Archive for the ‘Taxes’ Category
by Ron Paul
Lew Rockwell.com
I have recently had several opportunities on various news programs to discuss the economy and what is wrong with the so-called economic stimulus package. I have said over and over what we shouldn't be doing, and now I'd like to explain what we should be doing.
But to improve the situation, you must first have a solid grasp of how we got here. Government policies and central planning created the housing bubble, now going bust. About a decade ago the government made expanded homeownership and affordable housing a public goal. Through Fannie Mae, Freddie Mac and the secondary mortgage market the government incentivized creative, low down-payment, more widely available mortgage products, and discouraged the market-proven lending standards of the past. The Federal Reserve kept interest rates artificially low, which added more fuel to this fire. Many related sectors temporarily flourished because of this, and many people got into homes they otherwise could not have afforded. The increased demand for housing sent prices soaring until in many markets housing became even more unaffordable, necessitating even more creative mortgages, and impossibly leveraging homeowners. Many risky investment vehicles such as mortgage-backed securities, derivatives, credit default swaps grew out of this unsustainable situation. As the foreclosures began, the house of cards started to tumble. Too many people have confused the symptoms and the pain of the bust with the problematic policies that caused the bubble, which is really what needs to be treated.
First of all, just as the best cure for a hangover is not to drink so much, the best cure for a recession is a recession. It is time to sober up and return to free market sanity, risk and reward, supply and demand, without political intervention. Politicians are good at catering to the needs of special interests, but very bad at determining what needs to take place in the market. Government should stick to punishing fraud and enforcing contracts. When they use the tax code, bureaucratic departments and their manipulative rules and regulations to dictate social and economic behavior, we end up with distortions and malinvestments. Bailing out banks, continuing failed Fed policies and strapping the taxpayer with toxic debt will worsen the pain, and punish the innocent.
If Congress really wanted to do something helpful, it would cut taxes. Ideally, we would repeal the income tax altogether and get the IRS off the economy's back, which would be a huge boon. We should also cut spending. Cut every unconstitutional department and program, every wasteful governmental encroachment on the people's liberty and money, starting with our massive overseas empire. The cost of our empire is bringing us to our knees, just as the Soviets' empire did to them. Congress should also abolish the Federal Reserve and take back its responsibilities to ensure sound money, safe from the manipulations of powerful banking interests.
These things would constitute real change, real economic stimulus. The plans being bandied about Washington are just more of the same. As long as no one seriously considers the cure, we are unfortunately destined to prolong the disease.
No Comments »
From Bloomberg
The U.S. government is prepared to provide more than $7.76 trillion on behalf of American taxpayers after guaranteeing $306 billion of Citigroup Inc. debt yesterday. The pledges, amounting to half the value of everything produced in the nation last year, are intended to rescue the financial system after the credit markets seized up 15 months ago.
The unprecedented pledge of funds includes $3.18 trillion already tapped by financial institutions in the biggest response to an economic emergency since the New Deal of the 1930s, according to data compiled by Bloomberg. The commitment dwarfs the plan approved by lawmakers, the Treasury Department’s $700 billion Troubled Asset Relief Program. Federal Reserve lending last week was 1,900 times the weekly average for the three years before the crisis.
When Congress approved the TARP on Oct. 3, Fed Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson acknowledged the need for transparency and oversight. Now, as regulators commit far more money while refusing to disclose loan recipients or reveal the collateral they are taking in return, some Congress members are calling for the Fed to be reined in.
“Whether it’s lending or spending, it’s tax dollars that are going out the window and we end up holding collateral we don’t know anything about,” said Congressman Scott Garrett, a New Jersey Republican who serves on the House Financial Services Committee. “The time has come that we consider what sort of limitations we should be placing on the Fed so that authority returns to elected officials as opposed to appointed ones.”
Too Big to Fail
Bloomberg News tabulated data from the Fed, Treasury and Federal Deposit Insurance Corp. and interviewed regulatory officials, economists and academic researchers to gauge the full extent of the government’s rescue effort.
The bailout includes a Fed program to buy as much as $2.4 trillion in short-term notes, called commercial paper, that companies use to pay bills, begun Oct. 27, and $1.4 trillion from the FDIC to guarantee bank-to-bank loans, started Oct. 14.
William Poole, former president of the Federal Reserve Bank of St. Louis, said the two programs are unlikely to lose money. The bigger risk comes from rescuing companies perceived as “too big to fail,” he said.
‘Credit Risk’
The government committed $29 billion to help engineer the takeover in March of Bear Stearns Cos. by New York-based JPMorgan Chase & Co. and $122.8 billion in addition to TARP allocations to bail out New York-based American International Group Inc., once the world’s largest insurer.
Citigroup received $306 billion of government guarantees for troubled mortgages and toxic assets. The Treasury Department also will inject $20 billion into the bank after its stock fell 60 percent last week.
“No question there is some credit risk there,” Poole said.
