The question is, will someone deliver this between now and November?
My fellow Americans;
Almost exactly four years ago the stock market began a sickening plunge that would shake the world. Declining from just over DOW 11,000 to under 7,500 in two short months, only to fall another 1,000 points in the next three, this period marked an unprecedented time of government intervention that you were told was for all of our good, and the good of our nation.
You were lied to.
The intentional expansion of debt unbacked by anything was the cause of the market crash. This intentional fraud perpetrated upon all of you went back to the Tech Crash in 2000, and goaded Americans into taking out loans that could not be repaid to cover up the malfeasance of those who had systematically looted Americans’ retirement accounts and offshored their jobs during the 1990s.
Nobody makes bad loans on purpose under ordinary circumstances, because doing so guarantees a loss. So these Wall Street and Banking swindlers did something very creative — they sold that debt, which they knew was bad when it was originally issued to Americans all over the world to various pension funds, insurance companies and other investors. They lied about the credit quality of the borrowers, they lied about what they had put into the securities and they skimmed off billions in fees and bonuses. By doing so they shifted the loss onto others — your pension, your state, your personal investment account.
But that wasn’t the worst of it. Having shifted all of the liability for these losses to you, these banksters and Wall Street swindlers then went even further. They petitioned Congress and Treasury, having donated copious amounts of money to political campaigns for decades, to bail them out, arguing that there would be massive civil unrest and even that the government would collapse if they did not get their way.
This is why TARP was passed even though you, the people, told Congress by a 300:1 margin not to do so.
If this swindle had ended in TARP, it would have been bad enough. But these greedy Wall Street executives and Banksters weren’t done with fleecing you. In fact, they were just getting started.
See, they still had trillions of dollars of worthless exotic and impossible-to-value financial instruments — enough to sink their banks several times over. So rather than lose their jobs, lose their companies and take their just medicine for what they had done, they conned Congress, Treasury and The White House into running a combined $5 trillion in deficits over the last four years. This amounts to about 10% of the economy every year since 2008.
You have been told that this, too, was for your benefit. That too is a lie. By running these monstrous deficits the Federal Government has effectively raised taxes on everyone, across the board, in the amount of those deficits — to the tune of 10% or more every year for the last four years.
If you’re in the middle class you know it’s been tough; gasoline, food and other necessities have gone up in price dramatically. Health care has become more expensive. Your ability to buy the things that you need has been severely damaged and the job market has been trashed. The reason this has happened is that the government’s deficit spending is nothing other than a tax on your income and assets — indeed, it is a tax on every transaction in the economy.
Ben Bernanke of The Fed has argued that his “Quantitative Easing” has helped the jobs market and will continue to. This too is a lie; the entire and only purpose of this program is to allow the government to continue to run its monstrous deficits — that is, The Fed is responsible for taxing you as an unelected private body.
The funds from this tax are not going into the economy. They are going to fill the hole in the big banks’ balance sheets. These large financial firms, banks and Wall Street companies, went from having about 20% of the size of the economy in debt in 1980 to over 120% in 2007, an expansion in relationship to the size of the economy of six times. From the start of the crash to today this has contracted to right near 90%, which is still more than four times where it was historically.
This credit peaked at 17.1 trillion in 2008. Today it stands at 13.9 trillion, or $3.2 trillion less. Mortgages, which are largely held by these financial institutions, declined by $1.061 trillion during this time. Adding these together you get approximately $4.3 trillion.
The Federal Government, on the other hand, added $4.7 trillion in debt during the same time.
To put this in plain English virtually all of the Federal Government’s deficit spending did exactly nothing to benefit you; it all went to these large banks, Wall Street firms and other financial institutions.
This is why the economy and labor market have not recovered; none of the deficit spending went to actually help you. It instead went to bail out all the swindlers on Wall Street and in the big banks that caused the crash in the first place.
This is the big lie that nobody will discuss openly and honestly. But arithmetic doesn’t care about politics; it just is. 2 + 2 will always equal 4. And it is long past the time when a political leader should be willing to stand, face the American public, and tell the truth.
The truth is that the government cannot spend more than it takes in via taxes. This is not a matter of opinion, it is a matter of fact. If the government attempts to do so via deficit spending then that deficit spending destroys the purchasing power of your money, whether saved or in the form of wages, and is exactly identical economically as if taxes had been raised. Since we all agree that there are things government should do, taxation is inevitable.
