FedUpUSA

Archive for November 6th, 2011

It’s a simple word, really.

But few practice it.

This failure, incidentally, is partly because nobody learns about it any more, but in those who did, it’s an intentional act.

It is why we’re in this economic mess.

It is what is stoked by the hard-core partisans on the left and right.

And it is what people like Limbaugh, Hannity, Maddow, Mathews and others pray to their favored deity you never figure out, because the day you do their entire little empire crumbles around them.

Discernment is about accuracy, not popularity.  It is about depth, not surface perception.

It has been said that great minds debate ideas.
Mediocre minds talk about events.
Small minds attack people.

Labels are so much fun, aren’t they?  Faggot.  Nigger.  Racist.  Homophobe.  Anti-semite.  Communist.  Marxist.

But one must discern.  That is, one’s ideas may be Marxist, but a person is not Marxist.  And note carefully: That one particular idea someone has is Marxist does not mean the rest of what they believe or know is. Find their error of logic, discuss, debate and convince and suddenly you can’t call them names any more.

Of course there are those who refuse to look at ideas, and instead label people.  It’s easier, you see, as you don’t have to practice discernment.  You only need to see a T-shirt, the color of someone’s skin, a cross, pentagram or Star of David around someone’s neck.  You need only observe dreadlocks, a pierced nose or tattoo.

Do recall that Einstein was considered “slow” by some early in his life.  There might have been a discernment problem there, eh?

We have become a nation that is apparently incapable of this function, and that’s a problem.  And this is an indictment that deserves to be leveled at both the left and right.

For literally two years we have heard that the Tea Party is a “Nazi” organization, that it’s a bunch of “white boys who hate blacks”, that the Tea Party is all “gun-toting rednecks” and other similar charges.  Yes, there are probably people who call themselves “Tea Partiers” who have committed various offenses, including serious felonies.  I recall news stories trumpeting that this guy was dealing dope, that one was engaged in some sort of kiting offense, and there was even an allegation of criminal sexual conduct in the news at one point.

But that there are bad acts committed by individuals does not mean that the ideas embodied in the Tea Party are evil.

That fact certainly didn’t stop the left from making this claim on an incessant basis literally from the time of Santelli’s Chicago Scream.

But now the shoe is on the other foot.  No less an authority than the Oakland PD said that “about 100″ black-clothed violence-loving jackasses showed up out of a crowd estimated at 10,000 in Oakland.  They committed a few acts of vandalism but were stopped by the protesters in the main (and video of this has been posted; it was also shown live from news choppers hovering over the scene.)  Just as telling on the 3rd there were multiple reports of demonstrators returning to where some of these thugs had committed vandalism helping to clean it up.

So does a 1% “infiltration” by these thugs make the entire demonstration “violent” or “violence-loving?”  Well, if you’re the right wing it does.

Similarly there is an alleged thug who demonstrated with the Ft. Collins folks and is now sitting in jail on an arson charge.  The newspaper says: “Arrest papers available to the public do not connect Occupy Fort Collins to the arson fires, and police made no connection between the group’s protest and Gilmore’s arrest.”

The right wing, of course, says no such thing.  A quick Google search shows multiple “titles” claiming “Add Arson to Obama-endorsed #Occupy Activism.”

Smearing political opponents is nothing new in America, but it is especially galling coming from the same people who themselves complained (and rightly so!) when they were identically smeared over the last two plus years.

The problem is that their smear is no more valid than it was when the left wing ran the same crap against the Tea Party.

Indeed, this afternoon there is one particular right-wing agitprop who was all but issuing threats that I’d become “irrelevant” if I don’t decide and declare that the “Occupy” movement is what the hard right wants you to believe about it – not about individual acts either piggybacked or even unassociated with the protests, but about the protests themselves and by association everyone in them.

Let’s remember that it wasn’t that long ago that I had the same slurs and “threats” made against me by the hard left when we were all told that the “Tea Party” was behind Giffords’ shooting.  You do remember that charge — later proved entirely false and baseless in the fullness of time — right?

Well for those of you who don’t remember that I’m an equal-opportunity clue-by-four applier to those in the media and blogosphere who run this sort of baseless garbage let me remind you of my lead story on that event:

Using the actions of someone who is clearly disturbed – the gunman was, from the results, not interested in only shooting Giffords as he targeted anyone in the vicinity – in an attempt to foment political fervor is both unhelpful and exactly how you take a nation from Freedom to Fascism.

Those who attempt to do so must be shunned and permanently turned aside, without exception and irrespective of which side of the political aisle they may hail from or argue for.  Not only are such attempts wildly destructive to our Republic and inherently evil they also are outrageously disrespectful to those who have been injured or killed today.

And this is what I later wrote as more became clear surrounding the events of that day:

It took only a few hours for the radical left to literally infest the entire Huffington Post with what amount to a litany of lies.

….

Jeff Biggers:

…..

“What is clear to me, at this chaotic moment, is that no one should be surprised by this turn of events. The bullets that were fired in Tucson this morning are the logical extension of every bit of partisan hatred that came spewing out during the last election, in which Gabrielle Giffords—a centrist, representing well and faithfully a centrist district—was vilified and demonized as a socialist, a communist, a fascist, a job-killer, a traitor, and more.

