Dilution of wealth

I've been trying to get a simple, clear explanation of fractional reserve banking & monetary policy for years. I could see the evils of inflation, & how it robs people of their life's savings, & i could see the dangers of fiat money, & the seemingly automatic degeneration of a culture or empire once that becomes the basis for the currency. But i haven't been able to get it boiled down to the essence.. the simple basics of what is actually happening, & tying it all together.

As usual, it is not the system that is necessarily flawed, but the way govt has worked it. Fractional reserve banking has been with us for centuries, & if managed in a responsible way, is a workable system for a nation to regulate it's currency & money supply. Here is the progression that i see, & how we have gotten to where we are. And of course, none of these things happened in a vacuum, either, but were part of the timeline of events in history, from the american revolution to the civil war, to the new century.

1. Creation of the federal reserve, 1913.

These periodic banking panics were symptomatic of a less dramatic but more regular problem:
the seasonal variation in the need for currency for transactions. The system of gold and legal
tender notes was not elastic, and it was subject to money “shortages” especially at harvest time.
In 1913, this problem was addressed by the creation of the Federal Reserve System (Fed).33 The
Fed was to remedy the situation in a two ways. First, it would provide a means by which banks
could borrow in times of stringency to satisfy their customers’ demand for cash. Second, it could
create a new form of money, Federal Reserve notes, which could be expanded or contracted in
quantity to respond to the need for more cash.
The creation of the Federal Reserve had little if any effect on the gold standard. The dollar was
still defined in terms of gold. Federal Reserve notes were redeemable in lawful money. The Fed
not only operated under the gold standard, but was charged with maintaining it, and kept a
percentage of gold cover for its notes. Gold still dictated the value of the dollar.
source

Basically, the fed was created to allow banks to extend themselves more in fractional reserve banking.. IOW, they were not required to have ALL the assets on hand to make loans, but would get guarantees from the fed to cover any runs on the banks. This took some risk away from the banks, & also seemed to insure the deposits & savings of the people. But, it created unintended consequences, which had to be addressed by more govt measures.

BTW, the creation of the fed was a private entity not run by elected govt officials, & not really accountable to the american people, congress, or other banks. This institution was given tremendous power, to control the nation's money supply. While it was still under the gold standard, it ability to manipulate the currency was limited.

2. FDR ends the gold standard, 1933. 
This was one of the greatest administrative overreaches in american history. He got congress to rubber stamp it.. which, btw, was controlled by the democrats. The senate was 59/36 & the house 313/117 in dem/pub ratio. Basically, the problem was runs on the banks, & a lack of confidence in the banking system. People were converting their liquid assets to gold, & the federal reserve bank was finding itself overextended, as the fractional reserve created bubble in the roaring 20s had burst. But instead of letting a correction happen, the govt intervened. Private gold ownership was outlawed. People had to conduct all transactions with federal reserve notes. It was all done under the guise of 'save the economy, save the children!' It provided a temporary solution to the failing banks. Socialism was growing in the world, as was a sense of entitlement to basic needs.

The problems of fractional reserve banking became obvious in the roaring 20s. The stock market was booming, & margin buys were common. That is essentially buying stock on credit.. you have money to buy 10 shares, but can buy 100 on margin. This is fine as long as stock keep rising. But if they fall, the bill comes due for the rest of the stock purchase, which has not decreased in value so selling it does not provide the money to pay the original cost. Eventually, all liquidity is lost, & bankruptcy ensues, or jumping out of the wall street windows.

But this was the start of the dilution process. Margin buying was not 'creating' anything, or actual production, but was 'fake' wealth.. an illusion of increase, based only on monetary policy & inflation. This boom in the money supply, created by the fed, was not justified by actual, physical production in the nation. The economy was booming in the postwar 20s.. farmers were growing & expanding, with production increasing exponentially with the appearance of the internal combustion engine.. tractors could do the work of many mules & horses, with one man driving it. Building was booming.. houses, factories, economic growth was exploding. But much of it was on margin.. credit. When the bubble burst, it took many people down with it.

