former Wall Street banker/derivatives trader, restaurateur, and fanatically conservative Republican Pennsylvania Senator Pat Toomey.  I also want him to explain how the derivative “products,” that he pioneered, caused fiscal chaos in American towns, cities and states.  But, literally, from the day he took office as senator, he has refused to even acknowledge my letters, long distance phone calls or e-mails, let alone address the issues that I raise in my correspondence.       

With debt-free U.S. Notes, the U.S. Treasury can fully fund federal, state and local governments and loan money to businesses interest free.  When viewed in the context of Treasury issued debt-free money, it is self evident that the bond markets are a gigantic shakedown operation.  Incidentally, I’ve always wondered why most large businesses and corporations never pay off their multi-billion dollar debt no matter how much profit they make. 

But, what would indicate that the equity markets are a Ponzi scheme?  Consider these historical facts.  The Dow Jones “Industrial” Average was flat from 1965 to 1983.  In 1983, the trend of businesses dumping their pensions and offering 401K plans went into high gear.  At exactly this time, the Dow took off like a rocket to 14,000 and promptly crashed to 6600.  Just like a classic Ponzi scheme, as long as the money pours in, stock prices inevitably go up.  But when the economy crashed in 2007/2008 and many people stopped putting money into stocks, the markets crashed too.  Despite Fed Chairman Ben Bernanke’s heroic efforts to rescue and support the equity markets, they seem to be stuck in a “trading range” lately.  Is Wall Street waiting for social security privatization to power the next “major bull run”?  The Wall Street shills on business shows and the conservative talk shows are constantly beating the drum for social security privatization.  Are they part of a giant Ponzi scheme? 

On the subject of stupidity, I did something really stupid.  Before US Airways went bankrupt, a “legendary” billionaire Wall Street stock picker predicted that US Airways stock was going to $120 a share.  Like so many of my fellow employees, I rushed out and bought US Airways stock.  What we didn’t know then was (it was credibly reported) the “legendary stock picker” who predicted $120 a share was selling while we were buying.  Buying that stock was against everything I believe in.  But, everybody was buying.  And “I would have been stupid” if I missed out on the big move.  I didn’t want people to laugh at me when I missed my chance to get something for nothing.  Well, US Airways stock subsequently crashed to ZERO!!!  I, and the other “investors” (suckers), lost every penny we paid for our “ownership stake.”  Was it a classic case of Wall Street “pump and dump”?  

Incidentally, I read that when “retail investors” sue because of suspicious stock losses, the judges throw out the cases as fast as the alleged victims can file them.  I just want that “legendary” billionaire stock picker to know that there were devastating consequences for some of the people who took his prediction to heart.  That disaster reminds me of the “legendary” Wall Street traders who made billions of dollars by betting against the housing market.  Who cares if millions of lives were ruined?  When the talking heads on the business shows hang on your every word and call you are a “legend,” apparently, you can do no wrong.  I know. I know.  That kind of “work” is perfectly legal.  And I’m sure these “legends” will say it sure beats wages aka useful, productive work.  Billions of dollars are made buying and selling stocks and millions of dollars are made talking about buying and selling stocks.  However, I have yet to figure out what useful purpose is served by buying and selling stocks.

As I said, the Stupidity Barrier has caused a Stupidity Crisis in America.  I hate repeating the same points over and over, but maybe with enough repetition, the truth might finally sink in.  The bipartisan attack on social security began in 1968 during the Johnson Administration when the so-called “unified budget” dumped social security money into the federal general revenue fund.  President Richard Nixon continued to raid social security to help pay for the Vietnam War.  Eventually, social security went into the red.  In 1983, with bi-partisan support, the Alan Greenspan Commission “saved social security” by raising the payroll deduction, cutting benefits, taxing benefits and raising the retirement age.  But the politicians kept on stealing the money! Then, in 1999, came the insane bi-partisan financial deregulation that ultimately put the “trust fund” again in the red in 2010.  Now I would like to explain how the unified budget, the Bush/Obama tax cuts, 2 wars, globalization, bailouts of the financial services “industry,” the New Normal economy and the consequences of financial deregulation all work together to destroy vitally important government programs like social security, Medicare, Medicaid and the PBGC.  And they also disrupt or prevent the many excellent things the government does, like hurricane Sandy relief.        

The first Bush tax cut was put in place in June of 2001.  I previously explained why those tax cuts should have been rescinded on September 12, 2001 (we were at war).  In May of 2003, George W. Bush simultaneously put in place more tax cuts and invaded Iraq!  This insanely stupid move glaringly illustrates the American Stupidity Crisis.  Bush cleverly put the cost of the wars “off budget” so that the America people wouldn’t notice that we were borrowing the money from the global credit markets to pay for the wars.  Of course, this irresponsible neo conservative blunder (no WMD) wiped out the surplus and exploded the national debt.  Now fast forward to December 17, 2010.   In a “rare example of bipartisan compromise,” “socialist” President Barack Obama thrilled his fellow multimillionaires and the billionaires and multibillionaires by extending the Bush tax cuts for two more years.  His cover story was that he had to extend the tax cuts so he could extend unemployment benefits.  And, that tough negotiator Obama forced the Republicans to let him rob social security for another year with the stupid, so-called “payroll tax cut.”  (Republicans loved the idea.)  When did that “socialist” Obama ever demand full employment from the private sector so we wouldn’t need unemployment benefits?  When did that “socialist” Obama demand better pay (and better benefits) for workers from the private sector so social security and Medicare could be fully funded?  But that “socialist” did slash government jobs and freeze the pay for government workers. 

As I explained previously on this blog, these stupid budgetary “blunders” seem to be part of a bipartisan (along with the media and academia) PLAN to destroy “entitlements.”  According to the pronouncements of the politicians and the pundits, all of our fiscal problems are the result of “out of control entitlements.”  They ignore the two wars, the Bush/Obama tax cuts, the massive cost of the “War on Terror,” the massive cost of our global military footprint, corporate welfare, foreign aid and other government expenditures that have nothing to do with “entitlements.”  They just whine and cry and worry and warn about nothing but ENTITLEMENTS.  So, what is the obvious conclusion that I must draw from this?  To them, all the above listed government spending and tax cuts are just fine, but entitlements are bad.  Why are they bad?  They are bad because they take money away from Wall Street and the insurance “industry.”  The other day, I even heard Newt Gingrich talking about a private sector alternative to social security.  Are you finally getting the picture?

Politicians, Republican and Democrat, steal money from the social security “trust fund,” spend it, and add that amount of the theft to the national debt.  Then the national debt is used as an excuse to slash social security (and other vitally important government programs).  Are we supposed to believe that the politicians don’t know that they are destroying the system when they steal trust fund money?  Nobody could be that stupid.  Unlike most my liberal friends, I listen to conservative talk radio.  One of the many reasons why I find these Wall Street/private sector shills so despicable is the way they try to make fools of their audience.  Here is an example: The conservative talkers love to tell us about how the politicians steal money from the social security “trust fund.”  But, they spin it like this: “The liberal Democrats steal the money and spend it on government programs.”  Here is the truth.  All the money that isn’t paid out in benefits goes into the federal general revenue fund, stupid.  (Of course, that was before Wall Street and the private sector put social security funding into the red.)  But, would the conservative talkers ever demand that the politicians STOP STEALING THE MONEY?  Not a chance.  What is their “solution”?  “Privatize social security so the politicians can’t steal your money.”  No wonder the advertisers are lined up around the block.  I wonder how many advertisers would sponsor me.  Answer: ZERO.