Anyone who uttered such words or paid for them to be uttered has his or her name etched on those bullets

Anyone care to rethink their position that my views on this are not one of discernment and have a partisan bent?  That I expect that people will be judged individually and that if you are going to smear an entire group of people you damn well better be able to prove it — not by claim but by strict proof?

I want answers.

I want to know who’s funding these black-dressed folks that showed up in Oakland.  I want to know because there’s a recurring theme here among protests and demonstrations, going back to several examples during G20 meetings, including the last one in Toronto.  There is evidence that some of these people at some of these protests have been intentional plants.  Well all that nice new gear costs money folks, and while it’s not exactly “high tech” the fact remains that a bunch of do-no-good dope-smoking hippies don’t have the funds to put toward something like that, never mind the very real risk of a prison term.  Who were these clowns?  I know who they are pretty-clearly not — they’re not representative of the people “Occupying” Oakland.

Likewise, I want to know what the truth is about this arson charge.  Arson is a very serious felony; this guy, if he did it, is going up the river for a very, very long time.  But this doesn’t fit either; he’s a businessman if the news reports are correct, which hardly fits with an “Occupy” motif for setting fires.  The truth will come out on this one, of course; he’s entitled the presumption of innocence under the law but the judge was convinced that the bond should be held at a very high level, so whatever might be in the arrest report the judge is buying it — at least for now. If you’re going to claim that this person is somehow connected to the goals or acts of the actual “Occupy” movement then present your evidence — thus far that claim is no more valid than that Gifford’s shooter was a “Tea Partier” or that “Tea Party ideals” were responsible for her attempted assassination.

We have a serious set of problems in this nation folks.  That the left smeared the Tea Party for the last two+ years is no excuse for the right to pull the same crap now.

It was wrong when they did it and it’s wrong when you do it too.

I called the left out on it and I’m going to keep calling the right out on it as well.  If that means both sides send me hate mail, so be it.  I refuse to play this game no matter which side of the aisle it originates from.

We must have a debate of ideas, not people.  I don’t care whether the person with a good idea is white, black, Chinese, Indian or Martian.  I don’t care if they vote Democrat, Republican or Libertarian.  I don’t care if they’re liberal or conservative.

I do very much care if they speak out of both sides of their mouth.  I will attempt to debate and discuss if an obvious logical flaw is apparent, but if you display a closed mind and partisan crap I will come after you like a nest of angry hornets and for each straw man you care to stand up I will chop it down without fear or favor.

As just one example of this from the right’s set of “charges” leveled against the OWS demonstrators relates to student loans.  The claim made is that “it’s your own damn fault for taking on $100,000 worth of debt for a degree that doesn’t pay well enough (or at all!)”

Ok, let’s examine that.

First, College Debt was made non-dischargable in bankruptcy.  Congress did that at the behest of the banks and it’s relatively recent.  This status is unique among types of debt, with the only other type being as difficult to discharge being that for child support.  The common cry from the right is that one has a “moral obligation” to pay all debts incurred.

The problem is that these people are speaking out both sides of their mouth.  Two examples will make this clear.  First is the Mortgage Bankers’ Association, which walked on its own building and repudiated its debt, jingle-mailing the keys.  Where was the outrage from the right on this practice and why wasn’t that outlawed?

Remember, it is a moral obligation to pay your debts, especially your mortgage.  Well?

Second, I want to draw a different and much-more damning parallel: Drug abuse.

See, leverage — that is, debt — is an addictive drug.  Doubt me?  Ok, if it’s not addictive then the Federal Government can stop deficit spending tomorrow, cold turkey.

Who on the either side of the aisle — left or right — has advocated, pushed for and demanded this happen (other than me)?  Nobody.  Therefore, the assertion is false.  Therefore, you’re forced by basic logic to accept my premise — it is addictive.

Now let’s look at the right’s argument on addictive substances.

The essence of the argument is two-fold:

1. Drug addiction is wrong and thus is and should be punishable by prison terms.
2. Drug dealing is even more wrong and thus is not only punishable, it is more-severely punishable than drug using

Hmmmm….

So therefore the purveyor of a loan that knows, or has reason to know, that the borrower cannot pay should be held more liable than the borrower.

Guess what?  If we got rid of the “special case” educational loan problem, and those loans were able to be discharged in bankruptcy, how many “sociology majors” would have $100,000 in student loans?

That’s easy: Zero, just as there were zero before the law was changed.

Why?

Because nobody would loan you the money to go to school unless the lender, in their analysis, believed you could pay — that is, the loan would not be a harmful drug to you.

Therefore they might determine that you could borrow say, one times the average annual earnings for your particular field of study over four years, provided you got acceptable grades (checked every quarter!)  If not, well, you’d get cut off.

You want to borrow a lot of money?  Ok, go into engineering.  Or some other high paying field.  If you want to study the liberal arts that’s fine, but you’re not going to be able to borrow $100,000 to do it, as if you default the lender will eat it and thus they won’t lend to you unless they believe they’re going to get paid back!

At the same time get the government out of the student loan business.  Now we have private loans and they’re fully able to be discharged.  Therefore, in the main only good loans will be made because the lender will have skin in the game.

That in turn will drive down the cost of college – a lot.  Like by more than half.  Why?  Because nobody will be able to get a loan for $100,000 to pursue a sociology degree, ergo, it won’t cost $100,000 to obtain one.