The statist cheerleaders could not face the prospect of taking blame for their own govt meddling, so they blamed gold. It was a roadblock to continued economic expansion. So the solution? Outlaw gold, & force usage of the declared (fiat) money.

This is also when people began to get rich from money shuffling.. sure, there have always been money lenders, who get rich off of usury, but this was different. It was cutting the real wealth with a bulky filler.. printing more money with the same basis, & allowing middle men to skim off for their own enrichment. This was different than the typical money lender, charging interest for the loan. This was not REAL value, but something 'created' by the fed, then skimmed off by multiple middle men.. money shufflers who don't produce anything. They are leeches in the system, & the new structure was causing an explosion of growth. But the actual production was not growing at the rate of the money supply, so the producers were not able to support all of these middle men, each diluting the original value of the product. It is drug dealer dynamics.. a ponzi scheme system of monetary supply.

This is getting too long, so i'll quit for now.. maybe later i'll finish up with the rest of the progression, from ww2 to nixon, skyrocketing inflation, opec, & the growing explosion of the money supply, along with the dwindling production. Some people already know this, as it is nothing new. But most people do not grasp the significance of the financial meddlings by the govt. 

What it all boils down to is confiscation of wealth.. REDISTRIBUTION from the producers to leeches, via dilution of the value of the currency. The leeches early on were the money shufflers.. bankers, wall street tycoons, etc, & the progressives want to 'share the wealth' with a bunch more leeches in the welfare state. But it is all done on the backs of the producers, & is unsustainable.

I am myself persuaded, on the basis of extensive study of the historical evidence, that... the severity of each of the contractions - 1920-21, 1929-33, and 1937-38 - is directly attributable to acts of commission and omission by the Reserve authorities and would not have occurred under earlier monetary and banking arrangements. ~Milton Friedman

The Great Depression, like most other periods of severe unemployment, was produced by government mismanagement rather than by any inherent instability of the private economy. ... Roosevelt's policies were very destructive. Roosevelt's policies made the depression longer and worse than it otherwise would have been. ~Milton Friedman

In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. ... This is the shabby secret of the welfare statists' tirades against gold.Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard. ~Alan Greenspan

With the exception only of the period of the gold standard, practically all governments of history have used their exclusive power to issue money to defraud and plunder the people. ~Friedrich August von Hayek

Wealth creation by dilution

Probably the most basic concept about currency, wealth & money is also the most misunderstood. There is this notion that wealth is a pie, managed by the govt. Poor people get a small slice of the pie, while greedy rich people take big slices. The origination of that pie is not considered.

Wealth begins when a crop is harvested, a building is built, or a product manufactured. There is something of value, which people want. Without the demand, the item has no value, so the beginning of wealth starts with demand. All of the wealth of a nation depends on actual creation of something from raw materials, or the production of those raw materials. 

Production is the basis for all wealth & value.

But what about Quantitative Easing? Can't the govt just print more money & provide the currency that fuels the economy? No. All that does is DILUTE the real product of a nation. It is drug dealer dynamics. A drug dealer gets some drugs & cuts it with powdered sugar or some other cheap diluting product, to make it go further, but he does not 'create' more drugs. It is like a distiller producing a barrel of whiskey, then diluting it with water to make 5 barrels. This is what QEs do. They dump more money into the system. It is shuffled around, skimmed off by bankers, politicians & their cronies, & finally trickling down to the people as borrowed money. But it is not based on production. It has NO basis for its creation. It is fundamentally destructive to the economy, not productive.

So what does this dilution accomplish?

1. It enriches the money shufflers. An unintended consequence of QEs or any fiat money scheme is those who originate it profit the most. Instead of the PRODUCERS getting the bulk of the increase from their product, the money shufflers take the lion's share through dilution. They are like the drug dealers, cutting the original drug with bulky filler.

2. It causes inflation. The currency is not based on something of value, but simply declared.

3. It causes income inequality. The money shufflers: bankers, politicians, govt, financial sector manipulators. They get the bulk of the value from the nation's production, so they become rich off of other people's labor.