I think I covered the bipartisan attack on social security pretty well.  Now I would like to explain why Medicare is underfunded.  As I explained in the first paragraph of this Update, the underfunding problem of social security is caused by low worker’s wages.   The same problem caused the underfunding of Medicare.  (Of course, politicians steal Medicare “trust fund” money too.)  I am so sick of hearing conservatives, Republicans and Democrats whine and cry about how Medicare costs have increased more than inflation.  Of course they have.  So what?  The research and development that produced all the wonderful advances in medical treatment cost money.  And, all those new and wonderful treatments cost money.  Get over it!  At the time when my father died of a heart attack, none of the life saving treatments that we take for granted today were available.  No stents, no heart-bypass operations, nothing.  And, of course, all these wonderful treatments increase insurance costs.  So, what’s the problem?  The problem is our greedy, selfish, free market, capitalist system.

In all the thousands of words that I’ve written on this site, up till now, I think I’ve used the word capitalism once.  I’ve avoided this word because it has been sanctified by that pillar of the Religious Right, Pat Robertson, when he coined the term “Christian Capitalism.”  I won’t spend a lot of time talking about the evils of capitalism.  This subject has been very competently covered by Michael Moore, Ralph Nader, Howard Zinn and many other fine people.  When anyone attacks capitalism, they risk being labeled anti American.  This charge is total hogwash.  In fact, just the opposite is true.  The myth that America and capitalism are synonymous is an insult to America.  Many people accept the America equals capitalism myth because they don’t know the difference between capitalism and industrialism.  And furthermore, I say wrapping the pillars of the New York Stock Exchange with the American flag is a desecration of our hallowed symbol. 

But, before I move on, I would like to add a religious dimension to the discussion of “Christian Capitalism.”  By definition, capitalism is loaning money for interest.  Does Pat Robertson not know that loaning money for interest was illegal in all Christian countries for centuries after the death of Jesus?  Back then, loaning money for interest was the sin of usury.  To quote Jesus: “Loan not expecting to get anything back.”  What would happen to the global financial system if these words were taken seriously?  Government issued, debt free, fiat money is the solution to poverty and economic injustice around the world.  I would like to tell Larry Kudlow that free market capitalism isn’t the solution.  It’s the problem. 

Now back to Medicare.  The American economic system is a free market, globalized, financialized, deregulated, capitalist system.  In fact, for millions of Americans, socialism is a dirty word.  (I’m not a socialist, I’m a populist.)  This is ironic because the U.S. Constitution “was established in order to promote the general welfare” of the American people.  This sounds like the popular (as opposed to the textbook) definition socialism to me.  Does this mean the Founding Fathers wanted to establish a Welfare State?!  What do you think of that, Larry? 

But, contrary to the spirit of the Constitution, in the early 1970s, a process of deunionization swept across the American economy and globalization became the rule.  Unrelenting wage stagnation and decline began and continues to this day.  At the same time, advances in healthcare took off in the opposite direction.  These advances increased life expectancy (for some) and produced life saving treatments for deadly illnesses where none existed before.  At that time, you didn’t have to be a rocket scientist to realize that for workers to afford these new treatments, their wages would have to go UP, not down.  But, in a free market, globalized, capitalist economy the workers were at the mercy of Market Forces.  Sweatshop wages and benefits were/are the benchmark ideal.  According to the free market capitalists, we must chase that ideal in order to be “competitive.”  Thus, full healthcare coverage for many workers must be sacrificed on the altar of global competition. 

And, of course, the private sector insurance companies are in business to make a profit.  Consequently, providing healthcare coverage for sick, old people is not part of the New Normal business model.  This is why we have Medicare for sick, old people.  But the workers were never paid enough to properly fund the Medicare system.  What is the free market, capitalist’s solution to the underfunding problem that they caused?  Raise the eligibility age and slap the sick, old people with higher premiums and higher co pays. Unfortunately, this is a brutal hardship for the vast majority sick, old people.  I thought “free market capitalism was the best path to prosperity,” Larry. 

When it was announced that the Democrats were going to try for so-called “universal health care,” my healthcare premium jumped fifty percent.  My wife’s premium exploded one hundred and fifty percent!  Free market capitalism certainly made us less prosperous, Larry.  I asked an insurance company representative this question: if the government subsidy to the insurance “industry” (actually a private sector bureaucracy) was cut thirteen percent, why did my premium go up fifty and my wife’s premium one hundred fifty percent?  The insurance company representative said: “You don’t understand accounting.”  Maybe so, but I do understand one thing:  Our free market capitalist system doesn’t work in the spirit of the United States Constitution.  Free market capitalism is certainly capable of producing prosperity and wealth for some of the people, but it certainly does not promote the general welfare of all the people, Larry.

Nothing illustrates this fact more clearly than the conservative/Republican attack on Medicaid.  They whine and cry about the cost of Medicaid just like they whine and cry about the cost of anything the government does to promote the general welfare of the American people.  Whose fault is it that we even need Medicaid?  Medicaid is a government program for “people and families with low income.”  In other words, the system covers the working poor who can’t afford health insurance (and sick, poor people).  This gets us right back to the low wages paid by the private sector.  And, to add insult to injury, taxpayer’s dollars are given to private sector insurance companies who “provide all or most of the Medicaid recipient’s healthcare needs.”  What a joke!  I thought this was a government program.  How did the private sector get in on the act?  Is this not an unnecessary layer of bureaucracy?

I won’t spend any more time talking about the obvious problem.  I will just repeat my solution: fully fund social security, Medicare, Medicaid and the PBGC with Treasury issued, debt-free, legal tender United States Notes.  Obviously, as I pointed out above, many small and medium size businesses can’t afford to provide full healthcare coverage for their employees.  Some could provide the coverage and pass the cost on to the consumers, but this would be inflationary.  Only the government can provide the money for full healthcare coverage for Medicare and low wage workers.  How would the government know which businesses need financial help to provide full healthcare coverage?  The government already knows because the IRS knows.  The qualifying businesses wouldn’t have to fill out any forms or endure any “government red tape.”  The system would be completely automatic.  The IRS would hire all the additional personnel necessary to administer this automatic system, and they would be paid with Treasury issued debt-free U.S. Notes.   U.S. Notes would be transferred directly from the Treasury to the Medicare and Medicaid systems and paid directly to the healthcare providers.  No tax dollars or government borrowing would be required.  Fully funded Medicare and Medicaid systems would literally save lives.  No more insurance company death panels.  Cash flush Medicare and Medicaid systems would be a boon to our healthcare industry, provide thousands of well paying government jobs, and the result would be a significant increase in our Gross Domestic Product.  What could be more fair, simple and benevolent?  This system would be voluntary, however.  If a business objects to “big government intrusion into their business,” they can decline the government help.  They would be free to choose the old fashioned free market, capitalist model.  Of course, the free marketers will probably complain that they are at a disadvantage.  However, the Constitution was established to “promote the general welfare” of the American people.  The Medicare and Medicaid funding system outlined above does exactly that.  If the free marketers want to argue, they can argue with the United States Constitution.