Is this so difficult to understand?

Not in the least.  It’s basic logic.  But if you follow it, then the right’s incessant claim that the banksters “did nothing wrong” evaporates instantly and they’re forced to admit that the essence of all that happened during this time frame with the abuse of leverage was intentional predation.

Several people at the Pensacola OWS were waving signs about student loan debt and trouble getting a job.  With just five minutes spent explaining this proposed change in the law I had every single one of them I spoke with agreeing that this path represents a real answer to the problem.

That’s discernment of where the problem actually lies and then it’s communication, conversation and debate leading to conversion of belief through logic, not name-calling and bomb-throwing rhetoric.

That is what we need in this nation folks.

Discernment, communication, conversation and debate and if we engage in it we can obtain conversion of belief through logic.

Yes, it’s easier to name-call and bomb-throw, rhetorically and otherwise.  But it’s fundamentally dishonest and we’re out of time — we simply cannot afford that sort of crap any more.

For four and a half years I’ve tried to accomplish this job through the path that begins with discernment, because it is the only way you will ever do anything constructive.  Name-calling is not constructive, nor is the rhetorical and political crap that passes for “debate” among the banal.

One path leads out of the woods in this nation and brings us forward.  It is not an easy path and it requires effort, but it is attainable.

Of that I am certain.

The other is more of what we’ve had: Hypocrisy, lies and smear jobs.

It is your choice to make folks, but here’s the rub: The mathematics of where we are as a nation, and where we’re headed, is not a debate topic.  It’s a fact.  The longer we wait to take the path of discernment the greater the probability that it will not matter any longer — that events will foreclose that option as a viable path forward, leaving no constructive options at all.

There are those who think hastening or praying for such is a good idea.  You’re wrong.  Down this path lies almost-certain ruin.  Only about 1 in 20 “revolts” succeed; the other 19 are put down at horrific cost.  Put another way, as I’ve said before, for ever 1 George Washington you get 20 Hitlers, and those odds suck.  To those who believe that being an agitprop for same will get you some privileged position history says the exact opposite: Those who participate in the incitement are immediately rounded up and killed by the new dictator as he consolidates his power, as he’s well aware that the people who did it before could do it again, this time to HIM!  History thus tell us that it’s nearly certain that you will wind up in a shallow ditch with 10,000 of your closest friends and a literal splitting headache as your “reward” for such activity in the event your “provocation” is successful.  That should be something to think long and hard about before you engage in this sort of foolishness.

Discernment folks.

It’s the correct first step, it’s the necessary first step, and it’s the one you ought to be taking, because it’s the only path forward that works.

One of the most important steps that we could take to bring prosperity back to America would be to nationalize the Federal Reserve. Doing so would allow the federal government to quit borrowing money, dramatically reduce taxes and eventually pay off the entire U.S. national debt. Instead of inheriting the largest debt in the history of the world, future generations would actually have a chance at economic prosperity because they would not be forced to pay off the horrific debt of previous generations. The Federal Reserve is a perpetual debt machine, it has almost completely destroyed the value of the U.S. dollar and it has an absolutely nightmarish track record of incompetence. There are no good reasons to keep the status quo. Our current debt-based monetary system will inevitably lead to a complete and total economic collapse. We desperately need to make a change while we still can. As you will see below, there are a ton of good reasons why we should nationalize the Federal Reserve.

Right now, most Americans believe that the Federal Reserve is actually an agency of the federal government. But that is simply not the case. The truth is that the Federal Reserve is about as “federal” as Federal Express is.

The Federal Reserve openly admits as much. For example, in defending itself against a Bloomberg request for information under the Freedom of Information Act, the Federal Reserve stated in court that it was “not an agency” of the U.S. government and therefore not subject to the Freedom of Information Act.

So who owns the Federal Reserve?

As the Federal Reserve’s own website describes, it is the member banks that own it….

The twelve regional Federal Reserve Banks, which were established by Congress as the operating arms of the nation’s central banking system, are organized much like private corporations–possibly leading to some confusion about “ownership.” For example, the Reserve Banks issue shares of stock to member banks. However, owning Reserve Bank stock is quite different from owning stock in a private company. The Reserve Banks are not operated for profit, and ownership of a certain amount of stock is, by law, a condition of membership in the System. The stock may not be sold, traded, or pledged as security for a loan; dividends are, by law, 6 percent per year.

The debt-based monetary system established by the Federal Reserve has greatly enriched the big banks and the people that own them. This has been at the expense of the American people.

A private central bank should not issue our currency, set interest rates and run our economy. Rather, we need to return control over the currency to the American people where it belongs.

The following are 14 reasons why we should nationalize the Federal Reserve….

#1 The U.S. Constitution says that the federal government is the one that should be issuing our money.

In particular, according to Article I, Section 8 of the U.S. Constitution, it is the U.S. Congress that has been given the responsibility to “coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures”.

#2 Our current debt-based monetary system is a perpetual debt machine. It is absolutely imperative that we nationalize the Federal Reserve and begin to issue debt-free money.

In a previous article about money and debt, I explained how more government debt is created whenever the U.S. government puts more money into circulation….

When the government wants more money, the U.S. government swaps U.S. Treasury bonds for “Federal Reserve notes”, thus creating more government debt. Usually the money isn’t even printed up – most of the time it is just electronically credited to the government. The Federal Reserve creates these “Federal Reserve notes” out of thin air. These Federal Reserve notes are backed by nothing and have no intrinsic value of their own.

