Ron Paul Says 1.3 Trillion Dollar Debt Owed To Federal Reserve Is Not Real! Amazing Plan To Save A T

reply to post by macman


What you advocate is a truly free market system. Unfortunately that also entails anarchy. We have a government, the poor people cannot pay for it. The wealthy can. Its not a punishment, they don't feel the affect at all. If it was a punishment then they would feel the effect greatly. What you advocate is essentially a feudal system, so to speak. Everyone pays part of their crop to the main guy who gets wealthy(we have that now too, sort of).

Redistribution of wealth has become a nasty term, and I am sure Adam Smith would hate my position. However, Hayek would love the progressive system if there were no loopholes(as he eluded to in the Road to Serfdom). You grow the middle class by incentivising it. Currently, and especially under a flat tax system, the middle class is shrinking b/c there simply isn't enough wealth to be captured. The wealthiest people are saving that money and keeping it in their accounts. Its not being spent. The neat thing about a progressive system, when it is implemented fairly, is that the wealthy spend and feel weatlhy as they should. The middle class is happy b/c they have money to enjoy life and can acquire more. The poor are still poor, but they have hope of achieving the next level. This is where the American Dream comes from!

If I have a big bucket of water, and you have a glass, you drink it and want more but I won't give it to you. I drink a few glasses and still have a huge bucket remaining. Why not force me(essentially at gunpoint, hehe) to give you 2-3 more glasses so you are not thirsty, since I will not even notice the change anyway?

The argument you make is about fairness. Its not fair for me to take your money that you fairly earned. Well, its not fair for you to take mine either. However, in reality life isn't about fairness its about increasing everyone's utility, and in turn increasing the utility of the entire economy. If that can be achieved without real harm to you, and it benefits me, then it is a policy that should be adopted.

Fair should never be an argument. Your $3million that is in the bank does nobody any good, so let me take it and I will spend it. Then everyone is benefited and you are not harmed. You still have $7million left, so why would you complain? You weren't going to spend it anyway! But the poor guy down the road will spend his $3000 since he is living paycheck to paycheck. Don't take his, that only hurts.

Plus, its the best deal in the world, so game theory dictates you will stay in the country.

Originally posted by watcher3339
I tend to look on Ron Paul's approach to the Fed in a very Wizard of Oz kind of way. He simply acknowledges that the man behind the curtain: the Great Green Wizard of the Bankers, has no real power. By recongnizing such, and refusing to pay them (which is debt to ourselves) it simply evaporates the mists they have put up around their manuverings. It scares me. But I kind of like it.
Given the opportunity, I would likely vote for Ron Paul. And then I would likely kick myself a hundred times in the next four years as he did things I didn't like but couldn't fault on logic or principle.

edit on 12-7-2011 by watcher3339 because: typos. Always with the typos!

So that would make Ft. Knox the Yellow Brick Road!

Gotcha!

Who'da thunk it! the Wizard of Oz was really about the future of America! So each flying monkey was one of the newly created LEO organizations and related departments, all controlled by that wicked witch of Homeland Security, who wants the ruby slippers (those things that magically tell you 'there's no place like home') of America's Freedom at all costs... and graciously helped along the way by the good Ron Paul of the North...

We have cowardly (Bush, Clinton, Bush, Obama) Lion, Military Operative Tin Man joining in to monitor the group as we skip along our merry way, Bewildered Congressional Dorthy, who's job it is to hold America's basket, American (Straw Man) Citizen, who gets set on fire (by the wicked witch of Homeland Security) but is doused with the waters of (Free Masonic) reasoning, So that in the end, Builderburg Oz can get exposed by Anonymous Toto...

What a classic that movie was!

reply to post by memarf1


Sorry, but any way you paint it, it is still punishing some for making more then others.
And not to mention that most of what you suggest is Socialist in nature.


What's mine is mine. What's yours is yours. Not a little of mine goes to you.

Theft is what it's called, when working outside the scope of Govt.

Originally posted by memarf1
reply to post by sligtlyskeptical

 

The problem with reducing bank leverage is that it will strengthen the dollar further and further amplify the unemployment effects of a strong dollar. If we are willing to live in a nation with a natural rate of unemployment of about 15% then great, lets strengthen our money! I jest of course.

Is your response for real? I thought we were fighting inflation due to cancelling the fed's debt? There must be some % of bank leverage we can cut which will even out both inflation and the strength of the dollar, both in a one time response to cancelling the debt and also on an ongoing basis to cover ongoing government spending and also when the economy needs an influx of money. Basically the government issues X dollars and leverage is cut so banks create X less dollars. It really is as simple as 1+1 =2

The problem with our monetary system is not the Fed per se. Although, a debt based money creation system does limits national wealth growth from productivity and instead requires it come from inflation. The real problem is the Fed allowing private banks to create money. That is the underlying cause of inflation in our economy. Do you honetsly think that the banks from 2004-2008 only created money at the rate of inflation?

reply to post by ModernAcademia


I have always said that if the system is not working change the rules to make it work. Some people accept that a system must work as designed. Ron Paul can see the system is comprised on rules, and those rules can be changed if they make the system work better.