[I’m still reading “Better, Stronger, Faster -- the Myth of American Decline…” by Daniel Gross.  So far, I have read nothing in this book to allay my fear that America is in a very serious state of decline.]

Rebuttals to my analysis and proposals from politicians, policy makers, reputable pundits, academics and business leaders can be sent to Post Office box 815, Coraopolis, PA 15108.     

UPDATE 12-12-2012

 

It’s the Stupidity, Stupid

Part 2

 

Actually, I’m not calling everyone who reads this blog update stupid (despite the attention grabbing title).  My objective is to warn people about the dangers and consequences of accepting stupid ideas as revealed wisdom.  After more than eight years of stonewalling and silence, it is obvious that I have to try harder to get the attention of the politicians, the pundits, the mainstream media (MSM) and the general public.  Calling people stupid will usually get their attention.  I am not running again for public office (calling people stupid is not a good way to get votes). As a non candidate, I don’t have to pander to anyone.  I have a populist message, that is: economic and social justice based on the U.S. Constitution and existing law.   

What is the stupidity that I’m talking about?  The current budget “debate” is an exercise in stupidity that is a result of widespread ignorance.  It is ironic that the politicians who stuck us with the sixteen trillion dollar national debt are now frantically warning us about the evils of public debt.  I think it is more realistic to think of the politicians not as public officials, but as loan originators.  After all, it was them, not the taxpayers, who borrowed the money that put us sixteen trillion dollars in the hole.  Politicians, as loan originators, serve exactly the same function as did Mitt Romney when he owned and ran Bain Capital.  That function was/is: to borrow huge amounts money that other people have to pay back.  (And don’t forget, it was the loan originators, working for the banks, who created the massive debt that caused the home mortgage disaster.)  I hope that everyone who reads this blog will write or call their Congressperson and ask them this question: If the Constitution and the law give Congress the authority to direct the U.S. Treasury to issue debt-free legal tender currency (United States Notes) why do we have a $16 trillion national debt?   I recommend clicking on this link to the U.S. Treasury Department web site: U.S. Treasury - FAQ: Legal Tender Status of Currency.  There you will learn that everything I say about debt-free money is true and based on existing law.

………………………………

We have heard hundreds of times that, when President Bill Clinton left office, he had a budget surplus.  This Peace Dividend produced a fearful reaction in Federal Reserve Chairman Alan Greenspan.  Why would Greenspan fear a budget surplus?  On page 104 of the worthless, conservative propaganda book I.O.U.S.A., Alice Rivlin (Director of the Office of Management and Budget under President Bill Clinton) is quoted: [the federal budget] “had a large surplus.  It had such a large surplus that people were beginning to worry about the surplus.  My then colleague, Alan Greenspan, worried that the surplus was so large that we would pay off the whole national debt.”  Why would that be a problem?!  Ms. Rivlin said: “Well, he thought it would be a problem because then the government would have to buy private securities.”  I hope I have finally made my point that because our money is based on debt, we will never pay off the national debt under our current debt based monetary system.  The national debt is an integral part of our economic/monetary system and the foundation of the global bond market.  And, to make matters worse, U.S. government debt securities are in the retirement portfolios of millions of Americans.  How is that for a really stupid idea?

The George W. Bush administration inherited the Clinton surplus, and we all know what happened next.  President Bush said he wanted to give the surplus money “back to the American people.”  Well, he could have replaced some of the money that the politicians had stolen from social security and the other “trust funds.”  But, of course, he chose tax cuts that favored the rich.  Fast forward to September 11, 2001.  The historical record shows that the Bush administration ignored the warnings of the Clinton administration about the threat of Al Qaeda terrorism, but that’s another story.  My point is about the surplus.  From that day in 2001, when we were attacked, America was, and still is, at war.  The justification for the Bush tax cuts was that the surplus was the result of the Peace Dividend (lower defense spending).  According to that logic, the tax cuts should have been rescinded on September 12, 2001.  As far as I know, I am the first and only person who has ever made this point.  Now, our elected loan originators (politicians) are using the national debt as an excuse to attack social security, Medicare, Medicaid and other important, necessary and beneficial government operations.  Is this monumental stupidity, or is it something more sinister and destructive?

I think I should take some time to explain how the fiscal cliff/debt ceiling scam goes beyond monumental stupidity into the realm of a deliberate attack on the general welfare of the American people. (These italicized words are found in the first sentence of the U.S. Constitution.)  I’ve already established the fact that the national debt will never be reduced or paid off under our current debt-based monetary system.  Believe it or not, Congress could have the Treasury issue $16 trillion of debt-free U.S. Notes and pay off the entire national debt tomorrow.  Of course, the Bond Vigilante parasites, who own our politicians and our debt, would never permit such an act of fiscal responsibility.  Also, Congress could send massive amounts of debt-free money to state and local governments to solve their funding problems (which are the results of the Wall Street-caused Great Recession).  Of course, that will never happen because the tax-free municipal bond market parasites will never permit that, either.

So, what is all this debt alarmism really about?  It is about attacking so-called “entitlements” and destroying the power of the American government.  If you listen to the disgusting rhetoric of conservative politicians, pundits, CEOs and the think tank shills, the above statement becomes a self-evident fact.  The PLAN is to destroy “entitlements” and starve the government into a powerless, heartless tool of the private sector.  And the totally unnecessary national debt is the perfect lash to enforce the collective will of the conservative politicians, CEOs and Wall Street. 

When viewed in this context, the insanely illogical drumbeat for tax cuts, with a $16 trillion national debt, makes perfect sense.  

On this blog, I have totally debunked the “Printing Money Causes Inflation” myth.  I previously explained that several other factors, not printing money, cause inflation.  Now I would like to put this concept into the framework of what is happening today.  The Supreme Court’s infamous Citizens United ruling is inflationary.  Why?  It increased the massive amounts of corporate and business money that floods into our corrupt electoral system.  This legalized bribery money is added to the cost of the products and services that we buy.  This obviously causes inflation.  I have a better idea for funding elections: use Treasury issued debt-free money to publicly fund all political campaigns and kick the private sector media out of the process.  (In my opinion, the advertising “industry” is a plague on our culture and a gigantic, inflationary waste of money.)   Candidates can make their cases for election through a government information service.  This will save the billions of dollars that are wasted on our idiotic electoral circus and lower the prices of many of the goods and services we buy.  Publicly funding elections with debt-free money would be a great way to fight inflation.  But, the private sector would probably just use the money that they squandered on candidates for more dividends, more stock buy backs and even more lavish salaries, perks and golden parachutes.  That’s why price controls are the best way to fight what I call Greed Inflation.

I previously made the point that conservative “think tanks” are inflationary.  But I didn’t cover foundations.  Massive amounts of private sector business money floods into foundations.  This highly dubious, and in many cases wasteful, use of money is inflationary because it adds to the cost of the goods and services that we buy.  I could write many pages about the inflationary foundation scam, but I will focus on just one: the Peter G. Peterson Foundation.

