Wild Horses on Public Lands and the impact on Ranching and Communities
We took the show to Beaver County this week to get an on the ground look at how wild horses impact the range. In Utah the population of wild horses is over the Appropriate Management Level (AML) by 1,300 animals. Nationally the problem of dealing with the number of wild horses increases to 14,000 beyond the AML. The management of wild horses costs the BLM tens of millions of dollars every year but despite the efforts to gather wild horses off the range; the numbers keep increasing.
Chad Booth talks to Beaver County Commissioner, Mark Whitney; Iron County Commissioner, David Miller; and local rancher Mark Winch about the impacts on ranchers and the ultimate impact it has on the economies of rural Utah.
Transfer of Public Lands
Public Lands in Utah County Seat Season3, Episode 8
In recent years there has been a public outcry from Utahans asking the State to take a more active role in how management decisions are made on public lands. The take back Utah movement has looked at the history of public lands in the United States and began to ask why hasn’t Utah received the same treatment as other states in the Union. Utah has about 67% of its lands controlled and managed by the federal government. Some counties in the state are about 90% federally owned which creates a burden on the local governments because there is no property tax base to pay for the services that citizens need.
Last year Utah passed the Utah Public Lands Transfer Act, HB148; which basically asks the federal government to dispose of the remaining unallocated federal lands within the state by 2014. HB148 has opened up a conversation about what the proper role of the federal government should be in the management of public lands. Today’s show takes a look at the issues from a federal, state, and county perspective.
WARNING! MORE FOOD INFLATION COMING 2014 STOCK UP ASAP
Grocery Prices Soar
Spike in food prices has shoppers feeling effects – Mar 19th, 2014
U S Government Says ‘No Inflation’ As Food Prices Soar New update 2014
Preppers: Food Prices Rise Sharply – Up 19% for 2014!
Milk Prices PKG
Food Prices The Shocking Truth
Food Prices The Shocking Truth 1 of 2
Food Prices The Shocking Truth 2 of 2
Worldwide Food Shortages
GLOBAL FOOD CRISIS to Usher in Worldwide Famine
Where’s the (Cheap) Beef? US Prices Soar
Meat Beef Bacon Costs Rise due to Drought? Inflation! Starvation Great-Depression Dollar$
Beef prices explained
BLM Wild Horse Strategy
The BLM’s Wild Horse and Burro Program
BLM Socorro Water Trap Method Wild Horse Gather
The World Food Crisis ~ Special Report
Don’t Fence Me In – Roy Rogers & The Sons of the Pioneers –
Roy Rogers & Sons of The Pioneers Sing “The Last Roundup”
Wild horses targeted for roundup in Utah rangeland clash
By Jennifer Dobner April 11, 2014 8:41 PM
Two of a band of wild horses graze in the Nephi Wash area outside Enterprise, Utah, April 10, 2014. REUTERS/Jim …
ENTERPRISE, Utah (Reuters) – A Utah county, angry over the destruction of federal rangeland that ranchers use to graze cattle, has started a bid to round up federally protected wild horses it blames for the problem in the latest dustup over land management in the U.S. West.
Close to 2,000 wild horses are roaming southern Utah’s Iron County, well over the 300 the U.S. Bureau of Land Management has dubbed as appropriate for the rural area’s nine designated herd management zones, County Commissioner David Miller said.
County officials complain the burgeoning herd is destroying vegetation crucial to ranchers who pay to graze their cattle on the land, and who have already been asked to reduce their herds to cope with an anticipated drought.
Wild horse preservation groups say any attempt to remove the horses would be a federal crime.
On Thursday county workers, accompanied by a Bureau of Land Management staffer, set up the first in a series of metal corrals designed to trap and hold the horses on private land abutting the federal range until they can be moved to BLM facilities for adoption.
“There’s been no management of the animals and they keep reproducing,” Miller said in an interview. “The rangeland just can’t sustain it.”
The conflict reflects broader tension between ranchers, who have traditionally grazed cattle on public lands and held sway over land-use decisions, and environmentalists and land managers facing competing demands on the same land.
The Iron County roundup comes on the heels of an incident in neighboring Nevada in which authorities sent in helicopters and wranglers on horseback to confiscate the cattle herd of a rancher they say is illegally grazing livestock on public land.
In Utah, county commissioners warned federal land managers in a letter last month that the county would act independently to remove the horses if no mitigation efforts were launched.
Cattle rancher Jeremy Hunt looks out over land, at a barbed wire fence in the Nephi Wash area outsid …
“We charge you to fulfill your responsibility,” commissioners wrote. “Inaction and no-management practices pose an imminent threat to ranchers.”
The operation was expected to last weeks or months.
“The BLM is actively working with Iron County to address the horse issue,” Utah-based BLM spokeswoman Megan Crandall said, declining to comment further.
Attorneys for wild horse preservation groups sent a letter this week to Iron County commissioners and the BLM saying the BLM, under federal law, cannot round up horses on public lands without proper analysis and disclosure.
