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Posts Tagged ‘national debt’

In Defense of Defaulting on the National Debt

Posted by M. C. on June 23, 2022

Apart from not paying perpetual interest on ever-increasing debt, another benefit of default, rarely mentioned but arguably one of the most important from the antiwar libertarian perspective, is that it would essentially end Washington’s ability to practice unbridled military Keynesianism. Slapping pointless wars and military buildups on the credit card has become Congress’s standard operating procedure. It is not a coincidence that our annual trillion-dollar deficits are approximately equal to the trillion dollars dumped into the the military-industrial complex black hole each year.

https://mises.org/wire/defense-defaulting-national-debt

Joseph Solis-Mullen

With the acknowledged national debt now a politically and economically unpayable $30 trillion (in reality, its unfunded liabilities are far greater), Americans should start to become acclimated to the realities of the United States’ eventual, inevitable default. While it may seem unfathomable, and the results too catastrophic to imagine, in fact the likely damage to everyday Americans would be minimal in the short term and unquestionably a net plus in the long term.

This is far from surprising and not a new problem. As Carmen M. Reinhart and Kenneth S. Rogoff detail in their comprehensive review of the subject, history shows that great powers defaulting on their debts was long the rule, not the exception, and that the long-term implications of various regimes’ repudiations of their external debts in particular were minimal or a net plus, depending on the circumstances.

As a way of starting, it is helpful to contextualize the current numbers we’re talking about, because, frankly, they would have been unfathomable previously. As the old math joke “What is the difference between a million and a billion? Basically, a billion” illustrates, the orders of magnitude under discussion are scarcely comprehensible. But the reality is that trillion dollars is $999 billion plus another billion.

The present debt level has only been manageable because of the artificially low interest rates provided by successively accommodating Federal Reserve chairs dating back to Alan Greenspan. With both fiscal and monetary policy having been run heedlessly off the rails for twenty years, the reckoning of a higher interest rate environment necessarily awaits. Short of cuts in annual spending drastic enough to produce large running surpluses (not likely), default is the only sensible option toward which to encourage policy makers.

For context, consider that when Ronald Reagan and the Democrats controlling Congress started running budget deficits that hadn’t been seen since the Second World War, the national debt was running in the hundreds of billions—eventually jumping into the low single-digit trillions.

In the 1990s, as the unipolar moment was beginning, successive administrations and Congress seemed to recognize the foolishness of their previous policies. Compelled by grassroots activism and insurgent Republican candidacies, George H.W. Bush and Bill Clinton both made deals to cut spending and raise taxes. By the time Clinton left office, the country was running a budget surplus and the national debt was projected to be paid off by the end of the decade.

Then came George W. Bush and his disastrous wars of choice. The size and scope of the government grew at the same time that historic tax cuts were enacted. The words of then vice president Dick Cheney should have spooked foreign buyers of US debt more than they did. He was of the opinion that “deficits don’t matter.”

Nor did they matter to Barack Obama, his successors, or their congressional partners—to the point that the mere $30 trillion in openly acknowledged debt amounts to over $80,000 per American.

Nor did the regular trillion-dollar deficits matter to the Fed, which with its accommodating and regularly mandate-violating policies has raised the stakes of the coming financial oppression orders of magnitude higher than they would have been had interest rates been determined formulaically or purely by market forces.

The good news, at least for ordinary Americans, is that we personally just don’t hold very much of the debt. Fully two-thirds is held between the Fed, various other US government entities, and foreign governments. A US government default wouldn’t be the first time the latter have taken a haircut (Alexander Hamilton and Richard Nixon both undertook such necessary actions), and our own government has spent the money so poorly that no coherent argument can be made that justifies paying them back. They would just continue in their profligate ways. As for Wall Street, they’ve lived on corporate welfare long enough to justify their taking a one-time bath.