This process creates a huge problem. When each new dollar is created, the interest owed by the federal government on that new dollar is not also created at the same time.

Therefore, more debt is actually created than the amount of money that the federal government receives from the Federal Reserve.

This is a Ponzi scheme that is designed to drain wealth from the American people and transfer it to the banking system.

This is why I call the Federal Reserve system a perpetual debt machine. Today, the U.S. national debt is more than 5,000 times larger than it was 100 years ago.

Back in 1910, prior to the passage of the Federal Reserve Act, the national debt was only about $2.6 billion.

By going to a system of debt-free money, the U.S. government would never have to borrow a single dollar ever again.

#3 Our current debt-based monetary system requires very high personal income taxes to pay for it. It is no accident that the personal income tax was introduced at about the same time that the Federal Reserve system came into existence.

If we nationalized the Federal Reserve and capped federal government spending at a reasonable percentage of GDP, it would be entirely possible to massively cut taxes and still keep our promises regarding Social Security and other important social programs at the same time.

I believe that eventually the entire personal income tax system could be completely wiped out and the IRS could be totally shut down. This would save our economy billions upon billions of dollars in income tax compliance costs.

However, as an initial first step, I believe that we should eliminate all payroll taxes, all “self-employment taxes” and all taxes on the first $100,000 earned by every American.

This would provide much needed relief to the millions of poor and middle income families that have been hurt so badly by this economic downturn.

Also, I believe that we could instantly reduce the corporate tax rate to levels that would be competitive with the rest of the world, while closing corporate tax loopholes at the same time. This would remove the temptation for companies to leave the United States in order to escape our brutally high corporate tax rates.

Yes, the proposals above would definitely cut taxes.

So where would we make up the difference?

Well, the U.S. Constitution provides one clue. According to Article I, Section 8 of the U.S. Constitution, the U.S. Congress has the right to impose “duties, imposts and excises” on goods sold in this country.

For way too long, big corporations have been taking advantage of sweatshops in the third world. For way too long, other nations have used predatory trade practices to take unfair advantage of us. For way too long, we have allowed nations with horrific human rights records to ship their goods into our country for free.

Well, we need to bring that to an end. By raising tariffs we would raise money for the federal government and we could potentially start to reverse the flow of jobs and businesses that have been leaving this country.

Access to the U.S. market is a privilege, not a right. High tariffs would be imposed on goods from any country that allows slave labor wages to be paid. Very high tariffs would be imposed on goods from any country that is using predatory trade practices against us. Extremely high tariffs would be imposed on any nation that does not respect basic human rights.

However, please keep in mind that none of this would work if we did not nationalize the Federal Reserve. The tax cuts proposed above would be suicidal under our current debt-based monetary system. But if we nationalize the Fed, we really could do this. It may sound crazy, but it really would work.

#4 If we nationalize the Federal Reserve, there would be no more budget deficits. If the federal government was a bit short one year, it would just print up a little bit of extra money in order to make up the difference.

It would also be very important to cap federal government spending as a percentage of GDP so that we don’t have crazy Congress critters creating a lot of inflation by spending us into oblivion.

Just because we would be adopting a debt-free monetary system does not mean that we could throw spending discipline out the window. Rather, it would actually become more important than ever.

#5 If we nationalize the Federal Reserve, we would instantly reduce the national debt by 1.6 trillion dollars. That is the amount that is currently on the balance sheet of the Federal Reserve. The Federal Reserve just created this money out of thin air anyway, so it was never their money to begin with. Some members of Congress have already proposed cancelling the debt held by the Federal Reserve, and it is a great idea.

#6 If we nationalize the Federal Reserve, we could eventually get rid of the entire national debt.

Under our current system, the U.S. national debt will never, ever be paid off. We are 15 trillion dollars in debt, and at this point we add more than a trillion dollars to that number every year.

As I have written about previously, if the federal government began right at this moment to repay the U.S. national debt at a rate of one dollar per second, it would take over 440,000 years to pay off the national debt.

But under our current system we are not paying it off. Rather we keep piling up more debt at an astounding pace.

In a system of debt-free money, there would be no more budget deficits, and we could actually start slowly paying off the national debt with newly issued “United States money”.

This would have to be done very slowly so as to not shock the financial system, but it could be done. As U.S. debt becomes due, a small percentage of it could be retired each year.

It is entirely conceivable that within 30 to 40 years we could pay it off entirely without causing tremendous damage to the financial system.

#7 If we nationalize the Federal Reserve, we will eventually totally eliminate the interest on the national debt. Most Americans don’t understand this, but each year we spend hundreds of billions of dollars just on interest on the national debt. For example, the U.S. government spent over 454 billion dollars on interest on the national debt during fiscal year 2011.

Under a debt-free monetary system, that number would eventually go to zero. That would save the federal government a ton of money.

#8 While there is certainly a danger that we would have inflation under a debt-free monetary system, the reality is that we are absolutely guaranteed inflation under the Federal Reserve system.

Most Americans believe that inflation is a fact of life, but the sad truth is that the United States has only had a major, ongoing problem with inflation since the Federal Reserve was created back in 1913.

If you do not believe this, just check out this chart.

