If you take a minute to understand how our money is created, the perversity and corruption in our system will become clear. And, when I say system, I mean our monetary system to be sure, but also our entire system of government as it functions today. Oh, and not just our system, everybody's system, as you will see below.

Most of our money starts out in life as debt. When the Federal Government of the United States of America decides that it needs money that it otherwise does not have, it issues debt ….. bonds.  Those bonds are sold at auction by the Treasury Department.  Much if not most all of these bonds are purchased by a group of twenty or so large, mostly Wall Street banks designated by The Federal Reserve Bank as "Primary Dealers".

As always, click on the map above to see the source information. although because I don't know the collection date for the map, the source info from the CIA Factbook might be different.

It certainly won't be improved.

Interestingly, The Federal Reserve Bank or "The Fed" as it is commonly known is not an agency of the Federal Government of the United States of America as one would reasonably expect by virtue of it's name.  It rather is a privately held institution, owned in large part by ..... wait for it ..... the "Primary Dealers.  The Federal Reserve Bank adds or subtracts money from the economy by trading government bonds with the "Primary Dealers", mostly always at a profit to the "Primary Dealers". 

Purchasing bonds from the "Primary Dealers" injects cash into the economy as the Federal Reserve simply makes a journal entry into it’s own computer system for it's own account, and in so doing it deposits a sum of money which did not exist one instant before and thus some number of billions of dollars of new money is born out of thin air.  It only dies when the Fed subsequently sells those bonds back into the economy, thus drawing cash out of the economy, or when the government pays that money back by redeeming it's previously issued bonds.  In other words, that money is for the most part immortal. 

The Federal Government of the United States of America then pays the interest on this debt out of tax revenue.

Lately the Federal Reserve Bank has on occasion been buying the bonds back from the "Primary Dealers" the very next day following their original purchase by the "Primary Dealers" from the Treasury Department.  This enables these preferred banks to buy the next batch of new bonds and then subsequently resell them to the Federal Reserve Bank at another profit whenever the Federal Government of the United States of America again decides that it needs to spend some money that it does not have.  Usually, that would be tomorrow.

This practice is the nuts and bolts process commonly referred to as "Monetizing The Debt".

Here is where it gets real interesting ..... at least to me.  Congress is empowered by the Constitution to “coin” money without ever having to fool around with The Fed, issuing bonds, debt or making interest payments. U.S. Constitution - Article 1 Section 8 begins as follows: The Congress shall have Power To ….. some stuff you should probably take the time to read ….. Clause 5, “Coin Money, regulate the Value thereof” ….. and then some other stuff you should probably also take the time to read.”  Congress punted on that right with the passage of The Federal Reserve Act of 1913, which Act created The Federal Reserve Bank as a privately held institution.

Were the Federal Government of the United States of America or any other nation in the world for that matter, to simply make it's own entry into it’s own account at it's own bank, rather than the privately owned institution that it now banks with, there would be no debt, no sale of bonds and no need to pay any subsequent interest payments out of tax receipts.

There most certainly would be instances of inflation, which would most certainly be underreported by a legion of governmental economists kept on the payroll, in one way or another, for purposes of massaging numbers in an effort to obscure the true rate of inflation in a cynical effort to evade accountability to the American people.  BUT ..... how is any of that different from what we have today?

The hidden benefit here is of course that there would be no insider profits to be had for the "Primary Dealers”.  Which profits they are presently using for the purchase of among other things, legislation that suits their own special interests, largely to the detriment of the American people.  That last part there is just my opinion.

Were we to simply cut out the middle man by chartering a bank that is wholly owned by the American people through the Federal Government of the United States of America and let it give birth to it's own money, a lot of our problems, most notably our debt, would become a whole lot more manageable.

Doesn't that strike you as an ever so much better approach?  It certainly worked for Andrew Jackson.

Since we're already on the subject.

If the American people ever allow private banks to control the issue of their  currency, first by inflation, then by deflation, the banks … will deprive the people of  all property until their children wake-up homeless on the continent their fathers conquered … The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.  Thomas Jefferson

I believe that banking institutions are more dangerous to our liberties than standing armies. Thomas Jefferson

The modern theory of the perpetuation of debt has drenched the earth with blood, and crushed its inhabitants under burdens ever accumulating.  Thomas Jefferson

I wish it were possible to obtain a single amendment to our Constitution. I would be willing to depend on that alone for the reduction of the administration of our government to the genuine principles of its constitution; I mean an additional article, taking from the federal government the power to borrow money.  Thomas Jefferson

If (As the supreme court had recently inferred) Congress has the right under the Constitution to issue paper money, it was given to them to be used by themselves, not to be delegated to individuals or corporations.  Andrew Jackson

 

 

The Government should create, issue, and circulate all the currency and credits needed to satisfy the spending power of the Government and the buying power of  consumers. By the adoption of these principles, the taxpayers will be saved immense sums of interest. Money will cease to be master and become the servant of humanity.  Abraham  Lincoln

 

 

 

 

 

Issue of currency should be lodged with the government and be protected from domination by Wall Street. We are opposed to … provisions [which] would place our currency and credit system in private hands.   Theodore Roosevelt

 

 

 

I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. Our system of  credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most  completely controlled and dominated Governments in the civilized world no longer a  Government by free opinion, no longer a Government by conviction and the vote of the majority, but a Government by the opinion and duress of a small group of dominant men.  Woodrow Wilson 

 

 

 

Yes you did you half-witted narcissistic twit!!!!!

