Spend, spend, spend til daddy takes the Tbird away

[jraabe]

This fun little piece of family feud by Bill Bonner of "The Daily Reconing",

Thirty-five years ago yesterday, the U.S. government told its foreign
creditors to drop dead. It does not dare so say so out loud, but now it is
about to say the same thing to the American people...and to foreign
holders of U.S. paper, too.

That is what our faith-based global monetary regime has wrought: a massive
increase in debts and obligations.

But who will pay it?

We turn to our family hearth for illustration.

"Look, I don't owe you anything," was what we heard yesterday at the
breakfast table. Jules, back from college, feels he should not be treated
like the younger children.

His mother had just given him a long list of chores.

"Well...hold on...we gave you your life," countered his mother.

"Hey, I didn't ask you for that; you did it for your own sakes," Jules
replied.

"Well, how about this: we just gave you breakfast. The least you can do is
to take the dishes to the kitchen," his mother said.

"No, you invited me to come here. I really didn't want to come here for
the summer. There's nothing to do here. You can't invite me and then force
me to work," Jules noted.

Jules, you will note, is in a weak bargaining position. He does not earn
his own way in life. He cannot really say "no" to his parents, without
potentially suffering a big drop in his standard of living.

But we rush to add that we have not invited you, dear reader, into our
dining room and into our family squabbles to make idle chatter. You
probably get enough of that at home. We do it to illuminate our subject:
what one generation owes another.

You see, Jules wants to feel independent, a young man...free, white, and
over 18. He should be able to do what he pleases, he figures. But he has
the U.S. Congress, the Bush administration and the world's dollar-based
monetary system all working against him, hammering out shackles, chains,
and leg irons that he and the rest of his generation will have to wear
their entire lives. The latest report in the Financial Times claims the
shackles weigh in at $79 trillion. If there are 100 million people in
Jules' generation, that works out to $790,000 for every one of them.

We played the part of provocateur, as usual, gladly.

"What do you think of that, Jules?" we needled our young man.

"You've got to be kidding. I'm not paying it. And I couldn't pay it even
if I wanted to," came the reply. "And why should I have to work all my
life so some old geyser "

"Jules..." protested his mother.

"Well, so people of your generation can retire to Florida on their fat,
happy derrieres? Besides, it's all smoke and mirrors," Jules said.
There is, of course, so much smoke it is like the Great Fire of San
Francisco, and a fun house full of mirrors, too - in the fed's Magic Money
Show, which is what makes it so entertaining.

Every public spectacle is amusing in its own way, but all have the same
basic theatrical elements: each begins with legerdemain or an outright
lie, it progresses into a farce, and ends in disaster. The founding lies
of the Fed are as follows: that a bank can create money out of thin
air...that experts who can't tell you whether oil is going up or down
tomorrow can nevertheless manage an entire economy...and that a committee
of bureaucrats can cobble together a short-term lending rate better than
the market itself.

This same Fed has now turned the world economy into a financial circus;
accountants juggle the books; deficits soar through the air like trapeze
artists; the animals in the trading pits roar; the magicians try to
convince the rubes that they can't believe the evidence of their own eyes.
And, the clowns at the Fed pretend that they know what they are doing.

The dollar is now so elastic that people think that the budget can be
stretched like Lycra tights on a fat woman, and yet somehow it will snap
right back into place. They believe they can spend, spend, spend...and
daddy will never take the T-bird away.

In the last nine years, $40 trillion worth of new financial commitments
has been added to Social Security and Medicare alone, USA Today tells us.


Who is supposed to make them good?

Jules and his friends?

It is as if a man were to go into a restaurant, order a bottle of
champagne, enjoy a nice meal and when the bill comes around, say, "My wife
had a son last week...save this for him. Just let the interest build up
until he's ready to begin paying it off."

"Yeah, right," says Jules.

[Sassy]

Unfortunately, all so true  :-/ !  I, too, read the Daily Reckoning, Whiskey & Gunpowder & other financial websites.  Exactly why I mentioned the Federal Reserve a few months ago... read the real history & the movers & shakers behind it & be prepared to be sick   & then angry   ...

Here's a good article from the August Review  The August Review

Is the U.S. Bankrupt?
By: Patrick Wood on Jul 17, 2006

Do Federal Reserve managers secretly believe that the U.S is bankrupt and is about to go under?

Well, where there's smoke, there's fire!

A stunning 23 page report by Professor Laurence J. Kotlikoff titled "Is the U.S. Bankrupt?" was issued by the Federal Reserve Bank of St. Louis in November, 2005, and quietly posted on their public website. Although publicly accessible, it was totally ignored by the U.S. press.

Kotlikoff is professor of Economics at Boston University and has penned at least 355 papers published by the Federal Reserve over several years.

Kotlikoff concludes that "Countries can and do go bankrupt. The U.S., with its $65.9 trillion fiscal gap, seems clearly headed down that path."