Sadly, the U.S. dollar has lost well over 95 percent of its value since the Federal Reserve was created.

So, yes, there would be a need for monetary discipline under a debt-free monetary system, but it would be hard to do worse than the Federal Reserve has already been doing.

#9 If we nationalize the Federal Reserve, we would eliminate all of the financial bubbles that the Federal Reserve has been creating.

For example, there would not have been such a bad housing crash if the Federal Reserve had not created such perfect conditions for a housing bubble in the first place.

We should eliminate the Federal Reserve and allow the market to set interest rates. Having a central authority that sets interest rates is just simply wrong and it creates all sorts of problems.

#10 The Federal Reserve has not been doing a good job.

In case anyone has not noticed, Federal Reserve Chairman Ben Bernanke has a very long track record of incompetence. Nearly every major judgment that he has made since taking over that position has been dead wrong.

We are always told that we need someone to run the economy and that the Fed is there to keep depressions from happening.

Well, the truth is that the Fed actually greatly contributed to the Great Depression and it was at least partly responsible for the financial crash of 2008.

Now we are right on the verge of yet another massive financial implosion.

If someone keeps wrecking your car, you don’t let them keep driving it, do you?

#11 If we nationalize the Federal Reserve, we could potentially transition to “sound money” at some point.

There is great debate about this of course. But it is a debate that we need to have.

But before we go to “hard money” we need to do something about this horrific debt that we have piled up for future generations first. We simply cannot lock this debt in and expect them to pay for our mistakes.

We made this mess, so we need to clean it up.

Going to a debt-free monetary system would allow us to do that.

#12 If we nationalize the Federal Reserve, our local banks will have much more freedom. Most Americans simply do not understand just how much power the Federal Reserve actually has over our local banks.

For example, just last year Federal Reserve officials walked into one bank in Oklahoma and demanded that they take down all the Bible verses and all the Christmas buttons that the bank had been displaying.

#13 If we nationalize the Federal Reserve, we won’t have trillions of dollars of secret loans being made to big financial institutions on Wall Street and in foreign countries.

Most Americans don’t realize this, but the Federal Reserve made $16.1 trillion in secret loans to their friends during the last financial crisis.

Meanwhile, hundreds of small banks were left out in the cold and the American people got no help.

This is rampant corruption and it needs to be stopped.

#14 The Federal Reserve needs to be nationalized because it is an unelected, unaccountable “fourth branch of government” that has gotten completely and totally out of control. Even some members of Congress are now openly complaining about how much power the Fed has. For example, Ron Paul told MSNBC last year that he believes that the Federal Reserve is now more powerful than Congress…..

“The regulations should be on the Federal Reserve. We should have transparency of the Federal Reserve. They can create trillions of dollars to bail out their friends, and we don’t even have any transparency of this. They’re more powerful than the Congress.”

To learn much more about the Federal Reserve and how it is destroying prosperity in America, there is a great animated documentary on YouTube entitled “The American Dream” that you can watch right here.

It is absolutely imperative that the American people get educated about the Federal Reserve and about why a debt-based monetary system is bad for us.

In 1922, Henry Ford wrote the following….

“The people must be helped to think naturally about money. They must be told what it is, and what makes it money, and what are the possible tricks of the present system which put nations and peoples under control of the few.”

The U.S. government does not need to go into debt to anyone.

The U.S. government is a sovereign nation.

So why in the world are we 15 trillion dollars in debt?

We have allowed ourselves to become willingly enslaved.

In the book of Proverbs, it tells us the following….

The rich ruleth over the poor, and the borrower is servant to the lender.

By allowing ourselves to become enslaved to debt, we have become the servants of the international banking system.

Our founding fathers attempted to warn us about this.

For example, Thomas Jefferson strongly believed that when the federal government borrows money in one generation which must be paid back by future generations it is equivalent to stealing….

And I sincerely believe, with you, that banking establishments are more dangerous than standing armies; and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale.

Not only that, Thomas Jefferson also once stated that if he could add just one more amendment to the U.S. Constitution it would be a ban on all government borrowing….

I wish it were possible to obtain a single amendment to our Constitution. I would be willing to depend on that alone for the reduction of the administration of our government to the genuine principles of its Constitution; I mean an additional article, taking from the federal government the power of borrowing.

If we had implemented that advice, how much better off would we be today?

We can still do this.

We can take back control of our financial system.

We can nationalize the Federal Reserve.

We can dramatically cut taxes and eventually shut down the IRS.

We can give our children and grandchildren a future that is debt free.

We can escape the tyranny of the international bankers.

The choice, America, is up to you.

The Economic Collapse

Shooting a peacefully-walking cameraman who is filming a police line from a clear and respectful distance — there is no violent action visible in the film anywhere — is felony assault if you or I do it.

Why isn’t the cop who did this under arrest?

Stop calling this sort of incident “brutality” and start calling it what the clear video evidence appears to show: A felony.

To The Oakland PD (And Others)

According to the U.S. Census Bureau, a higher percentage of Americans is living in extreme poverty than they have ever measured before. In 2010, we were told that the economy was recovering, but the truth is that the number of the “very poor” soared to heights never seen previously. Back in 1993 and back in 2009, the rate of extreme poverty was just over 6 percent, and that represented the worst numbers on record. But in 2010, the rate of extreme poverty hit a whopping 6.7 percent. That means that one out of every 15 Americans is now considered to be “very poor”. For many people, this is all very confusing because their guts are telling them that things are getting worse and yet the mainstream media keeps telling them that everything is just fine. Hopefully this article will help people realize that the plight of the poorest of the poor continues to deteriorate all across the United States. In addition, hopefully this article will inspire many of you to lend a hand to those that are truly in need.