But when you are taxed it should happen where you can see it, and what you’re told the money is spent to do should be what it is spent for. You should not be ripped off twice — first with dodgy deals and then again by being forced to bail out speculators who made bad bets.
So to the American people, I make you these promises. If you elect me I will jail those bankers and Wall Street hotshots who lied to you, to your pension funds and to others in industry. I will stop deficit spending and put an end to the unbacked and fraudulent emission of credit. I will submit to Congress and demand passage of a bill that puts teeth into The Fed mandate for stable prices, ending the shell game of inflation and back-door taxation, backing that mandate with criminal and severe civil penalties for non-performance. I will protect depositors if we must should banks fail, but nobody else; lending people money is a hazardous enterprise, and the cost of that lending should reflect the risk. If you loan someone money who can’t pay it back, under my administration you will lose your capital. If you swindle someone under my administration, no matter how you do it, you will be indicted, arrested, tried and if convicted imprisoned and your assets will be stripped to pay back those who you stole from.
Finally, I will stop banks from lending out money on an unbacked basis unless they actually have capital or an asset valued at the market behind each and every loan, without exception, because what they have been doing for the last 30 years is functionally identical to counterfeiting of the United States dollar.
The stock market is likely to disapprove of this and I am telling you that I will do all of this in advance, so that you, like everyone else, can sell your stocks if you’d like. You should not buy stocks because The Fed and government will prop up prices, but rather because you believe in a company’s business prospects. Likewise, housing will likely fall dramatically in price, but you should buy a house to live in and raise your family, not as a form of speculation. If you do not own a house now, you would obviously like to have lower prices rather than higher ones, and if you do, and bought it as a place to raise your family then this adjustment should not bother you.
There are many people who will decry this approach, but it is the right thing to do. Nobody should be able to rob the public and get away with it. Further, your purchasing power will be restored; those of you who have saved and been prudent in your lives will find that your personal financial situation will improve significantly, while those of you who are in debt up to your eyeballs will still be as broke, but for this we have a solution in our bankruptcy courts — and you should use it rather than continue to suffer from creditors hounding you over bills you cannot afford to pay.
Next, I will dismantle the special monopoly-style protections that the health industry has lobbied for and accumulated. DVD players went from $1,000 to $50 in just a few short years. There is no reason that mature medical technologies like MRIs should not undergo the same sort of price decrease, and were there actual competition that’s exactly what would happen. These changes are too numerous to detail in one short speech, but you may rest assured that if there is a price protection law somewhere or restraint of trade is permitted, as of my inauguration day I will redress what I can by executive order and send to Congress and demand passage of bills to address the rest.
Finally, I will rationalize trade policy. The idea that we should embrace firms and nations that effectively enslave their population and pay them a $2/day wage while poisoning their air, water and land as a means of being “more competitive” is outrageous. As of my inauguration this will come to an end. The WTO can either recognize these practices for what they are or we will withdraw from it. America stands for fair competition and trade on a fair and even basis, not enslavement and poisoning the environment as a means of improving one’s competitive posture. This will serve to bring jobs home here to America, so that Americans are once again building the goods that Americans buy while earning an honest living doing so.
By restoring soundness to our capital markets and banking system we will make wealth accumulation via the formation of businesses and entrepreneurship the primary means by which people get ahead in America once again. This path forward is much more accessible to the ordinary American than trying to make money trading in a stock market rigged by Wall Street computers. In addition entrepreneurship and business formation always lift employment; jobs and the economy are what this race is and should be about.
The adjustment that will come from these policies in our economy will not be easy, but it is necessary. We face a choice — to allow our nation to be continually looted by a small cadre of bankers and Wall Street swindlers who promise Americans the moon and then repossess it from your hands, or to put a stop to these practices that have destroyed our competitiveness, grossly raised the price of housing, education and health care, led to rampant unemployment and now threaten to destroy the federal government’s and states ability to remain in operation.
In just a few short weeks you shall have to choose between bankers and Americans. Between Wall Street and Main Street. Between employment and the promise of a welfare check that will, in just a few more years, bounce. Between enslavement and freedom.
I know America will make the right choice.