I just watched Harry Reid do an update on deliberations related to the bailout. He said 'we did not create this problem' and that 'this problem was created by the republicans'. He had the gall to say this with Chris Dodd standing right there beside him. Reid made several other statements that were clearly partisan and political while saying other words trying to claim he and the democrats are acting in the peoples' interests. He is disgusting.

Why should Democrats tell the truth when the MSM doesn't call them on their lies?

Give me a BREAK! You're worried about democrats pork? Who is going on telivision telling us that mr. taxpayer needs to come up with 700 BILLION dollars ASAP or banks will start closing in your neighborhood and you will lose your job? Well it ain't the democrats - it is none other than Pres. Bush and Paulsen (a wall street fat cat). How come when their shipping jobs overseas or tightening the noose on consumers with tougher bankruptcy laws the Republicans pull out the "free market" is best for everyone song and dance but as soon as the rich get in trouble they go Karl Marx in a heartbeat? The republicans and john mccain are the biggest hipocrites since Jimmy Swaggart.

Bob Smith · September 26, 2008 04:05 PM

Give me a BREAK!
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As a hard-core Constitutionalist conservative who mistakenly voted for shrub both times...I must agree with you in part but the bottom line is that BOTH parties and candidates..as well as the past presidents of either party...are the ones who were crooked and criminal enough to corrupt the entire country with their crap!!

Neither party is free from guilt and the slimey stench of corruption!! Its not enough to try to smear one party against another..BOTH are scum buckets and filled with fraud and false voters/votes and more greed than a money grubbing POS named Greenspan/Bernake/Paulson/ et al!!!!!!!!

N.A.M.E
New American Model of Economics
DRAFT DOCUMENT

I am not an Economist, nor have I attended any University or other institution held in high regard in the United States of America or other Country. I have however the ability to count and using this specific skill set, have devised a draft model that would be worthy of consideration by all recipients of this document if in fact, they wish the future to be prosperous as opposed to depressive.

My name is Kelvyn Alp. I am a New Zealander and I humbly submit this information for your perusal, discussion and comment.

1. CREDIT CREATION
2. COUNTER INFLATION
3. SECOND TEIR LENDERS
4. FOREIGN EXCHANGE
5. OBSERVATIONS

1. CREDIT CREATION

The role of primary creator of the nation’s coin, credit or currency must rest in the hands of the United States of America Treasury and not with an unaccountable and stand alone Federal Reserve System.

It is well known that the Federal Reserve came into being under dubious circumstances and has been the sole driving force behind the creation of the economic problems that have plagued the United States of America and the American people.

All primary loans must be facilitated by the Treasury at a predetermined rate of interest. However, rather than simply create debt based credit, the Treasury would make the specific loan required while at the same time creating the interest component expected from that loan at the time. That interest component would then be spent into circulation; whether that be via the consumer directly, community based initiatives or other related designation. The result of this approach will see the avoidance of the problems continually faced via irredeemable debt.

The total amount of currency in circulation would be equivalent to the amount of debt owed and therefore create a solid currency base that retains a consistent value.

2. COUNTER INFLATION

Credit creation as described above will not in itself resolve the issue. Some may argue (as they often do) that such an approach will cause rampant inflation. I do not believe this to be so considering the other aspects to this model as I will outline herein.

The greatest barrier to growth is one’s inability to access funds, whether by employment or borrowings. The next barrier is ones ability to retain those funds for the purposes it was required. Taxation is one of the main inhibitors of a nation’s growth. Taxation as it currently stands penalises production, initiative, drive and innovation.

To counter internal inflation while at the same time allowing constant growth is to abolish all forms of taxes and levies and in place of those, implement a Transaction Tax on the currency alone. Every time a transaction is made, whether it be between the banks, retailer and consumer, supplier and manufacturer or any other where a monetary transaction takes place, a percentage of that transaction i.e. .1% (point one percent) would be remitted via the settlement exchange and settlement system directly to the Treasury accounts.

This allows the removal of currency from the system without an inflationary build up and will serve a number of purposes such as: a fund that can be targeted to stimulate failing areas of the economy if required and to meet Government expenditure requirements. It will also allow the creation of new credit without the hangover effect so often attributed with the current form of credit creation.

The result of this approach will negate the need for the Internal Revenue Service in its entirety as the collection of the Transaction Tax would be made and remitted via the banking system and therefore, wipe out a major cost to the Government.

3. SECOND TEIR LENDERS

Retail Banks that offer public services via deposit facilities, loans and insurance would be regulated and be required to report directly to the Treasury. All loans made would be done so based upon the ability of the borrower to not only service that debt, but for a large part upon the real wealth held by the borrower.

Flagrant leveraging (in other words irredeemable debt creation) will no longer be permitted due to the destructive nature of this practice.

We must recognise that we can no longer place children inside a candy store and tell them to eat as much as they want, then blame them for getting sick. It is human nature to improve their position and strive for more. Easy debt and the “must have it now” mentality must never become a substitute for hard work.

4. FOREIGN EXCHANGE

Allowing the “market” to determine the rate at which the United States currency is valued by vested interests will not serve in the future interests of the country’s economic prosperity. The Treasury alone must set the exchange rate against other currencies to maintain a position whereby large trade deficits are mitigated.

If a nation’s currency value is determined by its ability to service debt, then the United States is in a precarious position. Just as someone finally asked what the leveraged homes were actually worth that led to the current crises, so they will ask if the United States currently has enough money or any hope of paying its bills; we all know the answer to that!

5. OBSERVATIONS

Please note that the information contained herein is in draft form only and not intended to be a final model. The considerations put forward require fleshing out to reach a final form and I offer my service if required to work with interested parties to create such a system. It is my opinion that this system has the ability, not only to allow a smooth transition from the current model employed, but also become one that others will aspire to repeat for their nation.

