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Gary Edwards

The New Debt Deal: Why States Will Get Whacked & Musings on the Bush Tax Cuts - Budget ... - 0 views

nationalpriorities.org/...the-new-debt-deal

Banskters national-debt Budget-Control-Act-2011

shared by Gary Edwards on 05 Aug 11 - No Cached
  • Gary Edwards on 05 Aug 11
     
    excerpt: "Well friends it's August 3, and despite their best efforts Congress and the President did finally pass a deal to raise the debt-ceiling. It's call the Budget Control Act of 2011. Happy days, right? Not so fast, Fonzarelli. Nearly every lawmaker who voted for the bill has described it as the legislative equivalent of a '87 Buick Wagon: not pretty, but it'll get you to work. Here in the halls of the National Priorities Project we've been mulling over the details of the plan extensively, which you can read about here and here. After looking at this stuff for 2 straight days, my reaction to the Budget Control Act (debt deal) can summed up thusly: Picture of the statue of Liberty sticking out of the sand, from the last scene in the movie, "Planet of the Apes".  Caption "...we finally, really did it." In exchange for raising the debt-ceiling by an initial $900 billion, the bill calls for an immediate $917 billion in cuts through discretionary spending caps over the next 10 years.* Raising the debt-ceiling further - which will need to happen next year - is contingent upon further savings to be identified by a new bipartisan commission: the "Super Committee, or "Super Congress" it's being called. This group of 12 lawmakers (6 Democratic, 6 Republican Senators & Representatives) will have to identify another $1.2 - $1.5 trillion in deficit reduction measures by November 23, 2011. Congress will also be required to have an up-or-down vote on the recommendations by December 23, 2011. This means after the Super Committee makes its recommendations there will be no further discussion, debate, or filibustering. Just an aye-or-nay vote in each chamber of Congress.
Gary Edwards

The Daily Bell - Richard Ebeling on Higher Interest Rates, Collectivism and the Coming ... - 0 views