Tonight, there are more than 20 million Americans that are living in extreme poverty. This number increases a little bit more every single day. The following statistics that were mentioned in an article in The Daily Mail should be very sobering for all of us….

About 20.5 million Americans, or 6.7 percent of the U.S. population, make up the poorest poor, defined as those at 50 per cent or less of the official poverty level.

Those living in deep poverty represent nearly half of the 46.2 million people scraping by below the poverty line. In 2010, the poorest poor meant an income of $5,570 or less for an individual and $11,157 for a family of four.

That 6.7 percent share is the highest in the 35 years that the Census Bureau has maintained such records, surpassing previous highs in 2009 and 1993 of just over 6 percent.

Sadly, the wealthy and the poor are being increasingly segregated all over the nation. In some areas of the U.S. you would never even know that the economy was having trouble, and other areas resemble third world hellholes. In most U.S. cities today, there are the “good neighborhoods” and there are the “bad neighborhoods”.

According to a recent Bloomberg article, the “very poor” are increasingly being pushed into these “bad neighborhoods”….

At least 2.2 million more Americans, a 33 percent jump since 2000, live in neighborhoods where the poverty rate is 40 percent or higher, according to a study released today by the Washington-based Brookings Institution.

Of course they don’t have much of a choice. They can’t afford to live where most of the rest of us do.

Today, there are many Americans that openly look down on the poor, but that should never be the case. We should love the poor and want to see them lifted up to a better place. The truth is that with a few bad breaks any of us could end up in the ranks of the poor. Compassion is a virtue that all of us should seek to develop.

Not only that, but the less poor people and the less unemployed people we have, the better it is for our economy. When as many people as possible in a nation are working and doing something economically productive, that maximizes the level of true wealth that a nation is creating.

But today we are losing out on a massive amount of wealth. We have tens of millions of people that are sitting at home on their couches. Instead of creating something of economic value, the rest of us have to support them financially. That is not what any of us should want.

It is absolutely imperative that we get as many Americans back to work as possible. The more people that are doing something economically productive, the more wealth there will be for all of us.

That is why it is so alarming that the ranks of the “very poor” are increasing so dramatically. When the number of poor people goes up, the entire society suffers.

So just how bad are things right now?

The following are 19 statistics about the poor that will absolutely astound you….

#1 According to the U.S. Census Bureau, the percentage of “very poor” rose in 300 out of the 360 largest metropolitan areas during 2010.

#2 Last year, 2.6 million more Americans descended into poverty. That was the largest increase that we have seen since the U.S. government began keeping statistics on this back in 1959.

#3 It isn’t just the ranks of the “very poor” that are rising. The number of those just considered to be “poor” is rapidly increasing as well. Back in the year 2000, 11.3% of all Americans were living in poverty. Today, 15.1% of all Americans are living in poverty.

#4 The poverty rate for children living in the United States increased to 22% in 2010.

#5 There are 314 counties in the United States where at least 30% of the children are facing food insecurity.

#6 In Washington D.C., the “child food insecurity rate” is 32.3%.

#7 More than 20 million U.S. children rely on school meal programs to keep from going hungry.

#8 One out of every six elderly Americans now lives below the federal poverty line.

#9 Today, there are over 45 million Americans on food stamps.

#10 According to the Wall Street Journal, nearly 15 percent of all Americans are now on food stamps.

#11 In 2010, 42 percent of all single mothers in the United States were on food stamps.

#12 The number of Americans on food stamps has increased 74% since 2007.

#13 We are told that the economy is recovering, but the number of Americans on food stamps has grown by another 8 percent over the past year.

#14 Right now, one out of every four American children is on food stamps.

#15 It is being projected that approximately 50 percent of all U.S. children will be on food stamps at some point in their lives before they reach the age of 18.

#16 More than 50 million Americans are now on Medicaid. Back in 1965, only one out of every 50 Americans was on Medicaid. Today, approximately one out of every 6 Americans is on Medicaid.

#17 One out of every six Americans is now enrolled in at least one government anti-poverty program.

#18 The number of Americans that are going to food pantries and soup kitchens has increased by 46% since 2006.

#19 It is estimated that up to half a million children may currently be homeless in the United States.

Sadly, we don’t hear much about this on the nightly news, do we?

This is because the mainstream media is very tightly controlled.

I came across a beautiful illustration of this recently. If you do not believe that the news in America is scripted, just watch this video starting at the 1:15 mark. Conan O’Brien does a beautiful job of demonstrating how news anchors all over the United States are often repeating the exact same words.

So don’t rely on the mainstream media to tell you everything.

In this day and age, it is absolutely imperative that we all think for ourselves.

It is also absolutely imperative that we have compassion on our brothers and sisters.

Winter is coming up, and if you see someone that does not have a coat, don’t be afraid to offer to give them one.

All over the United States (and all around the world), there are orphans that are desperately hurting. As you celebrate the good things that you have during this time of the year, don’t forget to remember them.