What is most ironic is that those who oppose income inequality the most, support those who provide the setting for it to happen! Leftists & occupy wall street types are indignant over obscene profits from the banks, yet it is their political cronies that are making this happen. The politicians, via the federal reserve, are responsible for all the QEs, the complex derivatives & secret financial wranglings that dilute the currency & stifle the economy. They trumpet redistribution, but they are already redistributing from the producers to the NON productive money shufflers! Then, they want to INCREASE the dilution by giving away more money to other non producers in the society via the welfare state. They are merely cutting more bulky filler into an already diluted drug. That is why the value or 'potency' of our currency continues to decline. All it does is burn & not provide the high. But like good marketing drug dealers, they tell us what 'good stuff' this is.

This is why the current financial system is doomed to fail. It is based on drug dealer dynamics.. ponzi scheme increases. It is NOT based on real production, nor does it reward it. Real production is discouraged, while money shuffling is rewarded. That is why people pursue MBAs instead of farming... politics instead of construction.. welfare instead of working. Hard, productive work is not rewarded, but shuffling & cons are.

A currency, to be valid, should be based on something of value. That is the difference between 'hard' & 'fiat' currencies. Fiat currencies ALWAYS fail. They operate by dilution. They are currency by theft. They offer illusion in exchange for the created product. But eventually, the actual producers see through the scam & no longer accept the illusion. Then, you get weimar republic inflation & devaluing. The american dollar is allegedly based on our gdp.. gross domestic product. Now this sounds good, IF the currency is actually based on our production. But that is not the case. The GDP is a propaganda construct. It does NOT measure actual production, but money shuffling! So they use the borrowing, shuffling, & skimming of money in the financial sectors to measure the nation's production. It is all paper based numbers with no reflection of reality or actual production.

This seems like an obvious, common sense observation of reality. Yet when we actually propose & debate monetary policy, we think it grows on trees. We want to pass it out like candy. But there is no value without production. Unless a crop is produced, land improved, a product manufactured , or the raw materials mined or acquired for any of these things, all other increases come from dilution.

The solution is to stop the flood of fiat money. That will end the dilution, limit the enrichment from the money shufflers, & give more of the value to those who actually work & produce the product. We need accountability from the fed, & a constant audit of their actions. It is the responsibility of our elected officials to provide a stable currency, which they have not done for over a century. The current system is theft from the producers by dilution. It weakens the currency, discourages production, & breeds corruption & non-productivity. The currency should be tied to actual production of food & raw materials, like lumber, oil, steel, etc. If that could happen, the currency would stabilize, & those actually producing the products would gain the most, & there would be less money printed for the shufflers to skim from. But if we continue along the current path, history shows the outcome: Economic collapse.

The Question for the Ages..

"There has never been but one question in all civilization-how to keep a few men from saying to many men: You work and earn bread and we will eat it." ~Abraham Lincoln

All of societal interaction.. governance, or anything regarding the human collective, seems to boil down to this Question for the Ages. Human beings seem to be divided between 2 basic philosophies or ideals:

1. Self sufficiency & independence.
2. Entitlement & dependence.

Those who are independent want freedom to reap the harvest of their own labors. Those who want dependency are willing to put up with less freedom, if they are taken care of. The basic philosophy is there, even if it is not clearly defined or stated. Left wing ideology is one of dependence. They look to someone else to provide their basic needs. 

The root of the ideology can be seen by the choices made in our lives. Those who look for easy money in the financial or govt sectors are different than those who pursue productive labor. A farmer creates a crop, useful to people everywhere, & is arguably the most important single industry of mankind. Bankers or govt workers look for others to support them, & purport to offer a useful service for those who are producing.

Our basic needs are few:
1. Sustenance (Food, water)
2. Protection (clothing, shelter, personal defense)

Anything beyond these things are luxuries for an affluent society. The independent work to provide these things for themselves & their families. The dependent look to the producers to provide it for them. 

Throughout the ages, almost every system of human governance was based on the collective working & providing for the governing elite. It did not matter if the system was based on the divine right of kings, or the might of a military dictator. The state used it's power to take from the producing workers & use it for themselves. Some of them used foreign conquest to placate the masses, & bring plunder home for them to share. But until 1776, every system of human governance centered around the many working to support the few.