“The BLM must stop caving to the private financial interests of livestock owners whenever they complain about the protected wild horses using limited resources that are available on such lands,” wrote Katherine Meyer of Meyer, Glitzenstein and Crystal a Washington, DC-based public interest law firm representing the advocates.
The BLM puts the free-roaming wild horse and burro population across western states at more than 40,600, which it says on its website exceeds by nearly 14,000 the number of animals it believes “can exist in balance with other public rangeland resources and uses.”
Wild horse advocates point out that the tens of thousands of wild horses on BLM property pales into comparison with the millions of private livestock grazing on public lands managed by the agency.
Wild horses have not been culled due to budget constraints, according to Utah BLM officials, who say their herds grow by roughly 20 percent per year.
Pressure on rangeland from the horses may worsen this summer due to a drought that could dry up the already sparse available food supply, according to Miller.
“We’re going to see those horses starving to death out on the range,” he said. “The humane thing is to get this going now.”
Adding to frustration is BLM pressure on ranchers to cut their cattle herds by as much as 50 percent to cope with the drought, Miller said.
A tour of Iron County rangeland, not far from the Nevada border, illustrates the unchecked herds’ impact on the land, said Jeremy Hunt, a fourth generation Utah rancher whose cattle graze in the summer in a management area split through its middle by a barbed wire fence.
On the cattle side of the fence, the sagebrush and grass landscape is thick and green. The other, where a group of horses was seen on Thursday, is scattered with barren patches of dirt and sparse vegetation.
“This land is being literally destroyed because they are not following the laws that they set up to govern themselves,” said Hunt, who also works as a farmhand to make ends meet for his family of six.
“I want the land to be healthy and I want be a good steward of the land,” he added. “But you have to manage both sides of the fence.”
Wholesale Prices in U.S. Rise on Services as Goods Stagnate
By Lorraine WoellertApr 11, 2014 9:07 AM CT
Wholesale prices in the U.S. rose in March as the cost of services climbed by the most in four years while commodities stagnated.
The 0.5 percent advance in the producer-price index was the biggest since June and followed a 0.1 percent decrease the prior month, the Labor Department reported today in Washington. The recent inclusion of services may contribute to the gauge’s volatility from month-to-month, which will make it more difficult to determine underlying trends.
Rising prices at clothing and jewelry retailers and food wholesalers accounted for much of the jump in services, even as energy costs retreated, signaling slowing growth in emerging markets such as China will keep price pressures muted. With inflation running well below the Federal Reserve’s goal, the central bank is likely to keep borrowing costs low in an effort to spur growth.
“Every six months or so service prices seem to pop, but over the year, service prices tend to dampen inflation more often than not,” Jay Morelock, an economist at FTN Financial in New York, wrote in a note. “One month of price gains is not indicative of a trend.”
Also today, consumer confidence climbed this month to the highest level since July, a sign an improving job market is lifting Americans’ spirits. The Thomson Reuters/University of Michigan preliminary April sentiment index rose to 82.6 from 80 a month earlier.
Stocks dropped, with the Standard & Poor’s 500 Index heading for its biggest weekly decline since January, as disappointing results from JPMorgan Chase & Co. fueled concern that corporate earnings will be weak. The S&P 500 fell 0.4 percent to 1,826.29 at 10:02 a.m. in New York.
Today’s PPI report is the third to use an expanded index that measures 75 percent of the economy, compared to about a third for the old metric, which tallied the costs of goods alone. After its first major overhaul since 1978, PPI now measures prices received for services, government purchases, exports and construction.
Estimates for the PPI in the Bloomberg survey of 72 economists ranged from a drop of 0.2 percent to a 0.3 percent gain.
Core wholesale prices, which exclude volatile food and energy categories, climbed 0.6 percent, the biggest gain since March 2011, exceeding the projected 0.2 percent advance of economists surveyed by Bloomberg. They dropped 0.2 percent in February.
The year-to-year gain in producer prices was the biggest since August and followed a 0.9 percent increase in the 12 months to February. Excluding food and energy, the index also increased 1.4 percent year to year following a 1.1 percent year-to-year gain in February.
The cost of services climbed 0.7 percent in March, the biggest gain since January 2010. Goods prices were unchanged and were up 1.1 percent over the past 12 months.
Wholesale food costs climbed 1.1 percent in March, led by higher costs for meats, including pork and sausage. Energy costs fell 1.2 percent last month.
Food producers and restaurants say they’re paying more for beef, poultry, dairy and shrimp. At General Mills Inc. (GIS), maker of Yoplait yogurt, Cheerios cereal and other brands, rising dairy prices helped push retail profit down 11 percent in the third quarter, said Ken Powell, chairman and chief executive officer of the Minneapolis-based company. Powell called the inflation “manageable.”
“While the economy is improving slowly and incomes are strengthening slowly, they are improving,” Powell said on a March 19 earnings call. “As incomes continue to grow and consumers gain confidence that will be a positive sign for our category.”
Today’s PPI report provides a glimpse into the consumer-price index, the broadest of three inflation measures released by the Labor Department. The CPI, due to be released April 15, probably climbed 0.1 percent in March, according to the median forecast in a Bloomberg survey.