Apart from not paying perpetual interest on ever-increasing debt, another benefit of default, rarely mentioned but arguably one of the most important from the antiwar libertarian perspective, is that it would essentially end Washington’s ability to practice unbridled military Keynesianism. Slapping pointless wars and military buildups on the credit card has become Congress’s standard operating procedure. It is not a coincidence that our annual trillion-dollar deficits are approximately equal to the trillion dollars dumped into the the military-industrial complex black hole each year.

With foreign investors temporarily alienated, the Fed would be faced with the choice of either absorbing the entire amount of “defense” spending with its own balance sheet (thus sparking a drastic inflationary bout that would visibly discredit the unconstitutional institution) or forcing Washington to give up the myth of global military indispensability.

Either case is preferable to the current course.

It is in the interests of the American people, our children, and our grandchildren, and would arguably do more for world peace than any other realistic scenario imaginable.

So, contact your representative today and tell them you support defaulting on the debt.

Author:

Joseph Solis-Mullen

A graduate of Spring Arbor University and the University of Illinois, Joseph Solis-Mullen is a political scientist and graduate student in the economics department at the University of Missouri. An independent researcher and journalist, his work can be found at the Ludwig Von Mises Institute, Eurasian Review, Libertarian Institute, Journal of the American Revolution, Antiwar.com, and the Journal of Libertarian Studies. You can contact him through his website http://www.jsmwritings.com or find him on Twitter @solis_mullen.

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True National Debt Exceeds $123 Trillion, or Nearly $800,000 per Taxpayer: Report

Posted by M. C. on April 20, 2021

https://www.theepochtimes.com/mkt_morningbrief/true-national-debt-exceeds-123-trillion-or-nearly-800000-per-taxpayer_3782624.html

By Mark Tapscott

A subscription is required to read.

No one discusses the total cost to taxpayers to support everyone alive today through their lifetime. SS, medicare, unemployment…

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Did Bankers Foment the “Civil War”? – PaulCraigRoberts.org

Posted by M. C. on July 25, 2020

The Southern states seceded because the Republicans passed a high tariff.

Slavery was in the mix.

For the North the issue was perserving the empire (saving the Union).

Northern Railroads (Honest Abe was a railroad lawyer), Washington business cronies and of course banksters were all instigators.

I am seeing a lot of Civil War press in the places I frequent. Maybe it has to do with Thomas DiLorenzo’s new book – The Problem With Lincoln.

https://www.paulcraigroberts.org/2020/07/22/did-bankers-foment-the-civil-war/

Paul Craig Roberts

In my last two columns, sufficient evidence was provided that the Lincoln regime was an unconstitutional war crime regime and that the so-called “civil war” was an act of northern aggression against the South initiated by Lincoln for the  purpose of saving the Union. See: https://www.paulcraigroberts.org/2020/07/20/the-cause-of-the-so-called-civil-war/

and   https://www.paulcraigroberts.org/2020/07/21/how-lincoln-destroyed-the-united-states/ 

Slavery was not an issue.

The Southern states seceded because the Republicans passed a high tariff.

For the North the issue was perserving the empire (saving the Union).

Now comes defense attorney and former public prosecuter John Remington Graham.  Was there a deeper underlying cause, an agenda unbeknown to the southern states and perhaps also to Lincoln?  Graham puts forward an intriguing thesis that bankers spent a decade fomenting hatred between North and South in order to provoke a war that would greatly increase federal debt, which the banks could acquire and use as reserves to support the issuance of money and credit.  Federal debt would become the reserve basis (like gold) for the expansion of the money supply. This power would give bankers control of the government.