Back in 2008, Peterson bankrolled a piece of worthless, conservative propaganda titled “I.O.U.S.A.”  The book rounded up a bunch of “entitlement” haters, millionaires and billionaires to warn us about the fiscal evil and dangers of “entitlements.”  The very premise of the book is enough to turn your stomach.  By the way, I was so furious when I finished reading “I.O.U.S.A.,” that I fired off a challenge to everyone at the Peter G. Peterson Institute and everyone involved with the book, including former Comptroller General (and Romney supporter) David Walker, to a public debate on my web site.  Of course, I was ignored.  Plausible deniability is very important to these people.  Let’s take a look at the “Honorable” David Walker and some of the “Cast of Characters” of “I.O.U.S.A.”  The Cast:

Former Senator Judd Gregg: a regulation hater now working for Goldman Sachs as a highly paid Wall Street shill. 

Former Chairman of Citigroup, Goldman Sachs, the Council on Foreign Relations  and former Treasury Secretary Robert Rubin, A Wall Street billionaire who fought regulation and oversight of the financial services “industry.” Mr. Rubin is one of the main culprits of the 2007/2008 mortgage disaster/global credit crisis.   

Former Federal Reserve Chairman Alan Greenspan, He fought regulation and oversight of the financial services “industry.”  He is also one of the main culprits of the 2007/2008 mortgage disaster/global credit crisis.  He is a devoted student of Ayn Rand.    

Congressman Ron Paul, Gold bug to the Tea Party.  He called social security “unconstitutional.” Some people considered his 1999 legislation, H.R. 219, back door privatization of social security.

Investor Warren Buffet, He is the owner of discredited Moody’s credit rating agency.  He admits that he doesn’t work (“I get other people to do the work”).  He owns things and buys stocks.  How productive!

Senator Kent Conrad: As the chairman of the Senate budget committee, did he ever suggest using Treasury issued debt-free United States Notes to balance the budget?  Why finance the government with borrowed money if you don’t have to?  Why borrow money with a $16 trillion national debt?  Treasury issued U.S. Notes is the only solution to our budget problems, Senator.   

Former Federal Reserve Chairman Paul Volker, Historians claim that he “cured the stagflation of the1970s with 20% interest rates.”  But the resulting recession and high unemployment indicates that the “cure” left much to be desired.  Economists are still arguing about the causes of the “stagflation,” so I guess I can add my opinion. 

The October, 1973, Arab-Israeli War caused the famous five month OPEC Arab Oil Embargo.  Somehow, we are told, this five month embargo led to a global, decade long stagflation crisis.  The embargo and oil production cuts were retaliation against the countries that supported Israel in the war.  But did the embargo really cause the price of oil to quadruple?  Of course not, because OPEC didn’t set the price of oil.  The price was set by the global free market.  What a golden opportunity for the oil companies and the commodities traders to gouge, not only the hapless American consumer, but the entire world!  (Does anybody remember the “windfall profits tax”?)  Of course, high oil prices caused the price of everything else to go up.  What a golden opportunity to blame the high prices on American workers.  (Does anybody remember the so-called “vicious wage/price spiral”?)  Then, when President Nixon tried to protect American consumers with price controls, the oil companies simply hoarded the oil, and the result was stagflation and gas station lines around the block.  The phony “Law of Supply and Demand” ensured that the price of gas would stay high, and the abused American consumers would be ready and willing to go to war with the hated Arabs. 

The weak 1920s Weimar Republic’s hands off policy toward the markets led to the infamous hyperinflation and the catastrophic Nazi takeover of Germany.  In the same way, President Nixon’s inability to reign in the oil companies and the oil commodity markets led to stagflation and global economic turmoil.  Fiscal stimulus, money supply growth and the inherent momentum of the American economy eventually returned things to “normal.”  Twenty percent interest rates fixed nothing.

Former Alcoa Chairman, former member of the Trilateral Commission and Former Reagan Treasury Secretary Paul O’Neill, As far as I know, the then Treasury Secretary O’Neill never explained what Vice President Dick Cheney meant when he told him “Reagan proved that deficits don’t matter.”  (Check out my last (9-27-2012) Update for my explanation of Cheney’s statement.)

Investment bank advisor Art Laffer, He gave us the discredited “Laffer Curve” and the now discredited supply side economics.  Was Laffer the unnamed Ronald Reagan staffer who coined the phrase “Starve the Beast”?  Calling the American government a “beast” is sedition according to the dictionary definition that I quote elsewhere on this blog.   

Executive Director of the Concord Coalition Robert Bixby, He “educates the American people about the growing national debt.”  I recommend my blog to Mr. Bixby.  He might find it educational.

Billionaire investment banker Peter G. Peterson, I have one question for Mr. Peterson: What did you actually do to become a Wall Street Billionaire?

Former Comptroller General David Walker, Talk about someone being asleep at the switch!  David Walker was Comptroller General from 1998 to 2008.  Where was he when the politicians were stealing $5 trillion from the social security and other trust funds and adding that missing money to the national debt in the form of so-called IOUs?  Instead of whining and crying about government spending, he should have been learning about Abraham Lincoln’s and John F. Kennedy’s debt-free, legal tender United States Notes.  Was it willful ignorance that caused him to miss his opportunity to stop the national debt in its tracks in 1998 when it was “only” $5,526,193,008,897?  In his Annual Report to Congress, he could have reminded the politicians of their legal and Constitutional authority to have the Treasury issue debt-free, legal tender United States Notes instead of borrowing money from the Bond Vigilante parasites.  Thank you “deficit hawk” David Walker for approximately $10.5 trillion of our national Debt!

So, that’s the lowdown on the Peter G. Peterson Foundation.  When these “highly respected policy analysts” tell us that we have to slash “entitlements,” we should laugh in their faces and ignore them.  Unfortunately, this gang of entitlement haters have great and undeserved influence with our politicians, but they have zero credibility with me. 

……………………………………….

I’m reading “Better, Stronger, Faster -- the Myth of American Decline…” by Daniel Gross.  (I personally believe America is in a very serious state of decline.  But, we will see if Mr. Gross can change my analysis.)  I was stopped in my tracks on page 2 by his statement: …“Congress and the president were locked in an absurd standoff over extending the debt ceiling.  … official Washington had managed to turn a once-routine formality into a circular firing squad.”  Unfortunately, Mr. Gross didn’t elaborate on the explosive implications of his statement.  Does a “once-routine formality” mean that the national debt will automatically increase forever?!  Apparently, that is exactly what he meant, because our currency and economy are based on that government debt.  Consequently, as our population and economy expand, the national debt will expand right along with them.  The “routine formality” of raising the debt ceiling reminds me of the algorithms in billionaire New York city Mayor Michael Bloomberg’s Bloomberg Terminal (aka the “Bloomberg Machine”).  Those Nobel Prize winning algorithms predicted that housing prices would go up forever.  We all know how that worked out – Crash!  I only bring this up to reinforce my point that the national debt is an integral part of our economic system.  (Have you ever heard of “fixed income investments”?)   

This means all the dire warnings and hand wringing over raising the debt ceiling and the “unsustainable” national debt are really just self-serving political rhetoric.  The debt ceiling will always be raised.  But, on the other hand, the debt alarmism rhetoric is a real and deadly threat to social security, Medicare, Medicaid, the “trust funds,” the Pension Benefit Guarantee Corporation and the power of the American government.  How is the national debt a threat to the “social safety net” (a term I dislike)?  The answer is simple.  Our stupid, debt based economic system can’t completely service our stupid national debt.  Something has to go, and we know what that is. “Entitlements.”  Are you getting the picture?

