Thursday, June 9, 2011

Collateralized Currency Certificate

Collateralized Currency Certificate

When the fall in value of the Federal Reserve Note ( US Dollar) occurs a new system of currency will need to be established to replace the devalued dollar.

An approach to this need for currency to allow all commerce in our cities, states and country to do a kind of reboot and reestablishment our US economy could be established and distributed by a state owned and controlled system of banks.


Some have spoken of using precious metals to back our currency and is a valid approach, but the massive problem is these metals are not affordable or likely not even available so an alternative will have to be found and established.

The concept of accessing the already owned value of both real property and titled property to back a new currency could be a viable approach to the need for currency.

Every state, city , county and of course the Federal Government presently own property that would be valued in the trillions and do present a true value. An approach could include a new system of state owned banks to be established and capitalized by assigning the already known value to the various owned real properties, such as roads, bridges, buildings and other titled properties like autos and other titled items.

Each state would take `the value of existing rolls, for real property as well as registrations for other titled properties and assign that value as a asset and reserve for these various state banks, with branches in all counties within the various states. Also all state payroll, retirement and other cash accounts would be deposited in these banks, with the same following by the various county, city and school boards and all taxes collected within their county, city and other government entity.

The new currency would be called Collateralized Currency Certificates and be equal in amount to these established values of already owned government properties. The banks can in turn loan to local governments for new projects with very low or even no interest loans. A new project can be valued at the after completion value and new certificates could be issued and used as currency to pay for the development.

Every government entity would be given an account in these banks reflecting the value of their owned properties as well as deposits for all taxes or fees collected by their entity. Every citizen and property owner would be given an account with account balances equal to the already owned property on the existing tax and registration rolls.

The Federal Reserve System could be nationalized and after repurchasing all out standing debt bonds be closed down and be replaced with the new state owned and operated banks with the new currency replacing the value less Federal Reserve Note.

Wednesday, April 13, 2011

A Fairer Tax for All

Just a thought about the big budget problem and a suggestion to help some and certainly make this more fair. Most folks do not realize we have a special tax bracket for those of us that have so much money they no longer have to earn money by working. Instead of earned -income they have something called capital gains, a special tax rate that does not ever go above 15 percent, and they are also special because they never have to pay any FICA taxes either. Most folks can pay as much as 32 percent in income taxes and then they pay FICA taxes or with holding for Medicare and Social Security.

A couple of years ago a very wealth man named Warren Buffett was reported as haven discovered his secretary paid more (higher or greater part of her income) than he did, he said, ” He was paying at the rate of 17 percent”, ( he must have had some salary income that caused his rate to go up the two percent) and his secretary was paying over 40 percent of hers.

My proposal would have something called a means test applied to the income and if a person has more than 50 percent of their income as capital gains they would be taxed as everyone else on any thing over 50 percent as earned income. If you are a working class person getting less 50 percent of your income from capital gains you would not be taxed any different than now. This way the folks that do not actually work ( no earned income) would still be taxed more fairly and some of the badly needed money to pay off all the wars since Vietnam might be able to be paid for. Wall Street needs to pay their fair share of taxes also, this is not asking for the rich to be over taxed, but just pay like every one else. If you go to the dog track and win, your winnings are taxed as any other income, so why not tax some of the earnings of the winnings on Wall Street?

Thursday, June 3, 2010

A Plague Upon The World: The USA is a "Failed State"

A Plague Upon The World: The USA is a "Failed State"


Interview with Dr. Paul Craig Roberts


By Dr. Paul Craig Roberts


Global Research, June 2, 2010


Interview with Dr. Paul Craig Roberts, former Assistant Secretary US Treasury, Associate Editor Wall Street Journal, Professor of Political Economy Center for Strategic and International Studies Georgetown University Washington DC.


Question: Dr. Roberts, the United States is regarded as the most successful state in the world today. What is responsible for American success?


Dr. Roberts: Propaganda. If truth be known, the US is a failed state. More about that later. The US owes its image of success to: (1) the vast lands and mineral resources that the US "liberated" with violence from the native inhabitants, (2) Europe's, especially Great Britain's, self-destruction in World War I and World War II, and (3) the economic destruction of Russia and most of Asia by communism or socialism.


After World War II, the US took the reserve currency role from Great Britain. This made the US dollar the world money and permitted the US to pay its import bills in its own currency. World War II's destruction of the other industrialized countries left the US as the only country capable of supplying products to world markets. This historical happenstance created among Americans the impression that they were a favored people. Today the militarist neoconservatives speak of the United States as "the indispensable nation." In other words, Americans are above all others, except, of course, Israelis.


To American eyes a vague "terrorist threat," a creation of their own government, is sufficient justification for naked aggression against Muslim peoples and for an agenda of world hegemony.


