The Fiction of
Government Debt
Source: http://www.whatreallyhappened.com/us_government_debt.html
And: http://openingmind.blogspot.com/2006_05_01_openingmind_archive.html
Government debt is a fiction. The government ought to have sovereignty
which includes the right to print a currency. Yet in America and in the modern
world with the exception of Singapore the right to create money has been given
to the bankers. We have had three Presidents who supported the right of the
government to issue Treasury Notes instead of Federal Reserve Notes.
Unfortunately for us, all three were killed by "lone assassins."
Let me begin by explaining what money is. Money is a commodity
that measures the value of all other commodities and services. Prices are a
ratio of money to all other goods for sale. If the ratio remains constant then
there is no inflation. For example, if the money supply were one trillion
dollars and production increased by 4%, then we could increase the money supply
by 4% without fear of inflation.
So, you ask, how do banks and governments differ in how they
create money? Imagine it is in the early 19th century and we are shipwrecked on
an island far from the shipping lanes with no immediate chance of rescue. I
would open a bank. I would find an artist to help me create one thousand one
dollar bills. I would spend these "Island Treasury Notes" into
circulation by paying anyone who did community work, such as, building a clinic
or a school. I would have a popular government as I would dispense more social
services than I took from the people in taxation.
Now imagine you are stranded on an island with a New York or
London banker. He would set up a private bank and create money which he would
loan to you. Notice he is not loaning you anyone's savings. He is functioning
as a counterfeiter. He is using loan agreements to pass counterfeit money. And
he is requiring you to pay interest on his forgeries. This form of banking is
nothing more than a theft as it will eventually through monetary creation,
interest payments, inflation and depression transfer all wealth from those who
produce wealth to those who print the currency.
Suppose our banker runs low on paper to print money. He can create
checking account money. You go in for a loan and he gives you a check book in
which he gives you the right to write checks up to the amount of the loan.
Notice again he is not loaning you someone else's deposit. He is creating money
out of thin air and obligating you to work to repay him both the amount he counterfeited
and the interest.
Now let us look at how the Treasury Department "borrows"
money. Suppose the Secretary of the Treasury is short 100 billion dollars over
the next three months. Under the Treasury Note System as advocated by martyrs
Lincoln, McKinley and Kennedy, the central bank would be owned by the
government. It would create 100 billion dollars in checking account money and
cash. The Treasurer would then use this money to pay for government wages and
programs. Remembering that prices are a ratio of the commodity called money to
all goods and services for sale, we know that this 100 billion deficit will
actually be good for the economy. Why? Because the money supply is currently 10
trillion dollars. And, if the economy grows 4% a year, we need to create 400
billion dollars a year and spend it into circulation. From the Keynesian
economic perspective this spending money into circulation would protect us from
a depression. And it would also prevent an inflation as the ratio of money in
circulation to goods and services would be constant. Please note I am not
endorsing Keynesianism. I am just saying there are economists who would agree
that spending non-interest bearing money into circulation makes sense as it
would reduce unemployment and not create inflation.
Now let's look at what happens when we run a deficit under the
Federal Reserve system which was copied by Max and Felix Warburg from the
German Central bank. The Secretary of the Treasury calls up the Federal Reserve
and begs them to create one hundred billion dollars. Suppose the Fed decides to
print ten billion dollars in coins and cash and to create 90 billion dollars in
checking account money. The Fed calls the Bureau of Engraving and Printing and
asks them to print ten billion dollars. The Fed then writes out a check for 3
1/2% of the ten billion dollars which is what the Bureau charges on average.
The Bureau delivers ten billion dollars in Federal Reserve Notes to the Fed.
That check for 350 million dollars the Fed used to buy ten billion dollars was
created out of nothing as an accounting entry. The Fed then creates 90 billion
dollars in checking account money which they deliver to the Treasury along with
the ten billion dollars in cash in exchange for 100 billion dollars in Treasury
Notes. Those Notes obligate you to work and pay taxes to pay a debt and an
interest on the debt which are fictions. Last year I calculated that the total
amount of money we pay as taxpayers to pay the interest on our "fictitious
debt" and the the money we could have spent into circulation as being 759
billion dollars a year.
But 759 billion dollars a year is not the total cost of the
subsidy you pay each year to the bankers. The banks launder 2.5 trillion
dollars in drug money each year. That amount of money can only result in the
unleashing of a tremendous wave of crime for addicts to buy drugs. That is
another subsidy to the banks. And the spread of fatal sexually transmitted
diseases is another by-product. The banks also launder 500 billion dollars in
bribes each year and another 200 billion plus dollars in illegal weapons sales.
Both of these do great harm to the average person. And then there is the matter
of the theft of billions of dollars each week from unaudited government
contracts. The total cost of the banking class is over a trillion dollars a
year even if you assume that the bankers had nothing to do with all of our wars
which is a rather dubious proposition!
Of course a system such as the Federal Reserve was never intended
to work if you mean by that you could work all your life, save money and rely
upon a company pension to provide for yourself when you were too old to labor.
What it was intended to do was transfer all wealth from those who work to those
who do not. In the Great Depression of 1929-1939 the monetary contraction forced
tens of millions into bankruptcy which transferred wealth as the system was
designed to do. We are approaching a period of great inflation that will
transfer all wealth to the banking class. On November 10th of last year the
Federal Reserve bank said it would no longer tell us what the total money
supply (M3)of the United States is. I believe they will be creating tens of
trillions of dollars in M3 credits to cover the sale of an equal amount of
assets held by the bankers and their friends so they can get out of soon to be
bankrupt stocks and bonds. They will take this money overseas and invest it in
hedge funds, foreign currencies, gold, silver and other commodities. When the
dollar has collapsed, they will be able to buy America for pennies on the dollar
and cut our wages to nothing. Our homes and our businesses will have all been
confiscated by foreclosure. Fifty companies will own America. Their employers
association will effectively eliminate all democracy. If their spies hear that
you are a union organizer or a precinct worker for that token opposition
candidate, you would lose your job at WalMart and wind up working as a day
laborer taking the jobs the illegal aliens do not want. The level of inflation
I am expecting is so enormous that pensions and savings will be cut by at least
90% and wages by more than half. And, I would expect all of this to happen
before the end of 2009 if we do nothing.
You might ask yourself which congressman or Senator, Democrat or
Republican, has denounced the Federal Reserve's declaration that would no
longer tell us what the money supply is? None have so far. How many congressmen
and Senators have denounced the theft of billions of dollars each week in
unaudited federal government contracts? None so far. There is a lot of Bush
bashing (and deservedly so) but there is very little truth telling.
For references I would suggest the following:
On the theft of billions each week in unaudited government
contracts go here: http://openingmind.blogspot.com/2005/10/financing-new-world-order-did-you-ever.html
On the Federal Reserve's November 10th announcement saying they
would destroy all pensions and savings go here:
http://openingmind.blogspot.com/2005/11/conversation-with-catherine-on-m3this.html
For an in depth perspective on the End Game strategy of the NWO
as we approach the end of the world as we knew it go the next article in this
blog here:
http://openingmind.blogspot.com/2006/04/end-game.html
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See also: US Bankruptcy & Vote Fraud - Index of What
Really Happened