Why do I dislike the term social safety net?  It implies that it is normal for lives to be ruined by the instability of our economic system and social security, Medicare and Medicaid exist to catch people as they plunge into the economic abyss.  This stupid notion gets the private sector off the hook for their responsibility to provide the American people with a stable and prosperous economic system.  Are people so stupid that they can’t figure out that social security and Medicare are an integral part of the compensation package of every working American and not an optional afterthought?

Social security and Medicare are called entitlements because we paid into them and we are entitled to that money.  Of course, we all know that there is a funding shortfall problem.  Whose fault is that?  Conservatives and Republicans say it is the fault of the workers because they are living too long!!!  Actually, real workers, people who really WORK for a living are not living longer.  It is true that the average life span is longer but, surprise; longer life spans aren’t the problem.  The problem is our greedy, selfish, deregulated, globalized, financialized, free market economic system.  Over the years, workers simply weren’t paid enough money to properly fund the social security and Medicare systems.  And, to make matters worse, the politicians were stealing the trust fund money and adding the amount of the stolen money to the national debt in the form of IOUs! 

When I hear multi-millionaire and billionaire bankers, businessmen and CEOs say they are willing to pay higher taxes only if we cut entitlements I want to start smashing things.  Why would I have such an angry reaction?  I go ballistic because it is the bankers and the CEOs who are responsible for the social security and Medicare funding short fall!!!  This is self-evident, but I will connect the dots anyway.  Bankers prefer to invest in the most profitable businesses.  As they say: “Capital chases return” (on invested dollars).   The more a business slashes wages and benefits the more profitable they become.  Consequently, less money is available for the social security and Medicare systems.  It’s that simple.  And let’s not forget the CEOs and stockholders.  The CEOs want profit growth because profit growth means that huge salaries, perks and golden parachutes are even bigger, and profit growth means more capital gains on their stock and bigger dividends.   The stockholders want profit growth for the capital gains (that they didn’t work for). 

So, the globalized free market business model demands union busting, off shoring, downsizing and a lean and mean work environment.  The workers are expected to work until they die and pay for their own healthcare with their “globally competitive” wages.  Remember, the New Normal economic benchmark is the lowest subsistence wages, the most miserly “benefits,” the most brutal, dangerous working conditions, with maximum job insecurity in the most heartless, inhumane “emerging market economies” of the world.  That is the ideal.  And, that is a big part of the underfunding problem of social security and Medicare. 

For almost a century, conservatives, Republicans and business interests have been battling the Democrats in order to deny the American people universal healthcare.  Do these people have no shame?  Because I know about Treasury issued debt-free money, it makes me very angry when I hear multimillionaire bankers, CEOs, politicians and conservative talk show shills say: “We just can’t afford it.”  We can afford it, stupid!  I cast a wide net for my information.  So I listen to conservative talk radio when I’m driving.  For years, I have been a believer in the ethical teachings of Jesus and the Old Testament Prophets.  But, I never thought much about the existence of the devil until I started listening to conservative talk radio.    

Here is a question that has never come up, as far as I know.  If the private sector wasn’t greedy and selfish, could social security, Medicare, Medicaid, the Pension Benefit Guarantee Corporation and the government, in general, be properly funded with fairly shared business profits and taxes?  I don’t think so.  If that is the case, where does that leave us?  The answer is obvious: Treasury issued debt-free money.  That is what this blog is all about.  If our economic system, in its current form, can’t provide health care and pensions for the sick and elderly workers who earned and deserve it, there must be an alternative.  This is why I have attacked and so thoroughly debunked the myth that “printing money causes inflation.”  This myth and corrupt politicians are the two things that stand in the way of Treasury issued debt-free money and a more stable and prosperous life for the American people.  Rebuttals to my analysis and proposals from reputable pundits, economists and politicians can be sent to post office box 815, Coraopolis, PA 15108.  I will put their counter arguments on this blog, and I will debate them.  The debate will be public and in the historical record.

……………………………….

Shifting gears, I have to say something about my hero, Federal Reserve (Fed) Chairman Ben Bernanke.  I have been told that on my blog I make him out to be some kind of folk hero.  That’s exactly what I’m doing because, to me, he is a folk hero.  And, today (12-12-12) he reinforced my opinion of him.  When you start talking about the Federal Reserve, quantitative easing, bond buying, the Fed funds rate, primary securities dealers, repos, reverse repos and the Fed’s balance sheet, most people’s eyes glaze over.  Not me, I love it.  So I think I know what I’m talking about when I say Helicopter Ben is a hero.

According to standard economic and monetary theory, when the economy is sluggish, the Federal Reserve lowers interest rates to stimulate the economy.  This is normal.  This is what the Fed is supposed to do under these economic conditions.  In a convoluted way, which I don’t like and won’t try to explain, this gives more money to the banks and businesses.  But, as we all know, the banks and businesses are sitting on the money and, consequently, we have a sluggish economy.  This is the Capital Strike that I discuss extensively on this blog.  [This is a good point to throw in a quick correction.  I stated somewhere on this blog that the banks and business are sitting on “8 trillion dollars of cash.”  This mistake was the result of me misunderstanding a statement by former Congressman Dick Armey.  I thought he said $2 to 8 trillion.  Apparently, he actually said $2.8 trillion.  Sorry about the mistake.  My hearing isn’t what it used to be – jet engines and loud rock n roll will do that.]   

According to my Romney Campaign Conspiracy Theory, the Capital Strike was designed to put Mitt in the White House when President Obama got blamed for the sluggish economy.  That didn’t work, so now this economic blackmail is being used to force the Democrats to cut taxes on the rich, businesses, capital gains, dividends, deregulate and to force them to slash “entitlements.”  This is all very slick and diabolical but there is one problem – the Fed’s low interest rates.  The financial services “industry” doesn’t like low interest rates for obvious reasons.  Now, the business talking heads are on TV today with all kinds of whacky theories about how Ben’s money printing and low interest rates are hurting the economy. 

But here is the good part.  Chairman Bernanke said to the business community: when you lower the unemployment rate to 6.5%, I’ll give you higher interest rates.  Brilliant!  Fantastic!  Helicopter Ben called their bluff.  He made job creation a condition for the higher interest rates that they want.  This was a brilliant tactical move.  But the Chairman may have inadvertently exposed a very serious weakness in the structure of the “new economy.”  One pundit coined the term “QE infinity,” that is, infinite quantitative easing.  What could he have meant by that?  Did he mean to imply that in the New Normal economy we will never get unemployment down to 6.5%?  Of course, nobody asked him to elaborate on the implications of “QE infinity.”  This New Normal is why I say the globalization and financialization of our economy is a disaster for America.    

The Federal Reserve has a dual mandate: maximize employment and control inflation.  Recently, conservatives, Republicans and conservative pundits have been calling for the Fed to dump the first part of the mandate.  What a stunning coincidence.  Did they fear that we had a Federal Reserve Chairman with the guts to put some real muscle behind his commitment to maximum employment?  (I wonder what Ron Paul thinks about that.)  That’s why Chairman Bernanke is a folk hero.