The fiscal gap of $65.9 trillion is more than 5 times U.S. Gross Domestic Product and twice as large as national wealth. The fiscal gap is all the money that the U.S. owes now and in the future, for which it doesn't have revenue to pay for. According to the Kotlikoff,

   One way to wrap one's head around $65.9 trillion is to ask what fiscal adjustments are needed to eliminate this red hole. The answers are terrifying. One solution is an immediate and permanent doubling of personal and corporate income taxes. Another is an immediate and permanent two-thirds cut in Social Security and Medicare benefits. A third alternative, were it feasible, would be to immediately and permanently cut all federal discretionary spending by 143 percent. (p.

Imagine Ben Bernanke, chairman of the U.S. Fed., getting up in front of Congress and stating "The U.S. is clearly headed toward bankruptcy!"

The stock market would crash, the dollar would melt down, the bond market would implode and real estate would be frozen in time.

The greater question is, "What does the Fed intend to do about its bankrupt client? After all, the Fed has the exclusive franchise to loan money to the government and for the issuance/destruction of money and credit in the U.S. The Fed has only one client- the U.S. Government - and it is about to bite the monetary dust.

This writer believes that the Fed's proactive response is already well underway, but we have not recognized is as such -- until now.

As of June 29, 2006, the Fed has raised discount rates for the 17th straight time. This has the effect of withdrawing credit from the banking system. In other words, the Fed has been pulling in its loans and creating resistance for bankers to not lend as freely as before. Ask around the banking community (as I have done) and see how willing they are to loan money these days! They are collectively pulling in their horns.

When John Snow abruptly resigned as Secretary of Treasury on May 30, 2006, President Bush immediately nominated his replacement: Henry Paulson, CEO of Goldman Sachs. Goldman Sachs is part of the white-hot core of global banking, ranking with Brown Brothers, Harriman, Lehman Brothers, Kuhn Loeb, Inc. J.P. Morgan, Chase and others. Is Paulson such a patriot that he would leave a $38 million per year job for the paltry salary of the head of Treasury? After all, he was the highest paid CEO on Wall Street and was still rising. Also consider that Paulson's personal stock in Goldman Sachs is currently worth almost $500 million. He is no pauper!

Against any other possible logic, it's more likely that Paulson went on the inside (of government) to protect his crony's investments: And what better place to do that than as head of the U.S. Treasury?

This writer hates to be a pessimist, but this does not make for an optimistic near-term or long-term forecast. Monetarily speaking, it's time to "run for the hills."

The demise of the dollar may be at hand.

(Ed. note: For you history buffs, compare today's monetary scenario with 1928-1929 and the subsequent sharp removal of credit from the manic stock market of the 1920's.)


The International Financial Review Vol 30 #1 produced in Great Britain had an article last year titled "The N.U.O. The Global Security Fund to Finance the World State" with info previously printed in March 2003 Vol 28 #4  (N.U.O. stands for New Underworld Order...)  Some very interesting if not almost unbelieveable info there...

[Amanda_931]

I get propaganda from the LaRouche organization, they are convinced that hyperinflation is just around the corner for us.

Think Weimar Germany.  

Woody Guthrie's quip was that things were so bad (in the Dust Bowl) shopkeepers kept the money on the store shelves, and the eggs in the cash register.  Same in Germany.

Two scary books at my bedside.

One, Empire of Debt is by Bill Bonner--the person quoted above by John, with Addison Wiggin.

The other, Backfire by Loren Baritz is older, from 1985, shows us how our belief system, ideas deeply held enough to rightly be called myths, set us up to fail in Vietnam.  And by extension, continue to do so in the Mid-East.

[MIEDRN]

My head is spinning and I'm sitting here wondering where the heck I've been for the last 30 years.

Seems I've been so busy just trying to live that I've missed a few things along the way. Let's face it, life is a struggle. More so for some than others and in facing those issues, it's easy to fail to see the big picture.

First, it was the idea that I actually could build. My dream wasn't so fantasy based after all. I read about people doing it day after day on this website. That's enough set your nerve cells on overdrive right there with all the possibilities.

Next, consider the amount of information here. It begins with comments that differ from what you've been exposed to previously. Nothing earth shattering...just a different way to look at things. Kinda stops you in your tracks for a second in time to rethink things.

How contrasting the situation I'm in!

Perhaps Michigan is conservative as some would like to describe it. This is my home state - but more and more I notice that people here are materialistic. I mentioned building to someone I'm working with and they couldn't understand why I just didn't get a McMortgage to go along with their idea of what a new house should look like.

I'm surrounded by women with diamonds on their hands bigger than dinner plates, driving 40K cars and waking up in their mansions only to repeat yesterdays heartaches.

I started second guessing myself over the last week or so over the choices I'm planning for the next five years. I started to fall into that line of thought again.

The comments in this thread only reinforces why I'm doing this.

Thanks for the education and pardon my rambling but my head is still spinning!

[Sassy]

Creative financing - for your reading enjoyment...  

The Creature from Jekyll Island
by G. Edward Griffin
Chapter 10
What is the Mandrake Mechanism?
It's the most important financial lesson of your life!