 

We first posted this video in June of 2010.

Seemingly nothing has changed.

From Credit Loan here's another pretty good infograph.

As always, click on the graphic for a short article that will offer some details the generalities of which you probably already have down.

I love the part about Argentina having reduced their national debt over the past decade.

Default and subsequently becoming an international credit pariah will do that for you.

U.S. eats up most of debt limit in one day

$239 billion spike uses up 60% of funding OK’d on Tuesday

As always, click on the photo to link up to this Washington Times story.

As an aside, I'm feeling particularly cranky this morning and saved the above photo as "Morons around a table".

The following are just some of the items within the President's proposed 2011 budget:

Provides a $3 billion increase in K-12 education programs, plus up to $1 billion in additional
funding if Congress successfully completes a fundamental overhaul of the Elementary and
Secondary Education Act (ESEA). Together, these measures would represent the largest
funding increase for ESEA programs ever requested.

Provides $1.35 billion to expand Race to the Top for school districts as well as States to carry
out systemic reform, and $500 million to continue the Investing in Innovation program to test,
validate, and scales up effective approaches to student learning. 

Increases the number, and improves the distribution of, effective teachers and principals,
by investing $950 million in competitive grants to States and school districts that build
comprehensive systems to recruit, prepare, retain, and reward effective teachers and
principals.

 Provides $429 million, the highest funding level ever, for competitive grants through the
Agriculture and Food Research Initiative.

Provides $50 million for a new “Healthy Food Financing Initiative” to bring grocery stores and
other healthy food retailers to underserved communities. 

Provides $7.4 billion for the National Science Foundation, an 8 percent increase over the
2010 enacted level, as part of the President’s Plan for Science and Innovation.

Drives the creation of the industries and jobs of the future by doubling funding for
multidisciplinary research targeted at next-generation information and biological technologies.

Provides $19 million in graduate and undergraduate fellowships and scholarships for a joint
initiative with the Department of Energy to inspire tens of thousands of American students to
pursue careers in science, engineering, and entrepreneurship related to clean energy.

Creates a new $766 million, cross-agency sustainability research effort focused on renewable
energy technologies and complex environmental- and climate-system processes.

Increases funding by 14 percent for a new consolidated program aimed at building the
science and technology workforce by recruiting and retaining undergraduate students from
under-represented groups. 

Adds $6 billion to NASA’s budget over five years and draws upon American ingenuity to
enable us to embark on an ambitious 21st Century program of human space exploration.

Provides $3.3 billion total for the Clean Water and Drinking Water State Revolving Funds.
This will allow States and Tribes to initiate approximately 800 clean water and 500 drinking
water projects nationally, continuing a major Federal commitment to water infrastructure
investment.

Provides new funding to support the Administration’s commitment to mitigate climate change.

Provides grants for States and Tribes to administer delegated environmental programs at $1.3
billion, the highest level ever.

Builds on the historic past increase in funding for the Department of Veterans Affairs (VA), for
a 20 percent total increase since 2009.

Invests over $8 billion in the Internal Revenue Service’s enforcement and modernization
programs, while continuing to drive innovation and responsiveness in taxpayer services. The
Budget supports significant new revenue-generating initiatives that will target critical areas of
non-compliance, and enhances a multi-year modernization strategy that will deliver a vastly
improved IRS within the next five years. 

Provides $4 billion for a new National Infrastructure Innovation and Finance Fund, which will
invest in high-value projects of regional or national significance.

Establishes a new $30 million Federal transit safety program to address critical needs.

Invests in modernizing the air traffic control system by increasing funding for NextGen by
more than 30 percent.

Helps communities to become more livable and sustainable by allocating $527 million for the
Department’s investments as part of the President’s multi-agency Partnership for Sustainable
Communities.

Sustains large-scale, multi-year support for high-speed rail, with $1 billion to fund promising
and transformative projects. 

Increases funding for the President’s Global Health Initiative, including increased efforts to
reduce mortality of mothers and children under five, avoid unintended pregnancies, and work
towards the elimination of some neglected tropical diseases. As part of this effort, the Budget
also expands support for the President’s Emergency Plan for AIDS Relief to prevent new HIV
infections while providing care and treatment to millions of people, and for the President’s
Malaria Initiative to dramatically reduce the prevalence of this disease.

Increases funding for the President’s Global Hunger and Food Security Initiative to help poor
countries improve the nutritional and income status of millions of people living in extreme
poverty and suffering from hunger by 2015.

Increases aid to Afghanistan and Pakistan to revitalize economic development and confront
the resurgence of the Taliban.

 Stays on track to fully fund Land and Water Conservation Fund programs by 2014 by
providing nearly $620 million to acquire new lands for national parks, forests and refuges,
protect endangered species habitat, and promote outdoor recreation.

There is no nice way to say it.