And, I want to commend Treasury Secretary Tim Geithner for calling the Republican’s bluff on the debt ceiling.  In a brilliant tactical move, he caught everybody flatfooted when he said take the decision to raise the debt ceiling out of the hands of Congress and give it to the president.  The media were shell-shocked into confusion or silence.  I was jubilant because Secretary Geithner confirmed what I have been saying on this blog: the debt ceiling will always be raised so why waste time arguing about raising it?  And, by all means, don’t let the Republicans use the debt ceiling as a weapon to attack social security, Medicare and Medicaid. 

I’ve been telling people for a long time that Chairman Bernanke and Secretary Geithner are the smartest guys in the room.  Fighting for American jobs and protecting social security, Medicare and Medicaid makes them folk heroes in my book.         

UPDATE 9-27-2012

It’s the Stupidity, Stupid

Actually, I’m not calling everyone who reads this blog update stupid (despite the attention grabbing title).  My objective is to warn people about the dangers and consequences of accepting stupid ideas as revealed wisdom.  After more than eight years of stonewalling and silence, it is obvious that I have to try harder to get the attention of the politicians, the pundits, the mainstream media (MSM) and the general public.  Calling people stupid will usually get their attention.  This is going to be a long, “rambling” dissertation so I will get to my main point first.  Also, I am not running again for public office (calling people stupid is not a good way to get votes). As a non candidate, I don’t have to pander to anyone.  I have a populist agenda, that is: economic and social justice based on the U.S. Constitution and existing law.   

What is the stupidity that I am talking about?  The current budget “debate” is an exercise in stupidity that is a result of widespread ignorance.  It is ironic that the politicians who stuck us with the sixteen trillion dollar national debt are now frantically warning us about the evils of public debt.  I think it is more realistic to think of the politicians not as public officials, but as loan originators.  After all, it was them, not the taxpayers, who borrowed the money that put us sixteen trillion dollars in the hole.

Politicians as loan originators serve exactly the same function as did Mitt Romney when he owned and ran Bain Capital.  That function was/is: to borrow huge amounts money that other people have to pay back.  (And don’t forget, it was the loan originators, working for the banks, who created the massive debt that caused the home mortgage disaster.)  The infamous Washington to Wall St. -- Wall St. to Washington revolving door is the obvious explanation why American governments: federal, state and local are drowning in an ocean of debt.  Why is all this debt a monument to political and fiscal stupidity?  The answer is simple: all this debt is totally unnecessary!

For more than eight years I have been telling people on my web site, on my blog and person to person before and during my two political campaigns, that the government does not have to borrow money.  Article one, section eight, paragraph five of the U.S. Constitution grants the U.S. government the power to “coin,” that is, create money “and regulate the value there of.”  Why borrow from the capital markets (and stick the taxpayers with the debt) when the U.S. Treasury can issue debt free legal tender currency?  That currency is called United States Notes (U.S. Notes or Greenbacks).  I know many people refuse to accept this simple fact.  However, I will not waste time debating counter arguments.  Abraham Lincoln, John F. Kennedy and the Supreme Court have established my position as historical and legal fact.  No further discussion is necessary (see my links to the U.S. Treasury web site for confirmation of this fact).

On August 27, 2004, I wrote a letter to an editor of the so-called liberal Pittsburgh Post-Gazette newspaper.  I explained that the money raided from the social security trust fund and the projected future funding shortfall could be paid for with U.S. Treasury issued, debt free United States Notes.  The editor’s response: my proposal was “interesting but unrealistic.”  And “Printing new money would be inflationary and would unsettle markets, national governments and international finance institutions as they would wonder whether the US would resort to printing more new money to accommodate other debts, such as the mounting annual budget deficits.”  Events in the post housing crash Great Recession period have revealed the stupidity of his response:  The massive, multi trillion dollar “quantitative easing” (money printing) by the U.S. Federal Reserve (the Fed) and other central banks have barely quelled the fears of deflation.  As for “unsettl[ing the] markets,” the news of Chairman Bernanke’s QE3 popped the (Dow) stock market up more than two hundred points in one day.    

The reaction of the “markets, national governments and international financial institutions” would be moot.  In other words, there is nothing they can say or legally do to oppose U.S. Treasury issuance of United States Notes because U.S. Notes are legal tender.  They are interchangeable with and have exactly the same value as Federal Reserve Notes.  And, they are currently an unissued part of our national money supply.  I’ve explained all this in detail elsewhere on this blog.  Also, I have this link: U.S. Treasury - FAQ: Legal Tender Status of Currency to the U.S. Treasury web site that proves that what I say is true.

There is no excuse for the “liberal” Post-Gazette’s suppression of the truth about Treasury issued debt-free money.  It is noteworthy that my Oct. 11, 2010 letter challenging to the Post-Gazette to a public debate was unanswered.   Click on this link: An open letter to the Pittsburgh Post-Gazette to read my letter.  The above letter was sent and posted about a month before the 44^th legislative district election for the Pennsylvania General Assembly.  I was the Democratic candidate in that election.  The public debate between me and the Post-Gazette could have exploded into a national debate about the issuance of debt free money.  However, the “liberal” Post-Gazette made sure that didn’t happen.  The result of those editors not doing their job is Mitt Romney, Paul Ryan and the rest of the mob of government haters claiming that social security, Medicare and Medicaid will “bankrupt America.”  I say, it is the politicians (loan originators) who ignore the U.S. Constitution and borrow $16 trillion on the taxpayer’s credit card and then base our currency on that debt, who will bankrupt America.

No matter what I do, I can’t get the attention of the media.  I wrote a letter to talk show host Cenk Uygur who at the time was working for MSNBC.  Just about the time the letter should have arrived, Uygur disappeared as did my letter.  He later surfaced on Al Gore’s Current TV Network but my letter was never acknowledged.  I could fill half a page with the names of the media people and organizations I have contacted (I have all the E-mail addresses somewhere in “the cloud” to prove it.  The media doesn’t want the general public to know that the national debt is a scam and a scandal because they are in on the scam.  The result: widespread ignorance breeds stupidity in the general public. 

I would like to reinforce my point again that printing money does not cause inflation.  The “explanation” from the gold bugs and conservative media pundits for the lack of hyperinflation, despite massive “money printing” by the Fed, is that “there will be hyperinflation down the road when the economy improves.”  This deceptive spin is constantly repeated in the media but I never hear a discussion of the implications of this statement.  How convenient for me that their “explanation” clearly confirms my Greed Inflation thesis!  Which is: prices rise because people can or will pay the higher prices.  As they say: “raise the price and see if it sticks.”  This is classic Greed Inflationary thinking.  The size of the money supply is irrelevant.  Also, Chairman Bernanke has stated repeatedly that, before inflation becomes a problem, he will withdraw the “excess” money from the system.  President Abraham Lincoln proposed exactly the same solution in 1862 in the event inflation became a problem when he put debt free United States Notes into circulation.  Try finding that important fact in a boxcar full of Abraham Lincoln biographies. 