This hubristic attitude explains why among most Americans there is no remorse over the one million Iraqis killed and the four million Iraqis displaced by a US invasion and occupation that were based entirely on lies and deception. It explains why there is no remorse among most Americans for the countless numbers of Afghans who have been cavalierly murdered by the US military, or for the Pakistani civilians murdered by US drones and "soldiers" sitting in front of video screens. It explains why there is no outrage among Americans when the Israelis bomb Lebanese civilians and Gaza civilians. No one in the world will believe that Israel's latest act of barbarity, the murderous attack on the international aid flotilla to Gaza, was not cleared with Israel's American enabler.


Question: You said that the US was a failed state. How can that be? What do you mean?


Roberts: The war on terror, invented by the George W. Bush/Dick Cheney regime, destroyed the US Constitution and the civil liberties that the Constitution embodies. The Bill of Rights has been eviscerated. The Obama regime has institutionalized the Bush/Cheney assault on American liberty. Today, no American has any rights if he or she is accused of "terrorist" activity. The Obama regime has expanded the vague definition of "terrorist activity" to include "domestic extremist," another undefined and vague category subject to the government's discretion. In short, a "terrorist" or a "domestic extremist" is anyone who dissents from a policy or a practice that the US government regards as necessary for its agenda of world hegemony.


Unlike some countries, the US is not an ethic group. It is a collection of diverse peoples united under the Constitution. When the Constitution was destroyed, the US ceased to exist. What exists today are power centers that are unaccountable. Elections mean nothing, as both parties are dependent on the same powerful interest groups for campaign funds. The most powerful interest groups are the military/security complex, which includes the Pentagon, the CIA, and the corporations that service them, the American-Israel Public Affairs Committee, the oil industry that is destroying the Gulf of Mexico, Wall Street (investment banks and hedge funds), the insurance companies, the pharmaceutical companies, and the agri-companies that produce food of questionable content.


These corporate powers comprise an oligarchy that cannot be dislodged by voting. Ever since "globalism" was enacted into law, the Democrats have been dependent on the same corporate sources of income as the Republicans, because globalism destroyed the labor unions. Consequently, there is no difference between the Republicans and Democrats, or no meaningful difference.


The "war on terror" completed the constitutional/legal failure of the US. The US has also failed economically. Under Wall Street pressure for short-term profits, US corporations have moved offshore their production for US consumer markets. The result has been to move US GDP and millions of well-paid US jobs to countries, such as China and India, where labor and professional expertise are cheap. This practice has been going on since about 1990.


After 20 years of offshoring US production, which destroyed American jobs and federal, state and local tax base, the US unemployment rate, as measured by US government methodology in 1980, is over 20 percent. The ladders of upward mobility have been dismantled. Millions of young Americans with university degrees are employed as waitresses and bartenders. Foreign enrollment comprises a larger and larger percentage of US universities as the American population finds that a university degree has been negated by the offshoring of the jobs that the graduates expected.


When US offshored production re-enters the US as imports, the trade balance deteriorates. Foreigners use their surplus dollars to purchase existing US assets.



Consequently, dividends, interest, capital gains, tolls from toll roads, rents, and profits, now flow abroad to foreign owners, thus increasing the pressure on the US dollar. The US has been able to survive the mounting claims of foreigners against US GDP because the US dollar is the reserve currency. However, the large US budget and trade deficits will put pressures on the dollar that will become too extreme for the dollar to be able to sustain this role. When the dollar fails, the US population will be impoverished.


The US is heavily indebted, both the government and the citizens. Over the last decade there has been no growth in family income. The US economy was kept going through the expansion of consumer debt. Now consumers are so heavily indebted that they cannot borrow more. This means that the main driving force of the US economy, consumer demand, cannot increase. As consumer demand comprises 70% of the economy, when consumer demand cannot increase, there can be no economic recovery.


The US is a failed state also because there is no accountability to the people by corporations or by government at any level, whether state, local, or federal. British Petroleum is destroying the Gulf of Mexico. The US government has done nothing. The Obama regime's response to the crisis is more irresponsible than the Bush regime's response to Hurricane Katrina. Wetlands and fisheries are being destroyed by unregulated capitalist greed and by a government that treats the environment with contempt. The tourist economy of Florida is being destroyed. The external costs of drilling in deep waters exceeds the net worth of the oil industry. As a result of the failure of the American state, the oil industry is destroying one of the world's most valuable ecological systems.


Question: What can be done?


Roberts: The American people are lost in la-la land. They have no idea that their civil liberties have been forfeited. They are only gradually learning that their economic future is compromised. They have little idea of the world's growing hatred of Americans for their destruction of other peoples. In short, Americans are full of themselves. They have no idea of the disasters that their ignorance and inhumanity have brought upon themselves and upon the world.


