Income Taxes are used to pay Interest on money loaned from Federal Reserve?, page 1

Look up something from the early 80's called the Grace Commission Report. It was commissioned by Reagan as soon as he entered office. It found that all the taxes just go to pay interest on the debt.

Shortly after he started this there was the assassination attempt, and then suddenly he gave up on going after the fed.

Here's some things the report found.

www.uhuh.com...

Resistance to additional income taxes would be even more widespread if people were aware that:

* One-third of all their taxes is consumed by waste and inefficiency in the Federal Government as we identified in our survey.

* Another one-third of all their taxes escapes collection from others as the underground economy blossoms in direct proportion to tax increases and places even more pressure on law abiding taxpayers, promoting still more underground economy-a vicious cycle that must be broken.

* With two-thirds of everyone's personal income taxes wasted or not collected, 100 percent of what is collected is absorbed solely by interest on the Federal debt and by Federal Government contributions to transfer payments. In other words, all individual income tax revenues are gone before one nickel is spent on the services which taxpayers expect from their Government.

[edit on 13-12-2008 by badmedia]

In fact, going further, here are some figures that show how much IS spent on interest on the National Debt.

The fiscal year 2004 federal budget is about $2 trillion. The spending in percentages this year looks like this:
26.2%—military
22.6%—interest on the debt
19%—health care
5.5%—income security
3.4%—veterans’ benefits
3.3%—education
2.5%—nutrition spending
1.6%—housing
1.6%—environment
11.4%—everything else

If you believe the Grace Commission report, then:

But, if the Grace Commission is correct, then not one penny of income tax money is actually being spent on services the American People expect their government to provide.

So what is funding government? Tax researcher Richard Standring believes the U.S. funds itself with loans from the International Monetary Fund (IMF).
The IMF?

The IMF was created at the United Nations Monetary and Financial conference in Bretton Woods, New Hampshire, July 12, 1944. Per Title 22, Section 286 U.S. Code, the U.S. became an IMF member in 1945.

Standring followed checks naming the IRS as the payee. He claims the checks go to a Federal Reserve bank, a private banking institution that has never been audited. The money then goes to the International Bank for Reconstruction and Development and is deposited into what is called a “Quad Zero” account. It is from this account that IRS tax refunds are distributed (per 22 USC 286 and 31 CFR 11, section 214.7).

According to Standring’s research, whatever is left over is then transferred to the IMF. From there the money is redistributed among countries throughout the world—including the U.S.—in the form of loans. These loans must then be paid back to IMF bankers at interest.

According to the U.S. Bureau of the Public Debt, Americans were in the red $1.663 trillion in 1984. Twenty years later the debt has increased nearly five-fold to $7.1 trillion.

source for all of the above:truthintaxation.us...

reply to post by badmedia

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Your point is well taken. In fact, it is rather ironic that the government is making a big case out of the Bernard Madoff Ponzi scheme, when in fact, the US government is the creator of the biggest Ponzi Scheme in History- the Social Security System.
For those not familiar with Ponzi schemes, Wiki does a fairly good job of explaining them:
en.wikipedia.org...

Here is a good explanation of why the Social Security System is a Ponzi Scheme:

www.americanthinker.com...

In reality, few people likely have any idea what a Ponzi scheme is, nor how closely America's largest retirement system follows its outlines. According to the Securities and Exchange Commission:

'Ponzi schemes are a type of illegal pyramid scheme named for Charles Ponzi, who duped thousands of New England residents into investing in a postage stamp speculation scheme back in the 1920s. Ponzi thought he could take advantage of differences between U.S. and foreign currencies used to buy and sell international mail coupons. Ponzi told investors that he could provide a 40% return in just 90 days compared with 5% for bank savings accounts. Ponzi was deluged with funds from investors, taking in $1 million during one three—hour period—and this was 1921! Though a few early investors were paid off to make the scheme look legitimate, an investigation found that Ponzi had only purchased about $30 worth of the international mail coupons. Decades later, the Ponzi scheme continues to work on the "rob—Peter—to—pay—Paul" principle, as money from new investors is used to pay off earlier investors until the whole scheme collapses.'

Sound eerily familiar? Much as in the original Ponzi scheme, Social Security also paid huge returns to its first investors who, whether intentionally or not, led Americans to believe the plan worked marvelously, thereby engendering the support of an exceedingly grateful nation.