I dislike the idea of pulling money out of circulation to fight inflation.  Decreasing the money supply tends to cause a recession.  I would rather see Congress authorize the correct amount of debt free money for addition to the existing money supply.  Price controls should stop Greed Inflation when the money supply expands to “promote the general welfare of the American people.”  More money in circulation in America means more customers and more profit for American businesses.  There is no reason for more money to cause higher prices.  Increased costs, of course, can justify price increases but with a flexible currency like U.S. Notes, costs can be offset with more liquidity.  If price controls fail, the so-called excess money can be withdrawn from circulation and the American people informed of the reason for the economic downturn.  Treasury issued U.S. Notes would put a stop to all the frantic warnings and worry about a “fiscal cliff” or raising the debt ceiling.  As for the hyperinflation myth, it does serve one purpose: it sells a lot of gold – just ask Glen Beck and G. Gordon Liddy.  Americans who “invest” in gold are actually speculators betting against their own country.  The nonsense about “going back on the gold standard” is debunked elsewhere on this site.  The stupid idea of a “partial gold standard” is nothing but a scheme to make money for the gold bugs.  It will do nothing to solve our fiscal and economic problems.

I know conservatives and Republicans are fainting at the thought of price controls.  However, here is some economic history trivia for the price control haters:  Wage/price controls were imposed three times in American history, during World War II, the Korean War and the Vietnam War.  I would like to remind the price control haters that we are currently at war.        

Increasing the money supply does not devalue a currency.  Price increases that grab that extra money is what devalues a currency.  This is Greed Inflation.  Greed Inflation is insidious because the businesses that raise prices benefit from the extra money but consumers and workers are stuck exactly where they were before the money supply was increased.  General prosperity is stifled and the dollar is devalued by Greed Inflation because it takes more dollars to buy the same product. 

“Money printing” has some obvious benefits that I’ve never heard Romney, Ryan or the other government haters mention.  After the 2007 crash, the Treasury’s and the Fed’s “easy money” policies prevented the collapse of the global financial system, rescued the financial markets and prevented a second Great Depression.  This debunks the stupid myth that President Obama “hates bankers and businessmen.” 

The rescue was/is great for bankers, investors and corporations.  However, it did nothing to solve the problems of the national debt, funding shortfalls in social security, Medicare, Medicaid, the Pension Benefit Guarantee Corporation and the general lack of money for necessary and desirable government operations.  Only the U.S. Treasury can put money directly into the trust funds to replace the roughly $5 trillion stolen and spent by the politicians.  Only the U.S. Treasury can put money directly into the government’s general revenue fund.  The idea of raising taxes and/or cutting spending to solve our fiscal problems is a fantasy – the math doesn’t work.   The solution to America’s fiscal problems is: U.S. Treasury issued debt free money injected directly into the money supply – it’s that simple.  Fully funding the government, the trust funds and government funded and administered (debt free) full employment policies would cause a massive increase in GDP and a drastic reduction in unemployment.  Our debt to GDP ratio will be so good; the Bond Vigilantes will be in tears.  We can argue about the details when some reputable pundit or politician finally writes to me at PO box 815, Coraopolis, PA 15108.  There are two things stopping the immediate government issuance of debt free money: the stupid notion that printing money causes inflation and the stupid acceptance of this hoary myth.  The loan originators have us right where they want us!

Here is an economics trivia question: What did Dick Cheney mean when he said “…Deficits don’t matter”?  I’ve never heard a satisfactory explanation so I will offer my explanation.  Our currency is backed by U.S. government debt.  As the population expands, the economy must expand and the money supply must expand to support the increased economic activity.  Therefore, the national debt must expand with the money supply.  To quote Fed Chairman Mariner Eccles (1934-51): “If there were no debts in our money system, there wouldn’t be any money.”  This means, of course, that the national debt will never be paid off under our current economic/monetary system.  I immediately thought of the Eccles quote when I heard Republican VP candidate Paul Ryan say he “would pay off the national debt.”   Congressman Ryan, the only way to reduce or eliminate the national debt is with Treasury issued United States Notes. 

After the 2007/2008 crash, Chairman Bernanke's easy money policy was designed to give the banks plenty money (recapitalization) to loan into the economy for job creation.  But this begs a question that is rarely if ever asked: what happened to the trillions of dollars that the U.S. Treasury and the Fed had to replace when the global financial system “froze up”?  In reality, that money never existed – it was debt.  Contrary to current, stupid economic thinking: debt isn’t money.  Widespread acceptance of the stupid notion that debt is money is what caused the 2007/2008 global credit crunch, the crash and the Great Recession that followed.  I explained this in detail elsewhere on this blog, but I would like to repeat the main points:  Worthless mortgage backed securities (debt) were the collateral for a large part of the global money supply.  When the myth that mortgage debt is money finally exploded in the summer of 2007, a large part of the global money supply simply vanished into thin air.  Then, to make matters worse, for Wall Street’s second act, they sold insurance policies called derivatives to investors (counterparties) to protect them when the mortgage backed securities became worthless.  But there was a massive, potentially catastrophic problem: Wall Street didn’t have the money to pay off on the derivatives!  Isn’t this fraud?  Whether it is or isn’t, the disappearance of several trillion dollars is the reason “helicopter Ben” Bernanke and other central bankers had to throw trillions of dollars into the global money supply.  They had no choice.  Don’t believe the claptrap that you hear from conservatives and Republicans that “Obama’s stimulus and economic policies didn’t/don’t work.”       

“Helicopter Ben” gave the banks plenty of money, the problem is: the banks aren’t lending (or they aren’t lending enough.). There are two reasons for this problem – both are beyond the control of the Fed.  1. The New Normal (caused by globalization) of low wages, lack of proper benefits for workers and high unemployment means there are less qualified borrowers and thus, less demand for loan “products.”  2. The Capital Strike: The private sector is sitting on trillions of dollars of cash.  This is after billions of dollars have been lavished on non productive shareholders in the form of dividends and stock buy-backs.  (In our culture, this parasitism, including capital gains, is considered preferable to actually working for your money.)  The American private sector is filthy with cash.  If they want to “build factories and put people back to work,” in America there is nothing stopping them.  But, despite loads of money and politicians in their pocket, the private sector says they are paralyzed with fear because of that dreadful “uncertainty.”  I say all the problems in the economy are the result of a Capital Strike, the Great Recession and the globalization of the economy which created the New Normal.  Obviously, the Capital Strike is economic blackmail designed to force politicians to deregulate and lower taxes on businesses.  Also, the real or imagined “horrible Obama economy,” caused by the Capital Strike, is Mitt Romney’s main campaign issue.  Whatever the actual state of the economy, conservatives and Republicans will blame all the problems, real or imagined, on the so-called “horrible Obama economy.”  This claptrap will be repeated in the other elections -- local, state, U.S. House and Senate.

The conservatives and Republicans created the myth of a “horrible economy.”  Then, every so-called “bad” economic number and every problem is blamed on Obama.  There is virtually no mention of the New Normal, the 2007/2008 mortgage disaster/global credit crisis, off-shoring, outsourcing, the lean and mean business model, downsizing, American workers competing against sweat shop labor, the Great Recession or the Capital Strike.  Intellectually, these people are a joke.  In fact, one conservative pundit from the American Enterprise Institute (AEI) tried to debunk my New Normal thesis by saying: “I don’t believe in the New Normal.”  He said: “It [the bad economy] is his [President Obama’s] fault.”  Obama slashed the government payroll to satisfy these AEI government haters.  This was supposed to relieve some of that mythical “uncertainty” that has the private sector “paralyzed with fear.”  No matter what Obama does or doesn’t do, the private sector will always whine and cry about the “confiscatory tax code” and the “job killing government regulations.”  The problems that exist in the economy are not the fault of President Obama, Chairman Bernanke or Secretary Geithner.  The problems are the result of the Wall Street-caused Great Recession, the Capital Strike, globalization, and the New Normal, stupid.