   THE MANDRAKE MECHANISM . . . What is it? It is the method by which the Federal Reserve creates money out of nothing; the concept of usury as the payment of interest on pretended loans; the true cause of the hidden tax called inflation; the way in which the Fed creates boom-bust cycles.

   In the 1940s, there was a comic strip character called Mandrake the Magician. His specialty was creating things out of nothing and, when appropriate, to make them disappear back into that same void. It is fitting, therefore, that the process to be described in this section should be named in his honor.

   In the previous chapters, we examined the technique developed by the political and monetary scientists to create money out of nothing for the purpose of lending. This is not an entirely accurate description because it implies that money is created first and then waits for someone to borrow it.

   On the other hand, textbooks on banking often state that money is created out of debt. This also is misleading because it implies that debt exists first and then is converted into money. In truth, money is not created until the instant it is borrowed. It is the act of borrowing which causes it to spring into existence. And, incidentally, it is the act of paying off the debt that causes it to vanish. There is no short phrase that perfectly describes that process. So, until one is invented along the way, we shall continue using the phrase "create money out of nothing" and occasionally add "for the purpose of lending" where necessary to further clarify the meaning.

   So, let us now . . . see just how far this money/debt-creation process has been carried -- and how it works.

   The first fact that needs to be considered is that our money today has no gold or silver behind it whatsoever. The fraction is not 54% nor 15%. It is 0%. It has traveled the path of all previous fractional money in history and already has degenerated into pure fiat money. The fact that most of it is in the form of checkbook balances rather than paper currency is a mere technicality; and the fact that bankers speak about "reserve ratios" is eyewash. The so-called reserves to which they refer are, in fact, Treasury bonds and other certificates of debt.

   Our money is "pure fiat" through and through.

   The second fact that needs to be clearly understood is that, in spite of the technical jargon and seemingly complicated procedures, the actual mechanism by which the Federal Reserve creates money is quite simple. They do it exactly the same way the goldsmiths of old did except, of course, the goldsmiths were limited by the need to hold some precious metals in reserve, whereas the Fed has no such restriction.

   The Federal Reserve is candid.

   The Federal Reserve itself is amazingly frank about this process.

   A booklet published by the Federal Reserve Bank of New York tells us:

   "Currency cannot be redeemed, or exchanged, for Treasury gold or any other asset used as backing. The question of just what assets 'back' Federal Reserve notes has little but bookkeeping significance."

   Elsewhere in the same publication we are told: "Banks are creating money based on a borrower's promise to pay (the IOU) . . . Banks create money by 'monetizing' the private debts of businesses and individuals."

   In a booklet entitled Modern Money Mechanics, the Federal Reserve Bank of Chicago says:

   In the United States neither paper currency nor deposits have value as commodities. Intrinsically, a dollar bill is just a piece of paper. Deposits are merely book entries. Coins do have some intrinsic value as metal, but generally far less than their face amount.

   What, then, makes these instruments -- checks, paper money, and coins -- acceptable at face value in payment of all debts and for other monetary uses? Mainly, it is the confidence people have that they will be able to exchange such money for other financial assets and real goods and services whenever they choose to do so. This partly is a matter of law; currency has been designated "legal tender" by the government -- that is, it must be accepted.

   In the fine print of a footnote in a bulletin of the Federal Reserve Bank of St. Louis, we find this surprisingly candid explanation:

   Modern monetary systems have a fiat base -- literally money by decree -- with depository institutions, acting as fiduciaries, creating obligations against themselves with the fiat base acting in part as reserves. The decree appears on the currency notes: "This note is legal tender for all debts, public and private."

   While no individual could refuse to accept such money for debt repayment, exchange contracts could easily be composed to thwart its use in everyday commerce. However, a forceful explanation as to why money is accepted is that the federal government requires it as payment for tax liabilities. Anticipation of the need to clear this debt creates a demand for the pure fiat dollars.

   Money would vanish without debt.  

there's a lot more but I don't have room - read it for yourself if you want the whole story  

[Sassy]

Ok, ok, read these & I'll shut up...

What Congress Can Do About Higher Gas Prices  August 1, 2006
by Ron Paul

Gasoline prices are soaring and the American people are angry. They want something done about it—now!

$100 rebate checks to American motorists won't cut it, nor will mandatory mileage requirements for new vehicles. Taxing oil profits will only force prices higher. But there are some very important things we can do immediately to help.

First: We must reassess our foreign policy and announce some changes. One of the reasons we went into Iraq was to secure oil. Before the Iraq war oil was less than $30 per barrel; today it is over $70. The sooner we get out of Iraq and allow the Iraqis to solve their own problems the better. Since 2002 oil production in Iraq has dropped 50%. Pipeline sabotage and fires are routine; we have been unable to prevent them. Soaring gasoline prices are a giant unintended consequence of our invasion, pure and simple.

