IPFS Barry Hess

Theft is still theft, even by Government.

More About: Depression

The great De-Stimulus Package of 2009…and Some Rational Thought

The great De-Stimulus Package of 2009…and Some Rational Thought
                    By Barry Hess
Things have certainly changed in the last year or two.  Somehow, the part of the economy that is felt in the pocketbooks of average Citizens has gone from super-heated and ever-expanding, to ice-cold and losing ground--at about the same incredible rate.
I’m not ignoring the toll all this is taking on most Americans, but I find that interesting, don’t you?
Acting in your ‘best interest, of course, Congress, the Senate and the latest Messiah decided to ‘borrow’ $1 Trillion dollars that hasn’t even been earned yet.  Now there’s a trick.  Even better than that, YOU get to be obligated (along with your children and theirs) to ‘pay it back’ to somebody that never loaned it to ‘us’ in the first place.  It’ll be $400,000.00 to 700,000.00, E-A-C-H before the interest accumulates.  Whew!
What’s going to be very interesting is how the next generation handles being told that ‘we’ Baby-Boomers are going to take 70-80% of everything they even think of earning over the course of their entire working lives to pay for our retirement.  And that’s before the Congress they hire gets to spend a cent on them, and their ‘needs’.  
Obviously, there will have to be ‘more’ Trillions ‘borrowed’ to keep up, and in the not-too-distant future the govern-monkeys will have promised away all of the future labor of the next 50 generations of Americans.  Then what? 
Well, I’m glad you asked, because we are seeing a tiny bit of ‘then what?’ in real time.  One would hope the next generations of laborers would have the good sense to just refuse to pay saying, “It’s Not MY Debt!”   It won’t take the whippersnappers long to figure out that there’s more spend-able profit in not working.  They’ll find out that government can’t give everybody everything without anybody paying for anything.
That’s why all 92 attempts (‘Amerika’ is #93) to create Socialist societies have collapsed under their own weight.  For the next generation(s) to be held responsible for anyone else’ debt (‘ours’ included) is in polite company referred to as, slavery.  I guess that’s one of those things that’s ‘illegal’ and immoral…unless government does it.
But I digress.  Back to the Trillion Federal Reserve Notes that Congress voted to ‘borrow’ even over clear opposition, from (Their supposed, ‘Boss’) the People themselves.  How could it possibly be used to stop the free-fall in the ‘worth’ of the Federal Reserve Note?  Hummm.
Let’s look a little closer so that even the people who have been abused by the government’s welfare school system might have pause for thought. 
Here’s the premise:  people were encouraged by the banks to use credit lines to ‘operate’ in everyday life, so the banks could rake in profits at usurious interest rates and fees.  “Get the stuff you want NOW, in exchange for your own personal promise of labor to pay for it, later” was the screaming message in all their advertisements. 
Personal homes, we were told had ‘increased’ in value to such an extent that a fictional character called, “equity” could be tapped as collateral to keep up with the Jones’ (no offense to the Jones’ of the world). Then the economy hit the wall.  People had used up all their credit, there was no more to be had, and uh oh, there wasn’t enough ‘real’ money to make all the monthly payments. 
In what seemed to be a concerted effort, property appraisers all over the country decided houses were suddenly worth 3, 4 or even 5 times as much as Common Sense would dictate.  They stretched it as far as they could—then it went bust. 
In reality, (given a constant dollar value) there’s not even a cent of value to a property unless you have a willing buyer and willing seller and are sitting at the closing table with a deal.
Buyers tend to be a little scarce during a Depression so, now we’re in what will no doubt prove to be the most devastating Depression in world history, with no possible chance of even ‘bottoming out’ until the final quarter of 2011.  Homes can not even possibly hope to begin ‘gaining’ in saleable values (given a constant currency value) for 2-3 years after that, assuming the currently growing inventory of empty homes can be absorbed in part by then.  It’s gonna be a while.
So what are our brilliant political representatives forwarding as their plan to ‘fix’ it?  Well, they figure the banks and monster corporations are suffering because ‘irresponsible’ Citizens stopped making their credit payments, so Congress, et al figured they’d make YOU make up the profits ‘lost’ by the banks and monster corporations.  They decided to print up a Trillion (That really is a very big number) Federal Reserve Note Dollars and give it to the banks and monster corporations so they could stay in business.