www.thedailybell.com/...tivism-and-the-Coming-Collapse

Richard-Ebeling The-Daily-Bell Austrian-Economics Liberty-Tryanny

shared by Gary Edwards on 17 Jun 13 - No Cached
  • The "larger dysfunction," as you express it, arises out of a number of factors. The primary one, in my view, is a philosophical and psychological schizophrenia among the American people.
  • While many on "the left" ridicule the idea, there is a strong case for the idea of "American exceptionalism," meaning that the United States stands out as something unique, different and special among the nations of the world.
  • the American Founding Fathers constructed a political system in the United States based on a concept on which no other country was consciously founded:
  • ...95 more annotations...
  • But the American Revolution and the US Constitution hailed a different conception of man, society and government.
  • n the rest of the world, and for all of human history, the presumption has been that the individual was a slave or a subject to a higher authority. It might be the tribal chief; or the "divinely ordained" monarch who presumed to rule over and control people in the name of God; or, especially after the French Revolution and the rise of modern socialism, "the nation" or "the people" who laid claim to the life and work of the individual.
  • the idea of individual rights.
  • That is, as long as the individual did not violate the equal rights of others to their life, liberty and property, each person was free to shape and guide his own future, and give meaning and value to his own life as he considered best in the pursuit of that happiness that was considered the purpose and goal of each man during his sojourn on this Earth.
  • Governments did not exist to give or bestow "rights" or "privileges" at its own discretion.
  • Governments were to secure and protect each individual's rights, which he possessed by "the nature of things."
  • The individual was presumed to own himself. He was "sovereign."
  • The real and fundamental notion of "self-government" referred to the right of each individual to rule over himself.
  • Each individual, by his nature and his reason, had a right to his life, his liberty and his honestly acquired property.
  • during the first 150 years of America's history there was virtually no Welfare State and relatively few government regulations, controls and restrictions on the choices and actions of the free citizen.
  • But for more than a century, now, an opposing conception of man, society and government has increasingly gained a hold over the ideas and attitudes of people in the US.
  • It was "imported" from Europe in the form of modern collectivism.
  • The individual was expected to see himself as belonging to something "greater" than himself. He was to sacrifice for "great national causes."
  • He was told that if life had not provided all that he desired or hoped for, it was because others had "exploited" him in some economic or social manner, and that government would redress the "injustice" through redistribution of wealth or regulation of the marketplace.
  • If he had had financial and material success, the individual should feel guilty and embarrassed by it, because, surely, if some had noticeably more, it could only be because others had been forced to live with noticeably less.
  • left on its own, free competition tends to evolve into harmful monopolies and oligopolies, with the wealthy "few" benefiting at the expense of the "many."
  • They are the crises of the Interventionist-Welfare State: the attempt to impose reactionary collectivist policies of political paternalism and redistributive plunder on a society still possessing parts of its original individualist and rights-based roots.
  • it is in the form of communism's and socialism's critique of capitalism.
  • Unregulated capitalism leads to "unearned" and "excessive" profits; unbridled markets generate the business cycle and the hardships of recessions and depressions;
  • These two conflicting conceptions of man, society and government have been and are at war here in the United States.
  • And if it cannot be gotten and guaranteed through the redistributive mechanisms of the European Union and the euro, well, maybe we should return power to our own nation-states to provide the jobs, the social "safety nets" and the financial means to pay for it through, once again, printing our own national paper currencies.
  • This is the political-philosophical bankruptcy of the West and the dead ends of the collectivist promises of the last 100 years.
  • Ludwig von Mises's book, Socialism: An Economic and Sociological Analysis, originally published in 1922, demonstrated how and why a socialist, centrally planned system was inherently unworkable.
  • The nationalization of productive property, the abolition of markets and the prohibition of all competitive exchange among the members of society would prevent the emergence and operation of a price system, without which it is impossible to know people's demands for desired goods and the relative value they place on them.
  • It also prevents the emergence of prices for the factors of production (land, labor, capital) and makes it impossible to know their opportunity costs – the value of those factors of production in alternative competing uses among entrepreneurs desiring to employ them.
  • Without such a price system the central planners are flying blind, unable to rationally know or decide how best to utilize labor, capital and resources in productively efficient ways to make the goods and services most highly valued by the consuming public.
  • Thus, Mises concluded, comprehensive socialist central planning would lead to "planned chaos."
  • And, therefore, there is no guarantee that the amount of investments undertaken and their time horizons are compatible with the available resources not also being demanded and used for more immediate consumer goods production in the society.
  • As a consequence, financial markets do not work like real markets.
  • Thus, the interventionist state leads to waste, inefficiency and misuses of resources that lower the standards of living that we all, otherwise, could have enjoyed.
  • We cannot be sure what the amount of real savings may be in the society to support real and sustainable investment and capital formation.
  • Government intervention prevents prices from "telling the truth" about the real supply and demand conditions thus leading to imbalances and distortions in the market.
  • We cannot know what the "real cost" of borrowing should be, since interest rates are not determined by actual, private sector savings and investment decisions.
  • Government production regulations, controls, restrictions and prohibitions prevent entrepreneurs from using their knowledge, ability and capital in ways that most effectively produce the goods consumers actually want and at the most cost-competitive prices possible.
  • This is why countries around the world periodically experience booms and busts, inflations and recessions − not because of some inherent instabilities or "irrationalities" in financial markets, but because of monetary central planning through central banking that does not allow market-based financial intermediation to develop and work as it could and would in a real free-market setting.
  • But in the United States and especially in Europe, government "austerity" means merely temporarily reducing the rate of increase in government spending, slowing down the rate at which new debt is accumulating and significantly raising taxes in an attempt to close the deficit gap.
  • The fundamental problem is that over the decades, the size and scope of governments in the Western world have been growing far more than the rates at which their economies have been expanding, so that the "slice" of the national economic "pie" eaten by government has been growing larger and larger, even when the "pie" in absolute terms is bigger than it was, say, 30 or 40 years ago.
  • European governments, in general, take the view that "austerity" means squeezing the private sector more through taxes and other revenue sources to avoid any noticeable and significant cuts in what government does and spends.
  • So there is "austerity" for the private sector and a mad rush for financial "safety nets" for the government and those who live off the State.
  • In reality, of course, it is the burdens of government regulation, taxation and impediments to more flexible labor and related markets that have generated the high unemployment rates and the retarded recovery from the recession.
  • Instead, the "common market" ideal has been transformed into the goal of a European Union "Super-State" to which the individual countries and their citizens would be subservient and obedient.
  • Keynesian policies offer people and politicians what they want to hear. Claiming that any sluggish business or lost jobs are due to a lack of "aggregate demand," Keynes argued that full employment and profitable business could only be reestablished and maintained through "activist" government monetary and fiscal policy – print money and run budget deficits.
  • What Britain and Europe should have as its goal is the ideal of the classical liberal free traders of the 19th century – non-intervention by governments in people's lives, at home and abroad. That is, a de-politicization of society, so people may freely work, trade and travel as they peacefully wish, with government merely the protector of people's individual rights.
  • Take the benefits away and tell people they are free to come and work to support themselves and their families. Restore more flexibility and competitiveness to labor markets and reduce taxes and business regulations.
  • Then those who come to Britain's shores will be those wanting freedom and opportunity without being a burden upon others.
  • What was needed was a change in ideas from the statist mentality to one of individual freedom and unhampered free markets.
  • In an epoch of collectivist ideas, don't be surprised if governments regulate, control, intervene and redistribute wealth.
  • The tentacle of regulations, restrictions and politically-correct social controls are spreading out in every direction from Brussels and its European-wide manipulating and mismanaging bureaucracy.
  • In the name of assuring "national prosperity," politicians could spend money to buy the votes that get them elected and reelected to government offices.
  • And every special interest group could make the case that government-spending programs that benefitted them were all reasonable and necessary to assure a fully employed and growing economy.
  • Furthermore, the Keynesian rationale for government deficit spending enabled politicians to seem to be able to offer something for nothing. They could offer, say, $100 of government spending to voters and special interest groups but the tax burden imposed in the present might only be $75, since the remainder of the money to pay for that government spending was borrowed. And that borrowed money would not have to be repaid until some indefinite time in the future by unspecific taxpayers when that "tomorrow" finally arrived.
  • instability
  • Keynes argued that the market economy's inherent
  • arose from the
  • who were subject to irrational and unpredictable waves of "optimism" and "pessimism."
  • animal spirits" of businessmen
  • Mises argued that there was nothing inherent in the market economy to bring about these swings of economic booms followed by periods of depression and unemployment.
  • If markets got out of balance with the necessity of an eventual correction in the economy to, once again, set things right, the source of this instability was government monetary policy.
  • Central banks too often followed a policy of trying to create "good times" in the economy by expanding the money supply through the banking system.
  • With new, excess funds created by the central bank available for lending, banks lower rates of interest to attract borrowers.
  • But this throws savings and investment out of balance, since the rate of interest no longer serves as a reliable indicator and signal concerning the availability of real savings in the economy in relation to those wanting to borrow funds for various investment purposes.
  • The economic crisis comes when it is discovered that all the claims on resources, capital and labor for all the attempted consumption and investment activities in the economy are greater than the actual and available amounts of such scarce resources.
  • The recession period, in Mises's view, is the necessary "correction" period when in the post-boom era, people must adapt and adjust to the newly discovered "real" supply and demand conditions in the market.
  • Any interference with the "rebalancing" of the economy by government raising taxes, imposing more regulations, or new artificial government "stimulus" activities merely makes it more difficult and time-consuming for people in the private sector to get the economy back on an even keel.
  • Friedrich A. Hayek, once observed, unemployment is not "caused" by stopping an inflation, but rather inflation induces the artificial employments that cannot be sustained and which inevitably disappear once the inflation is reined in.
  • The recession of 2008-2009 was the result of several years of central bank stimulus.
  • From 2003 to 2008, the Federal Reserve increased the money supply by about 50 percent.
  • Interest rates for much of this time, when adjusted for inflation, were either zero or negative.
  • Awash in cash, banks extended loans to virtually anyone, with no serious and usual concern about the borrower's credit-worthiness.
  • This was most notably true in the housing market, where government agencies like Fannie May and Freddie Mac were pressuring banks to make mortgage loans by promising a guarantee that they would make good on any bad home loans.
  • Since 2008-2009, the Federal Reserve has, again, turned on the monetary spigot, increasing its own portfolio by almost $3 trillion, by buying US Treasuries, US mortgages and other assets.
  • So why has there not been a complementary explosion of price inflation?
  • In some areas there has been, most clearly in the stock market and the bond market, But the reason why all that newly created money has not brought about a higher price inflation is due to the fact that a large part of all newly created money is sitting as unlent reserves in banks.
  • This is because the Federal Reserve has been paying banks a rate of interest slightly above the market interest rates to induce banks not to lend.
  • (a) general "regime uncertainty," that is, no one knows what government policy will be tomorrow; will ObamaCare be fully implemented after January 2014?;
  • Among the reasons for the sluggish jobs growth in the US are:
  • (b) what will taxes be for the rest of the current president's term in the White House
  • (c) what will the regulatory environment be like for the next three years – in 2012, the government implemented around 80,000 pages of regulations as printed in the Federal Registry;
  • (d) how will the deficit and debt problems play out between Congress and the White House and will it threaten the general financial situation in the country; an
  • (e) what wars, if any, will the government find itself involved in, in places like the Middle East?
  • China
  • is still a controlled and commanded society, with a government that works hard to try to determine what people read, see and think.
  • All these building projects have been brought into existence by a government that not only controls the money supply and manipulates interest rates but also heavy-handedly tells banks whom to specifically loan to and for what investment activities.
  • Central planning is alive and well in China, with the motives being both power and profits for those inside and outside the Communist Party having the most influence and connections in "high" places.
  • In my opinion, China is heading for a great economic crisis, resulting from a highly imbalanced and distorted economic system still guided far more by politics than sound market decision-making.
  • global financial markets in any foreseeable future. It is a money that still primarily exists to serve the political purposes of those who sit in the "inner circles" of power in Beijing.
  • One hundred years ago, in 1913, how many could have predicted that a year later a European-wide war would break out that would lead to the destruction of great European empires and set the stage for the rise of totalitarian collectivism that resulted in an even worse global war two decades later?
  • Thus, whether, at the end of the day, freedom triumphs and the future is one of liberty and prosperity is partly on each one of us.
  • Near the end of his great book, Socialism, Ludwig von Mises said:
  • "Everyone carries a part of society on his shoulders; no one is relieved of his share of responsibility by others. And no one can find a safe way out for himself if society is sweeping towards destruction. Therefore, everyone, in his own interest, must thrust himself vigorously into the intellectual battle. None can stand aside with unconcern; the interests of everyone hang on the result. Whether he chooses or not, every man is drawn into the great historical struggle, the decisive battle into which our epoch has plunged us . . . Whether society shall continue to evolve or where it shall decay lies . . . in the hands of man."
  • In my view, the idea of a "soft landing" is an illusion based on the idea held by central bankers, themselves, that they have the wisdom and ability to know how to "micro-manage" the all the changes and adjustments resulting from their own manipulations of the monetary aggregates. They do not have this wisdom and ability. So hold on for what is most likely to be another rocky road.
  • It was Mises's clear vision that once society has broken the relationship between value and payment, sooner or later people would not know the price of anything.
  • At this point, investment ceases and business becomes furtive and transactional.
  • People cannot plan for the future because they do not understand the reality of the present.
  • Society begins to sink.
  • Gary Edwards on 17 Jun 13
     
    Incredible.  A simple explanation that explains everything.  Rchard Ebeling's "Unified Theory of Everything" is something every American can understand.  If only they would take a break from "Dancing with the Stars" and pay attention to the future of their country and the world.  It's a future where either "individual freedom", as defined by our Constitution and Declaration of Independence, will win out; or, the forces of fascist socialism / marxism will continue to roll and rule.  Incredible read!!!!
Gary Edwards

Video RANT OF THE DAY: Hey, Washington, How About A Plan To Balance The Budget? - 0 views

www.businessinsider.com/balance-the-budget-2011-3

budget-deficit deficit-spending financial-crisis banksters

shared by Gary Edwards on 04 Mar 11 - No Cached
  • Gary Edwards on 04 Mar 11
     
    America, it's time we pulled our heads out of the sand.  Specifically, it's time the people we pay to run this country develop a long-term plan to balance the budget.  Tell your politician you can handle the truth. Tell him or her that you're sick of pretending.
Gary Edwards