For instance, the first American to ever receive a check from this new national savings plan was Ernest Ackerman, a streetcar motorman from Cleveland, Ohio who retired exactly one day after the program went into effect. For the five cents that was deducted from Mr. Ackerman's check the sole day he was a 'participant', he received a lump—sum payment of 17 cents. This was a 240% return, which annualizes out to 87,600%. Nice investing, Ernie.

Then, in 1939, a series of changes were made to this new retirement system that included moving up the start of monthly payments by two years. As a result, the first monthly Social Security check went out on January 31, 1940 to Ida May Fuller, a retired legal secretary from Ludlow, Vermont.

This maiden disbursement was $22.54, which, according to Social Security Online, after cost of living increases and 35 years of receipts until her death in 1975, totaled a startling $22,888.92 in payments from a system to which Mrs. Fuller contributed $24.75.

Now, please bear in mind that Mr. Ponzi was only promising people a 40% return on their money in 90 days. By contrast, the first Social Security recipients received yields approaching 100,000 percent.

Unfortunately, few participants in a Ponzi scheme ever achieve such spectacular returns, and the whole scam invariably implodes when the real investors have the nerve to ask for their money back. For instance, when regulators finally shut Mr. Ponzi's operation down in 1920, they were only able to recover $1.593 million. Sadly, this was a small pittance compared to the $15 million he owed his 40,000 investors, not including the interest he had promised them.

This makes it quite logical that 70 years after our government implemented a Ponzi scheme of its own —— remarkably just fifteen years after the first one imploded —— the real investors (a.k.a., the baby boomers who have paid into this program since they received their first pay checks, while absorbing numerous increases to the required contributions) are concerned that there won't be enough money available to fund their own retirements.

Naturally, irrespective of the protestations of those who seem able to attain high office in our nation without possessing even the most rudimentary arithmetic acumen, these fears are warranted. Yet, now that the flaws in this equation have finally been exposed, the debate is unconscionably focused on the machinations of extending this scheme rather than if and how we should unwind it.

After all, as the best returns from this plan have already been realized by folks like Mrs. Fuller and Mr. Ackerman —— as well as millions of seniors in the past seventy years who received yields on their contributions that can't possibly be replicated —— shouldn't the rest of us who can add one plus one without difficulty be entitled to opt out of this investment nightmare?

Such a question becomes even more appropriate considering the gags yet to be played in this inhumane comedy in the form of neatly disguised —— yet predictable —— Democratic solutions to avert the imminent crisis they maintain is neither imminent nor a crisis. To date, these options comprise increasing the Social Security tax cap above its current $90,000 threshold, and eliminating the 2003 tax—cuts on the wealthiest wage earners.

As a result, no matter how you slice it, their 'solution' is to once again demand that people pay additional funds into this failing system above and beyond what was originally dictated by statute. Isn't this despicably akin to regulators asking the folks who were defrauded by Mr. Ponzi to contribute more to his scheme in the hopes that this would avert insolvency and increase the likelihood that they'd eventually get their money back?

Originally posted by badmedia
Look up something from the early 80's called the Grace Commission Report. It was commissioned by Reagan as soon as he entered office. It found that all the taxes just go to pay interest on the debt.

Wrong.

First of all, the Grace Commission Report doesn't say that. Secondly, even if it did it's not true.

Let's look at the Budget of the United States.

The amount collected from income tax greatly exceeds the amount spent on interest on the national debt every year. For example, in 2006, the individual income tax raised $1.04 trillion (click this linkand see page 30 of the historical tables). The government’s net interest expense in 2006 was $226 billion (see page 54 of the tables). That’s about 20% of individual income tax revenues, not 100%.

docs.law.gwu.edu...

As to the OP question: Yes and no.

The Fed buys the currency from the Treasury (a few pennies per bill) and presents Treasury bills in the amount of currency purchased as collateral.

The Fed collects interest on these Treasury securities so you could say the Federal Government (the public) pays interest for the money sold to the Fed. In 2007 the total income to the Fed from Treasury securities amounted to 40.3 billion dollars. However, the Fed reimburses the Treasury for much of this interest. In 2007, the Fed reimbursed the Treasury 34.6 billion dollars for interest on the Federal Reserve Notes.

reply to post by IAttackPeople

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Ok now tell him owns the FED!
and who is actually calling the shots at the FED!