The american system was a brief interlude in that pattern. Here, the governing few.. regular citizens, not an empowered elite.. were supposed to use their granted powers to protect the individual's rights.. to provide a society where the individual could work & earn a large share from their labors, instead of it being taken by the ruling elite. For nearly 200 yrs, that was the system in place, until the govt grew to the all consuming monster we see today. The granted powers are seen as entitled powers, & the rulers have conned us into working to support them.

For a society to prosper, those producing MUST outnumber the dependents. The expenses of society: govt, infrastructure, fire & police protection, any social services provided by the collective; if these are a small percentage of the income of the society, it can prosper. But, if these dependents grow & the percentage they take increases, eventually the producers cannot produce enough for everyone. A farmer cannot grow enough food for a growing population, if more people do not go into farming. A society cannot support a huge standing army or police force, if they do not produce enough to pay for them.

Probably the most misunderstood concept in the nation is that of production & dependency. Liberal ideology thinks money can be printed, or that there is an unlimited source of food, clothing, shelter, & other commodities to draw from. They think it is everyone's RIGHT to have these commodities. But how is it anyone's right to take what another has worked for? All they are doing is promoting the same scam that has been going on for time immemorial: "You work and earn bread and we will eat it."

That is why the growing dependency in america cannot continue. It is already beyond our ability to provide. The governing elite have just borrowed from future generations to keep the scam running, like a typical pyramid scheme. They are building a bubble with currency, conjuring it from thin air, rather than real production. This is unsustainable, & will eventually crash.

What is the solution? How can we avoid the repetition of history?
1. Demand fiscal responsibility from the elected officials. A balanced budget is essential.
2. Encourage people to pursue productive careers. Farming, manufacturing, building.. these are the foundation that ALL other sectors depend on. They MUST be the preferred, elevated career choices, rather than easy dependency money.
3. Value & esteem production, instead of entertainment & elitism. Rebel against the system, & stop giving the fruits of our labors to unproductive dependents. Clowns, minstrels, & court jesters should not be the richest people in a society.
4. Revolt. Overthrow those who are perverting the constitution.

It will take a change in the values of society, if we are to change the direction we are heading. If we continue the current path, there will be financial collapse first, then the rest of the institutions will follow, until the military force is the only one left.

Happy Birthday, Jesus. Thanks for the gift of American Freedom!

As a student of history & an armchair philosopher, i regularly examine the progression of events, ideological thinking, & how we got to where we are.. the basis for our ideology.  Most people know me as a  zealous american, who still gets misty eyed reading the declaration of independence, & is filled with awe & amazement at the simple truths in it.  The basic concept of individual freedom is unique in human history, especially as a basis for governance.

So i have often pondered the events in history & the evolution of thinking that got us to this point.  I see the beginnings of america in the roots of the reformation.  There was a backlash to the establishment religious institution, & the idea that the authority of religious instruction should be in the written texts, not the edicts of the hierarchy.  Many religious groups & philosophies went to the new world to be free to practice their version, or dream of a religious utopia.  Many of them were no more tolerant to alternate views than the oppressive system they left.  But the idea was born.  The new world became a place where tolerance to other religious views was the norm.. it was institutionalized, & eventually stated clearly in the 1st amendment of the constitution.

But before that, the magna carta emphasized the concept of Law.  Law is something deeper.. an inner morality & sense that everyone has.  It does not need to be constantly spelled out, or especially, arbitrarily changed at the whims of the king.  This also has its roots in the biblical texts, specifically, the writings of Paul the apostle.

Ro2:14For when Gentiles who do not have the Law do instinctively the things of the Law, these, not having the Law, are a law to themselves, 15in that they show the work of the Law written in their hearts, their conscience bearing witness and their thoughts alternately accusing or else defending them,…

So Law was something internal.. something that EVERYONE had to respect, not just the serfs of the kingdom.  Even the king was subject to the Law of God.  But the concept of freedom was more obscure.. the 'powers that be' were not keen on telling people about that part.  They loved to tell them about submission to the king, & respecting the law of God, but didn't talk much about freedom.. until the reformation.  More & more people were becoming literate.. the central reason was to read the sacred texts of the bible.  And what did it say?