Federal Deficit Reduction Plan Comparison Tool - The Committee For A Responsible Federa... - 2 views

crfb.org/compare

Federal-budget Committee-For-A-Responsible-Federal-Budget

shared by Gary Edwards on 12 Dec 12 - No Cached
  • Gary Edwards on 12 Dec 12
     
    Amazing interactive chart that enables a comparison of the many different budget proposals circulating Washington DC.  Amazing and loaded with specific data - yet simple and easy to use.  Many thanks to the Committee For A Responsible Federal Budget!!!!  Awesome. excerpt: "The U.S. national debt is rising to unsustainable levels. The need to address this critical challenge with a long-term, comprehensive approach is evident in the many fiscal plans that have emerged. Many of these plans share common ideas, but many differ in important aspects. With our interactive comparison tool below, you'll be able to compare all the existing plans by category and even compare up to three plans side-by-side. This tool is a useful reference as policymakers debate solutions to our fiscal challenges."
Paul Merrell

Saudi Arabia in Search of a New Course | nsnbc international - 0 views

nsnbc.me/...abia-in-search-of-a-new-course

war & peace economic war Saudis oil-prices Syria

shared by Paul Merrell on 19 Oct 15 - No Cached
  • Saudi Arabia, one of the wealthiest countries in the world, is experiencing serious financial problems. The ongoing plummeting of oil prices is forcing the Saudis to be more careful with money. Tens of billions of dollars invested abroad are making a return to the kingdom. In July 2015, Saudi Arabia’s authorities, for the first time in 8 years, issued governmental bonds worth $4 bn.
  • Bloomberg reports that Saudi Arabia has already withdrawn $50-70 bn, which it had previously invested worldwide through management companies. It is noteworthy that the country has been withdrawing funds for the past six months. For example, Saudi Arabia’s SAMA Foreign Holdings reached its maximum in August 2014, having amounted to $737 bn. But since then, the fund has been shrinking because oil prices have dropped more than twice in this period. Saudi Arabia’s budget deficit is forecast to reach 20%; however, reduction of expenditures still remains a sensitive topic. In the context of the continuous fall in oil prices, Riyadh has worked out a plan to gradually reduce public spending to cope with a sharp decrease in budget revenues caused by the slumping oil prices. For example, Saudi Arabia’s Ministry of Finance has issued an order prescribing all state companies to temporary stop hiring new employees and launching new projects until the end of the fiscal year. In addition, the government procurement of new cars and furniture has also been put on hold as well as the signing and approval of new lease agreements for state institutions and enterprises. The expropriation of plots of land for the purpose of the subsequent extraction of oil has also been suspended throughout the country. The Ministry of Finance has, at the same time, demanded an acceleration in the collection procedure of oil revenues.
  • “To prove that the country indeed has a sound fiscal discipline, the government has to take steps to cut expenditures in the 4th quarter. Subsequently Saudi Arabia will be compelled to find new ways to reduce expenditures and boost efficiency in order to assure there will be no budget deficit in 2016,” John Sfakianakis, Director of the Middle East Division of the Ashmore Group, said in his interview to Bloomberg. It should be pointed out in that regard that oil revenues comprise about 90% of Saudi Arabia’s budget, and the landslide of oil prices of over 40% within the last 12 months adversely affected the country’s financial standing. And, although the kingdom’s debt burden remains one of the lowest in the world (less than 2% of the GDP), the kingdom’s international assets have been consistently shrinking for the last nine months and reached a two year minimum. This situation directly influences the policy of OPEC since Saudi Arabia (which extracts almost 30% of the OPEC’s oil, positions itself as an extremely influential raw material supplier, maintains powerful military forces, and has its own global ambitions, immense resources and substantial diplomatic experience) de facto plays the role of the shadow leader of this organization. At times siding with the US, and then pursuing its own interests, the kingdom has assumed such an influential position in the international community that other countries revere its opinion, and as for the last oil crisis, Saudi Arabia is seen as its key player.
  • ...3 more annotations...
  • And, based on the information provided by the international mass media, the Saudi leadership has split in their opinion on whether to continue funding Syria or to begin reducing their financial commitment. “Riyadh is facing a choice: to give more support to the moderate opposition or to look for a compromise,” an American expert on national security, James Farvell, wrote in The National Interest. The expert explained that if Saudis offer more support, that would trigger a confrontation with Russia, but if they side with Moscow, Russia’s regional influence might be reinforced and that might, in turn, challenge Saudi Arabia’s interests. Because of this dilemma, controversial information regarding Saudi’s decisions are appearing in the press. On the one hand, Saudi Arabia was one of the first to condemn Russia after the beginning of the Russian military operation in Syria on September 30. It accused Russia of bombing the troops of moderate opposition instead of ISIS. “These attacks resulted in the deaths of numerous innocent victims. We call for a stop it immediately,” demagogically and groundlessly said the representative of Saudi Arabia Abdallah al-Muallimi in the UN. Simultaneously 53 religious leaders signed an online appeal to support a jihad against the Syrian authorities as well as the presence of Russia and Iran in this country. They appealed to the countries of the Muslim world to render “moral, financial, military and political support to those who are called the ‘holy warriors of Syria’.” The authors of the appeal explicitly stated that if they fail, the other Sunni states in the region, and, first of all, Saudi Arabia will be the next victims.
  • With reference to a high-ranking Saudi official who wished to remain anonymous, the BBC stated that armed groups of the so-called moderate opposition would receive new, high-tech weapons, including tank destroyers. Jaish al-Fath, The Free Syrian Army and The Southern Front moderate opposition groups will also receive support. According to the source, it is quite likely that the “moderate opposition” in Syria will receive surface-to-air systems as well. Keeping in mind that Russia is carrying out air strikes across not only the facilities of ISIS, but also the above listed groups, a scenario when Saudis turn their weapon against Russian aviation is quite possible. On the other hand, a curious document, apparently a copy of the instructions issued for the embassies of Saudi Arabia in the Middle Eastern countries, has been uploaded to the Internet. The main idea of the documents is that all the diplomatic representative offices should gradually cease financial support of the armed Syrian opposition, apparently owing to the low efficiency of militants’ activities. The authenticity of the document raises certain doubts, as is always the case with such documents. However, specialists in the Arabic language concluded that the text was written by a native speaker, and that the document’s design conforms to the style adopted in Saudi Arabia. It shouldn’t be ruled out that the drying up of the source of funding, that militants used to receive from the Saudis, against the backdrop of a certain degree of success of the government troops as well as the increasing military and technical assistance to Syria on the part of Russia, have convinced many “oppositionists” to surrender and change masters. This process is expected to only accelerate in the future.
  • On Sunday, October 11, the Defense Minister, Mohammed bin Salman, visited Sochi. The search for common ground on the issues related to the situation in Syria was the main theme of the meeting held by the son of the Saudi king and Vladimir Putin. The parties also discussed the prospects of their economic cooperation. And, since Saudi Arabia is currently experiencing certain financial difficulties and is in the “clutches” of economic uncertainty, this topic was of a special interest. It was the second visit to the Russian Federation of the Saudi prince, who currently carries out sensitive missions related to the complex relations between the two countries. It should be noted that King of Saudi Arabia Salman bin Abdulaziz Al Saud has been admitted to hospital in a critical condition and is currently being kept in the intensive care unit of the King Faisal royal hospital in Riyadh.
Gary Edwards

Here's The Problem With This Market Crash... - 1 views

www.businessinsider.com/-with-this-market-crash-2011-8

Banksters national-debt-Ceiling dollar-destruction financial-collapse banksters

shared by Gary Edwards on 05 Aug 11 - No Cached
  • Gary Edwards on 05 Aug 11
     
    Obama and the Federal reserve are out of bullets......... The only thing that will work is Cut, Cap and Balance - the TEA Party Patriot formula that passed the House during the run up to the Natioanl Debt Limit SCAM, only to be immediately tabled and discarded by the ruling elites in the Bankster, Democrat and Repubican establishment.  With 69% of the taxpaying public in support of the Balanced Budget Amendment, one would have thought the ruling elites would have shown a bit more respect for Cut, Cap & Balance.  What we got however was anything but.   In this article Long time liberal - big government - let me into the elite ruling class advocate Henry Blodgett looks into the chasm, wondering how to pull back from the brink impending disaster. excerpt:  there are also several very important differences between this market crash and the ones a few years ago: ........... The Fed has fired most of its bullets (interest rates are already at zero) ............. Our budget deficit is already out of control, and Congress has had it with "stimulus" ............... The public has had it with bailouts That means the government's ability to do anything about this market crash is severely limited. Yes, we'll almost certainly have a "QE3." And maybe that will prop things up a bit. But it won't fix the fundamental problems clogging the economy, just as QE1 and QE2 didn't permanently fix anything. (The only thing that will fix our economy is debt-reduction, discipline, and time.)............
Gary Edwards