Much of the world, looking at a country that appears both stupid and inhumane, wonders at Americans' fine opinion of themselves. Is America the virtuous "indispensable nation" of neoconservative propaganda, or is America a plague upon the world? 2



aplagueupontheworld.gif


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Monday, May 24, 2010

Truth Has Fallen and Has Taken Liberty With It

Maybe the most important article I have read in years, the death of "Truth", in our society may truely be the death of our nation. Please read this well presented argument and by one of my favorite voices. When will the needed awakening take place or is it already to late to matter?

This article expresses my opinion and presents it so much better than I ever could. Folks visiting my home always ask why so many dishes in my yard and this article tells why they are necessary, one must search the world if any "TRUTH" is hoped to be found.


March 24, 2010

Truth Has Fallen and Has Taken Liberty With It
Good-bye

By Paul Craig Roberts

"During times of universal deceit, telling the truth becomes a revolutionary act". George Orwell

There was a time when the pen was mightier than the sword. That was a time when people believed in truth and regarded truth as an independent power and not as an auxiliary for government, class, race, ideological, personal, or financial interest.
Today Americans are ruled by propaganda. Americans have little regard for truth, little access to it, and little ability to recognize it.
Truth is an unwelcome entity. It is disturbing. It is off limits. Those who speak it run the risk of being branded "anti-American," "anti-Semite" or "conspiracy theorist."
Truth is an inconvenience for government and for the interest groups whose campaign contributions control government.
Truth is an inconvenience for prosecutors who want convictions, not the discovery of innocence or guilt.
Truth is inconvenient for ideologues.
Today many whose goal once was the discovery of truth are now paid handsomely to hide it. "Free market economists" are paid to sell offshoring to the American people. High-productivity, high value-added American jobs are denigrated as dirty, old industrial jobs. Relicts from long ago, we are best shed of them. Their place has been taken by "the New Economy," a mythical economy that allegedly consists of high-tech white collar jobs in which Americans innovate and finance activities that occur offshore. All Americans need in order to participate in this "new economy" are finance degrees from Ivy League universities, and then they will work on Wall Street at million dollar jobs.
Economists who were once respectable took money to contribute to this myth of "the New Economy."
And not only economists sell their souls for filthy lucre. Recently we have had reports of medical doctors who, for money, have published in peer-reviewed journals concocted "studies" that hype this or that new medicine produced by pharmaceutical companies that paid for the "studies."
The Council of Europe is investigating big pharma’s role in hyping a false swine flu pandemic in order to gain billions of dollars in sales of the vaccine.
The media helped the US military hype its recent Marja offensive in Afghanistan, describing Marja as a city of 80,000 under Taliban control. It turns out that Marja is not urban but a collection of village farms.
And there is the global warming scandal, in which climate scientists, financed by Wall Street and corporations anxious to get their mitts on "cap and trade" and by a U.N. agency anxious to redistribute income from rich to poor countries, concocted a doomsday scenario in order to create profit in pollution.
Wherever one looks, truth has fallen to money.
Wherever money is insufficient to bury the truth, ignorance, propaganda, and short memories finish the job.
I remember when, following CIA director William Colby’s testimony before the Church Committee in the mid-1970s, presidents Gerald Ford and Ronald Reagan issued executive orders preventing the CIA and U.S. black-op groups from assassinating foreign leaders. In 2010 the US Congress was told by Dennis Blair, head of national intelligence, that the US now assassinates its own citizens in addition to foreign leaders.
When Blair told the House Intelligence Committee that US citizens no longer needed to be arrested, charged, tried, and convicted of a capital crime, just murdered on suspicion alone of being a "threat," he wasn’t impeached. No investigation pursued. Nothing happened. There was no Church Committee. In the mid-1970s the CIA got into trouble for plots to kill Castro. Today it is American citizens who are on the hit list. Whatever objections there might be don’t carry any weight. No one in government is in any trouble over the assassination of U.S. citizens by the U.S. government.
As an economist, I am astonished that the American economics profession has no awareness whatsoever that the U.S. economy has been destroyed by the offshoring of U.S. GDP to overseas countries. U.S. corporations, in pursuit of absolute advantage or lowest labor costs and maximum CEO "performance bonuses," have moved the production of goods and services marketed to Americans to China, India, and elsewhere abroad. When I read economists describe offshoring as free trade based on comparative advantage, I realize that there is no intelligence or integrity in the American economics profession.
Intelligence and integrity have been purchased by money. The transnational or global U.S. corporations pay multi-million dollar compensation packages to top managers, who achieve these "performance awards" by replacing U.S. labor with foreign labor. While Washington worries about "the Muslim threat," Wall Street, U.S. corporations and "free market" shills destroy the U.S. economy and the prospects of tens of millions of Americans.
Americans, or most of them, have proved to be putty in the hands of the police state.
Americans have bought into the government’s claim that security requires the suspension of civil liberties and accountable government. Astonishingly, Americans, or most of them, believe that civil liberties, such as habeas corpus and due process, protect "terrorists," and not themselves. Many also believe that the Constitution is a tired old document that prevents government from exercising the kind of police state powers necessary to keep Americans safe and free.
Most Americans are unlikely to hear from anyone who would tell them any different.
I was associate editor and columnist for the Wall Street Journal. I was Business Week’s first outside columnist, a position I held for 15 years. I was columnist for a decade for Scripps Howard News Service, carried in 300 newspapers. I was a columnist for the Washington Times and for newspapers in France and Italy and for a magazine in Germany. I was a contributor to the New York Times and a regular feature in the Los Angeles Times. Today I cannot publish in, or appear on, the American "mainstream media."
For the last six years I have been banned from the "mainstream media." My last column in the New York Times appeared in January, 2004, coauthored with Democratic U.S. Senator Charles Schumer representing New York. We addressed the offshoring of U.S. jobs. Our op-ed article produced a conference at the Brookings Institution in Washington, D.C. and live coverage by C-Span. A debate was launched. No such thing could happen today.
For years I was a mainstay at the Washington Times, producing credibility for the Moony newspaper as a Business Week columnist, former Wall Street Journal editor, and former Assistant Secretary of the U.S. Treasury. But when I began criticizing Bush’s wars of aggression, the order came down to Mary Lou Forbes to cancel my column.
The American media does not serve the truth. It serves the government and the interest groups that empower the government.
America’s fate was sealed when the public and the anti-war movement bought the government’s 9/11 conspiracy theory. The government’s account of 9/11 is contradicted by much evidence. Nevertheless, this defining event of our time, which has launched the US on interminable wars of aggression and a domestic police state, is a taboo topic for investigation in the media. It is pointless to complain of war and a police state when one accepts the premise upon which they are based.
These trillion dollar wars have created financing problems for Washington’s deficits and threaten the U.S. dollar’s role as world reserve currency. The wars and the pressure that the budget deficits put on the dollar’s value have put Social Security and Medicare on the chopping block. Former Goldman Sachs chairman and U.S. Treasury Secretary Hank Paulson is after these protections for the elderly. Fed chairman Bernanke is also after them. The Republicans are after them as well. These protections are called "entitlements" as if they are some sort of welfare that people have not paid for in payroll taxes all their working lives.
With over 21 percent unemployment as measured by the methodology of 1980, with American jobs, GDP, and technology having been given to China and India, with war being Washington’s greatest commitment, with the dollar over-burdened with debt, with civil liberty sacrificed to the "war on terror," the liberty and prosperity of the American people have been thrown into the trash bin of history.
The militarism of the U.S. and Israeli states, and Wall Street and corporate greed, will now run their course. As the pen is censored and its might extinguished, I am signing off.


