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Sailing into Uncharted Waters

This article should be required reading for every congressperson, staffer, citizen and high school and college student in the country. We are headed for a cliff.

The article on Real Clear Politics by Richard Fisher should be required reading for every congress person, staffer, citizen, high school and college student in the country. Richard Fisher is the president and CEO of the Federal Reserve Bank of Dallas.

He mentions the questions raised at the Fed’s FOMC meeting about the “efficacy of further asset purchases.” This is Fed-speak for buying further Treasury debt, which is quite simply enabling the continued deficit spending of Congress.

He also refers repeatedly to “Congress” as a monolithic entity. It is not. It is a collection of 535 individuals, each of whom is engaged in a political mini-circus between his constituents, his congressional associates, his party and his president. It is only when the collective will of these 535 people becomes strong enough to take controversial action that we will see real progress. Unfortunately, that isn't likely to happen until there is a crisis, and then the action is rarely well thought-out.

It is too easy, and even compelling, for congressmen to submit to the pleas of their business or labor contributors, their lobbyists, or even their constituents to use the federal purse or tax system to dispense goodies such as food stamps, unemployment compensation, health care, tax preferences, subsidies, grants and all the other forms of vote-buying that they engage in. It is too easy for “we the people” to accept all of these goodies as part of our expectation for an “advanced” society that “takes care” of people.

Like an errant college student with her first credit card, it’s all fun until the limit is reached and the bills must be paid off. In the case of the United States, or the countries of Europe, the limit is very near. Ignoring that approaching limit literally guarantees the collapse of our economic system and our country. If you think the recession of the last few years was tough, you ain’t seen nothing yet.

It is past time that we demand of our representatives some fiscal responsibility and some limits on the passing out of goodies.

Please read the article.

This post is contributed by a community member. The views expressed in this blog are those of the author and do not necessarily reflect those of Patch Media Corporation. Everyone is welcome to submit a post to Patch. If you'd like to post a blog, go here to get started.