Higher Taxes are Coming. Head for Your Bunkers. | Mogambo Guru - 0 views

dailyreckoning.com/e-coming-head-for-your-bunkers

numbers mogambo obammunism

shared by Gary Edwards on 24 Jul 10 - Cached
  • Gary Edwards on 24 Jul 10
     
    Then numbers are staggering: excerpt: Well, if there is such a thing as the hypothetical "rational economic man," then this "sell everything!" scenario is exactly what will happen because taxes of all kinds, including the all-important income taxes and capital gains taxes, are going to all go up by - hold onto your hats! - almost a third or more next year! Right now, the marginal income tax rates are 10%, 15%, 25%, 28%, 33% and 35%, which is the range of six different tax rates for the few people that make enough money to actually pay any federal income taxes, which seems like such a quaint anachronism these days because more people receive money from the government than people who pay the government, which explains why the budget deficit this year - alone! - is $1.4 trillion or so, and when including the inevitable supplemental appropriations throughout the year, will surely be near staggering $2 trillion, bringing total federal government spending to almost $5 trillion, whereas all the business and personal income taxes collected for the whole year is less than $1.5 trillion!
Gary Edwards

Morning Bell: The Obama Fiscal Responsibility Farce Continues | The Foundry: Conservati... - 3 views

blog.heritage.org/...sponsibility-farce-continues-2

obammunism progressive-socialism fiscal-irresponsibility facts

shared by Gary Edwards on 27 Apr 10 - Cached
  • This February, after signing the largest single-year increase in domestic federal spending since World War II, President Obama held a “fiscal responsibility” summit designed to “send a signal that we are serious” about putting the nation on sounder financial footing. The Washington Post’s Dana Milbank quipped at the time: “Holding a ‘fiscal responsibility summit’ at the White House in the middle of a government spending spree is a bit like having an Alcoholics Anonymous meeting at a frat house on homecoming weekend.”
  • Gary Edwards on 27 Apr 10
     
    Conn puts the numbers into the context of events and issues.  Good read. Today President Barack Obama's National Commission on Fiscal Responsibility and Reform will convene for the first time at the White House. Tasked with making recommendations to Congress that would put the budget in primary balance by 2015 and "meaningfully improve" our nation's long-term fiscal outlook, the commission meets a little over a month after Congress approved a new $2.5 trillion health care entitlement that the Obama administration now confirms will increase our nation's total health care spending. This is a now familiar pattern for the White House: first enact record breaking levels of deficit spending, then turn right around and promise austerity sometime in the future.
Gary Edwards

Government Spending in United States: Federal State Local 2011 - Charts Tables History - 0 views

www.usgovernmentspending.com

Banksters national-debt-Ceiling financial-collapse dollar-destruction banksters

shared by Gary Edwards on 05 Aug 11 - Cached
  • Gary Edwards on 05 Aug 11
     
    Complete breakdown of Federal Budget and Government Spending.  Includes history and charts for everything.  Covers Federal, State and Local spending / deficits /debt.  Incredible compilation!
Paul Merrell

2015 Will Be All About Iran, China and Russia / Sputnik International - 0 views

sputniknews.com/...1016436434.html

war & peace economic-warfare U.S.-foreign-policy Russia China Eurasia

shared by Paul Merrell on 03 Jan 15 - No Cached
  • Fasten your seatbelts; 2015 will be a whirlwind pitting China, Russia and Iran against what I have described as the Empire of Chaos.
  • Considering that this swift move was conceived as a checkmate, Moscow’s defensive strategy was not that bad. On the key energy front, the problem remains the West’s – not Russia’s. If the EU does not buy what Gazprom has to offer, it will collapse. Moscow’s key mistake was to allow Russia's domestic industry to be financed by external, dollar-denominated debt. Talk about a monster debt trap  which can be easily manipulated by the West. The first step for Moscow should be to closely supervise its banks. Russian companies should borrow domestically and move to sell their assets abroad. Moscow should also consider implementing a system of currency controls so the basic interest rate can be brought down quickly. And don’t forget that Russia can always deploy a moratorium on debt and interest, affecting over $600 billion. That would shake the entire world's banking system to the core. Talk about an undisguised “message” forcing the US/EU economic warfare to dissolve.
  • Global oil prices are bound to remain low. All bets are off on whether a nuclear deal will be reached by this summer between Iran and the P5+1. If sanctions (actually economic war) against Iran remain and continue to seriously hurt its economy, Tehran’s reaction will be firm, and will include even more integration with Asia, not the West.
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  • Now let’s take a look at Russian fundamentals. Russia’s government debt totals only 13.4% of its GDP. Its budget deficit in relation to GDP is only 0.5%.  If we assume a US GDP of $16.8 trillion (the figure for 2013), the US budget deficit totals 4% of GDP, versus 0.5% for Russia. The Fed is essentially a private corporation owned by regional US private banks, although it passes itself off as a state institution. US publicly held debt is equal to a whopping 74% of GDP in fiscal year 2014. Russia’s is only 13.4%. The declaration of economic war by the US and EU on Russia – via the run on the ruble and the oil derivative attack – was essentially a derivatives racket. Derivatives – in theory – may be multiplied to infinity. Derivative operators attacked both the ruble and oil prices in order to destroy the Russian economy. The problem is, the Russian economy is more soundly financed than America's.
  • So yes – it will be all about further moves towards the integration of Eurasia as the US is progressively squeezed out of Eurasia. We will see a complex geostrategic interplay progressively undermining the hegemony of the US dollar as a reserve currency and, most of all, the petrodollar. For all the immense challenges the Chinese face, all over Beijing it's easy to detect unmistakable signs of a self-assured, self-confident, fully emerged commercial superpower. President Xi Jinping and the current leadership will keep investing heavily in the urbanization drive and the fight against corruption, including at the highest levels of the Chinese Communist Party (CCP). Internationally, the Chinese will accelerate their overwhelming push for new 'Silk Roads' – both overland and maritime – which will underpin the long-term Chinese master strategy of unifying Eurasia with trade and commerce.
  • Russia does not need to import any raw materials. Russia can easily reverse-engineer virtually any imported technology if it needs to. Most of all, Russia can generate — from the sale of raw materials – enough credit in US dollars or euros. Russia's sale of its energy wealth — or sophisticated military gear — may decline. However, they will bring in the same amount of rubles — as the ruble has also declined.  Replacing imports with domestic Russian manufacturing makes total sense. There will be an inevitable “adjustment” phase – but that won’t take long. German car manufacturers, for instance, can no longer sell their cars in Russia due to the ruble's decline. This means they will have to relocate their factories to Russia. If they don’t, Asia – from South Korea to China — will blow them out of the market.
  • The EU's declaration of economic war against Russia makes no sense whatsoever. Russia controls, directly or indirectly, most of the oil and natural gas between Russia and China: roughly 25% of the world's supply. The Middle East is bound to remain a mess. Africa is unstable. The EU is doing everything it can to cut itself off from its most stable supply of hydrocarbons, prompting Moscow to redirect energy to China and the rest of Asia. What a gift for Beijing – as it minimizes the alarm about the US Navy playing with "containment" across the high seas.  Still, an unspoken axiom in Beijing is that the Chinese remain extremely worried about an Empire of Chaos losing more and more control, and dictating the stormy terms of the relationship between the EU and Russia. The bottom line is that Beijing would never allow itself to be in a position where the US could interfere with China's energy imports – as was the case with Japan in July 1941 when the US declared war by imposing an oil embargo, cutting off 92% of Japanese oil imports. Everyone knows a key plank of China’s spectacular surge in industrial power was the requirement for manufacturers to produce in China. If Russia did the same, its economy would be growing at a rate of over 5% per year in no time. It could grow even more if bank credit was tied only to productive investment.
  • Now imagine Russia and China jointly investing in a new gold, oil and natural resource-backed monetary union as a crucial alternative to the failed debt "democracy" model pushed by the Masters of the Universe on Wall Street, the Western central bank cartel, and neoliberal politicians. They would be showing the Global South that financing prosperity and improved standards of living by saddling future generations with debt was never meant to work in the first place. Until then, a storm will be threatening our very lives – today and tomorrow. The Masters of the Universe/Washington combo won’t give up their strategy to make Russia a pariah state cut off from trade, the transfer of funds, banking and Western credit markets and thus prone to regime change. Further on down the road, if all goes according to plan, their target will be (who else) China. And Beijing knows it. Meanwhile, expect a few bombshells to shake the EU to its foundations. Time may be running out – but for the EU, not Russia. Still, the overall trend won’t be altered; the Empire of Chaos is slowly but surely being squeezed out of Eurasia.
Paul Merrell