Watch this one to get started I'm searching for a better one I found



And here is another one


[edit on 13-12-2008 by SLAYER69]

Originally posted by SLAYER69
reply to post by IAttackPeople

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Ok now tell him owns the FED!
and who is actually calling the shots at the FED!

I already know how the story supposedly goes. The secret meeting at Jekyll Island with Rockefeller, Warburg, Morgan, etc. The Rothschilds supposedly being the ones who started this whole privately owned central banking business... etc etc...

But I just want to find out once and for all if it is true that our government pays these international bankers interest on the money printed for them.

reply to post by Diplomat

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It is .. almost complete crap.

WE DO spend an enormous amount of money on interest, but these interest payments go to Treasury holders, those who purchased debt. These come in the form of bonds, etc.

65% of all Federal Debt is owned by international entities, being governments, banks, companies, individuals.

30% is owned by Asia alone.

THE FEDERAL RESERVE DOES NOT (yet) PURCHASE FROM THE TREASURY. In fact, the Federal Reserve cannot technically take ownership of anything except regulation of the financial sector.

The Federal Reserve loans to banks and banks only, the bank pay the interest rate on this short term debt, used to keep banks solvent. Higher interest rates help control inflation, as the money paid back to the Federal Reserve is (supposed) to be destroyed.

FED represents banks.

Why do you think we needed the Treasury to purchase the Senior Preferred Shares? The Fed cannot own anything.



Also, the Fed has all the legal rights (by Congress) to print what money is needed, allowing the banks to over see the currency on the basis that they understand it best. Any Dollar printed by the Federal Reserve is NOT a debt the US purchases, it is literally our method of generating currency.

Printing money = hyper inflation if you do it on a grand scale (see bank bailouts, another topic) but if money is needed and interest is paid on it, the effects on inflation are somewhat dimmed. That 700billion Dollars? .. That was all purchased by other entities at auction for a yield (interest).

Hope that helps you understand a little more.

Originally posted by SLAYER69
reply to post by IAttackPeople

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Ok now tell him owns the FED!
and who is actually calling the shots at the FED!

the FED is not 'owned' by anyone honestly.. it's a regulation board. It regulates the banking industry.. every major industry has their own version of the Fed.

The FED being the oversight of the banks, obviously carries an enormous amount of clout, it also has almost complete control over our currency. At any time Congress could abolish the Fed.

The FED does not have shares, ownership or anything of the likes. It is composed of MEMBER BANKS, which have shares and thus ownership, and bigger banks hold more.. persuasive influence.. on the Fed..

reply to post by IAttackPeople

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The Federal Reserve does NOT purchase anything from the Treasury Dept.

They have talked recently of doing this to in a vain attempt stem inflation, which we will soon be seeing, but have not yet done so.

reply to post by Diplomat

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don't ask for sources on ATS LOL ..

Most of the myths you read or hear about regarding the fed and supposed 'elite ownership' is a misunderstanding or 'dumbed down version' of economics in America.

Granted I don't think they even have economics as a required class in high school, it's hardly a surprise.

Originally posted by Rockpuck


The FED being the oversight of the banks, obviously carries an enormous amount of clout, it also has almost complete control over our currency. At any time Congress could abolish the Fed.

Yeah right! you go with that one

I haven't read the document but Zeitgest-Addendum refers to this document and how it is used by the fed. Your answer might be in it.

Introduction The purpose of this booklet is to describe the basic process of money creation in a "fractional reserve" banking system. The approach taken illustrates the changes in bank balance sheets that occur when deposits in banks change as a result of monetary action by the Federal Reserve System - the central bank of the United States.

Modern Money Mechanics (pdf)


html version

Originally posted by Rockpuck

The FED does not have shares, ownership or anything of the likes. It is composed of MEMBER BANKS, which have shares and thus ownership, and bigger banks hold more.. persuasive influence.. on the Fed..

Check this out by the wording it does not sound kosher.

The Fed lent cash and government bonds to banks that handed over collateral including stocks and subprime and structured securities such as collateralized debt obligations, according to the Fed Web site.

link

[edit on 14-12-2008 by SLAYER69]

reply to post by Diplomat

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Yes

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