Aren’t you glad they will still be around to bleed all that they can from the people they conned from the start of this?  I guess in some worlds that might be considered, ‘stimulating’, but not in mine.
Since the American People are on the hook for this first Trillion (and ALL subsequent ones), and have to pay it “back”, shouldn’t the government have just paid off everybody’s credit balances?  To me, that’s just Common Sense, but not to the Republican/Democrats our dumbed-down populace keep electing over and over again. 
People stupidly fall for the notion that ‘we’ need to elect ‘them’ to correct the very problems and inequities they created.  See what happens when government forbids creative, critical or rational thought in their “free” schools?  Real education is cheap when compared to the cost of delusional ignorance.
As an aside, I just have to butt in to urge you to ask yourself, or anyone else:  To “whom” do you ‘pay back’ this Trillion Federal Reserve Note Dollars they just printed up—that NEVER existed before, and had NO previous owner? 
Regardless of the immorality, the net effect is that YOU will pay for the Trillion ‘fake’ dollars just printed up.  It’ll all be given to the credit companies and banks--and you STILL get to pay off your individual debts to those same companies!  How’s that for a sweet deal?
The lack of a run on tar, feathers, pitchforks or torches under these circumstances can only mean one of two things:  Either votes are not actually counted honestly in our elections, or what used to be “America, land of the FREE, home of the brave” should be re-named, “La-La-ica, land of the STUPID, home of the slave”.
Any rational person has to conclude that the new Messiah’s plan to use the Trillion Federal Reserve Note Dollars to simply delay the inevitable—only delays the inevitable.  There is no incentive for anyone one to stay in a home that could only fetch $50,000.00 on the open market, but has a half-million dollar mortgage.  That would be economic suicide, when you realize if you wanted to ‘sell’ your house, even if you got top dollar ($50,000.00), you’d still have to pay $450,000.00 to complete the sale.
The simple fact is that until mortgage balances are less than the sale value of the homes, nothing is going to change. The new ‘Messiah’, and his advisors know this, so, why does their bailout plan simply ‘delay’ the inevitable crash for a specific period of 5 years?  A cynic might suggest it’s a thinly veiled set up for the fear mongers to take another bite of the apple…after the next election. 
But seriously, if the real objective is to “stimulate” the ‘economy’ to where we have a healthy frequency of exchanges and transactions at all levels and in all sectors, why would the new ‘Messiah’ and his Republican/Democrat cohorts propose a plan that will very soon shut down the entire economy and usher in a far more severe Depression than in the 1930s?  I dunno either.      
What if there was a better, smarter, simpler, easier, zero ‘cost’ way to halt the damage, and “really” begin healing our wounds.  If there were such a thing existing beyond either the intelligence or the ethics of the representatives YOU keep re/electing, would it be ‘okay’ if implementing it recognized your, your friends, your kinfolk, and everyone else’, absolute, individual right, to be left absolutely alone?  Would that be ‘okay’? 
Only the “La-La’s” could think our formerly-robust economy will bounce back in a ‘couple days’, or that we can rob from ‘ourselves’ and think we are ‘adding’ the ‘loot’ to our own coffers.  The truth is we will never be able to get “back” to anything, not ‘back to the way it was’ and not ‘back to where we were’. 
The path that lies before us is a new one and that’s why the new Messiah’s, “same as before” actions can’t do anything but enrich his friends.  I just wish we could at least have someone with principles and intelligence sitting on the throne instead.  
This moment in time will be remembered, much as ‘Wile E. Coyote’ remembers what it was like, looking down and seeing that he had literally run out of ground above a deep canyon.   The only difference between the two is that ‘we’ actually can decide to stop the Depression from getting any worse—in the shortest possible timeframe, at any point we choose.
The great misconception is in the populace repeating the idea that if ‘this’ is all that’s happened after we’ve lost the bulk of the wealth of this nation, it’s not so bad.  What these people don’t realize is that is will take several months before the real effect of what has already happened hits them.  There’s a lag time before the economic shovel hits them square in the face.  In the words of the late, great BTO, “You ain’t seen nuthin’ yet”.