Second: We must end our obsession for a military confrontation with Iran. Iran does not have a nuclear weapon, and according to our own CIA is nowhere near getting one. Yet the drumbeat grows louder for attacking certain sites in Iran, either by conventional or even nuclear means. An attack on Iran, coupled with our continued presence in Iraq, could hike gas prices to $5 or $6 per gallon here at home. By contrast, a sensible approach toward Iran could quickly lower oil prices by $20 per barrel.

Third: We must remember that prices of all things go up because of inflation. Inflation by definition is an increase in the money supply. The money supply is controlled by the Federal Reserve Bank, and responds to the deficits Congress creates. When deficits are excessive, as they are today, the Fed creates new dollars out of thin air to buy Treasury bills and keep interest rates artificially low. But when new money is created out of nothing, the money already in circulation loses value. Once this is recognized, prices rise – some more rapidly than others. That's what we see today with the cost of energy.

Exploding deficits, due to runaway entitlement spending and the cost of overseas engagements, create pressure for the Fed to inflate the money supply. This contributes greatly to the higher prices we're all paying at the pump.

If we want to do something about gas prices, Congress should greatly reduce federal spending, balance the budget, and eliminate regulations that interfere with the market development of alternative fuels. All subsidies and special benefits to energy companies should be ended. And in the meantime let's eliminate federal gas taxes at the pump.

Oil prices are at a level where consumers reduce consumption voluntarily. The market will work if we let it. But as great as the market economy is, it cannot overcome a foreign policy that is destined to disrupt oil supplies and threaten the world with an expanded and dangerous conflict in the Middle East.

Your Taxes Subsidize China

Each year the people of the United States write a check to subsidize China, one of the most brutal, anti-American regimes in the world. Lately it has been in vogue for everyone in Washington to eagerly denounce the egregious abuses of the Chinese people at the hands of their communist dictators. Yet no one in our federal government has been willing to take China on in any meaningful way.

Very few people realize that China is one of the biggest beneficiaries of American taxpayer subsidies. Thanks to the largesse of Congress and the President, China enjoys subsidized trade and the flow of US tax dollars into Beijing's coffers.

I offered an amendment before the House of Representatives last month that would have ended the $4 billion subsidy our nation quietly gives China through the US government's Export-Import Bank. The bank underwrites the purchases of goods and services by the Chinese government and others around the world. Unfortunately, only a minority of Democrats or Republicans supported my measure. Apparently, many members of Congress are happy to bash China, but don't mind lending her U.S. taxpayer money at sweetheart interest rates.

Some of your money went to fund a nuclear power plant in Shanghai owned by the China National Nuclear Corporation, a state-run company. Many US-based multinational corporations benefit directly from Export-Import Bank subsidies to China, including Boeing, Westinghouse, and McDonnell Douglas. So it's not hard to understand that business trumps the feelgood rhetoric condemning China.

There is no constitutional authority for Congress to make loans to any country, and certainly no basis for giving away the hard-earned cash of Americans to communist leaders who brutalize their women and children with forced abortions, and persecute Christians for their faith.

In reality, there is very little the federal government can do about conditions in China. Under our Constitution, the federal government simply does not have the authority to point a gun at Chinese leaders and force them to respect the principles of liberty. It just doesn't work that way.

I believe that by engaging the Chinese people, opening personal dialogue, and seeking to change their hearts and minds, we soon will see that regime collapse. The laws of economics dictate that a communist system cannot stand for long. But in the same way, I firmly believe there is a higher law which dictates that people exposed to the principles of liberty will not for long allow themse

[jraabe]

I've been reading the Daily Reckoning and (off and on) other "doomsday" and hard currency letters for many years. In fact, several years ago I lost much of my retirement money following their advice (which I fully believed).

It is so logical that it all must come crashing down - that money is nothing more than vaporous digits in cyberspace and that someday we will all wake up from the dream and come to our senses.

And, yet it hasn't happened... even after many decades of very convincing reasons why it should.

I think the reason the money economy hasn't gone down the gurggler is that the entire world economic system is based on an amazingly strong foundation that keeps the smoke and mirrors of what we now call "money" functioning. We all know that money isn't real... it's only an agreed upon fantasy object that exists to facilitate trade. And because we have to trade we all agree (wink, wink) to act as if money were something real.

In the end we are all just doing each others laundry... but in a much more specialized manner. I wash your socks and you wash my shirts. Instead of just trading we agree to exchange money with each other. That then opens up lots of possibilities for economies of scale. Maybe I'm better or faster or more clever at washing socks. Maybe you hate washing shirts and would rather build birdhouses. My increased efficiency can be rewarded and your birdhouses could become a hit and be exchanged for my sock washing service once we have a money system.

Of course, it is now much more complex than that. But it is still based on faith and more importantly, personal self-interest. We all believe in money because if we don't, the whole house of cards comes down on our collective heads... and nobody wins that war!