I am sure the following illustrations will aide you when considering the information contained herein:

THE BANKERS:

The following illustration will comically show what a fruitless exercise our application of banking has become (leaving the interest component out of the equation until the end);

We all decide we are going to sit around a table and play cards. We all borrow $1000.00 from our friendly banker and set our sites on striking it rich by out-witting our opponents with our refined skills and poker-face. At the opening of each hand, we of course each place $1.00 into the centre of the table for the banker that loaned us the money and then the cards are dealt. As the game progresses some of us will be up in our money count and some will be down. However, every hand we play, we are giving the banker the $1.00 so if we continue to apply this method of cards, it will not matter how lucky any particular player is, because at the end of that game, the banker will end up with it all. He risked nothing in the game and did not even play a hand, yet there he is holding all of the money and to make matters worse, we are now all in debt to him with no way to pay because of the interest he charged at the time we borrowed that money.

So how do we pay the banker that which he says we owe, when we have no means by which to satisfy the debt? Simple, we must forfeit assets, property, or some other form of wealth to discharge the debt. Now imagine our Government playing such a game of cards using us and our properties as collateral for those loans. Not a pretty scenario, yet here we are, all in debt because we forgot how to count and relied on the so-called experts to take control.

But how could this continue to happen, surely the people would do something about it if what I am saying is correct, right? Wrong! The best way to ensure that there is no opposition with the ability to challenge the authority of those that control the finances of one’s nation, is to make any opposition dependant on that very mechanism for their survival, thus eliminating any possibility of an organised challenge to the status quo.

The problems with the current debt-monetary system is well known by many, yet very few have come up with viable solutions to this problem and those that have, are publicly ridiculed, in the hope that no one will listen to them for fear of being branded as a conspiracy theorist or some other quaintly termed phrase designed to silence voices and deafen ears.

SIMPLIFIED CREDIT CREATION

All money that comes into existence is “borrowed” into existence at a certain rate of “interest”. The problem with this is the fact that the “interest” component of these loans, is not created at the time of the loan, and therefore impossible to pay. Let us suppose the United States Government borrowed $1Billion at a mere 2 percent interest rate from the Federal Reserve; they would then be liable for a total of $1 Billion plus the $20 Million in “interest” payments. In other words, the Government that had only been loaned the initial $1 Billion, will then have a shortfall of $20 Million on the due payment dates. That $20 Million does not exist and therefore will never be able to be paid. Usually the Government is forced to undertake certain “reforms” to satisfy the lenders (ultimately the World Bank, IMF and Bank of International Settlements - all tracing back to the hands of a few).

That is not the end of the problem. Due to the Government's inability to be able to pay the “interest” component of the loan, it then becomes liable for “penalty interest” on top of that “interest” and therefore further debt arises. How can a country so rich in resources, wealth, and ability worth literally Trillions of dollars be so broke? –"Permit me to issue and control the money of a nation, and I care not who makes its laws!" - Mayer Anselm Rothschild, Banker - 1743 - 1812. This statement is very telling indeed.

Many so-called economic experts will tell you that The United States can trade its way out of debt and all we need is to have exports out perform imports and all will be rosy, yet this is another false statement. Most of the countries in the world operate the same banking system (debt-money) and have to compete with other nations to capture resources and market share that is all too often, becoming scarce; this ultimately leads to conflict with other nations, as they try to open new markets to service a debt that can never be paid. It is simple mathematics.
Have you ever wondered why a house that cost you $200,000.00 one year suddenly costs you approx. $450,000.00 five years later? Some will tell you that the housing market is experiencing a boom and prices are going up due to demand or some such (always some excuse other than the truth).

The simple fact of the matter is that our currency is becoming devalued at a rapid rate as time goes on and therefore, you require more of our currency to purchase that same house. This is also true with everything else you purchase. After all, it took a certain amount of timber and other materials, labour and time, to build that house – so in actual fact that house will forever be worth what was needed at the time to build that house, and no more. The rise in prices is due to nothing more than the systematic manipulation of our currency.

Before people start to chant the old line about labour and materials costing more now than previously, that is easily dismissed, because again, this problem is due solely to the requirement of more money to service debt and living costs associated with the banking fiasco (the more debt to service, the more the increase in pricing to meet that debt requirement).

In order for one’s currency to have value, there must of course be a demand for it. To address this need, simply make the new currency the lawful medium of exchange for all goods and services within the country. To stimulate growth within the economy and add further economically driven demand, the public Treasury can issue loans (at lower interest rates) to industry and individuals. Unlike the current system however, the interest component is created and paid out at the time the loan is issued and spent into the economy, via government public works and expenditure (roads, health, education etc). This means that the amount of money owed is equivalent to that within circulation, so it is able to be repaid without ill-effect, and ensures inflation plays no part. This will mean an end to the forfeiture of a nation’s real wealth for imaginary and ultimately fraudulent debt.

Money was only ever meant to be the medium of exchange for goods and services at an agreed value, it was never meant to be the product itself, nor the tool by which we were all to be thrown into despair.

Until we master and control the money, we will forever be enslaved to it and therefore those that control it.

SIMPLIFIED TRANSACTION TAX

A simple Transaction Tax (rate to be determined) would easily replace ALL other taxes and levies and will ensure that businesses within the nation have the ability to compete on the world stage free from the concerns of high taxation, foreign exchange rate and market manipulation. It will also serve as a tool by which the economy can be stimulated in targeted areas to correct any shortfall, or held back if there may be a chance that too much is within the system.

I thank you for your time.

Kelvyn Alp
Ph: +649 267 0445
Mob: +6427 286 8789
Email: kalp@caratapa.com