Originally posted by ExPostFacto
reply to post by ModernAcademia

 

I have always said that if the system is not working change the rules to make it work. Some people accept that a system must work as designed. Ron Paul can see the system is comprised on rules, and those rules can be changed if they make the system work better.

I have come to call what you just suggested the Captain Kirk Principle, based upon his explanation to Savak in the Wrath of Khan on how he beat the no win computer simulation. When Savak hears what Kirk did, she reply's; "You cheated?" Kirk answered; "I did not cheat! I changed the rules."

reply to post by memarf1

What can you do with $10million, that you can't do with $6.5million?

$3.5 million more than I could with $6.5 million. $3.5 million more to invest. $3.5 million more purchasing power. It is simple math, really.

reply to post by sligtlyskeptical


The only way to change the leverage is by legislation or rules set forth by the FED. I doubt that will happen, but sure, it may be able to even out the effects. The most obvious tool you are eluding to is the required reserves. I'll address that in a second, first I want to clarify something. I didn't say the banks increased the money supply at the rate of inflation, I said the FED did. They print or loan in such a way to keep up with inflation. However, since inflation is typically caused by the change of the monetary supply, yes, I seriously think the banks only increased the money supply at the rate of inflation. If they had increased the money supply by more than that we would have seen higher inflationary rates. Which, as you can see this year, we are seeing an increase of about 30% to commodities and food. Interesting considering the FED increased the money supply by about that amount through their QE1+QE2 policies.

The banks have a required reserve ratio of 10% right now, and yes the FED can change that. The problem is that even a 1% change upward to decrease the money supply could send the banks into another tailspin. They would have to call in debts or sell debt to achieve it. The change could be mitigated by giving them a time limit to do so, but it would still be difficult for them and reserve ratio requirements changes typically end with worse economies, at least in the short run.

What needs to happen is that the FED just raise the discount rate back to about 1-1.5%, stop the QE, and then ride out the next 5-10 years of hard times. The problem is that everyone is trying to fix the economy and all they keep doing is making things worse in the short run and delaying the inevitable self correction.

I live in Joplin, MO. We just had the worst tornado in the history of the US and now, miraculously, there is plenty of work, a need for housing instead of an oversupply, and the economy is comparatively recovered compared to 2008 and pre-tornado levels. It took a huge tornado and a step backward, but we are in a good condition now. It wasn't the government that got us out of the Great Depression, it was the manufacturing caused by WW2. Its interesting to note that we had a recession right after that war(within about 5 years if I remember correctly) for 2-3 years also. If our government would take their hands off the economy, different things will occur all over the country that will self correct it within 10 years or so. Hopefully not natural disasters, but stuff will occur.

reply to post by Jean Paul Zodeaux


As a Smithian Economist, I can tell you honestly that that is a myth put forth by Smithian Economists. You won't invest that $3.5million, you will put it in a bank and earn interest. You won't buy stuff and you won't build stuff. You won't create infrastructure and since the market can only support so many businesses, you won't buy new business. Some will, but most won't. There is a dead weight loss from the government such that when you pay your $3.5million in taxes the government may only spend back $3million or something, but its still more than your inevitable $0million.

You might buy securities or stocks or bonds, but then you have the same problem as the government right now. You are earning money on money. Nothing is created in the economy, no innovation is made, no benefit is observed.

Tell you what, go build something and employ 100 dudes at $35,000 to build something related to infrastructure that everyone can use, and you can keep your money to do that. But, we all know you won't do that, because what is yours is yours, and whats mine is mine.

reply to post by Maxmars

If I may, it is correct that pretending the Federal Reserve is a 'private' bank is not precisely correct, it is equally incorrect to consider it a government entity.

It is a govt entity though.

The Fed is a state granted monopoly on the creation of legal tender. The Fed cannot exist without the monopoly license congress has granted it. It is public central bank in that it is given a monopoly privilege by congress. Congress could end the Fed just as easily as they created it.

By this reasoning we clearly must be prepared to retract the injudicious notion of the 'entity' we call the Fed as somehow operating for the benefit of the citizens...