We should not expect that “the government” will take care of everyone that is hurting.

The reality is that millions of people fall through the “safety net”.

Being generous and being compassionate are qualities that all of us should have.

Yes, times are going to get harder and an economic collapse is coming.

That just means that we should be more generous and more compassionate than we have ever been before.

The Economic Collapse

We are being throttled by the Big Lie: we’re told that if the predatory financial system implodes, we’ll all be ruined. The opposite is true: the only way to save our economy is to let the corrupt, pathological and flawed financial system implode.

I was recently challenged by a contributor to write something positive, and so I decided to write about the single most positive outcome of the current financial crisis in Europe: the complete collapse of the corrupt, predatory, pathological global banking sector and its dealers, the central banks.Exploring why this is so reveals the insurmountable internal conflicts in our current financial system, and also illuminates the systemic political propaganda which is deployed daily to prop up a parasitic, corrupting, pathologically destructive financial system.

Our first stop is modern finance itself. Modern financial “products” and “instruments” are often highly complex and abstract, but the entire edifice can be distilled down to this: the system is based on the assumption that all risk can be hedged, and the  difference between the initial position’s yield/gain (i..e. placement of capital at risk for a gain) and the cost of hedging the risk of the wager to zero can be skimmed from the system  risk-free.

That is the entire system in a nutshell, and we can immediately see the advantages of this system over traditional Capitalism, where risk can be hedged but never to zero, and the return is correlated to the risk taken on.

In modern finance, high-risk “investments” (wagers) with high returns can be taken on  without worry because any and all risk can be hedged to zero, even in super high-risk wagers.

And since even high-risk positions can be seamlessly hedged to zero, then there is no reason not to borrow money to increase the size of your wagers: since you can’t lose, then why not? Wagering in risk-free skimming with borrowed or leveraged money is simply rational.

Put these together and we see how a system based on risk-free skimming eventually leverages itself to the point that the slightest disruption can bring down the entire over-leveraged, over-extended system.

Why is this so?  Every hedge has a counterparty who is supposed to pay off if the initial wager blows up.A system based on risk-free hedging is ultimately a self-organizing system which maximizes return by increasing bet sizes, leveraging/borrowing to near infinity and hedging every hedge as well as every wager.

This creates long chains of hedges and counterparties.Here’s an example based on an asset we all understand, a house.  Let’s say someone buys a house for $1,000 down, something that was common in the housing bubble.  That $1,000 is leveraged up to buy a $200,000 house via a $200,000 mortgage.

The “owner” of the house then buys a hedge to protect himself from the house losing value, so the risk is reduced to zero: if the value rises, the owner reaps the gain  and if it declines, then he collects the payoff of the hedge from the counterparty, for example, a Wall Street investment firm.

The counterparty calculated the risk of real estate declining and then priced the hedge  accordingly. There is some small risk that the loss will exceed the cost of the hedge, so the issuer of that hedge bundles similar bets and then buys a hedge or “insurance” from another player, who makes the same calculations of risk and return.

Meanwhile, the mortgage has been tranched (sliced into principal and interest  and into various pools of risk) and bundled with other “low-risk” mortgages and sold to investors, who also buy a hedge against any loss in the tranch, for example, a credit default swap (CDS) which pays out if a borrower defaults. Those hedges are sold or “insured” with another hedges.

All of this debt and all of these hedges are based on a mere $1,000 of actual capital.The players who originated each hedge are similarly leveraged, because since risk can be lowered to zero, who needs capital?

So what happens when one counterparty (issuer of a hedge) somewhere in the chain runs into trouble? The entire chain collapses.  With razor-thin capital to cover any losses, then each link in the chain dissolves into insolvency if their counterparty fails to pay off.

This is how we get hundreds of trillions of dollars in “notational” derivatives: every hedged is hedged with another “instrument,” “products” are bundled and insured, and so on. The system is based on the principle that risk can be reduced to zero, and so there is no need for capital.

Unfortunately, that premise is demonstrably false. Benoit Mandelbrot dismantled the notion that risk can be reduced to zero in his prescient masterpiece,The (Mis)behavior of Markets.  The founder of fractal geometry showed that markets are  fractal in nature, and are thus intrinsically  prone to unpredictable disruptions. Simply put, risk cannot be massaged away.

Thus the fundamental premise of all modern finance is flat-out wrong, and this explains why systemic risk, rather than being eliminated, actually rises with every ratchet up in debt, leverage and counterparty hedging.

The entire global financial system is thus based on the equivalent of a perpetual motion machine:money can be borrowed or leveraged into existence in essentially unlimited quantities, and then deployed in risk-free skimming operations to harvest unlimited wealth.

What does this promise of using leveraged capital to skim risk-free fortunes do to the “real economy” of production and investment in plant and technology? It guts it.The risk of industrial Capitalism is real and cannot be hedged away; high-risk investments may blow up or they may return high yields. It literally makes no sense to risk real capital in productive Capitalism when a zero-risk skimming operation can be developed that essentially needs near-zero capital.

Thus financial capital has come to completely dominate industrial or productive capital.The pernicious consequences of this dominance have poisoned the economy and culture on multiple levels.

In the political sphere, the aggregation of hundreds of billions of dollars in skimmed  profits gave Wall Street and the banking sector unlimited budgets to buy political influence. This created a monstrously pathological feedback loop: the more political influence Wall Street bought, the higher their returns on financialization skimming.