Have you visited Second Life? (http://secondlife.com/) This is a virtual reality world where your alter-ego character can fly around and visit virtual reality areas (specific locations in cyberspace) and interact with people. You can buy things, build things and then charge money (Linden $) to visit or purchase the stuff you made. You also retain copyrights to your vitual creations. There are people making over $100,000 a year (the Linden $ is fully convertible into US$) selling things such as imaginary real estate where people will build imaginary houses and invite imaginary friends over to be impressed! All this is growing very quickly and now constitutes an alternative virtual economy with a $64,000,000 GDP (in real American "greenbacks" - we know how real they are  ).

When I visited just now there were half a million residents and over 9,000 people on-line in real time chatting and doing business.

This is an economy, a money based exchange system, without the claptrap of convertability to gold or anything else. Just a fantasy that people agree to give value or reality to because it serves their purpose to do so...

That's the real economy!

[Sassy]

more like the 'ole bartering" system?  

PS  If we want a real life example of a "house of cards" read the history of Enron & it's creative financing & bookkeeping - much like the bookkeeping of the USA & probably most countries...  when confidence falls, it all comes tumbling down!

I lost quite a bit of $ after 9/11 in my retirement.  The problem with the little guy investing, he only can go by the recommendations of the supposed people in the know... but the real markets are controlled by a few who are well aware of the inside scoop - much like the excessive trading & put options on United & American airlines stock before 9/11 - who knew???

[Sassy]

Think the Nation's Debt Doesn't Affect You? Think Again

By John F. Ince, AlterNet. Posted March 20, 2007

http://www.alternet.org/story/49418/

[Sassy]

Ron Paul's Texas Straight Talk - A weekly Column

The 2008 Federal Budget

April 2,  2007

The fiscal year 2008 budget, passed in the House of Representative last week, is a monument to irresponsibility and profligacy.  It shows that Congress remains oblivious to the economic troubles facing the nation, and that political expediency trumps all common sense in Washington.  To the extent that proponents and supporters of these unsustainable budget increases continue to win reelection, it also shows that many Americans unfortunately continue to believe government can provide them with a free lunch.

To summarize, Congress proposes spending roughly $3 trillion in 2008.  When I first came to Congress in 1976, the federal government spent only about $300 billion.  So spending has increased tenfold in thirty years, and tripled just since 1990.

About one-third of this $3 trillion is so-called discretionary spending; the remaining two-thirds is deemed "mandatory" entitlement spending, which means mostly Social Security and Medicare. I'm sure many American voters would be shocked to know their elected representatives essentially have no say over two-thirds of the federal budget, but that is indeed the case.  In fact the most disturbing problem with the budget is the utter lack of concern for the coming entitlement meltdown.

For those who thought a Democratic congress would end the war in Iraq, think again: their new budget proposes supplemental funds totaling about $150 billion in 2008 and $50 billion in 2009 for Iraq.  This is in addition to the ordinary Department of Defense budget of more than $500 billion, which the Democrats propose increasing each year just like the Republicans.

The substitute Republican budget is not much better: while it does call for freezing some discretionary spending next year, it increases military spending to make up the difference.  The bottom line is that both the Democratic and Republican budget proposals call for more total spending in 2008 than 2007.

My message to my colleagues is simple: If you claim to support smaller government, don't introduce budgets that increase spending over the previous year.  Can any fiscal conservative in Congress honestly believe that overall federal spending cannot be cut 25%?  We could cut spending by two-thirds and still have a federal government as large as it was in 1990.

Congressional budgets essentially are meaningless documents, with no force of law beyond the coming fiscal year.  Thus budget projections are nothing more than political posturing, designed to justify deficit spending in the near term by promising fiscal restraint in the future.  But the time for thrift never seems to arrive: there is always some new domestic or foreign emergency that requires more spending than projected.

The only certainty when it comes to federal budgets is that Congress will spend every penny budgeted and more during the fiscal year in question.  All projections about revenues, tax rates, and spending in the future are nothing more than empty promises.  Congress will pay no attention whatsoever to the 2008 budget in coming years.

[Amanda_931]

Here's a proposed budget (thatprobably won't pass--only 72 people are in the caucus proposing it).  CPC = Congressional Progressive Caucus.

http://www.tompaine.com/articles/2007/04/02/the_inspiration_budget.php

The theme of the CPC budget is to shift resources from war, weapons, and tax cuts for the wealthiest to domestic spending.  The contrast to the budgets proposed by the president and the House Republican minority is striking. The CPC invests in health, education, housing, rebuilding communities and developing renewable energy sources. The conservative hawks plow money into the military and high-end tax breaks.

Take a look at where the Progressive Caucus gets the revenue they—that is, we—need to start addressing our most pressing domestic priorities, without adding to the deficit. They spend $86 billion less than the White House and Congress on the military. They save over $200 billion over the next two years by leaving Iraq by the end of this year. And they get some serious bucks from ending the Bush tax cuts for the top 1 percent, yielding at least $300 billion.

Are the military cuts reckless? In the documents accompanying their budget, the CPC provides a clear, detailed and compelling discussion of the cuts they propose. They're heavily influenced by the work of Lawrence Korb, former high-ranking defense official under Reagan (there's some street cred for you). Korb elaborates a series of cuts with reference to specific weapon systems that are being kept on life support by the pols and contractors feeding the military industrial complex, not by any realistic rationale for our security.