Graham states his position:

“The divisive antagonisms between the North and the South, finally erupting in the spring of 1861, were not unfortunate historical accidents, nor the result of some inexorable momentum in events. Those anatagonisms, rather, were deliberately agitated during the 1850s by great international banking houses with a preconceived motive of provoking secession. And secession was to be used as a pretext for a bloody and expensvie war of conquest which was actually launched and carried out. The war was planned as a brutal slaughter, as it tragically became. The war was planned to generate a stupendous national debt, mostly represented by bonds, and such a national debt was in fact generated. The private interests acquiring these bonds successfully plotted to secure the passage of legislation which enabled them to convert the paper by them acquired in financing the war into a new and dominant system of banking and currency under their ownership and control. And those private interests fully succeeded in their sinister program, and set up a huge financial empire centered on Wall Street from which they have ever since governed the United States from behind the scenes.”

Graham is factually correct about the huge increase in US national debt caused by the war. In 1860 US national debt stood at a mere $65 million. By war’s end, US national debt was $2.7 billion–41.5 times larger.

Graham’s evidence that hatred was intentionally fomented in order to stimulate a war is circumstantial, but strong.  Graham focuses on the questions of who financed John Brown’s raid on Harper’s Ferry, who financed the marketing of Harriet Beecher Stowe’s propagandistic novel, Uncle Tom’s Cabin, and turned it into an international best seller, and who financed the expensive and long drawn out legal case of Dred Scott?  These are honest and important questions.  Graham also stresses the role played in fomenting armed strife in Kansas by Stephen Douglas’ modification or repeal of the Missouri Compromise with the Kansas-Nebraska Act in 1854.

Today I reproduce with permission a section, “Inciting Hatred: Uncle Tom’s Cabin,” from Graham’s monograph, Blood Money: The Civil War and the Federal Reserve (https://www.turningthetidepublishing.com/shop/blood-money ).

This will be followed by Graham’s analysis, “Transcontinental Railroads and the Repeal of the Missouri Compromise,” and by “The Case of Dred Scott.”  Once the reader is acquainted with some of the circumstantial evidence, I will attempt a review essay of Graham’s monograph. His intriguing thesis that “in order to stimulate a civil war within the United States, it was necessary to foment hatred between the North and the South” should spark a deeper investigation into the cause of the war.

Inciting Hatred: Uncle Tom’s Cabin

          The opening salvo in the campaign to sow hatred was Harriet Beecher Stowe’s Uncle Tom’s Cabin, first serialized in a newspaper, then as a book in 1852. It was not a reasoned argument against slavery. It had no basis in fact. It was pure fiction, reaching a melodramatic climax in a scene where the sadistic master Simon Lagree murders a kindly slave Uncle Tom who pleads, “Mas’r, if you was sick, or in trouble, or dying, and I could save ye, I’d give ye my heart’s blood; and, if taking every drop of blood in this poor old body would save your precious soul, I’d give ‘em freely, as the Lord gave his for me. O, Mas’r, don’t bring this great sin on your soul!” After more gaudy sensationalism, the awful moment: “There was one hesitating pause, — one irresolute, relenting thrill, — and the spirit of evil came back, with sevenfold vehemence; and Legree, foaming  with rage, smote his victim to the ground.”      

          This vindictive fabrication was published as a malicious libel against the Old South. It was mass marketed, requiring vast capital which could only have been supplied by the largest banking houses in the United States and Great Britain. This book was promoted lavishly like no other book had ever before been promoted in the history of Western civilization. The King James Bible and the Book of Common Prayer aside, ten times more copies were published and sold than of any other work then known in the English-speaking world.

Mrs. Stowe’s corny novel could not have gained a large readership without the kind of advertising and fanfare that only powerful connections and big money could assure. Pushing her work was like selling a low-grade Hollywood film today. It might be tasteless as so many films are, but with enough capital it is possible to sell almost anything. Northerners read Mrs. Stowe’s absurdity, and were outraged because they believed it was true. Southerners read her lie, and were outraged because they knew it was false. There was enough resulting anger in the air to generate the desire in men to kill each other, an essential ingredient of war — exactly what the financiers behind this “literary” production wanted.    

