The Fiscal Cliff
People, people, people ... wake up! The fiscal cliff thing going on in Washington right now is nothing more than "circus" ... it's theater designed to distract us from what is really going on.
It's not about the Republicans getting what they want ... or the Democrats getting what they want ... it's not about any handshake deal they might come up with where both sides make concessions to strike a balance. Stop trying to figure out which side is right because it is all slight-of-hand. The idea is to get you distracted and engaged in choosing sides while they raid the cookie jar.
No matter what congress does. no matter how much they cut spending, no matter how much they change the tax codes, no matter how much they curtail the so called "entitlement programs" ... frankly, none of it matters. Whether the Republicans get what they want or the Democrats get what they want ... or any combination thereof ... it makes no difference. And it is time you understood that ... because none of those things have anything whatsoever to do with why we are in trouble as a country.
Here is the source of our problems. In 1913 Congress passed a law that gave the Federal Reserve the singular and exclusive right to create this country's money ... and it can be created out of thin air. The Federal Reserve creates this money and loans it to our government at full face value plus interest.
Right now the Federal Reserve is in the middle of QE3 where they create $40 billion per month in fresh debt to buy-up mortgage backed securities (to bail-out their buddies). What does that mean, you might ask?
In order to simplify let's assume for a moment that no money exists anywhere. In year "one" the Federal Reserve creates $40 billion (and spends it); after 12 months the US Taxpayer gets the bill plus interest ... so after 12 months we owe $40 billion plus $1.2 billion in interest (3%); which equals $41.2 billion. But the if the Federal Reserve only created $40 billion, where would the other $1.2 billion come from ???? Remember at the beginning there was no money at all !!!! Do you see now where the real problem lies ???? How do you pay off a debt of $41.2 billion when only $40 billion exists ????
There is only one way. You have to borrow more money and the only source is the Federal Reserve ... could anything possibly more self serving than that?
Right now, according to the US Debt Clock https://www.usdebtclock.org/ The US National Debt is $16.3 trillion and going up at the rate of $40 billion per month. $40 billion per month over a year equals $480 billion ... or $1564 per citizen per year in additional debt. It makes you wonder how it could be any worse ... but it is !!!! According to the same debt clock (above) there is only $2.6 trillion dollars in circulation.
So let's cut to the quick. Instead of Washington trying to scare us with their fiscal cliff nonsense ... how about if they explain how they intend to pay off $16.2 trillion in debt with $2.6 trillion in existing funds ??? Or how about if they explain how ... and why ... they passed that completely idiotic law in 1913 ... and do something about that ????
So if the Federal Reserve can create currency from thin air and expect to be paid back with interest ... lets pay them back. It's this simple ... we pass a new law that says we can print our own currency from thin air and send them a check for $16.2 trillion and have done with it. At least the banking industry will get back everything they actually put into it.
Oh, and by-the-way ... if we did that ... the fiscal cliff would disappear the same day.