Saudi Arabia is at a Dangerous Crossroads | nsnbc international - 0 views

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Saudis economy pipelinestan

shared by Paul Merrell on 08 Nov 15 - No Cached
  • Ambivalence, political twists and turns and the adoption of mutually exclusive decisions on Syria clearly show how completely lost the Saudi leaders are and their distinct lack of understanding of the fundamentals of modern foreign policy. The leaders of the wealthiest countries in the world, the leaders of the Arab and Muslim world have fully displayed their political inadequacy, inability to manoeuvre and adapt to the realities of the modern world. The once infinite riches are melting away rapidly, and soon ordinary Saudis will be faced with the issue of cost-cutting in their simple everyday problems.
  • The current policy which is so inconsistent and lacks any elementary logic was not only unsuccessful, but plunges Saudi Arabia ever deeper into an abyss of hardship and misery, setting new, complex problems before the King. Primarily, this concerns the economic and financial problems that the once wealthy Saudi society has not yet encountered. As the director of the Middle East and Central Asia Department of the IMF, Masood Ahmed, said in an interview with The Wall Street Journal, the cumulative budget deficit of Middle Eastern oil-exporting countries in the next five years could reach $1 trillion. Moreover, the treasury of the regional leader, Saudi Arabia, is at risk of running dry, and the “kingdom of the welfare state” can expect bankruptcy. Up to now, financial holes – the budget deficit, which this year is projected to be 21.6 percent of GDP, has been covered by the earlier petrodollar savings. In particular, this summer the Saudi Arabian Monetary Agency was forced to withdraw $70 billion from foreign investment funds assets. It can be assumed that this is only the beginning of the return of capital to their homeland, to tide over the emerging new outgoings. Otherwise, a sharp reduction in expenditure could lead to a social explosion in the Kingdom, whose citizens have become used to living a well-off life during the oil boom.
  • Saudi Arabia is currently exploring the possibility of higher energy prices for consumers within the country, as reported by the Oil Minister Ali Al-Naimi. Responding to a question about whether the Kingdom is going to reduce energy subsidies in the near future, the Saudi official said: “Your question concerns whether we are considering such a possibility? Yes, we are considering it.” Energy prices in Saudi Arabia are among the lowest in the world. Saudi Arabia is in fact the leader of the Organization of Petroleum Exporting Countries (OPEC). Meanwhile, the Kingdom is losing out on potential revenue by selling oil on the domestic market at a much cheaper rate than on the foreign market. Currently, Saudi Arabia spends about 86 billion dollars a year in subsidies for oil producers.
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  • Not surprisingly, many members of the Saudi Royal Family are concerned about the situation which has come about after the new King Salman bin Abdulaziz Al Saud came to power. According to the Egyptian newspaper, the Egyptian Gazette, the changes that have occurred in the Kingdom’s foreign and domestic policy in less than 9 months of King Salman’s reign have cause a growing number of problems in both the Kingdom of Saudi Arabia and abroad. Dissatisfaction among the Saudis has risen to a new level. All of this is reflected in a letter that members of the Royal Family received from one of the younger princes. In the letter, which was widely reprinted in the world media, the anonymous monarch justifies the need for change and literally calls for a coup d’etat, which, according to the prince should by carried out by the 13 currently healthy sons of the founder of Saudi Arabia. “The King in not in a stable position and in reality the son of the King is ruling the Kingdom”, the prince wrote. He called for “the sons of Ibn Saud, from the eldest, Bandar, to the youngest, Muqrin” to urgently convene a meeting to examine the situation and see what should be done to save the Kingdom, to carry out a series of substitutions in high positions in the Kingdom of Saudi Arabia and to verify the decisions taken by members of the Saudi Arabian royal family, irrespective of which they generation belong to.
  • It is worth noting that the author of the letter refers to a range of reasons for which the current King Salman and his son should be removed from their posts, including their inability to lead or deal with the difficult economic situation in the country caused by the fall in oil prices, the unpopular war in Yemen, the foreign policy failures in Syria and the recent tragedy in Mecca that claimed more than 800 lives. Meanwhile the writer does not explain exactly whom he would like to see in the position of King and Crown Prince. Neither the Royal house, nor the 13 princes, to whom the letter is addressed, have since reacted. In any case, the current rulers are faced with a number of questions and problems, and the immediate future of Saudi Arabia will depend on how professionally and quickly they are able to solve them.
Gary Edwards

Daniel Henninger: It's the Spending, America - WSJ.com - 0 views

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constitutional-conservatism obama-pelosi-reid deficit-debt-disaster

shared by Gary Edwards on 18 Feb 10 - Cached
  • Gary Edwards on 18 Feb 10
     
    Anyone who isn't welded to the Obama-Pelosi-Reid ball and chain has their campaign issue for November's election and 2012: spending. Republicans, Lieberman-Bayh Democrats, tea partiers, it doesn't matter. Spending, spending, spending. This is bigger than drill, drill, drill. Way bigger. Finally, after a nonstop, nearly 80-year upward climb, government spending has hit a wall. It didn't seem possible but this is a big wall. It's the American voter. This has been an unforgettable year in the history of American spending. It began with an eye-popping $800 billion stimulus bill that came from nowhere and went to nowhere. Done with that, the Washington Democrats turned to President Obama's health-care reform, which looked big at first, but turned out to be bigger. A well-publicized June estimate of the Senate bill's cost by the Congressional Budget Office put the 10-year price tag at $1.6 trillion. So $800 billion, then a trillion. Dollar signs rocketed into the sky all year: hundreds of billions on various TARP salvage projects, much drawn from some magic stash held by the Federal Reserve. The Obama cap-and-trade bill was going to use an auction to siphon $3.3 trillion from various states to Washington over 40 years. Oh, almost forgot-an FY 2011 $3.8 trillion budget. Some of this was spending, some taxes, some fees. It's all spending. A tax or fee is just a sluice gate that separates private income from the public-spending lake. And in 2009 it was beginning to look as if the politicians were going to blow the dam. California and New York, the nation's first and third most populous states, were in fiscal collapse, with the whole nation watching as once-mighty California (which looks like Greece cubed) actually issued IOUs. On April 15, the tea parties achieved critical mass, then built into a political phenomenon. The New York Times this week gave two full pages to cataloguing tea partier grievances in a way meant to convey the paranoid style in American politi
Paul Merrell

Saudi Arabia is on the Brink of Regime Change - nsnbc international | nsnbc international - 0 views