Gal5:1 It is for freedom that Christ has set us free. Stand firm, then, and do not let yourselves be burdened again by a yoke of slavery.

Freedom?!?  We have been set free?!?  But wait!  There's more!

Gal5:13 You, my brothers and sisters, were called to be free. But do not use your freedom to indulge the flesh; rather, serve one another humbly in love. 14 For the entire law is fulfilled in keeping this one command: “Love your neighbor as yourself.”

Ok, so there is responsibility, too.  We are free, but still must live under the Law of love.. We can live as free men.. in harmony if we follow the golden rule that Christ taught.

The very first point in the magna carta had to do with freedom.. for the church, & the local leaders.. they were pleading (threatening) for liberty from an oppressive monarchy.

1. In the first place we grant to God and confirm by this our present charter for ourselves and our heirs in perpetuity that the English Church is to be free and to have all its rights fully and its liberties entirely. We furthermore grant and give to all the freemen of our realm for ourselves and our heirs in perpetuity the liberties written below to have and to hold to them and their heirs from us and our heirs in perpetuity.  ~magna carta

By the time we get to america, it is phrased like this:

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.--That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed.. ~declaration of independence

Now we've got the concept of human equality.. no divine right of kings.  We are ALL equal, & govt exists solely to secure our freedoms.  The concept of america has been born!

Here's a summary of the progression:

1. Mat7:12  So in everything, do to others what you would have them do to you, for this sums up the Law and the Prophets.
2. Law, not edict, is supreme.  The inner Law trumps human edicts.
3. Christ has set us free.  The inner law provides liberty.
4. The purpose of govt is to secure our rights & freedoms.

So thank you, Jesus, for the gift of American Freedom.  We would not have it but for your teachings..  oh, & Happy Birthday!!

Time for an American Spring..

We are at a point in our history where we need to 'alter or abolish' the current federal govt.  It is corrupt, deceitful, wasteful of the citizens' lives & property, & has spent us into near economic collapse.

The first step is a simple list of budget cuts that are in line with the constitution. ..not picking & choosing the ones we like, but cutting ANY & ALL of them. There is no partisan favoritism here, just meat cleaver fiscal policy. Cut the military to the bone.. the hawks will howl, but they have been overspending & over meddling with the us military for decades. Cut the welfare state to the bone.. the libs will howl, but they have done the same. Cut taxes to a fair amount that only the top earners pay. The poor & lower middle classes should pay nothing. They also should get no benefits from the feds for being poor.. just not be taxed for it. If states want to give away free food, housing, cell phones.. they can do it (and pay for it). But that should be a local matter, not something for the united states govt. THAT govt should concentrate on foreign affairs & treaties, a stable currency, & homeland defense. All the meddling in business, education, healthcare, housing, redistribution, & lots of other federal acronyms should not be allowed, as they are unconstitutional. A federal govt like this could be manageable.. people could haggle with the other things at the state & local level, where the people actually are. The federal govt should only be concerned with things that are of common interest to the states.

Here's my list.. open to tweaking..

1. Balanced budget amendment. They cannot spend more than they take in. During war, sell bonds.
2. Stable currency. Congress should take responsibility of the treasury. The federal reserve should be phased out, & the dollar stabilized with hard assets. Even oil reserves can be used to provide backing. But fiat currency is destroying western civilization. Just like the dollar used to be a set amount of silver, it can now be a set amount of oil, or a combination of precious metals. It can be done. The statists & world bankers just don't want it to be done.
3. End military meddling & occupation. No police actions, no unconstitutional 'executive actions', no illegal wars. We are in a time of relative peace, if we want. We are unable to police the world.. both by sheer numbers & costs. Make reasonable treaties with allies.  End ALL foreign aid.
4. Wind down the welfare state. Begin to wean everyone off the dole. Stabilize social security with valid actuarial numbers, & make it voluntary. It should pay for itself, & not be subsidized or run like a pyramid scheme. Phase out & completely eliminate all redistribution schemes. They do not work, but breed crime, corruption, & trap people in generations of dependency.
5. End all govt programs & departments, & massively cut the dept of defense. We can identify any real threats to our security, & assign funds to meet those threats. End govt contracts & contractors, & start over, justifying each one within the parameters of real need for national security. Have several checks & balances for that determination. No foreign aid. No grants. No subsidies. The federal govt is too inept & corrupt to be responsible for handling the public funds in this way. It is a magnet for corruption.