Congressman Darrell Issa, a California Republican on the Oversight and Government Reform Committee, said risk is lurking in the programs that Poole thinks are safe.
“The thing that people don’t understand is it’s not how likely that the exposure becomes a reality, but what if it does?” Issa said. “There’s no transparency to it so who’s to say they’re right?”
The worst financial crisis in two generations has erased $23 trillion, or 38 percent, of the value of the world’s companies and brought down three of the biggest Wall Street firms.
Markets Down
The Dow Jones Industrial Average through Friday is down 38 percent since the beginning of the year and 43 percent from its peak on Oct. 9, 2007. The S&P 500 fell 45 percent from the beginning of the year through Friday and 49 percent from its peak on Oct. 9, 2007. The Nikkei 225 Index has fallen 46 percent from the beginning of the year through Friday and 57 percent from its most recent peak of 18,261.98 on July 9, 2007. Goldman Sachs Group Inc. is down 78 percent, to $53.31, on Friday from its peak of $247.92 on Oct. 31, 2007, and 75 percent this year.
Regulators hope the rescue will contain the damage and keep banks providing the credit that is the lifeblood of the U.S. economy.
Most of the spending programs are run out of the New York Fed, whose president, Timothy Geithner, is said to be President- elect Barack Obama’s choice to be Treasury Secretary.
‘They Got Snookered’
The money that’s been pledged is equivalent to $24,000 for every man, woman and child in the country. It’s nine times what the U.S. has spent so far on wars in Iraq and Afghanistan, according to Congressional Budget Office figures. It could pay off more than half the country’s mortgages.
“It’s unprecedented,” said Bob Eisenbeis, chief monetary economist at Vineland, New Jersey-based Cumberland Advisors Inc. and an economist for the Atlanta Fed for 10 years until January. “The backlash has begun already. Congress is taking a lot of hits from their constituents because they got snookered on the TARP big time. There’s a lot of supposedly smart people who look to be totally incompetent and it’s all going to fall on the taxpayer.”
President Franklin D. Roosevelt’s New Deal of the 1930s, when almost 10,000 banks failed and there was no mechanism to bolster them with cash, is the only rival to the government’s current response. The savings and loan bailout of the 1990s cost $209.5 billion in inflation-adjusted numbers, of which $173 billion came from taxpayers, according to a July 1996 report by the U.S. General Accounting Office, now called the Government Accountability Office.
‘Worst Crisis’
The 1979 U.S. government bailout of Chrysler consisted of bond guarantees, adjusted for inflation, of $4.2 billion, according to a Heritage Foundation report.
The commitment of public money is appropriate to the peril, said Ethan Harris, co-head of U.S. economic research at Barclays Capital Inc. and a former economist at the New York Fed. U.S. financial firms have taken write downs and losses of $666.1 billion since the beginning of 2007, according to Bloomberg data.
“This is the worst capital markets crisis in modern history,” Harris said. “So you have the biggest intervention in modern history.”
Bloomberg has requested details of Fed lending under the U.S. Freedom of Information Act and filed a federal lawsuit against the central ...
No Comments »
I must admit, I am not very articulate, not a very good writer.
After reading the article US Expected to pledge some $10 billion for Afghans,
US expected to pledge some $10 billion for Afghans
I felt the need to vent.
The admitted debt of the U.S. is approximately $9.4 trillion, but the way government keeps its books, and the head of the GAO screaming that it is much higher, I have to first ask the question; where is this money coming from?
A few days ago, A CBS News video was brought to my attention. I posted this video in the RTR Media Section of the site.
It is titled:
Waiting In The Food Line
Where is the money coming from? The money is coming from our sweat and labor. It is an encumbrance placed upon every American. It limits our ability to buy fuel, and food; two essential items of survival.
What are we left with? Middle Class Americans forced to wait on a food line, having to rely on private assistance for their daily sustenance. Who would have ever thought that this once great republic would have middle class Americans waiting for handouts.
With things like this happening on our own soil, our magnificent government in all its wisdom, is shipping 10 billion dollars to aid Afghanistan.
We must conclude, and it is very difficult to digest, that it has been the plan for years now. There have been many books written on the subject by the so-called elite, working to turn America to the same environment as a third world country.
We must conclude that this is why there has been a migration of business out of U.S.. This is a self sustaining country. There is and always has been everything here that we need to survive, with just a few raw materials that are must be imported. Moving all our manufacturing outside the country will just cause a collapse of the once great U.S. economy.
We must also conclude that this is known by all these well compensated CEO's and board members.
There was a time in my life, when I thought this type of aid, foreign aid, was good. I really don't want to see my fellow man suffering, no matter who. If I am able to help it is good, but times have changed, and having Americans waiting on line to be fed, should tell us that there is something fundamentally wrong with this agenda.
Hey, it is our tax money, or our children's tax money if you really want to know, that is going abroad, so why do I not have a say in where it goes?
Where in the Constitution does it state that these disbursements of funds to foreign countries are lawful?
Can we afford to continue being the policemen, and saviors of the world, taking into account our current economic problems?