There was a time when the pen was mightier than the sword. That was a time when people believed in truth and regarded truth as an independent power and not as an auxiliary for government, class, race, ideological, personal, or financial interest.

Today Americans are ruled by propaganda. Americans have little regard for truth, little access to it, and little ability to recognize it.

Truth is an unwelcome entity. It is disturbing. It is off limits. Those who speak it run the risk of being branded "anti-American," "anti-Semite" or "conspiracy theorist.
"
Truth is an inconvenience for government and for the interest groups whose campaign contributions control government.

Truth is an inconvenience for prosecutors who want convictions, not the discovery of innocence or guilt.

Truth is inconvenient for ideologues.

Today many whose goal once was the discovery of truth are now paid handsomely to hide it. "Free market economists" are paid to sell offshoring to the American people. High-productivity, high value-added American jobs are denigrated as dirty, old industrial jobs. Relicts from long ago, we are best shed of them. Their place has been taken by "the New Economy," a mythical economy that allegedly consists of high-tech white collar jobs in which Americans innovate and finance activities that occur offshore. All Americans need in order to participate in this "new economy" are finance degrees from Ivy League universities, and then they will work on Wall Street at million dollar jobs.

Economists who were once respectable took money to contribute to this myth of "the New Economy."

And not only economists sell their souls for filthy lucre. Recently we have had reports of medical doctors who, for money, have published in peer-reviewed journals concocted "studies" that hype this or that new medicine produced by pharmaceutical companies that paid for the "studies."

The Council of Europe is investigating big pharma’s role in hyping a false swine flu pandemic in order to gain billions of dollars in sales of the vaccine.