Cleaning up the economic damage that’s already been/being done is going to be significant in scope and require significant time to recover.  The only question is: How much further do you want to fall?
It has to be noted that prior to the introduction of the Federal Reserve in 1913, there was no income tax, and there was never a depression, or even a recession because the United States Dollars were “as good as gold”— each and every one of them was backed with a dollar’s worth of the stuff and kept safely in a place called Fort Knox. 
Since the Federal Reserve Notes began replacing the United States Dollars 96 years ago, the American People have sheepishly ‘overlooked’ at least 12 (yes, 12) Recession/Depressions.  Each and every time, the loss is/was ‘absorbed’ by the working people of this country.  They had to take a loss on the money they had already earned whether they were saving it under the mattress, or in a bank account that paid less interest than there was inflation.
Even though a loaf of bread cost $1.00 when you earned what’s in your savings jar, after each recession/depression, it cost $2.00.  How would you explain that as good or sound economics?  Who do you suppose profited the “extra dollar” that’s now out in circulation?  You might want to look that up.
It was only a matter of time, before controlling the currency was perceived as only a ‘part’ of the duty of the Fed.  It just sort of ‘evolved’ from the confusion of how the ‘new money worked’ that these wise men would also ‘control’ the nation’s economy.  Today’s economic circumstance is the result.
The folly of acquiescing to the banking cartel’s insistence that ‘they’ could artificially manipulate the ‘free market’ is now a little more than apparent.  The truth is, no matter what they do, or how much they want to control it, the free market ALWAYS settles itself.  Like the seasons of the year, you’re not going to change the natural order of things to suit you, so why do people try?  Because they are stupid, and because these people have some inner drive to ‘control’ other people to any degree they can.
If the objectives are, 1) to stimulate economic exchange, 2) stop the declining dollar value and 3) stop the declining values in private home, there’re only two ways to stem the tide of economic disaster that is upon us. 
The first is drastic, it’s bold, it’s simple and it requires tolerating government’s dictating what businesses must do…just this once.  Nudge, nudge.  Wink, wink.  Here it is:
a)     Eliminate all personal taxes on the earnings of all individuals.  This immediately pumps ‘money’ into every economic sector and stimulates economic activity in areas government couldn’t hope to reach through central planning.  Besides, theft is still theft, even by government, so stopping the theft is a freebie.
b)     Reduce corporate taxes to a flat 4% of gross receipts without deductions of any kind.  This would give the small businessperson some sense of security and save substantially on regulatory compliance costs.
c)     Require that all bank or corporate-owned mortgages be immediately re-written at 30% of their current principle balances, termed as ‘new’ 30-year agreements at 5% interest, and that all be ‘assumable’.   You might think a 70% write-down is a lot, but I hope to assure you that your home has already lost 70% of it’s value from its peak.  You just haven’t felt the ripple yet.  The question is only whether you want it to drop further. 
One of the big benefits of taking such bold steps is public confidence.  Knowing that ‘we’ determined where the ‘bottom’ would be would give us all an immediate sense that we can now start to re-build our prosperity. 
Knowing that homes were finally realistically valued will allow the vacant homes inventory to be absorbed at the fastest possible rate.
Sure the banks will be a little mad, but not really because their stocks will stabilize instantly.  All they have to do is stop stealing from people and ‘earn’ their money the old fashioned way, if they want to stay in business.
It won’t be easy, and it won’t be quick, but it is certain.
Ta Da! 
Of course, the honest thing to do is: nothing (not counting eliminating personal income taxes).  Let the cards fall where they may.  One thing we know for absolute certain is that the free market ALWAYS settles itself, always, and it will again, this time, no matter what.
So what are YOU going to do about it?

2 Comments in Response to

Comment by Barry Hess
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Amen ta dat!

Comment by Morpheus
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My suggestion is a mass exodus from the the income tax system. Just like Nancy Reagan stance on Drugs or was it Sex...JUST SAY NO! Ignore them. that is what they hate the most!