IMO, 3 branches of govt, with corresponding checks & balances, are the best form of governance invented by man. The US constitution is a brilliant concept, & can work if implemented & guarded by the people. We have been lax in protecting this system.. scoundrels & charlatans have sneaked in & corrupted the intent & purpose they are charged with. They have elevated themselves to an elite ruling class, & have forgotten or deliberately distorted the role of the public servant. For generations, we have gotten worse stewards than the previous ones, all plundering the public treasury for political & personal gain.

It is time for Americans to take back their country. Where are the leaders & patriots? Where are the governors & statesmen to call for an American Spring? This federal govt is corrupt to the core.. it is decayed & useless, except to lead us to ruin & destruction. It is time to cut up their credit cards & demand fiscal responsibility.

The power to determine the quantity of money... is too important, too pervasive, to be exercised by a few people, however public-spirited, if there is any feasible alternative. There is no need for such arbitrary power... Any system which gives so much power and so much discretion to a few men, [so] that mistakes - excusable or not - can have such far reaching effects, is a bad system. It is a bad system to believers in freedom just because it gives a few men such power without any effective check by the body politic - this is the key political argument against an independent central bank. ~Milton Friedman

Too often in recent history liberal governments have been wrecked on rocks of loose fiscal policy. ~FRANKLIN D. ROOSEVELT

"I place economy among the first and most important virtues, and public debt as the greatest of dangers to be feared. To preserve our independence, we must not let our rulers load us with perpetual debt. If we run into such debts, we must be taxed in our meat and drink, in our necessities and in our comforts, in our labor and in our amusements. If we can prevent the government from wasting the labor of the people, under the pretense of caring for them, they will be happy." ~Thomas Jefferson

It is incumbent on every generation to pay its own debts as it goes. A principle which if acted on would save one-half the wars of the world. ~Thomas Jefferson

Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and not clothed. This world in arms is not spending money alone. It is spending the sweat of its laborers, the genius of its scientists, the hopes of its children. This is not a way of life at all in any true sense. Under the cloud of threatening war, it is humanity hanging from a cross of iron. ~Dwight D. Eisenhower

The lessons of history, confirmed by evidence immediately before me, show conclusively that continued dependence on relief induces a spiritual and moral disintegration fundamentally destructive to the national fiber. To dole out relief in this way is to administer a narcotic, a subtle destroyer of the human spirit. It is inimical to the dictates of sound policy. It is a violation of the traditions of America. ~FRANKLIN D. ROOSEVELT

“I am for doing good to the poor, but...I think the best way of doing good to the poor, is not making them easy in poverty, but leading or driving them out of it. I observed...that the more public provisions were made for the poor, the less they provided for themselves, and of course became poorer. And, on the contrary, the less was done for them, the more they did for themselves, and became richer.” ~Benjamin Franklin 
"If ye love wealth greater than liberty, the tranquility of servitude greater than the animating contest for freedom, go home from us in peace. We seek not your counsel, nor your arms. Crouch down and lick the hand that feeds you; May your chains set lightly upon you, and may posterity forget that ye were our countrymen." ~Samuel Adams 

Fiscal or moral factors?

Some people think we have to choose between doing what is fiscally responsible, or morally right.  They think that choices by politicians should have 'morality' as a priority factor over financial responsibility.