The media helped the US military hype its recent Marja offensive in Afghanistan, describing Marja as a city of 80,000 under Taliban control. It turns out that Marja is not urban but a collection of village farms.

And there is the global warming scandal, in which climate scientists, financed by Wall Street and corporations anxious to get their mitts on "cap and trade" and by a U.N. agency anxious to redistribute income from rich to poor countries, concocted a doomsday scenario in order to create profit in pollution.

Wherever one looks, truth has fallen to money.
Wherever money is insufficient to bury the truth, ignorance, propaganda, and short memories finish the job.

I remember when, following CIA director William Colby’s testimony before the Church Committee in the mid-1970s, presidents Gerald Ford and Ronald Reagan issued executive orders preventing the CIA and U.S. black-op groups from assassinating foreign leaders. In 2010 the US Congress was told by Dennis Blair, head of national intelligence, that the US now assassinates its own citizens in addition to foreign leaders.

When Blair told the House Intelligence Committee that US citizens no longer needed to be arrested, charged, tried, and convicted of a capital crime, just murdered on suspicion alone of being a "threat," he wasn’t impeached. No investigation pursued. Nothing happened. There was no Church Committee. In the mid-1970s the CIA got into trouble for plots to kill Castro. Today it is American citizens who are on the hit list. Whatever objections there might be don’t carry any weight. No one in government is in any trouble over the assassination of U.S. citizens by the U.S. government.

As an economist, I am astonished that the American economics profession has no awareness whatsoever that the U.S. economy has been destroyed by the offshoring of U.S. GDP to overseas countries. U.S. corporations, in pursuit of absolute advantage or lowest labor costs and maximum CEO "performance bonuses," have moved the production of goods and services marketed to Americans to China, India, and elsewhere abroad. When I read economists describe offshoring as free trade based on comparative advantage, I realize that there is no intelligence or integrity in the American economics profession.

Intelligence and integrity have been purchased by money. The transnational or global U.S. corporations pay multi-million dollar compensation packages to top managers, who achieve these "performance awards" by replacing U.S. labor with foreign labor. While Washington worries about "the Muslim threat," Wall Street, U.S. corporations and "free market" shills destroy the U.S. economy and the prospects of tens of millions of Americans.

Americans, or most of them, have proved to be putty in the hands of the police state.

Americans have bought into the government’s claim that security requires the suspension of civil liberties and accountable government. Astonishingly, Americans, or most of them, believe that civil liberties, such as habeas corpus and due process, protect "terrorists," and not themselves. Many also believe that the Constitution is a tired old document that prevents government from exercising the kind of police state powers necessary to keep Americans safe and free.

Most Americans are unlikely to hear from anyone who would tell them any different.

I was associate editor and columnist for the Wall Street Journal. I was Business Week’s first outside columnist, a position I held for 15 years. I was columnist for a decade for Scripps Howard News Service, carried in 300 newspapers. I was a columnist for the Washington Times and for newspapers in France and Italy and for a magazine in Germany. I was a contributor to the New York Times and a regular feature in the Los Angeles Times. Today I cannot publish in, or appear on, the American "mainstream media."

For the last six years I have been banned from the "mainstream media." My last column in the New York Times appeared in January, 2004, coauthored with Democratic U.S. Senator Charles Schumer representing New York. We addressed the offshoring of U.S. jobs. Our op-ed article produced a conference at the Brookings Institution in Washington, D.C. and live coverage by C-Span. A debate was launched. No such thing could happen today.

For years I was a mainstay at the Washington Times, producing credibility for the Moony newspaper as a Business Week columnist, former Wall Street Journal editor, and former Assistant Secretary of the U.S. Treasury. But when I began criticizing Bush’s wars of aggression, the order came down to Mary Lou Forbes to cancel my column.

The American media does not serve the truth. It serves the government and the interest groups that empower the government.

America’s fate was sealed when the public and the anti-war movement bought the government’s 9/11 conspiracy theory. The government’s account of 9/11 is contradicted by much evidence. Nevertheless, this defining event of our time, which has launched the US on interminable wars of aggression and a domestic police state, is a taboo topic for investigation in the media. It is pointless to complain of war and a police state when one accepts the premise upon which they are based.

These trillion dollar wars have created financing problems for Washington’s deficits and threaten the U.S. dollar’s role as world reserve currency. The wars and the pressure that the budget deficits put on the dollar’s value have put Social Security and Medicare on the chopping block. Former Goldman Sachs chairman and U.S. Treasury Secretary Hank Paulson is after these protections for the elderly. Fed chairman Bernanke is also after them. The Republicans are after them as well. These protections are called "entitlements" as if they are some sort of welfare that people have not paid for in payroll taxes all their working lives.