On the spending side, they get the budget balanced sooner than the other budgets floating around (nobody's perfect: Neither the CPC nor anyone else seems to be taking on the Alternative Minimum Tax , a tax that's about to bite the middle class big time unless Congress acts). But here's the beautiful part: the CPC budget spends $88 billion more than Bush on non-defense, domestic services. They also surpass their less bold House colleagues in this category by $34 billion.

Their spending priorities include fully funding the State Children's Health Insurance Program, to make sure every eligible child gets publicly provided health insurance. It's a proven success but it's under siege by the Bush budget. They restore the cuts made to job training programs, community investments, food stamps, veteran's benefits and housing. They fulfill long-ignored federal promises to increase funds for K-12 education. They remember the needs of people and communities devastated by Hurricane Katrina (which received nary a mention in the president's budget). And they invest $30 billion a year for 10 years to develop renewable energy resources, creating three million new jobs along the way.

[Sassy]

It would seem to make sense to focus on domestic needs & infrastructure rather than war... there'd still be some leftover to continue our aid to other countries rather than destroying them & bankrupting ourselves in the process  :-/

[Sassy]

Here's an editorial from "Daily Reckoning" that was posted today:

We opined the other day that it is not absolute wealth that the average
man cares about, but relative wealth. A man in an Indian village doesn't
envy the American with air-conditioning and two cars in his garage. He
envies the man down the street with a half-acre more of garden space.

An American may be perfectly content to vote Republican when Ronald Reagan
is in the White House and he thinks everyone is getting rich. But when the
slump comes, he looks around and sees things differently. He begins to
look for a New Deal. Not since the '20s, in America, have so many people
had so little while so few others have had so much. The many, pressing
their noses to their television screens and gaping at their rich neighbors
like the mob facing Marie Antoinette...are likely to want a change.

Then, the scoundrels and scalawags will have their day at last. The old
politics of envy will make a comeback. "Soak the rich," they will say.
"Hang the profiteers"... "Power to the people..."

Envy does not permit a free society. People say they value liberty, but
they can't stand what it produces. They can't stand the fact that - left
to their own devices - some people will have more than they do and some
will struggle to survive. Redistribute income, tax, control, regulate -
they will support almost any measure that promises to make the outcome
more to their liking. They will ask (and in some cases demand) that their
leaders control everything - income levels, interest rates, health care,
parking, handicapped access, what the schools teach, what language people
speak, who can marry whom, what goes into the sausages - even the
weather!

The rascals in every major political party all share the same basic
opportunistic creed. They differ in style, not in substance; one clown
wears patrician blue...the other a plebian red. One favors a plan whereby
government pays all medical expenses. Another offers reimbursements. Still
another offers subsidies and tax incentives to various favored projects.
Every one of them believes in taking something from one citizen and giving
it to another.

But envy is not the only reason for the triumph of collectivism. We are,
by nature, collective animals - like our monkey relatives. We may no
longer live in trees, but we still live in groups. And we look to our
neighbors - not to ourselves alone - for food, shelter, comfort,
companionship, direction, religion, opinions, and much more.

Yes, in theory, all of these relationships could be managed in a free,
consensual, collegial and civilized way - in which persuasion and honest
trade are used instead of violence and force. Most of our private lives
are run that way. We do not threaten the baker for a loaf of bread. Nor,
for the most part, do we take our wives like Sabine women; we are taken by
them...seduced, not stolen.

But public life is different. Without the iron hand of the state behind
him, mass man feels a little lost...vulnerable...and lonesome. How will he
eat, unless his neighbors are forced to give him bread? Who will look out
for him in his retirement, unless the younger generation is forced to pay
into Social Security? Who will protect him from terrorists, if his armed
forces are not properly locked and loaded? A little bit of humble
reflection might show him that he would be better off by relying on his
own wits...but not one man in ten is prepared to do it.

The world might be a better place if people were free...but it would not
be the place it is.

dr@dailyreckoning.com

[Amanda_931]

Google ads is sometimes placing a John McCain ad on this topic.  Stunningly elegant with animation in black and white.



One of our former senators--Fred Thompson is also thinking of running for President.

http://www.politico.com/news/stories/0407/3429.html

[Sassy]

Fiscal mess awaits new defense chief Gates inherits 'worst-managed' federal agency


April 15 - YOUR TAX $$$ AT WORK!

[Sassy]

http://www.truthout.org/docs_2006/051107N.shtml

       The Madness of the War Profiteering in Iraq
       By Robert Greenwald
       AlterNet

       Thursday 10 May 2007

       The following is Robert Greenwald's testimony to the House Appropriations Committee, Subcommittee on Defense about war profiteering.

       Thank you for inviting me to testify today. I appreciate the opportunity to share with you what I have learned in the course of making the documentary film, "Iraq For Sale: The War Profiteers." Along with my colleagues at Brave New Films, I spent a year researching the experiences of soldiers, truck drivers and families affected by the presence of private military contractors in Iraq. They shared with us their harrowing experiences of how military privatization and war profiteering have affected their lives, and in some cases taken the life of a loved one.