But it is a false comparison. It's not about morals. It is about emotion & misplaced compassion. We can be compassionate for the jobs lost in the buggy whip manufacturing sector, but demanding govt to 'do something about it!' never works. They can subsidize the industry, even though it cannot compete in the open market, but to do that you have to take from other, productive segments of the economy, thereby punishing their success. Markets are fluid. Change happens. Evolve or go extinct. This is market based, global, natural selection at work. The more we can adapt & change with the trends, the better off we are as a society & economy. Rewards go to the smart & resourceful, rather than the lazy or scam artists. You make a widget with demand, you get rich. That is better than writing up a clever grant proposal for the feds to consider, then they take from someone else to give to you, just because you wrote up a good scam concept. Solyndra did this, as have thousands of other grantees who get 'free money' for some dubious business venture. They don't risk their own capital & labors, but the taxpayers.

Real production should be encouraged & rewarded. That is the basis for wealth & will build a positive trade balance & real gdp. We have been going the wrong way for years, & unless we turn it around, we will collapse. This is not complicated. Money does not grow on trees, but must be earned by producing, harvesting, mining, or creating something of value. Printing money to hand out is a recipe for collapse. That is what we're doing now, & it cannot last. Subsidizing failing, non productive, or counter productive sectors is also a drain on the real production of the country.

Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it. ~Ronald Reagan

The govt shutdown.. a crisis of credibility

It's really not even much of a slowdown.  83% of the govt is still fully funded, with 17% under the administrations cuts.  Most of the sectors cut are at obama's discretion.  He can cut the parts of govt he deems not as essential, & he has shown what his priorities are by cutting things like the national parks, but providing full funding for pbs, govt cafeterias, & health clubs.  He shuts down the ww2 memorial, which takes more personnel to close than it did to keep it open, but keeps the very expensive golf course open so he can play.

"Based on estimates drawn from CBO and OMB data, 83 percent of government operations will continue. This figure assumes that the government pays amounts due on appropriations obligated before the shutdown ($512 billion), spends $225 billion on exempted military and civilian personnel, pays entitlement benefits for those found eligible before the shutdown (about $2 trillion), and pays interest costs when due ($237 billion). This is about 83 percent of projected 2014 spending of $3.6 trillion."source

So we have with this 'crisis', a 17% reduction in spending by the feds.  Let's see what the people have had over the last few years.



The real median household income for US the peaked in 2007 and is now $4,818 (8.57%) lower.  source
American citizens have had to adjust their budgets to adapt to the reduced income from a recession.

But what about the govt?



They went from spending ~ $2.7T in 2007 to ~ $3.8T in 2013.  This was about a 41% INCREASE in spending, while the taxpayers are cutting costs & living within their means.  Even with the govt 'shutdown', the govt is  currently spending more than they did in 2007, while most of us are forced to spend a lot less.

So all the hype about the 'govt shutdown' is just propaganda.  They are spending a LOT more than they did in 2007, even with the recession.  All this has done is add trillions to the deficit, & bring us closer to a currency collapse, as the dollar gets weaker.

But let's also check the govt's income, to keep everything in perspective.

Gross revenues:
2007-  $2.85 T
2013-  $2.81 T

So, while their revenues declined by ~ 1%, their spending went up 41%!!  The american people's income dropped by 8.6% during that same period.

So this 'govt shutdown crisis' is a manufactured crisis.. an emergency with no alarm.  They have MORE than enough to run the govt, & MORE than enough to waste in corrupt & inefficient programs.

The administration is using this phony 'crisis' for political strategy.  Obama is punishing the american people to bully the congress to increase spending & bankrupting the nation.  This is a petty, despicable tactic from a deceptive politician.  Most of the media is complicit with this deception, & the american people should see through their lies & demand justice.  The combined actions of this administration should be enough for us to call for impeachment or resignation.  Deliberate lies & falsehoods over the irs, benghazi, fast & furious, obamacare & it's promises.. these & many more have shown the corruption & falsehood of this presidency.

The only 'crisis' is the continued deception by our elected officials, who spin & lie to us for their political agenda.  We should be alarmed about that.. corruption, dishonesty, graft, cronyism, waste, & fraud.  It is time to get the liars out of politics.  We need honest representatives, not spin doctors.