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saudis succession

shared by Paul Merrell on 25 Jan 16 - No Cached
  • It seems that Saudi Arabia has started to undergo the transformation various experts predicted. Those became obvious when the sitting king Salman bin Abdulaziz Al Saud replaced his deceased elder brother Abdullah bin Abdulaziz Al Saud in January 2015, and made a number of quite unusual arrangements within the ruling elite, appointing the head of the Ministry of Interior Muhammad bin Nayef from Abdullah’s clan the Crown Prince, while his 33-year-old son Mohammad bin Salman Al Saudfrom the Sudairy clan received the appointment of Deputy Crown Prince.
  • Now it seems that the wheels of the political machine are moving again. Last week reports from Riyadh indicated that his disease is taking a toll on the king and he wants to renounce his reign in favor of the Crown Prince. But then neighboring states, especially Qatar and the United Arab Emirates, started hinting that the members of the Saudi royal family along with the sheikhs of the strongest tribes, which are the foundation of Al Saud’s rule, are extremely dissatisfied with the sharp deterioration of the economic and social situation in the country, leading to a major drop in their personal incomes. It is no secret that Riyadh increased the volume of oil production to weaken the positions of its main competitors – Russia, Iran and Venezuela. But the kingdom had to take a punch as well, it was forced to unseal its reserve fund and cut the funding of numerous social programs.
  • Now the highly respected Institute for Gulf Affairs is stating that the king of Saudi Arabia Salman bin Abdulaziz Al Saud is preparing to renounce the throne in favor of his son Mohammad bin Salman Al Saud, and has since brought his country to the brink of a disaster. It means that the 80-year-old Salman is trying desperately hard to persuade his brothers on the succession board to allow him to change the principle of succession of the Saudi throne, since he’s ready to leave, but not so ready for his nephew Mohammad bin Salman Al Saud to rule the country. What the king has been doing is allegedly done “only for the sake of the stability of the kingdom.” Although the reality of the situation is clear – should Salman retain his position, the disintegration of the kingdom is imminent, with certain Shia areas breaking away, while the regions on the border with Yemen which are mostly populated by Yemeni tribes, more than happy to return home. Moreover, the Minister of Interior used to be a habitual cocaine user, so he was only able to “produce” two daughters, and now he’s somewhat incapable of producing more children. Should the king manage to carry out the above described scheme, he will become the first Saudi monarch to leave the throne to his son.
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  • And the fact that there’s a growing crisis in Saudi Arabia was evident from the cuts in subsidies and bonuses that king Salman started at the beginning of this year to reduce the country’s total dependence on oil. After decades of extensive use of oil revenues to subsidize companies’ payment of generous salaries and providing enormous social benefits, falling oil prices struck Saudi Arabia at its heart. It’s enough to say that revenues from oil exports in 2015 alone dropped by half. Ultimately it’s hard to say which country suffers the most from these oil wars – Russia or Saudi Arabia, since the latter has virtually no other sectors to support the economy. Saudi economist Turki Fadaak believes that Saudi Arabia is exiting the policy of “universal welfare”, so there’s an ongoing psychological shift in the minds of the ruling elite of the state. Fadaak is convinced that the ultimate aim of king Salman’s measures is to eliminate the Saudi dependency on oil. But is it really? According to leading international experts – the answer is a resounding “no”, with all the arguments to the contrary nothing more than fantasy.
  • Although initially it seemed that Salman, who came to power after the death of his brother, King Abdullah, will continue his course, after assuming the throne Salman generously spent over 30 billion dollars from the budget on bonuses for civil servants, military personnel, and students. Additionally, prices for basic goods and services, including fuel, electricity and water prices were kept at extremely low levels due to government subsidies from oil revenues. However, due to falling oil prices, under the pressure of such costs the budget started to rupture. The most important thing now for the kingdom is to execute the transition from the extremely lavish social security system to a productive economy, but then the subjects of the king will be forced to cut their costs, and it looks that they do not agree with this notion. And accusations in the imminent economic collapse will go Salman’s way, so it is better for him to leave now, before protests even start.
  • It is curious that Saudi Arabia has been rather realistic about its budget for the year 2016, since it was based on the average price of oil keeping at the level 29 dollars per barrel. Last year, the Saudi budget deficit amounted to almost 98 billion dollars and the costs were considerably higher than it was originally planed due to bonuses for civil servants, military personnel and retirees. In 2016 the authorities decided to put up to 49 billion dollars into a special fund to provide funding for the most important projects in case oil prices drop even further. But it was Saudi Arabia back in 2014 that proposed new tactics for OPEC, that implied that there would be no cuts in the level of production, the tactics that drove oil prices to today’s levels. So we are to learn pretty soon should Riyadh choose the path of the utter and complete collapse of the kingdom, or the path of giving power to the young and pragmatic technocrats who are going to pursue a comprehensive oil policy. Either way, Saudi Arabia will be forced to put an end to the costly military adventures in Syria and Yemen as well as its confrontations with Russia and Iran.
Paul Merrell

Time for the Nuclear Option: Raining Money on Main Street | WEB OF DEBT BLOG - 0 views

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economy financial-stimulus printing-press

shared by Paul Merrell on 24 Sep 15 - No Cached
  • Predictions are that we will soon be seeing the “nuclear option” — central bank-created money injected directly into the real economy. All other options having failed, governments will be reduced to issuing money outright to cover budget deficits. So warns a September 18 article on ZeroHedge titled “It Begins: Australia’s Largest Investment Bank Just Said ‘Helicopter Money’ Is 12-18 Months Away.” Money reformers will say it’s about time. Virtually all money today is created as bank debt, but people can no longer take on more debt. The money supply has shrunk along with people’s ability to borrow new money into existence. Quantitative easing (QE) attempts to re-inflate the money supply by giving money to banks to create more debt, but that policy has failed. It’s time to try dropping some debt-free money on Main Street. The Zerohedge prediction is based on a release from Macqurie, Australia’s largest investment bank. It notes that GDP is contracting, deflationary pressures are accelerating, public and private sectors are not driving the velocity of money higher, and central bank injections of liquidity are losing their effectiveness. Current policies are not working. As a result:
  • There are several policies that could be and probably would be considered over the next 12-18 months. If private sector lacks confidence and visibility to raise velocity of money, then (arguably) public sector could. In other words, instead of acting via bond markets and banking sector, why shouldn’t public sector bypass markets altogether and inject stimulus directly into the ‘blood stream’? Whilst it might or might not be called QE, it would have a much stronger impact and unlike the last seven years, the recovery could actually mimic a conventional business cycle and investors would soon start discussing multiplier effects and positioning in areas of greatest investment.  Willem Buiter, chief global economist at Citigroup, is also recommending “helicopter money drops” to avoid an imminent global recession, stating: A global recession starting in 2016 led by China is now our Global Economics team’s main scenario. Uncertainty remains, but the likelihood of a timely and effective policy response seems to be diminishing. . . . Helicopter money drops in China, the euro area, the UK, and the U.S. and debt restructuring . . . can mitigate and, if implemented immediately, prevent a recession during the next two years without raising the risk of a deeper and longer recession later.
  • In the UK, something akin to a helicopter money drop was just put on the table by Jeremy Corbyn, the newly-elected Labor leader. He proposes to give the Bank of England a new mandate to upgrade the economy to invest in new large scale housing, energy, transport and digital projects. He calls it “quantitative easing for people instead of banks” (PQE). The investments would be made through a National Investment Bank set up to invest in new infrastructure and in the hi-tech innovative industries of the future. Australian blogger Prof. Bill Mitchell agrees that PQE is economically sound. But he says it should not be called “quantitative easing.” QE is just an asset swap – cash for federal securities or mortgage-backed securities on bank balance sheets. What Corbyn is proposing is actually Overt Money Financing (OMF) – injecting money directly into the economy. Mitchell acknowledges that OMF is a taboo concept in mainstream economics. Allegedly, this is because it would lead to hyperinflation. But the real reasons, he says, are that: It cuts out the private sector bond traders from their dose of corporate welfare which unlike other forms of welfare like sickness and unemployment benefits etc. has made the recipients rich in the extreme. . . . It takes away the ‘debt monkey’ that is used to clobber governments that seek to run larger fiscal deficits.
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  • Tim Worstall, writing in the UK Register, objects to Corbyn’s PQE (or OMF) on the ground that it cannot be “sterilized” the way QE can. When inflation hits, the process cannot be reversed. If the money is spent on infrastructure, it will be out there circulating in the economy and will not be retrievable. Worstall writes: QE is designed to be temporary, . . . because once people’s spending rates recover we need a way of taking all that extra money out of the economy. So we do it by using printed money to buy bonds, which injects the money into the economy, and then sell those bonds back once we need to withdraw the money from the economy, and simply destroy the money we’ve raised. . . . If we don’t have any bonds to sell, it’s not clear how we can reduce [the money supply] if large-scale inflation hits.
  • The problem today, however, is not inflation but deflation of the money supply. Some consumer prices may be up, but this can happen although the money supply is shrinking. Food prices, for example, are up; but it’s because of increased costs, including drought in California, climate change, and mergers and acquisitions by big corporations that eliminate competition. Adding money to the economy will not drive up prices until demand is saturated and production has hit full capacity; and we’re a long way from full capacity now. Before that, increasing “demand” will increase “supply.” Producers will create more goods and services. Supply and demand will rise together and prices will remain stable. In the US, the output gap – the difference between actual output and potential output – is estimated at about $1 trillion annually. That means the money supply could be increased by at least $1 trillion annually without driving up prices.
  • If PQE does go beyond full productive capacity, the government does not need to rely on the central bank to pull the money back. It can do this with taxes. Just as loans increase the money supply and repaying them shrinks it again, so taxes and other payments to the government will shrink a money supply augmented with money issued by the government. Using 2012 figures (drawing from an earlier article by this author), the velocity of M1 (the coins, dollar bills and demand deposits spent by ordinary consumers) was then 7. That means M1 changed hands seven times during 2012 – from housewife to grocer to farmer, etc. Since each recipient owed taxes on this money, increasing M1 by one dollar increased the tax base by seven dollars. Total tax revenue as a percentage of GDP in 2012 was 24.3%. Extrapolating from those figures, $1.00 changing hands seven times could increase tax revenue by $7.00 x 24.3% = $1.70. That means the government could, in theory, get more back in taxes than it paid out. Even with some leakage in those figures and deductions for costs, all or most of the new money spent into the economy might be taxed back to the government. New money could be pumped out every year and the money supply would increase little if at all.
  • Besides taxes, other ways to get money back into the Treasury include closing tax loopholes, taxing the $21 trillion or more hidden in offshore tax havens, and setting up a system of public banks that would return the interest on loans to the government. Net interest collected by U.S. banks in 2014 was $423 billion. At its high in 2007, it was $725 billion. Thus there are many ways to recycle an issue of new money back to the government. The same money could be spent and collected back year after year, without creating price inflation or hyperinflating the money supply. This not only could be done; it needs to be done. Conventional monetary policy has failed. Central banks have exhausted their existing toolboxes and need to explore some innovative alternatives.
  • Paul Merrell on 24 Sep 15
     