       It is their personal stories that compel me to testify today. I am not a lawyer or a financial specialist or a government expert, but I can tell you from my extensive first-hand experience with these folks that something is seriously wrong. We are hurting our country and the many patriots who serve in the military. Our taxpayer dollars are being spent, abused, mis-used, and wasted on profiteers. It is a true tragedy, and it is costing the lives of Americans and Iraqis.

       Please let me introduce you to a few of these people and their stories.

       Imagine someone with the exact same job as you, working next to you, but getting paid three times as much as you! We heard this story over and over again from the soldiers we interviewed. And in the case of US Army SPC David Mann, a radio repair technician who served in Iraq, he was even required to train KBR contractors to replace him. In "Iraq For Sale," David shared his frustration:

       "When I could be actively becoming a better soldier and becoming more proficient in my job, instead I'm going to sit up on guard duty and wait around while KBR contractors are doing the job that I had to train them to do."

       US Army specialist Anthony Lagouranis also spoke of the effects of the private contractors on the military:

       "It certainly affected retention because I don't know why any military person would re-enlist to do the same job when they could get out of the military and make six times the money - I really don't understand why they were outsourced. I mean, it seems like this is a military job and the military should be doing it. Especially because the more civilians you have out there, the more military people you need to guard them. So we're spreading us thin."

       "Iraq For Sale" was seen by hundreds of thousands of people around the country, and I cannot tell you the number of soldiers who saw it and thanked us for exposing the toll that contracting and profiteering are taking on our armed forces and on the war in Iraq.

       I was also appalled to learn of the amount of waste by contractors in Iraq.

       I remember clearly my interview with Stewart Scott, a former Halliburton employee. With pain and rage in his voice, he said how dare Halliburton put its people up at five-star hotels, while the soldiers, who he was there to help, were sleeping on the ground. I did not believe in him at first, but then he began naming the hotels and the locations. It was all true.

       I also spoke with Shane Ratliff, a truck driver from Ruby, South Carolina.

       He saw Halliburton advertising a job for truck drivers in Iraq and he signed up. When Shane started telling me that empty trucks were being driven across dangerous stretches of desert, I assumed he was mistaken. Why would they do that? Then he explained that Halliburton got paid for the number of trips they took, regardless of whether they were carrying anything. These unnecessary trips where putting the lives of truckers at risk, exposing drivers and co-workers to attack. This was the result of cost-plus, no-bid contracts.

       Another young Halliburton worker named James Logsdon told me about the burn pits. Burn pits are large dumps near military stations where they would burn equipment, trucks, trash, etc. If they ordered the wrong item, they'd throw it in the burn pit. If a tire blew on a piece of equipment, they'd throw the whole thing into the burn pit. They burn pits had so much equipment, they even gave them a nickname - "Home Depot."

       The trucker said he would get us some photos. And I naively asked, how big are they, the size of a backyard swimming pool? He laughed, and referred to one that he had seen that was 15 football fields large, and burned around the clock! It infuriated him to have to burn stuff rather then give it to the Iraqis or to the military. Yet Halliburton was being rewarded each time they billed the government for a new truck or new piece of equipment. With a cost- plus contract, the contractors receive a percentage of the money they spend. As Shane told me, "It's a legal way of stealing from the government or the taxpayers' money."

       These costs eat up the money that could be used for other supplies.

       Sgt. Phillip Slocum wrote to us and said, "In previous experiences I went off to war with extra everything, and then some. This time however, Uncle Sam sent me off with one pair of desert boots, two uniforms, and body armor that didn't fit."  (go to link for rest of story http://www.alternet.org/waroniraq/51719/ )

   

[benevolance]

Sassy

Nevermind that they have spent almost 3 and a half trillion in Iraq...And nevermind that this amount of money would be enough to build enough green power plants to eliminate the need for mid eastern oil completely!!!!!!!!!!

[jraabe]

Wow!!!

Wars are always wasteful but this has to be the topper. These are our dollars at work folks. Wasn't the hiring of mercenaries one of the early contributors to the fall of the Roman empire?

[benevolance]

Well there is going to be a financial fall...

Just based on the debt load and the ever increasing deficit each quarter...It will put the currency and credit rating at risk...

Sooner or later the world bank and the banks of other countries will start refusing to take American bank notes and opting for other currencies.... When this happens there will be a de-valuation of the currency in America like South America and Russia has seen....

Which will cause a massive free for all depression.... It will not be the end of days...But if this is allowed to happen it will serve as a wake up call for many that the money here needs to stay here...Of the people and for the people...

There will be political unrest...Whoever is leading the country when this starts to unfold will never be elected again...and they will be lucky not to be Executed!....But bad times are coming....

As abe lincoln said....You cannot fool all of the people all the time.....And America has been writing rubber checks they cannot cash for a long long time.... If someone decides to come collect on the debts there will be huge problems...