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Trump and Libertarians – LewRockwell

Posted by M. C. on October 1, 2019

https://www.lewrockwell.com/2019/10/laurence-m-vance/libertarians-and-trump/

By

I have never been a member of the Libertarian Party. I don’t vote, so I’ve never voted for the Libertarian Party candidate in any presidential election. If I did vote, I would have probably clamped my nose in a vice and voted for Donald Trump before I would have voted for the pathetic 2016 Libertarian Party ticket of Gary Johnson and William Weld.

I don’t believe anything—no matter how good it sounds—that comes out of the mouth of any politician, and especially those who run for president. I don’t even get excited if they say “zero tariffs, zero subsidies, zero non-tariff barriers” because they will say whatever they think people want to hear if they think it will increase their chances of getting elected.

Donald Trump is no exception. I was never part of the “Libertarians for Trump” movement (but neither am I a member of the “never Trumpers”). I took every “good” thing Trump said during his presidential campaign with a truckload of salt. Now that Trump has been in office for over half of his term, I think it should be clear that Trump has been a disaster for liberty and limited government…

It is a myth that Trump has cut the number of federal employees. The federal leviathan is as big, as powerful, and as intrusive as ever. Have any federal assets been sold?…

Although Trump talked about reducing the national debt during his presidential campaign, that debt now exceeds $22 trillion and is expected to reach $23 trillion by the end of 2019. By the end of Trump’s first term, he will have added over $5 trillion to the national debt…

Trump is said to have cut federal regulations. To give credit where credit is due, I believe he has rescinded some of President Obama’s regulations. But what major federal regulations has Trump cut? No one ever lists them. The federal government still regulates every facet of American life from the amount of water that toilets are allowed to flush to the size of holes in Swiss cheese.

Trump’s tax cut “is also undoubtedly the smallest, not the biggest, individual tax cut in history,” according to David Stockman, Director of the Office of Management and Budget (1981–1985) under President Ronald Reagan. And don’t forget that Trump’s individual tax cuts are only temporary. Trump should be praised, however, for getting the corporate tax rate permanently cut. But not, of course, for increasing refundable tax credits, a form of welfare.

Americans still live in a virtual police state. If you have any doubt, then just see the many articles on this by John Whitehead that regularly appear on this website.

The federal war on drugs continues unabated. Has the budget of the Drug Enforcement Agency (DEA) been cut? Have any of its employees been laid off? True, Trump commuted the life sentence of drug trafficker Alice Johnson. But over 2,000 federal prisoners are serving life sentences for nonviolent drug crimes…

Trump has been absolutely horrible on foreign policy. U.S. soldiers are still dying in Afghanistan. U.S. troops still occupy hundreds of foreign military bases and are still stationed in over 150 countries. The United States has never been closer to war with Iran. Trump has brought home from North Korea the bodies of some dead U.S. soldiers, but not one living U.S. soldier has been brought home from some country where he has no business being…

Trump’s trade policies have been an absolute disaster for the economy. Trump is an ignorant protectionist and economic nationalist, through and through…

The United States may now be the world’s top oil producer, but it hasn’t resulted in something far more important—U.S. disengagement from the Middle East…

Crumbs indeed are what we are getting from Donald Trump as far as liberty and limited government are concerned. Trump may be “better” than Hillary, Obama, and Bush, but not by enough to cheer him.

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8 Things You Can Do, Mr. President – LewRockwell

Posted by M. C. on May 24, 2019

https://www.lewrockwell.com/2019/05/no_author/open-letter-to-president-trump/

By Jim Cox and James W. Harris

Dear President Trump:

Below are seven suggestions which will accelerate your popularity while infuriating your critics and putting them on the defensive at the same time:

  1. Pardon all non-violent federal drug offenders. The First Step Act was hailed even by your opposition as “the most significant criminal justice reform law at the federal level in years.” Now you can build on that. Perhaps 70,000 or more prisoners are in this population. Set up an independent commission to identify these non-violent prisoners and pardon them at the rate of 700 per day with much ceremony and publicity. Their friends and families, along with other voters who find the huge prison population in this country disturbing, will have an increased enthusiasm and respect for you. 
  2. Fire Mike Pompeo and John Bolton. They do not support your much-stated foreign policy goal of avoiding foreign wars. Replace them with Republican intervention skeptics like Ron Paul and Pat Buchanan—or cross the aisle and choose principled Democratic non-interventionists like Tulsi Gabbard and Mike Gravel.
  1. Propose not only another tax cut but serious spending cuts as well. A second round of tax cuts reducing the current top rate on corporations from 21% to 15% and the current individual top rate from 37% to 25% will further boost US output and attract more of the world to set up shop within our borders, thus boosting American economic greatness. Announce that your plan is to cut taxes again every two years. Senator Rand Paul proposed a $500 billion spending reduction in 2011. Ask Paul to head a commission to make a similar proposal.
  1. Pay down the national debt. You could be the first president in nearly 100 years to leave office with the national debt smaller then when you entered. The debt could be paid down by selling federal assets, as President Clinton once proposed. Go bipartisan again and ask the former president to head a commission to pick federal assets to sell.
  1. Announce to each country in the world that you will reduce US tariffs to zero if they will. You’ve stated you want zero tariffs, zero barriers, zero subsidies. Here’s the way to achieve that goal and go down in history as the greatest trade creator who ever served in office. Since trade reduces conflict between countries—trade and peace go hand in hand—you’ll also be one of the greatest peace makers ever.
  2. Increase the child deduction. Polls show that Americans would like to have more children than they do. Increasing the child tax deduction to $5,200 (the inflation-adjusted level of 60 years ago) will empower many of them to do so.
  3. End the federal war on marijuana. A whopping two-thirds of Americans, including a majority of Republicans, favor this. The time is ripe to steal a key issue away from your Democratic opponents, win millions of voters to your side, and go down in history as the president who ended this failed and hugely unpopular modern-day Prohibition.

Mr. President, these proposals will confound your critics, expand your base, and go a long way toward fulfilling your pledge to Make America Great Again. Seize the day!

 

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3 Ways the Government Shutdown forecasts a totally boring federal collapse | The Daily Bell

Posted by M. C. on January 27, 2019

Name one successful company that has 800,000 non-essential employees.

https://www.thedailybell.com/all-articles/news-analysis/3-ways-the-government-shutdown-forecasts-a-totally-boring-federal-collapse/

Imagine: the federal government collapses, poof, gone.

Maybe it’s 2034, the date the government admits it can’t pay it’s $50 trillion Social Security bill.

Or maybe it’s earlier. The national debt is at almost $22 trillion, plus the massive everything-bubble created by the federal reserve money printing. Those don’t bode well for the future of the dollar.

It is inevitable that all this debt and the debasing of the US dollar will eventually hurt.

The longest government shutdown in history is a tiny preview, a little case study on what is coming when the federal government shuts down for good.

When it can’t pay its bills, when it runs out of cash flow, or when the US dollar has no value, what will happen?

Will planes fall out of the sky, and terrorists wield AK-47s in the rapidly crumbling streets? Without USDA guidance, humans begin subsisting on dirt and tree bark.

Or… perhaps federal workers will find themselves a private sector job in the emerging gig economy.

Maybe state governments will step up to fill whatever services their voters think were necessary from the federal government.

And maybe we will see government agencies replaced by the private sector.

Sound too good to be true? Because all three of these things are already happening in response to the government shutdown.

1. Unpaid, furloughed government workers have started working gig jobs like temporary labor, security guards,  renting rooms on Airbnb, and driving for Uber.

That’s the great thing about the gig economy, where people do contract work and get paid when they complete each task. You can easily jump in and start serving clients in whatever field you know best.

Name one successful company that has 800,000 non-essential employees… Read the rest of this entry »

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