After President Obama, the Fed has become the favorite target for the army of Wall Street hacks that infest our media.  Here is a perfect example of Wall Street disinformation: A highly respected expert said the Federal Reserve’s quantitative easing (money printing) is counterproductive.  To paraphrase: The Fed’s money printing is making the economy worse.  Is this “expert” so stupid that he dismisses the Great Recession, the New Normal and the Capital Strike as factors that affect the state of the economy?  Is anybody stupid enough to believe his hackish nonsense? 

So, because the private sector has given us low wages, slow growth and high unemployment, tax revenue to the government’s general fund and the trust funds is significantly reduced.  Now, thanks to the private sector, we have budget problems and the government can’t service its debt to the Bond Vigilante parasites.  As I said, the budget “debate” is mindless gibberish.  But, there is a sinister component to the debt alarmism of the conservatives and Republicans.  The national debt is the excuse and a weapon that Wall Street and their stooge politicians use to attack vital government programs like social security.  (The money raided from the trust funds is added to the national debt!)  Am I the only one who smells a rat?   What happens if Wall Street, the insurance “industry” and their stooge politicians succeed in destroying social security, Medicare and Medicaid?  All that trust fund and tax money goes to them.  Banking and insurance are not industries.  They are expensive, redundant, unstable and predatory private sector bureaucracies.  Insurance is a great idea, of course.  However, today’s “insurance” companies are about more than insurance – they are about investing and profits.  This is why government funded and administered insurance -- social security, Medicare, Medicaid and the Pension benefit Guarantee Corporation, -- are much better for the American people than the private sector version. 

The national debt scam is like the old loan shark trick: load the sucker up with debt; then, the money lender has him (us) by the throat.  We are VICTIMS of the greatest shakedown in history, $16 trillion!  Do I blame the Federal Reserve for this mess?  No, I blame Congress.  The Fed under Chairman Bernanke has done everything it could to fix the economy that was wrecked by Greenspan, Rubin, Summers, Cox, Gramm, G.W. Bush and others.  Actually, even with the U.S. Treasury issuing United States Notes, the Fed can go about its business pretty much as usual.  I never said we should replace Federal Reserve Notes with U.S. Notes.  I recommend a debt free supplement to our existing money supply.  This is what Abraham Lincoln and John F. Kennedy did in 1862 and 1963 respectively.  Three hundred million debt free dollars are already in the national money supply.  Please click this link to the U.S. Treasury web site U.S. Treasury - FAQ: LegalTender Status of Currency for confirmation of this fact.  All Congress has to do is increase that amount to what is needed to “promote the general welfare of the American people”.  It is all up to Congress. Only Congress has the authority to replenish the empty (minus $5 trillion) trust funds.  It is Congress that can authorize the funding for vitally important government agencies and operations that have been gutted because of “budget constraints” caused by Wall Street’s Great Recession.  Only Congress can undo the monumentally stupid folly of downsizing and privatizing the National Aeronautics and Space Administration (NASA).

Why are people cheering the death of the Space Shuttle program?  One title read: “Space Shuttle Endeavour’s last flight worth cheering about.”  A former astronaut said: “I am feeling a tremendous amount of pride.”  I don’t feel like cheering, I feel angry and ashamed that some people were stupid enough to take the magnificent Space Shuttle program and throw it onto the scrap heap of history.  Who do I blame for this debacle?   Politicians are obvious suspects, but I smell the same forces that want to destroy social security, Medicare and Medicaid -- Wall Street and their cronies.  They killed the Shuttle program and now their “start ups” are swarming around and feeding on the dying body of NASA like a school of piranha.  America had something that was the pride and envy of the world and now we have nothing and the world has nothing.  How could those people be so stupid?!

Why do I blame Wall Street and their start up entrepreneurs?  My Wall Street Killed the Space Shuttle Conspiracy Theory goes like this: With little fan fare, the politicians killed the Shuttle program in May of 1991 when they refused to authorize Rockwell International Corporation to build another Shuttle after the completion of Endeavour.  At this point, Wall Street surely noticed that big money was to be made reinventing the space plane wheel that NASA had operating as routinely as an airliner.  Stand by for CREATIVE DESTRUCTION!  The IPOs are coming suck more money into Wall Street’s pockets.   Apparently, Wall Street’s plan didn’t work very well because now we are begging and paying the Russians for a ride into space.  How long will we have to wait and how much money will be wasted before the sacred entrepreneurs blunder their way to a replacement for what we already had ?

Here is a better idea: Using Treasury issued debt free money, rebuild the Shuttle program as it was before Wall Street and the politicians killed it.  The template still exists, it wouldn’t be that difficult.  This resurrection would include bringing Pittsburgh based Rockwell International Corporation back from the dead (a victim of Wall Street’s “creative destruction”).  Rockwell built the orbiters so they are part of the original program.  Shuttle building should have never stopped.  Why was it stopped?  If the problem was lack of money, then the debt free money issue falls on our heads like an anvil.  If we had funded the Shuttle program with Treasury issued debt free money, America would still have the Space Shuttle and it wouldn’t cost the taxpayers a penny! 

Wall Street wrecked the American economy, they killed the Space Shuttle and now they are threatening the solvency of the American government.  Why would anybody want to wrap the pillars of the New York Stock Exchange with the American flag?  I see this as an outrage and desecration of our hallowed symbol. 

I hear a lot of talk about the Simpson-Bowles budget plan to slash the government.  Politicians say we must make “tough choices.”  Alan Simpson said, in effect, if Congress doesn’t make the tough choices and slash away at the government and government programs, the bond market will make those decisions for us.  Erskine Boles said: “I believe the markets will force us” to come to a deal.”  When did the American people give these loan originators the right to give away our national sovereignty to a bunch of Bond Vigilantes?  Following the Constitution and issuing debt free money was/is a tough choice that Simpson, Bowles and everyone in Congress has avoided since the assassination of President Kennedy.  This tough choice takes more guts than any of our politicians, then or now, possess.   I have a question for all the “starve the beast” government haters.  Where in the Constitution does the phrase “limited government” appear?  I constantly hear conservatives and Republicans say: “Let’s get back to the Constitution and limited government.”  I couldn’t find the phrase “limited government” or even the concept of limited government anywhere in the Constitution.  The Constitution defines our government, it does not set limits.  Twenty-seven Constitutional Amendments prove that point, stupid. 

This is my contribution to the budget “debate:”  Congress should immediately vote to increase the national money supply by twenty-five percent -- approximately $2 trillion -- with Treasury issued U.S. Notes.  Why twenty-five percent?   From 1862 onward, President Abraham Lincoln issued $400 million of U.S. Notes.  This amount increased the money supply by approximately 25% with little or no inflation.  Today, Congress can do exactly the same thing using the authority of the Legal Tender Act of 1862.  The historical precedent was set by Presidents Lincoln and Kennedy.  This fact destroys the objection that this was never done before.  Two trillion dollars is a small fraction of the amount of money that is needed to fix our fiscal and economic problems, but it would be a good start.  Is there a politician out there with the wisdom and courage of Abraham Lincoln or John F. Kennedy.

Rebuttals to my analysis, by reputable pundits or politicians, can be sent to PO box 815, Coraopolis PA 15108