With over 21 percent unemployment as measured by the methodology of 1980, with American jobs, GDP, and technology having been given to China and India, with war being Washington’s greatest commitment, with the dollar over-burdened with debt, with civil liberty sacrificed to the "war on terror," the liberty and prosperity of the American people have been thrown into the trash bin of history.

The militarism of the U.S. and Israeli states, and Wall Street and corporate greed, will now run their course. As the pen is censored and its might extinguished, I am signing off.

Tuesday, February 10, 2009

The Cause of the Great Depression

"When their credit ran out, the game stopped", is claimed for the cause of the great depression. My thoughts are that the World Economy Has Stopped TODAY because of the world wide debt. Please read my Debt Restart plan in an earlier posting .

The Worldwide DEBT is the problem.

"Marriner S. Eccles who served as Franklin D. Roosevelt's Chairman of the Federal Reserve from November, 1934 to February, 1948 gave his view of what caused the Depression in his memoirs, "Beckoning Frontiers" (New York, Alfred A. Knopf, 1951):

As mass production has to be accompanied by mass consumption, mass consumption, in turn, implies a distribution of wealth -- not of existing wealth, but of wealth as it is currently produced -- to provide men with buying power equal to the amount of goods and services offered by the nation s economic machinery. Instead of achieving that kind of distribution, a giant suction pump had by 1929-30 drawn into a few hands an increasing portion of currently produced wealth. This served them as capital accumulations. But by taking purchasing power out of the hands of mass consumers, the savers denied to themselves the kind of effective demand for their products that would justify a reinvestment of their capital accumulations in new plants. In consequence, as in a poker game where the chips were concentrated in fewer and fewer hands, the other fellows could stay in the game only by borrowing. When their credit ran out, the game stopped.

That is what happened to us in the twenties. We sustained high levels of employment in that period with the aid of an exceptional expansion of debt outside of the banking system. This debt was provided by the large growth of business savings as well as savings by individuals, particularly in the upper-income groups where taxes were relatively low. Private debt outside of the banking system increased about fifty per cent. This debt, which was at high interest rates, largely took the form of mortgage debt on housing, office, and hotel structures, consumer installment debt, brokers' loans, and foreign debt. The stimulation to spending by debt-creation of this sort was short-lived and could not be counted on to sustain high levels of employment for long periods of time. Had there been a better distribution of the current income from the national product -- in other words, had there been less savings by business and the higher-income groups and more income in the lower groups -- we should have had far greater stability in our economy. Had the six billion dollars, for instance, that were loaned by corporations and wealthy individuals for stock-market speculation been distributed to the public as lower prices or higher wages and with less profits to the corporations and the well-to-do, it would have prevented or greatly moderated the economic collapse that began at the end of 1929.

The time came when there were no more poker chips to be loaned on credit. Debtors thereupon were forced to curtail their consumption in an effort to create a margin that could be applied to the reduction of outstanding debts. This naturally reduced the demand for goods of all kinds and brought on what seemed to be overproduction, but was in reality underconsumption when judged in terms of the real world instead of the money world. This, in turn, brought about a fall in prices and employment.

Unemployment further decreased the consumption of goods, which further increased unemployment, thus closing the circle in a continuing decline of prices. Earnings began to disappear, requiring economies of all kinds in the wages, salaries, and time of those employed. And thus again the vicious circle of deflation was closed until one third of the entire working population was unemployed, with our national income reduced by fifty per cent, and with the aggregate debt burden greater than ever before, not in dollars, but measured by current values and income that represented the ability to pay. Fixed charges, such as taxes, railroad and other utility rates, insurance and interest charges, clung close to the 1929 level and required such a portion of the national income to meet them that the amount left for consumption of goods was not sufficient to support the population.

This then, was my reading of what brought on the depression."

Friday, November 28, 2008

The Worldwide DEBT is the problem.

The Worldwide DEBT is the problem.


The best solution for the present economic crisis would be a REBOOT or restart of the entire debt system for the ENTIRE WORLD.


1. A data base listing ALL DEBT, government, business and personal needs to be created. The list would need to list the debt and debt holder with a bank that could make an accounting of the debt. Included would be all national debt of all nations, all mortgages car notes and credit cards for individuals. All outstanding bond and other debt for corporations, The idea is to list ALL DEBT of any kind owed.


2. Every government on the planet would need to call a special session of its legislature. Using the same authority that governments have to use or create FIAT CURRENCY the legislatures and Central Banks need to authorize the creation of ACCOUNT CREDIT in an amount equal to all the listed debts in the world.


3. The Various governments and Central Banking Systems then need to make an accounting change equal to the debt in the form of an ACCOUNT CREDIT or CREDIT zeroing out ALL THE DEBT in the entire world, and crediting all debt-holders in the world.