    Debt having failed as a method of money creation leads us back to the printing press method. But on whom are those helicopters to drop their new money? And how to we ensure that the banksters are not among them?
Paul Merrell

Russia Gets Very Serious on De-dollarizing | nsnbc international - 0 views

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war & peace economic-warfare Russia China yuan gold reserve currrencies

shared by Paul Merrell on 07 Jun 15 - No Cached
  • Russia is about to take another major step towards liberating the Ruble from the Dollar System. Its Finance Ministry just revealed it is considering issuing Russian state debt in Chinese Yuan. That would be an elegant way to decouple from the dependence and blackmail pressures from the US Treasury financial terrorism operations while at the same time strengthening the bonds between China and Russia–Washington’s worst geopolitical nightmare.
  • Russian Deputy Minister of Finance, Sergei Storchak, announced that his ministry is making a careful study of what would be required to issue Russian bonds denominated in Chinese Yuan. The latest news is part of a long-term strategy between Russia and China that goes at the heart of American hegemony—the role of the dollar as the leading world central bank reserve currency. The dollar is used in some 60% of central bank reserves today. The second largest is the Euro. Now clearly China is carefully moving, as the world’s largest trading nation, to create its Renminbi or Chinese Yuan as another major reserve currency. That has huge geopolitical implications. So long as the US dollar is leading reserve currency, the world must de facto buy US dollar Treasury bonds for its reserves. That has allowed Washington to have budget deficits since 1971 when the dollar left the gold exchange standard. In effect, China, Japan, Russia, Germany—all trade surplus countries, finance Washington’s deficits that allow her to make wars around the world. It is a paradox that Russia and China at least, are determined to end as soon as possible.
  • What all this indicates is that Russia and China are carefully planning a long-term strategy of getting out from dependence on the US currency, something that, as the US sanctions last year revealed, make both countries vulnerable to US currency wars of devastating impact. China has just been accepted “in principle” by the Group of 7 finance ministers to have its yuan included in the International Monetary Fund basket of currencies making up IMF Special Drawing Rights. Today only US dollar, Euro and Japanese Yen are included in the basket. Including the yuan would be a huge step towards making the yuan a recognized international reserve currency, and at the same time would weaken the dollar share. China’s foreign reserves consist overwhelmingly of US dollar claims, mainly US Treasury bonds, which is a strategic weakness, because in case of war these can be frozen, as Iran knows too well. It is imperative for China to increase the gold content of the reserves and to diversify the rest into other currencies. China has also agreed with Russia to unify the new Silk Road high-speed rail project with Russia and Russia’s Eurasian Economic Union. At the same time Beijing has announced it is creating a huge $16 billion fund to develop gold mines along the rail route linking Russia and China and Central Asia. That suggests plans to greatly build up gold as central bank reserve share. China’s central bank has greatly increased its gold holdings in recent years, though whether it is now greater than the alleged Federal Reserve gold holdings of 8000 tons is not yet public. It is expected China must reveal its gold reserves on being formally accepted into the IMF SDR basket perhaps later this year.
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  • Last year, 2014, Song Xin, president of the China Gold Association stated, “We need to establish our gold bank as soon as possible…It can further help us acquire reserves and give us more say and control in the gold market.” A gold sector fund involving countries along the Silk Road has been set up in northwest China’s Xi’an City this May, led by Shanghai Gold Exchange (SGE), part of China’s national bank, PBOC. China is the world’s largest gold producer. Among the 65 countries along the routes of the Silk Road Economic Belt, there are numerous Asian countries identified as important reserve bases and consumers of gold. Xinhua reports that 60 countries have invested in the fund, which will facilitate central banks of member states to increase their holdings of gold. Dr. Diedrick Goedhuys, former economic adviser to the Reserve Bank of South Africa in an interview told me, “I want to emphasize the unique quality of gold, when viewed as a financial asset, of being an asset that is no-one’s liability. A treasury bond, for instance, is an asset in my hands, but a liability, or debt to be repaid, in the books of the treasury. Gold is a pure asset. The Chinese gold mining plan is of vast importance. It’s a long-term plan; it may take ten years before it has a significant effect.”
Gary Edwards

Mish's Global Economic Trend Analysis: Not Raising the Debt Ceiling Would be Blessing; ... - 0 views

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Mish Banksters national-debt-Ceiling Balanced-Budget banksters

shared by Gary Edwards on 29 Jul 11 - No Cached
  • Gary Edwards on 29 Jul 11
     
    Contrary to popular belief, the US would not default. Troops would still be paid. Medicare and Medicaid would not stop. The Bipartisan Policy Center has a nice analysis in a PDF on Debt Limit Analysis. check out Mish's prioritized check list.  As the mythical USA Chancellor of the Exchequer, he enters the month of August having to come up with $132, 312 Billion.  The monthly cash flow pays $172,400 B.  Then he prioritizes, ending the month with $30.6 B to spare!  Mish reduces the deficit, leaving the note the very first thing to NOT PAY should be congressional salaries.  Here Here!
Gary Edwards

Bruce Krasting: The Fed bombed the market - I ask, "Why?" - 1 views

brucekrasting.blogspot.com/...d-bombed-market-i-ask-why.html

Banksters Zero-Hedge Collapse-Euro banksters

shared by Gary Edwards on 19 Aug 11 - No Cached
  • Gary Edwards on 19 Aug 11
     
    This is an interesting post.  The WSJ published an article yesterday claiming that the Federal Reserve Bankster Cartel was looking at European Banksters and assessing the quality of "funding positions" and asset status for their USA branch operations.  The Fed Banksters are also consulting with EU regulators about European Bankster concerns. The WSJ article (http://on.wsj.com/nugr7s) triggered a massive market crash on Thursday.  Over $2 Trillion was washed away in the panic following the publication of this WSJ story.  That's on top of the $6 Trillion lost following the Obama Debt-Man-Walking deal with Congress. But here's where it gets interesting.  Bruce Krasting contacted Zero Hedge's Tyler Durden and got this reply; "the story is a Fed plant". Tyler Durden believes that the Feds want to create a world economic crisis to justify a massive QE3 where tens of trillions of dollars would be created and distributed to the worlds Banksters.  This follows the $16.1 Trillion created and distributed to the world's Banksters in 2009 - 2010 under QE1 and QE2. Incredible.  Just a few days ago Republican presidential candidate Gov Rick Perry warned the Fed Banksters not to flood the market with a new QE3.  No doubt what Perry has in mind is that the Fed will flood the world's economy with dollars, debasing the currency even further, but providing a phony and very temporary veil of prosperity - just enough to get Obama into a second term.   Not a bad concept for the Banksters since Obam has proven himself time and again as the bes tfriend the Banksters have ever had.  Obama has overseen the transfer of over $23 Trillion of USA taxpayer debt to the world Bankster community.
Paul Merrell