BStein September 27, 2012 at 01:50 PM
I think Simpson-Bowles would be a great start..Unfortunately Conservatives have shut it down in order to get President Obama out of the White House...Hopefully it's something that can be looked at again after the November election...But I wouldn't count on it because tea partiers won't agree to anything.
Emmie Majors September 27, 2012 at 04:01 PM
"Shock Doctrine" is a good read to understand why governments are able to accomplish much right after a major crisis. This is what keeps me up at night, and only a handful of the 535 seems to really 'get it.'
Hal Schneider September 27, 2012 at 04:29 PM
Of course, the fact that Harry Reid and the Democrat Senate have not passed a budget in almost 4 years has absolutely NOTHING to do with our current financial crisis. does it BStein?
Frank Jones September 27, 2012 at 04:44 PM
Hal...Believe it or not, the failure to pass a budget doesn't have anything to do with the financial situation. The failure of Congress, and specifically the right-wing extremists (i.e. Tea-Party), to work together is the root of the problem. The Tea-Party folks went to Washington as obstructionists and have succeeded in their efforts. They're unwilling to negotiate and work with the Democrats and the moderate Republicans are fearful of the far right zealots. For Washington to "normalize" and get back to work, the Republican party must take a stand against members of their own party. Sometimes when you look in the mirror, you see the problem.
Frank Jones September 27, 2012 at 05:10 PM
For too often, people use incorrect information to boost their arguments...I received an email from Tom Graves stating that the $16 trillion debt is $140,000 per taxpayer. However this IS WRONG. At $140,000 per taxpayer, Mr. Graves is implying that there are only 114,354,000 taxpayers. However, in 2009 there were 140,494,000 individual tax returns. Mr. Graves grossly understated the number of individual tax returns and didn't even factor in corporate tax returns (you know corporations are people too). In addition, most American households are two wage-earner families. As such, for most of the tax returns filed, the number of taxpayers is actually 2. As such, the number of tax returns needs to be multiplied by somewhere around 1.5 to 2 to determine the number of taxpayers. Lastly, to scare us into thinking we each owe $140,000, Mr. Graves failed to indicate that the national debt is actually owed by the 50% who pay taxes and specifically by the top 1% which controls 80% of the financial wealth of this great nation. It's interesting that while 1% of the country control such a great percentage of the wealth and have directly and indirectly benefited from the taking on of the debt, that they want to allocate the debt equally to all taxpayers. Thanks Mr. Graves, but No Thanks!
Emmie Majors September 27, 2012 at 05:29 PM
The fact that people immediately associate the remarks to their individual political belief system is obvious here, in virtually every blog, and in Congress. The trick is to get past the polemic arguments and find solutions because the "Red/Blue, They did this - or they didn't do that" bickering is what both Mssrs. Lowry and Fisher correctly claim to be at the root of the problem. "We'll sink together, fighting each other on the way down."
BStein September 27, 2012 at 07:06 PM
You'd be correct Hal...one thing has absolutely nothing to do with the other!
Jimmy September 27, 2012 at 10:08 PM
Sometimes when you look in the mirror, you see the problem. Project much, Frank?
Wei Li September 28, 2012 at 06:03 AM
Visa’s 2012 International Financial Literacy Barometer puts the US near the bottom of the pack globally. There is much evidence to conclude the level of ignorance within the public is not entirely accidental. The financial elite do not want people to understand how they use fractional reserve banking and fiat currency to stealthily transfer wealth (excess productivity) from the masses to themselves. Unlimited fiat currency from thin air allows politicians to avoid spending constraints and buy votes with the people's own money. This has been the game for hundreds of years. "All the perplexities, confusion and distresses in America arise not from defects in the constitution or confederation, nor from want of honor or virtue, as much from downright ignorance of the nature of coin, credit, and circulation." - John Adams, 2nd President of the United States "History records that the money changers have used every form of abuse, intrigue, deceit, and violent means possible to maintain their control over governments by controlling the money and its issuance." - James Madison, the chief architect of the Constitution “Of all the contrivances for cheating the laboring classes of mankind, none has been more effective than that which deludes them with paper money.” – Daniel Webster “It is well that the people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.” - Henry Ford
Mike Lowry September 28, 2012 at 02:53 PM
Frank and others, The root of the problem is much deeper. Financing of the deficit is only a surface problem. The root of the deficit is the desire of Congress (both parties) to continue to vote programs that buy votes. "Obstructionists" is the derogatory term given to people that want to stop this. In this view, count me as an obstructionist. We cannot simply continue to raise the credit card limit in order for politicians to continue voting in new benefit programs. It will destroy our independence, and continue to weaken the incentives to work and achieve.
Mike Lowry September 28, 2012 at 02:54 PM
This is like debating with a credit card company that the interest rate is really 23.5% instead of 22.1%. It completely misses the point.
Stormin September 28, 2012 at 04:02 PM
"To coin Money, regulate the Value thereof..." - US Constitution The first step to financial stability is for the US Congress to step up the their constitutional mandate and take control of the creation of the money supply. They have failed at this miserably. In fact in 1913 the congress passed the Federal Reserve Act of 1913. This one act gave control of the money supply to a PRIVATE bank operating for profit and to the detriment of the people of the united states. Since 1913 our currency has been devalued year after year. For example an item costing $1 in 1913 will cost you $23 today. Why is this? Inflation. Inflation is just a tax levied by the private central bank to you for the use of their money. Money the private central bank created out of thin air. Here is a nice little quote that sums up the real intentions of the central banking system: "Give me control of a nations money supply, and I care not who makes it’s laws." - Mater Amschel Rothschild, founder of the Rothschild banking dynasty. With this quote in mid it could be argued that the US Government was overthrown by an internal coup orchestrated by the bankers. So what to do. First End the private Federal Reserve system. It is really easy, congress just needs to let their charter expire. Although I think it should be terminated immediately. Second, congress should take direct control of the money supply. This is also easy and there are many examples of how it can be accomplished.