The following day the economy of the entire world would restart and the Stock Markets of the world would react to the new renewed capital in the banking systems, the Capital now available to restart all business and the disposable income to the individual people would restart and grow the retail sectors and the manufacturing sectors of the entire world.


Some have commented that if this was done in a very short time the exact problem would be repeated. My answer to this idea is history does recycle and repeat itself but some do learn and avoid making the same mistake. Europe learned after WWII and has avoided a major repeat for more than sixty years.


The other objection has been the possible inflation that would result would weaken the dollar. My answer to the weakened dollar is it may be a GOOD thing to help our ability to export manufactured products and also make our manufactured products more competitive in our own country. Jobs are needed for our own citizens especially the bottom forty percent.



Allen Charles Report


http://allencharlesreport.blogspot.com/

Wednesday, October 15, 2008

The Debt Realignment Initiative: A Better Idea than The Bailout

I was gathering my thoughts concerning the Year of Jubilee and how it might relate to today’s problems with the banks and the mortgage crisis and then found this address listed in a comments section at a newspaper site. I believe the writer has proposed a valid and maybe even Biblical method to address this crisis. His plan is sound,simple and should be put in place ASAP. I can not improve on it so I post it here as written by Samuel Margolies.
My one commit and belief is that an idea or revelation is often given by God to one person and then becomes available to all that will accept it, so all of us need to be open to accepting what may at first glance be out side the box of our normal way of thinking.


Debt Realignment - By Law Done Only Once

Worldwide, we are in an extreme circumstance financially and economically. Debt realignment offers a moral, pragmatic, available means to end the debt that plagues the world and restricts the use of resources and credit. Debt is a burden on people, resources, time, and capital. Deficit spending is sometimes necessary. Events happen, circumstances change, emergencies occur. A country must have full utility of its assets. This is only one reason why a robust economy is so crucial. But when the debt becomes so large, and the only strategy is to look the other way and hope something positive will happen in the future -- and nothing happens, the debt just keeps getting bigger over the years, it needs to be addressed. And with the present financial crises worldwide, it is obvious some means needs to be put in place to end this as quickly as possible and get the world economy back on track. Global debt realignment will enable a better track, however, wider, smoother, more efficient with avenues, venues, and projects we only dream about now, and some we have yet to consider. In each country all projects can be funded, and the global financial meltdown is vanquished at the same time. What is hoped is that once on the other side of debt realignment we learn from the past and do not repeat the same mistakes. This crisis is an opportunity. If it is taken.
Proposal:
It is proposed that an Economic Summit be called among the nations of the world. At this Summit, with agreement among all national executives, legislatures, and central banks that this be done only once, by law, it shall be ordered by all governments that in all ledgers, all balance sheets, all accounts in the computers around the world, and on the books of all central banks and institutions that all debt be transferred as an asset, as a credit, to all creditor's accounts in their respective banks either in real terms, or as a ratio of the present debt, to be determined, to get all on an even playing field as of January 1, 2009. If this is done in present real terms, or as a ratio, this means currencies will have to be realigned also if not doing so would promote inflation. Negotiations and discussions on this obviously will have to take place among the nations. This writing provides the direction, the outline, hopefully the impetus for this to be a reality. The specifics shall be determined by the various experts of different countries, the executive branches, and the central banks at the Summit.
The goal is zero global debt among nations. The Summit should occur before the end of 2008 with the debt realignment event date being in the first part of 2009. The sooner the better. If the Summit can occur quickly the event date actualizing debt realignment can be January 1, 2009. It can be done. It takes vision. It takes courage. It takes effort. It takes leadership. The European Union has also suggested a Summit, but at a Summit there must be a global plan that will work.
The world would welcome a plan that will work. This plan will work.
All creditors receive payment.
All debt of nations will be released and all debtor nations released from their obligations. All holders of national debt will be credited.
No one loses anything but the debt. No one suffers. The creditor nations and international banks get asset capital on their ledgers. The debtor nations lose their debt -- worldwide. This is not debt forgiveness. No one loses. This is the essence of debt realignment.
A new balance sheet in each institution is started with oversight and regulations in place, and with a new awareness of the pitfalls of wanton speculation and poor regulation. Nations are free to prosper. People can advance. Everyone is free to put their house in order. Nations can fully focus and fund the climate challenge, put their people to work, prosper. The world can advance.
Example:
A country owes 200 billion dollars to the World Bank. Authorization is given to the World Bank to put on its books 200 billion in credit, 100%, or a ratio to be determined, derived from the debtor country's debt. Since this is being done worldwide negotiations on this may be necessary, though not mandatory, to also align currencies. The debtor country's debt is transferred as a credit. The debtor country owes no debt. The bank has credit to loan. The country is free from the debt. This can be repeated with every country, the poor and the rich. Countries are free "to promote the general welfare" without the burden of debt.
Example:
America owes over a trillion dollars in Treasury Bills to different countries. It is agreed that the holders of these bills be realigned as a credit in the amount of the debts in the bank where the debt is on the balance sheet as a debit. The executive branch, legislature, and central bank authorizes credit to the Treasury account with the outstanding debt balance as a credit. The Treasury Bills are paid off. Interest payments cease. Resources are freed. Debt is gone. We move on. It is simple. But simplicity is what we need now. We do not need wild loans putting more debt and bondage on people, resources, and countries. What if a country or fund does not want to cash in its notes? The debtor's bank -- not a debtor now -- holds the credits in its account until such time as demand is made or maturity is reached. In any event the governmental debt will equal zero after debt realignment with credits available on the balance sheet.
Precedent:
The ancient Hebrews handled massive debt every 50 years with a "Year of Jubilee," where "all were returned to their possessions." Leviticus XXV, The Old Testament.
Let us not be so sophisticated in our minds to think that there is nothing to learned from this. But this too is different from debt realignment, in that debts are not just forgiven, credits are assigned to the creditors. Debt realignment is the evolved model. With modern technology and banking expertise, it can be done. All we have to do is do it.
To be sure, the International Monetary Fund, the World Bank, and the separate Central Banks of the nations around the world will be much more comfortable, as will Wall Street, other markets, individual investors, and workers, if this is accomplished.
If I were calling the shots, I would do debt realignment across the boards, from top to bottom; that is, I would realign the debt of nations, companies, and individuals. That will provide ultimate freedom to individuals, companies, markets, nations, and the world for progress and prosperity. But getting global national debt realignment is difficult enough for most to understand and envision. Since this is an extraordinary circumstance and that debt realignment would be done only one time, it is hoped that our leaders, meeting together in an economic Summit, will go to the farthest.