How America's Wars Fund Inequality at Home - LobeLog - 0 views

lobelog.com/s-wars-fund-inequality-at-home

war & peace U.S.-foreign-policy deficit-spending

shared by Paul Merrell on 29 Jun 18 - No Cached
  • In the name of the fight against terrorism, the United States is currently waging “credit-card wars” in Afghanistan, Iraq, Syria, and elsewhere. Never before has this country relied so heavily on deficit spending to pay for its conflicts. The consequences are expected to be ruinous for the long-term fiscal health of the U.S., but they go far beyond the economic. Massive levels of war-related debt will have lasting repercussions of all sorts. One potentially devastating effect, a new study finds, will be more societal inequality. In other words, the staggering costs of the longest war in American history — almost 17 years running, since the invasion of Afghanistan in October 2001 — are being deferred to the future. In the process, the government is contributing to this country’s skyrocketing income inequality. Since 9/11, the U.S. has spent $5.6 trillion on its war on terror, according to the Costs of War Project, which I co-direct, at Brown University’s Watson Institute for International and Public Affairs. This is a far higher number than the Pentagon’s $1.5 trillion estimate, which only counts expenses for what are known as “overseas contingency operations,” or OCO — that is, a pot of supplemental money, outside the regular annual budget, dedicated to funding wartime operations. The $5.6 trillion figure, on the other hand, includes not just what the U.S. has spent on overseas military operations in Iraq, Afghanistan, Pakistan, and Syria, but also portions of Homeland Security spending related to counterterrorism on American soil, and future obligations to care for wounded or traumatized post-9/11 military veterans. The financial burden of the post-9/11 wars across the Greater Middle East — and still spreading, through Africa and other regions — is far larger than most Americans recognize.
Paul Merrell

Trump's Infrastructure Boondoggle - 0 views

www.counterpunch.org/...umps-infrastructure-boondoggle

economy Trump infrastructure

shared by Paul Merrell on 19 Mar 17 - No Cached
  • Donald Trump’s $1 trillion infrastructure plan is not an infrastructure plan and it won’t put $1 trillion of fiscal stimulus into the economy. It’s basically a scheme for handing over public assets to private corporations that will extract maximum profits via user fees and tolls. Because the plan is essentially a boondoggle, it will not lift the economy out of the doldrums, increase activity or boost growth.  Quite the contrary. When the details of how the program is going to be implemented are announced,  public confidence in the Trump administration is going to wither and stock prices are going to plunge.   This scenario cannot be avoided because the penny-pinching conservatives in the House and Senate have already said that they won’t support any plan that is not “revenue neutral” which means that any real $1 trillion spending package is a dead letter.  Thus, it’s only a matter of time before the Trump’s plan is exposed as a fraud and the sh** hits the fan.
  • Here are more of the details from an article at Slate: “Under Trump’s plan…the federal government would offer tax credits to private investors interested in funding large infrastructure projects, who would put down some of their own money up front, then borrow the rest on the private bond markets. They would eventually earn their profits on the back end from usage fees, such as highway and bridge tolls (if they built a highway or bridge) or higher water rates (if they fixed up some water mains). So instead of paying for their new roads at tax time, Americans would pay for them during their daily commute. And of course, all these private developers would earn a nice return at the end of the day.” (“Donald Trump’s Plan to Privatize America’s Roads and Bridges”, Slate) Normally, fiscal stimulus is financed by increasing the budget deficits, but Maestro Trump has something else up his sleeve.  He wants the big construction companies and private equity firms to stump up the seed money and start the work with the understanding that they’ll be able to impose user fees and tolls on roads and bridges when the work is completed.  For every dollar that corporations spend on rebuilding US infrastructure, they’ll get a dollar back via tax credits, which means that they’ll end up controlling valuable, revenue-generating assets for nothing. The whole thing is a flagrant ripoff that stinks to high heaven.   The corporations rake in hefty profits on sweetheart deals, while the American people get bupkis. Welcome to Trumpworld.  Here’s more background from Trump’s campaign website:
  • “American Energy and  Infrastructure Act Leverages public-private partnerships, and private investments through tax incentives, to spur $1 trillion in infrastructure investment over ten years. It is revenue neutral.” (Donald Trump’s Contract with the American Voter”) In practical terms, ‘revenue neutral’ means that every dollar of new spending has to be matched by cuts to other government programs.  So, if there are hidden costs to Trump’s plan, then they’ll have to be paid for by slashing funds for Medicare, Medicaid, Social Security, food stamps etc. But, keep in mind, these other programs are much more effective sources of stimulus since the money goes directly to the people who spend it immediately and help grow the economy. Trump’s infrastructure plan doesn’t work like that. A lot of the money will go towards management fees and operational costs leaving fewer dollars to trickle down to low-paid construction workers whose personal consumption drives the economy. Less money for workers means less spending, less activity and weaker growth.
  • ...3 more annotations...
  • Here’s more on the topic from the Washington Post: “Trump’s plan is not really an infrastructure plan. It’s a tax-cut plan for utility-industry and construction-sector investors, and a massive corporate welfare plan for contractors. The Trump plan doesn’t directly fund new roads, bridges, water systems or airports…. Instead, Trump’s plan provides tax breaks to private-sector investors who back profitable construction projects. … There’s no requirement that the tax breaks be used for … expanded construction efforts; they could all go just to fatten the pockets of investors in previously planned projects… Second, as a result of the above, Trump’s plan isn’t really a jobs plan, either. Because the plan subsidizes investors, not projects; because it funds tax breaks, not bridges; because there’s no requirement that the projects be otherwise unfunded, there is simply no guarantee that the plan will produce any net new hiring. … Buried inside the plan will be provisions to weaken prevailing wage protections on construction projects, undermining unions and ultimately eroding workers’ earnings. Environmental rules are almost certain to be gutted in the name of accelerating projects.” (Trump’s big infrastructure plan? It’s a trap. Washington Post) Let’s summarize:  “Trump’s plan” is “massive corporate welfare plan for contractors” and the “tax breaks”…”could all go just to fatten the pockets of investors in previously planned projects.”
  • What part of this plan looks like it will have a positive impact on the economy? None. If Trump was serious about raising GDP to 4 percent, (another one of his promises) he’d increase Social Security payments, beef up the food stamps program, or hire more government workers.  Any one of these would trigger an immediate uptick in activity spurring more growth and a stronger economy.  And while America’s ramshackle bridges and roads may be in dire need of a facelift,  infrastructure is actually a poor way to inject fiscal stimulus which can be more easily distributed  by simply hiring government agents to stand on streetcorners and hand out 100 dollar bills to passersby. That might not fill the pothole-strewn streets in downtown Duluth, but it would sure as hell would light a fire under GDP. So what’s the gameplan here? What’s Trump really up to? If his infrastructure plan isn’t going to work, then what’s the real objective? The objective is to allow wealthy corporations to buy public assets at firesale prices so they can turn them into profit-generating enterprises. That’s it in a nutshell. That’s why the emphasis is on “unconventional financing programs”, “public-private partnerships”, and “Build America Bonds” instead of plain-old fiscal stimulus, jobs programs and deficit spending. Trump is signaling to his pirate friends in Corporate America that he’ll use his power as executive to find new outlets for profitable investment so they have some place to stick their mountain of money. Of course, none of this has anything to do with rebuilding America’s dilapidated infrastructure or even revving up GDP. That’s just public relations bunkum. What’s really going on is a massive looting operation organized and executed under the watchful eye of Donald Trump, Robber Baron-in-Chief.
  • And Infrastructure is just the tip of the iceberg. Once these kleptomaniacs hit their stride, they’re going to cut through Washington like locusts through a corn field. Bet on it.
  • Paul Merrell on 19 Mar 17
     
    Mike Whitney always tells it like it is.
Paul Merrell

IPS - U.S.: Right-Wing Hawks, Arms Industry Rally Against Pentagon Cuts | Inter Press S... - 0 views

www.ipsnews.net/...ry-rally-against-pentagon-cuts

corporate welfare financial-collapse neocons

shared by Paul Merrell on 30 Aug 12 - No Cached
  • While Iran, Russia, and China are all pretty scary, the ominous word “sequestration” is what is keeping right-wing hawks and their friends in the defence industry up at night. While they have been rallying their forces for most of the past year, their campaign to avoid the “spectre of sequestration”, as they often refer to it, shifted into high gear on Capitol Hill this week, as top industry executives were summoned to testify to the urgency of the threat. At stake is could be as much as 600 billion dollars in Pentagon funding – much of which would presumably be spent on lucrative procurement contracts for new weapons systems – over the next 10 years, as well as what the hawks see as the further erosion of U.S. global military dominance.
  • The sequestration spectre arises from a 2011 agreement, codified in the Budget Control Act, between President Barack Obama and Republican Congressional leaders for cutting the yawning U.S. federal deficit over the next decade. The Act provides that if Congress cannot agree on a specific plan that would cut 1.2 trillion dollars in the budget by the end of this year, then the cuts would take place automatically beginning in 2013, with half of the total taken from the Pentagon and the rest from non-defence programmes.
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