Wei Li September 28, 2012 at 04:09 PM
The Founding Fathers of our nation of liberty and equal opportunity - not outcome - knew the weaknesses of mankind and carefully honed the Constitution to provide key obstructions to tyranny. Knowing the history of bankers using the monopoly of issuing paper money and credit to rein over monarchs/nations, and profit from funding both sides of wars, they carefully defined USA money in the Constitution and the Coinage Act of 1792 to have physically finite units of gold and silver. Fiat paper/digital money concepts were obstructed, and violations - such as fraudulent dilution of purity with other metals - was punishable by Death. In 1872, Supreme Court Justice Stephen Field, aware of the rages of inflation, attempted to block an unconstitutional over-extension of powers by the Bank of the United States. He wrote: “The arguments in favor of the constitutionality of legal tender paper currency tend directly to break down the barriers which separate a government of limited powers from a government resting in the unrestrained will of Congress. Those limitations must be preserved, or our government will inevitably drift from the system established by our Fathers into a vast, centralized, and consolidated government.” "Those who create and issue money and credit direct the policies of government, and hold in the hollow of their hands the destiny of the people." - Reginald McKenna, former president of the Midland Bank of England, ex-secretary of the British Exchequer 1920
Wei Li September 28, 2012 at 05:18 PM
Since you understand this much of the root problem, surely you know the ruthless cabal of financial elite have assassinated even US Presidents and members of Congress that have challenged their control. "There exists in this country a plot to enslave every man woman and child. Before I leave this high and noble office I intend to expose this plot." - John F. Kennedy http://www.michaeljournal.org/lincolnkennedy.htm http://www.xat.org/xat/usury.html http://www.prolognet.qc.ca/clyde/pres.htm "On June 4th, 1963, President Kennedy signed a presidential document, called Executive Order 11110, which further amended Executive order 10289 of September 19th, 1951. This gave Kennedy, as President of the United States, legal clearance to create his own money to run the country, money that would belong to the people, an interest and debt-free money. He had printed United States Notes, completely ignoring the Federal Reserve Notes from the private banks of the Federal Reserve. ... It was perfectly obvious that Kennedy was out to undermine the Federal Reserve System of the United States. ... But it was only a few months later, in November of 1963, that the world received the shocking news of President Kennedy's assassination." http://dandelionsalad.wordpress.com/2008/07/21/louis-t-mcfadden-1876-1936-an-american-hero-by-richard-c-cook/ Congressman/patriot/victim http://rense.com/general86/pres.htm House and Senate members oppose the Fed and face death by coincidence
Stormin September 28, 2012 at 06:08 PM
Wei Li, Generally people are not open to the truth. Especially cold hard facts that will lead them down a path which threatens to obliterate their entire world view. Like a horse to water you can lead them to it but you cannot make them drink. Brace yourself for the onslaught from the blind. BTW - You mention Pres. Kennedy. There is evidence to support the idea that Pres. Lincoln was assassinated for his green back.
Pam J September 28, 2012 at 06:17 PM
Some of the "goodies" you refer to actually have kept some people from becoming homeless and dying from hunger. Things are different right now. You cannot use conventional wisdom with the current job market being what it is. When a large part of the population is suffering, our government has to suffer too. Financially. If our government could "create" millions of jobs (all kinds of jobs), we wouldn't need these "goodies", but they can't so some people need food stamps to keep from starving and some people need unemployment just to barely survive. If you don't believe in food stamps or unemployment pay, I honestly don't know what you expect people to do who have lost their jobs through no fault of their own and had their lives turned completely upside down.
Wei Li September 29, 2012 at 01:35 AM
What you say is so true. I like the "obliterate their entire world view" with facts description. There are none so enslaved as those who think they are free. On the other hand, awakening is gradual - then it is Not. See the prior links for Lincoln and others. Congressman McFadden deserves a monument for his efforts to save the country.
Mike Lowry September 29, 2012 at 02:01 PM
Pam, I'm sure every liberal firmly believes that government programs, all government programs, "help" people. There are some who actually might become homeless or even die from hunger. This view masks the reality that there are hundreds of programs for homeless (I work in one for homeless teens), and food banks abound -- all private without government assistance. I can even support a minimal state-level safety net for a short period to help people transition over a rough spot. The federal government should have no role here. Putting 53 million people on food stamps and providing 2 years of unemployment compensation isn't really helping anyone, just expanding the base of government dependency and removing their incentive to find real work. There are better solutions.
BStein October 01, 2012 at 02:15 PM
Mike, you fail to mention that there are bipartisan solutions that obstructionists, like you are avoiding. This has nothing to do with raising the debt ceiling. Simpson Bowles would reduce the deficit by over 4 trillion dollars. what about that?
Nick Maltese October 01, 2012 at 02:53 PM
Bi-partisanship, unfortunately, will be a long time coming from the way Congress is acting. Both sides are girding for four more years of gridlock, regardless of who resides at 1600. We are truly at the most significant crossroads of how America will attempt to resolve issues of major importance. If only a few of the recommendations in Simpson Bowles were enacted, we would probably avoided the credit downgrade. American voters fall into two categories, those who work and those who do not. The latter category is divided into those who want to work and those who don't need to work.
Wei Li October 01, 2012 at 08:57 PM
Nick, how about the division being between those voters that believe government (a comforting omnipotent paternal force assumed to be of "good" intentions) is the answer, and those that believe the answer lies in the contributions of the god-given talents of individuals. History shows governments - like fiat currency - have always failed.
Nick Maltese October 02, 2012 at 10:49 AM
@Wei Li: I have always believed that "The government that governs least, governs best." I find it striking that one US pol Party claims FDR as a savior and the other points to that same man as the beginning of the end for our Republic. We have a government and cannot simply dissolve it, but we can insist that our government does it's job. Here's a decent cause and idea: http://action.nolabels.org/5985/no-budget-no-pay/
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