Copyright 2008. Samuel Margolies. All rights reserved.
I received an email from Samuel.
Dear Mr. Charles:

Thank you for your comments and for your realizations. I heartily endorse your putting the link to my web site on yours. I have contacted world leaders, members of Congress, the Federal Reserve, and the Treasury with this idea. But as of yet they do not see what I have been getting at. It is difficult for people who think in complexities and have specializations to go outside their areas of expertise and grasp other ideas, particularly when an idea is a simple one. Humankind seems to want to make everything more complex than it needs to be.

I have made the analogy of what happens when a computer freezes up. We have no recourse but to turn off the power and then back on rebooting the system. Likewise, I believe we have to reboot the financial and economic systems of the world. Whether this occurs as I have forwarded remains to be seen.

I do not know what site you first saw my comment on, but on several I have recommended reading Barbara Tuchman's book, "The March of Folly," where Ms. Tuchman asks the questions of why leaders so often in history have made decisions that were contrary to the best interests of their constituents? This is more common than realized. In no other time was it more important that America choose the correct course. We have many challenges. We must meet each with the best decision. And this is true globally. Why would we choose a course that would lead to difficulties and more toil than is necessary? I do not believe this is deliberate. I believe the people making the decisions simply do not see the options.

I do not know how far reaching your blog is. I do know that the more people who contact our representatives and world leaders the better the chance that acceptance and implementation of debt realignment can become a reality.

Obviously, you, like me, are a believer in God. When I first addressed the issue of our national debt, I was influenced by the "Year of Jubilee." Our systems have evolved from those ancient days and we know a great deal more about many of the variables. But some things are constant.

Our national debt, and the debt of the world's nations, must be solved one day. We will not grow out of it. The debt has become too large. I hope I have made the case for numbers as representations of reality and not the reality itself. If we are to believe that it is God's purpose to make people free, does this not also mean freedom from debt, particularly overriding, overwhelming debt, which we cannot work or grow out of when we consider all the variables worldwide that are present in today's global economy?

But even if one were a strict secularist, if something works, why not use it? First, those making the decisions must see it. For them to see it , it must be shared and presented to them on many fronts. You have opened up another front, another forum for the dissemination of the idea of debt realignment. I really appreciate it. I have been alone for a long time with very little support. I do find it interesting that I do not get criticism though, I get silence. No one says it cannot work. No one. Just silence.

It may be that things will have to get worse before people are open to new ideas. This does not have to be.

There is no reason that humankind globally must go through possibly years of financial upheaval and difficulties when there is an idea that will work, one that will also enable humankind globally to enter a new age of progress.

Again thank you. And if you can get an email off to your representatives, to a media site, to world leaders to at least look at what I advocate, please do so. It would only take one world leader to see that debt realignment can be done and openly espouse it, sharing it, for its possibilities to become a reality.

Thank you and God Bless you in your work.


Respectfully,

Samuel Margolies