I never said anything like that. I'm just pointing out that the Fed is not a ``private corporation`` and that despite what a lot of people seem to think, completely nationalizing the Fed [making it for the people, as they say] won't solve any of the problems it creates.

here's a revolutionary idea, how about the united states government print it's own money so it doesn't have to buy it from a bunch of international bankers at interest rates.

the current system is either incredibly idiotic or incredibly corrupted.

reply to post by memarf1

If I have a big bucket of water, and you have a glass, you drink it and want more but I won't give it to you. I drink a few glasses and still have a huge bucket remaining. Why not force me(essentially at gunpoint, hehe) to give you 2-3 more glasses so you are not thirsty, since I will not even notice the change anyway?

You lost me there. If I have one glass of water, and I drink it all and expect a handout from your bucket, then I am a loser, a victim of poor planning, gluttonous, selfish, irresponsible fool depending on someone else's good will.

If you have a bucket of water, you obviously earned or obtained it in some way, and you have to make sure you will continue to have water for yourself, your family, your descendants. The last thing in the world you should do is waste your water on some irresponsible fool.

Now, in that same situation, there are other choices. If I have the glass, I can ration the glass and have enough to last until I can earn some from your bucket. You have needs, like how to maintain your bucket safely and still attend to other duties. Maybe I drink 1/4 of my glass, and offer to watch your bucket, and protect it while you are away earning more water. For that task, I only ask a meager 1/8 of a glass of water. It is nothing compared to your bucket, but it is half of what I consumed earlier! In this way, I can last a very long time on my single glass of water, and you are free to earn more water to replenish your bucket and mine! If I am savvy and responsible, I might learn that I can watch several buckets at a time, until I am earning more water than I am drinking, and I can begin to fill my own bucket!

Taking money away from a responsible, hard-working, smart, savvy, and accomplished person to give it to a lazy, gluttonous, irresponsible one is never a good thing for the economy, never a good thing for the country, not even a good thing for our evolution! Let the strong survive. If someone isn't born rich, let them learn skills, let them learn to be resourceful, let them change the game until is suits them. Don't change the rules and pander to the lowest denominator.

Your theory is exactly what is wrong in the economy, the education system, and it is the source of the entitlement attitude of the nation. It goes against the laws of natural consequences, and it is counterproductive to the evolution of mankind.

Hope that wasn't too harsh.

reply to post by defcon5


I couldn't agree with you more. The TARP program and Obama's Stimulus were totally incorrect to fix the economy. What would have been better would have been to provide that money to the homeowners(not directly) and reducing their balances and payments. The banks would have had their money and been safe, the people would have had lower balances and payments and that would have stimulated demand as the government had wished. Finally they should have immediately re-implemented the regulations that were removed in 1998.

This policy would have helped the banks, stimulated demand, and inevitably created a massive amount of inflation; but it would have worked and the past 3 years of recession, which would still have been very difficult, would be ending now instead of beginning to look perpetually like a new norm.

reply to post by getreadyalready


Actually, you make my point for me. Yes, I can guard your bucket while you go earn more, or what you mean to say is hire a military. My water example does seem like a handout, but in reality its just a reallocation that I was advocating. You can hire a military to guard your water, or since we have a government they can. Since they are established and reliable(we can agree the US military is reliable, and if not them then Blackwater, hahaha, j/k) you can pay them a tax to do so. Since I am poor and require fewer guards, I pay less in taxes than you do.

Its not a handout, you just have more to guard than me.

Now, you are certainly thinking, "Of course I do, 15% of 10million is a lot more than 15% of 75,000". But, I don't really need to worry about the military or anyone for that matter guarding my meager house. I can do that with my guns, friends, and family. You, however, need regulators, courts, and military to guard your assets against invasion, corruption, and employee theft or neglect. So, I pay 0% since I don't really need any guards and you pay 35% since you need lots of guards.

reply to post by memarf1


I also don't agree about the extra $3.5 million. If I put it in a savings account, by your account that same bank will loan out 10x that amount! That is $35 million in new energy injected into the economy in for form of business loans, home loans, car loans, etc. That $35 million will result in manufacturing and construction jobs!

Now, if I spend it like you would like, then I am buying boats, cars, and electronics. I am travelling and spending tourist dollars. I am paying sales tax everywhere I go. Ideally, for a Smithian economist, I will do all of those things within the country, and I will still create manufactuing jobs and service jobs, and I will provide a boost to local governments in the form of taxes.

Either way, the benefit of me having the money outweighs the benefit of the government having the money to redistribute on wars, foreign aid, or welfare programs to support drug habits.

reply to post by memarf1

As a Smithian Economist, I can tell you honestly that that is a myth put forth by Smithian Economists. You won't invest that $3.5million, you will put it in a bank and earn interest.

Not when interest rates are lower than the rate of inflation I won't. That, again, is simple math. This is the problem with economists, they are not business people. Economists don't sign paychecks on the front of a check, like any other employee they sign their paychecks on the back.

You won't buy stuff and you won't build stuff. You won't create infrastructure and since the market can only support so many businesses, you won't buy new business.