[Sassy]

The son of one of the nurses I work with just joined the military in "special operations" - he had to pay for his uniforms, kevlar vest, boots, haircut etc - they take it out of their paycheck - think how much money that leaves a father or mother to take care of their family... BTW, my friend, the nurse, paid for the gear herself so that her son would have money to live on.  :-/

[Sassy]

Short 4 min video excerpt from "Iraq for Sale" on how cost-plus contracts with Halliburton, KBR, Titan, CACI, etc are costing the US taxpayer billions of $$$.

http://www.brasschecktv.com/page/103.html

[Sassy]

http://blogs.abcnews.com/theblotter/2007/06/report-wasteful.html

Report: Wasteful Government Spending at All-Time High

[Sassy]

and yet more waste...  :-/  http://www.usatoday.com/news/washington/2007-07-23-militarysurplus_N.htm

Military buyers: Pentagon junks millions in hardware

"WASHINGTON (AP) — Millions of dollars' worth of gear, including combat boots, helmets, vests and aircraft parts, is being junked by the Pentagon rather than stored or sold as surplus to suppliers who sometimes sell it back to the military.

Of roughly $1.8 billion worth of equipment the Defense Department downgraded to scrap from January through June, at least $330 million worth came from categories of gear the Pentagon most frequently buys back from surplus dealers, according to the National Association of Aircraft & Communication Suppliers. Those include parts for aircraft, weapons and communications systems, the group said."  con't at link

[Sassy]

Pentagon Paid $998,798 to Ship Two 19-Cent Washers (Update3)

By Tony Capaccio

Aug. 16 (Bloomberg) -- A small South Carolina parts supplier collected about $20.5 million over six years from the Pentagon for fraudulent shipping costs, including $998,798 for sending two 19-cent washers to an Army base in Texas, U.S. officials said.

http://www.bloomberg.com/apps/news?pid=20601070&sid=aY5OQ5xv9HR8

[Sassy]

Make Congress Read the Laws It Passes!

On Sunday, December 16, members of Congress were handed a 3,417-page spending bill, H.R. 2764 - or was it a 1,443-page bill? It depends on what you include. The shorter version is found at the legislative information website thomas.loc.gov, but then there are attached committee reports, in which we find most "earmarks," or specific designations for the money Congress authorized in the bill.

And it appears these committee reports have the force of law. According to analyst Brian M. Riedl, "The appropriations bills' texts contain several sections stating that a certain amount of a program's budget 'shall be available for projects and in the amounts specified in the explanatory statement described in section....; This may effectively make many of the earmarks in the conference reports legally binding." Source: Heritage Foundation

That means the larger figure is more accurate. In any case, Congress has the responsibility to comb through both the bill and the earmarks to prevent waste.

Which Congress did not do. The House passed the bill within 24 hours (and passed an amended version two days later.) The Senate passed it Tuesday evening. Sen. Jim DeMint of South Carolina objected to the rush, leading Sen. Dick Durbin of Illinois to reply that the bill had been posted on the Internet for two whole days!

"For 46 hours and 8 minutes -- the Senator from South Carolina has had an opportunity to go to the Internet and see this bill in its entirety, with his staff, and to read every page... Please, do not come to the floor and suggest that this is a mystery bill which no one has seen. For two days, this has been posted on the Internet. You have had your chance. Every Senator has had a chance." - Sen. Dick Durbin

We're not sure this is even accurate, because we haven't found the 3,417-page version on the Internet. In any case, DeMint did the math: this would mean reading 1 1/4 pages of the bill every minute of those 46 hours before the debate. Members of the House would have had to read 2 1/2 pages every minute before their vote, with no breaks for sleeping, eating, bathroom, etc.  Source: DeMint's blog

Furthermore, by the time the Senate got to H.R. 2764, they had already passed 11 other bills that week. They even found time for such urgent matters as congratulating Appalachian State's football team and Wake Forest's soccer team. Indeed, by the time Congress adjourned Wednesday, the Senate passed 29 bills and 2,930 pages of legislation (not including additional reports and earmarks). And the House passed 33 bills amounting to 3,113 pages. (You can see the list of bills at the end of the blog version of this Dispatch.)

Apparently, Durbin assumes all members of Congress are expert speed-readers.

We at Downsize DC doubt this is so. That's why our Read the Bills Act would require all bills to be read before a quorum in Congress, and be posted on the Internet for seven full days before final passage. Some say this is not practical, but what is so practical about elected representatives not knowing the content of the bills they pass? How well has that worked for us?

Actually, the Read the Bills Act is very practical, because it will bring sunshine on bad policy and wasteful spending. And it will force Congress to write shorter bills, pass fewer bills, and spend less of our money.

Tell your Represenative and Senators that you don't believe they read H.R. 2764, because they simply didn't have the time. Tell them they have a duty to their constituents to oppose any bill they haven't read. And urge them to introduce the Read the Bills Act. You can do so here.

http://www.downsizedc.org/read_the_laws.shtml