Consider housing as an example.Housing was once a simple, barely profitable long-term investment for both the buyer, who had to place substantial capital at risk (20% down payment) and the holders of mortgages, who took a modest yield for 30 years in trade for low risk.

Wall Street and the banks financialized housing via political influence. opening up a vast new territory to be exploited via skimming.Since capital wasn’t necessary in no-risk skimming, then down payments were dispensed with to increase the pool of debtors, as they are the foundation of all skimming operations.

the cost of servicing that debt was manipulated via “teaser rates” and “interest only” loans, further leveraging up American home buyers’ modest income streams. Mortgages were bundled, tranched and hedged, and the mortgage-backed securities (MBS) and  collateralized debt obligations (CDOs) were sold to trusting investors aroudn the world.

It was a bonanza of unprecedented wealth creation from financial skimming.  $1,000 down and a few hundred dollars a month for a “teaser rate” interest-only loan was leveraged into a global chain of “products” and counterparties that could be skimmed all along the chain.

That deepened the political corruption that fed the skimming operation, and introduced the “no risk” pathology into Mainstream America.  Since real estate never went down in value, then buying a second, third or fourth home on leverage was simply rational; in a Federal Reserve-controlled world of near-zero yields on cash, it was irrational not to.

But there were two intrinsic flaws in the skimming operation:while the Wall Street players were hedged (or so they reckoned), the average Americans buying homes with near-infinite leverage were not hedged. That meant that when their razor-thin capital went to zero, they were insolvent.  Once they defaulted, then the income stream feeding the chain of skimming went away and the chain collapsed.

Once one counterparty failed in the chain, the entire chain collapsed as well.  As Mandelbroit explained, such disruptions were an intrinsic feature of the system; though the timing of a systemic disruption could not be predicted, the fact that disruptions would occur on a regular basis could be predicted.

Some players knew this, of course, but that led to another pathology:those investment players who avoided the “no risk” skimming casino could not generate the yields being “earned” by the leveraged skimmers with legitimate investing, and so their investors abandoned them for the fully rational reason that “no risk” yields were higher elsewhere.

This too created a feedback loop, where the capital available to be leveraged grew rapidly, while the pool of capital available for “patient” risky investments in actual productive assets declined.  Capital available for productive investment thus became costly and scarce, while capital available for leveraged skimming became cheap and abundant.

The Federal Reserve bankrolled the skimming to the hilt.  Indeed, the entire pathology of low-interest, unlimited leverage skimming was based on the Federal Reserve’s manipulation and intervention. That remains true today.

What happens when the whole chain blows up and the foundation of debt is impaired?Since the whole system is based on the debt and the income streams devoted to servicing it, the entire edifice collapses when the debt is impaired–debtors default and the system clogs with bad debt, i.e. uncollectable debt.

In a transparent Capitalist system, the debt would be written down and all the insolvent borrowers, lenders and counterparties would be wiped out. But the political corruption that enabled modern finance to poison the American economy and culture has stopped that cleansing from occurring.

Such a systemic writedown of bad debt in a system with only razor-thin capital to support a mighty edifice of leverage and debt would wipe out Wall Street and the banks and reveal the skimming operation of modern finance as an impossible perpetual motion machine rigged to enrich a thin crust of citizenry at the expense of the rest. And since they skim enough money to buy political protection, Capitalism has been strangled and tossed in a shallow grave lest it disupt the skimming and the political corruption that keeps the machine running.

What we end up with is artificial valuations, endless propaganda and a zombie economy.When borrowers are left dangling in default and the assets left on the books at full value, you end up with zombie debtors, zombie lenders, a zombie government that only has one lever to pull to keep the whole corrupt pathology going–borrow and squander more money– and ultimately a zombie economy, drifting and decaying in a fetid pool of lies, shadow banking, ceaseless official propaganda, jury-rigged “fixes,” manipulated statistics, corruption, predation, exploitation and pathology.

That’s the U.S. economy, and indeed, the economies of the E.U., China and Japan in a nutshell.

The only way to clear a zombie economy is to write off uncollectable debt and liquidate all the assets, loans and hedges.That would collapse our financial system, but since it is the cause of our political and economic dysfunction, that would be the highest possible good and extremely positive.

There is a great final irony in the scare-mongering threats of the skimmers and their political toadies.If the taxpayers don’t bail out the skimmers, then we’ll have martial law by the weekend, the smouldering fires of Europe will rekindle into open warfare, and so on.

The irony is the propping up of a deeply, intrinsically pathological and destructive financial system is not saving the economy, it’s the reason the economy is imploding.The Big Lie technique of propaganda is to reverse the polarity of reality: we are told up is down until we believe it.

We are told that liquidating the overhang of bad debt, leverage and hedges would “destroy the world as we know it.” The truth is that keeping the zombie system from expiring and covering up the corruption with propaganda is what’s actually destroying the world as we know it.

Thus the collapse of the current financial system of central banks, pathological Wall Street and insolvent banks would be the greatest possible good and the greatest possible positive for the global economy and its participants.

Charles Hugh Smith – Of Two Minds

This is a critical call to action #OccupyWallStreet. We must first end the global central banks and jail the criminals they employ before we can talk demands.

h/t Starvingartist from the Forum