No, you won't. I will. As to your bogus assertion that the market can only support so many businesses, it certainly can support far more than most modern economists will claim, even ones pretending to be "Smithonian economists". Where people are fed a line of crap with terminology like "Reganomics", and "Voodoo economics", supply side economics is demonstrably an effective method of doing business. Rupert Murdoch showed that with his upstart FOX Network when too many economists were insisting there was no market for a fourth network. Ironically, these "experts" were making this assertion while cable television was growing at an exponential rate.

Further, and just to illustrate how absurdly simple supply side economics can be, Gary Dahl made a clear and undeniable profit with his "Pet Rock". Rocks for Christ sakes! Plenty of rocks around to make your own damn pet rock, but people bought Dahl's instead. It is not as if Dahl responded to a market demand, he used supply side economics to make a fortune.

Some will, but most won't. There is a dead weight loss from the government such that when you pay your $3.5million in taxes the government may only spend back $3million or something, but its still more than your inevitable $0million.

Arrogance is a presumption of knowledge. Your continual prediction of what I will do with my $3.5 million is beyond arrogant.

Tell you what, go build something and employ 100 dudes at $35,000 to build something related to infrastructure that everyone can use, and you can keep your money to do that. But, we all know you won't do that, because what is yours is yours, and whats mine is mine.

I think you are handily demonstrating that you don't know squat! But thanks for your permission to invest my money. Just goes to show who economists really work for and it is not for private business, is it?

reply to post by getreadyalready


That is precisely the myth. You won't spend it on vacation or electronics. How could you? A $3million vacation would be a hell of a vacation! haha. Do you really think you could take a $3million vacation every year and also buy half a million dollars in electronics every year? Go watch... Breuster's Millions? You can do it once, or maybe twice, but theres no way you can do it every year. I'm for you keeping your $3.5million if you wanna start building mills and train stations and tracks and stuff like that, but thats infrastructure and I have not seen Bill Gates or Warren Buffett doing that yet. Again, proving that it just doesn't happen. The Carnegie type people are few and very far between.

Originally posted by memarf1

However, a flat tax affects the poor greatly. The guy making $30,000 per year and paying 15% now only gets to keep $25,500. There is a lot you can do with that extra $4,500. Buy a new car, go on a good vacation, and so on. That $4,500 gets spent over and over and over, and taxed by the states from sales taxes to fund education among other programs. The guy making $1million doesn't spend that $250,000 that he paid in taxes in its entirety. The one making $10million definitely doesn't spend the $3.5million that he was taxed. Not to mention the fact that pretty much everyone that is against the progressive tax doesn't pay in those top brackets anyway.

What makes you think that the guy that makes a million doesn't spend his money as well? Who do you think buy all the yachts, luxury cars and mansions that litter the landscape of America? Your argument applies to all classes, not just the poor.

I'll tell you the government's dirty little secret about the progressive tax. It doesn't go after the millionaires, because that's not a big enough pool of money to tap into and aside from that, they are the hunting buddies of the politicians anyway and have far too much clout to anger. It goes after the middle class, because that's where the bulk of the money is. So they lie to you and convince you that it's a tax that makes the "wealthy" pay, they blind you with tales of how those nasty old wealthy people have more money than they know what to do with anyway. Then when they implement it, the "threshold of wealth" is astonishingly low- 100k or so. So middle class families who are struggling to make ends meet suddenly find themselves in the highest tax bracket, and unable to purchase big ticket items as a result. Believe me I know, because I've been there!

Originally posted by memarf1
A flat tax is an attack on every class and eases off the rich, which makes absolutely no sense .

A flat tax is a percentage, so the rich pay more than the poor. A LOT more. But they make more, so in that respect it's fair and reasonable. Plus if we had a flat tax we could cut the IRS staff way down and save substantial money. And we wouldn't all have to craft incredibly complex tax returns (or pay others to do it for us).

Originally posted by Rockdisjoint

Originally posted by fltcui
I love Ron Paul but.... the Federal Reserve is a private bank. It's not owned by the US. So why would a private bank tear up those bonds and lose the interest on them?
Correct me please if i'm incorrect.

The Fed is not a private bank. I don't know why you guys keep spreading that lie, the Fed is quasi-private. The govt can make the Fed do what ever it wants it to do.

Yeah it really is, a private bank. The FED is a scam set up by the Government. The job that the FED does is really Congresses and the U.S. Treasury. The FED could tell our own Government to shove it and all their money IE: REAL GOLD is overseas in other banks or most likely in secure bunkers by now. Our Government would have to send the Army after the money in these desperate times cause you know the host nations would not want to part with it.

Step one should be default on the FED and next should be to dissolve it completely but they would kill Paul before that happens, just like they did to Kennedy.