Should we have ever taken on the responsibility of policing and aiding the world in the first place?
No Comments »
Tax Court: IRS Attorneys Committed Fraud On The Court
No Comments »
Posted: April 15, 2005
1:00 a.m. Eastern
By Devvy Kidd
© 2005 WorldNetDaily.com Charles A. Lindberg Sr., at the time of the passage of the Federal Reserve Act of 1913:
This Act establishes the most gigantic trust on earth. When the President signs this Act, the invisible government by the Money Power, proven to exist by the Money Trust Investigation, will be legalized. The new law will create inflation whenever the trusts want inflation. From now on depressions will be scientifically created.
Today is another sad day for America. Once again, Americans are being forced with a gun to their head to give the fruits of their labor to the international banking cartel via the Internal Revenue Service. This is how slaves have been Made in America. What, you say? "My income taxes provide new roads, education, welfare, coddling illegal aliens and foreign welfare." Wrong. Space is limited, so I will struggle to give you 15 years worth of research and learning on one short page.
None of your income tax dollars – which you "voluntarily" pay through force and coercion – funds the government. This money, as well as the "withholding" stolen from you all year long, goes to the privately owned "Federal" Reserve Banking System to pay back the money your member of Congress borrowed during the year for a trillion dollars worth of unconstitutional expenditures.
Few Americans realize the high cost of that "bacon" to their district. Every penny of income tax dollars collected by the Internal Revenue Service goes to the stockholders of the privately owned "Federal" Reserve to run the central bank and reap their astronomical profits from the sweat off your back. (See: "President's Private Sector Survey On Cost Control: A Report to The President" [Reagan] Jan. 15, 1984. Available from the Congressional Research Service. The excerpt below can be found on page 12.)
Resistance to additional income taxes would be even more widespread if people were aware that: With two-thirds of everyone's personal income taxes wasted or not collected, 100 percent of what is collected is absorbed solely by interest on the federal government contributions to transfer payments. In other words, all individual income tax revenues are gone before one nickel is spent on the services which taxpayers expect from their government.
This means that after transfer payments and usury on the congressionally created "national debt," there is no money so Congress must continue to borrow to spend. The central bank is one big credit card for these crooks in Congress with an unlimited balance. That amount borrowed is part of the government's deceptive, creating bookkeeping they call the "deficit." The transfer payments referred to above means that all income tax money goes to the central bank to pay for government borrowing and unconstitutional plundering of the people's treasury to the International Monetary Fund, the United Nations and endless wars.
Prior to 1913, America had no central bank and no direct income tax. There are many good, decent Americans out there pushing for these dangerous alternative taxing schemes. The current favorite is a bill in Congress by Rep. John Linder, R-Ga., which would replace the income tax with a 23 percent national sales tax. While this sounds great to the desperate, it is just another very dangerous Band-Aid that will not cure the cancer. The cancer is the central bank, because without it, there is no need for any direct taxation against the American people.
If you have only been taught the banking cartel's propaganda, I urge you to get educated on the issue of the privately owned "Federal Reserve" by requesting a complimentary copy of my best seller, "Why A Bankrupt America." When I say privately owned, this isn't my personal opinion, it is the assessment of the courts many times over, e.g., Lewis v. U.S. 680 Federal Reporter, 2nd Series, page 1240. Understanding the central bank and fiat currency is the key to understanding why no income tax is needed to fund a limited, constitutional, Republican form of government.
Please don't fall into this trap of pushing for these alternative taxing schemes. The banking cartel doesn't care how they get your money, just as long as they can continue to drain the wealth of America into their own pockets. Besides, that 23 percent will mean nothing in less than four years when the first wave of baby boomers hit.
A path-breaking study by Jagadeesh Gokhale of the Federal Reserve Bank of Cleveland and Kent Smetters, a former deputy assistant secretary at the Treasury – commissioned by former Treasury Secretary Paul O'Neill – estimated a $44 trillion fiscal gap. It laid out a few painful options on how to meet the liabilities:
More than double the payroll tax, immediately and forever, from 15.3 percent of wages to nearly 32 percent; Raise income taxes by two thirds (roughly 78 percent), immediately and forever; Cut Social Security and Medicare benefits by 45 percent, immediately and forever ...
You cannot buy or own stock in the privately owned Federal Reserve. That privilege is reserved for the money interests, i.e., the Rockefellers, Rothschilds and other global elites. The federal debt cannot be paid down, much less paid off. None of these alternative taxing schemes will make a dent in the expanding bubble that is going to burst because the banking cartel can't continue to prop up the debt load much longer. The day of reckoning is coming. Get the facts ... because knowledge is power.
Devvy Kidd authored the booklet, "Why A Bankrupt America and Blind Loyalty," which has over 2 million copies in distribution. She has been a guest more than 1,600 times on radio shows, run for Congress twice and is a highly sought after public speaker. To learn more about Devvy, please visit her website.
No Comments »
Recent Form Posts