The wholesale price report also offers an advance look into the personal consumption expenditures deflator, a gauge monitored closely by the Fed. Health care prices make up the largest share of the core PCE index, which excludes food and energy costs. The next PCE report is due from the Commerce Department May 1.
This week, Fed policy makers played down their own predictions that interest rates might rise faster than they had forecast, according to minutes of the Federal Open Market Committee’s March meeting. The minutes bolstered remarks made by last month by Chair Janet Yellen.
“If inflation is persistently running below our 2 percent objective, that is a very good reason to hold the funds rate at its present range for longer,” Yellen said at a March 19 press conference following the committee meeting.
BUREAU OF THE FISCAL SERVICE
STAR - TREASURY FINANCIAL DATABASE
TABLE 1. SUMMARY OF RECEIPTS, OUTLAYS AND THE DEFICIT/SURPLUS BY MONTH OF THE U.S. GOVERNMENT (IN MILLIONS)
ACCOUNTING DATE: 08/13
PERIOD RECEIPTS OUTLAYS DEFICIT/SURPLUS (-)
+ ____________________________________________________________ _____________________ _____________________ _____________________
OCTOBER 163,072 261,539 98,466
NOVEMBER 152,402 289,704 137,302
DECEMBER 239,963 325,930 85,967
JANUARY 234,319 261,726 27,407
FEBRUARY 103,413 335,090 231,677
MARCH 171,215 369,372 198,157
APRIL 318,807 259,690 -59,117
MAY 180,713 305,348 124,636
JUNE 260,177 319,919 59,741
JULY 184,585 254,190 69,604
AUGUST 178,860 369,393 190,533
SEPTEMBER 261,566 186,386 -75,180
YEAR-TO-DATE 2,449,093 3,538,286 1,089,193
OCTOBER 184,316 304,311 119,995
NOVEMBER 161,730 333,841 172,112
DECEMBER 269,508 270,699 1,191
JANUARY 272,225 269,342 -2,883
FEBRUARY 122,815 326,354 203,539
MARCH 186,018 292,548 106,530
APRIL 406,723 293,834 -112,889
MAY 197,182 335,914 138,732
JUNE 286,627 170,126 -116,501
JULY 200,030 297,627 97,597
AUGUST 185,370 333,293 147,923
YEAR-TO-DATE 2,472,542 3,227,888 755,345
No Fed Taper: What Does It Mean for Your Money? (9/18/13)
Federal Reserve: No Taper (9/18/13)
Ron Paul: Fed Decision To Not Taper Is A Really Bad Sign
Ron Paul: Taper Fakeout Means Fed Is Worried
Breaking News: Federal Reserve Will Not Taper
Rick Santelli Reacts to Federal Reserve No Taper
Why The Fed. Will INCREASE, NOT DECREASE, It’s QE/Money Printing. By Gregory Mannarino
In Business – Fed Taper Pause Fuels Commodities Rally
To Taper, or Not to Taper
FED Says No Taper — We Need A War, Gun Confiscation And Control Of Internet First — Episode 166
JIM RICKARDS: Fed Will TAPER in September or Never, and the Looming MONETARY System COLLAPSE 
James Rickards on “Why The Fed Will NOT Taper Quantitative Easing”
Peter Schiff: “The party is coming to an end”.
JIM ROGERS – When the FED stops PRINTING FIAT CURRENCY the COLLAPSE will be here. PREPARE NOW
Fed decision Just idea of tapering caused huge ruckus
Background Articles and Videos
Milton Friedman – Abolish The Fed
Milton Friedman On John Maynard Keynes
Free to Choose Part 3: Anatomy of a Crisis (Featuring Milton Friedman)
Murray Rothbard – To Expand And Inflate
The Founding of the Federal Reserve | Murray N. Rothbard
The Origin of the Fed – Murray N. Rothbard
Murray Rothbard on Hyperinflation and Ending the Fed
Murray N. Rothbard on Milton Friedman (audio – removed noise) part 1/5
Keynes the Man: Hero or Villain? | Murray N. Rothbard
WASHINGTON (AP) — The Federal Reserve has decided against reducing its stimulus for the U.S. economy, saying it will continue to buy $85 billion a month in bonds because it thinks the economy still needs the support.
The Fed said in a statement Wednesday that it held off on tapering because it wants to see more conclusive evidence that the recovery will be sustained.
Stocks spiked after the Fed released the statement at the end of its two-day policy meeting.
In the statement, the Fed says that the economy is growing moderately and that some indicators of labor market conditions have shown improvement. But it noted that rising mortgage rates and government spending cuts are restraining growth.
The bond purchases are intended to keep long-term loan rates low to spur borrowing and spending.
The Fed also repeated that it plans to keep its key short-term interest rate near zero at least until unemployment falls to 6.5 percent, down from 7.3 percent last month. In the Fed’s most recent forecast, unemployment could reach that level as soon as late 2014.
Many thought the Fed would scale back its purchases. But interest rates have jumped since May, when Fed Chairman Ben Bernanke first said the Fed might slow its bond buys later this year. But Bernanke cautioned that the reduction would hinge on the economy showing continued improvement.
In its statement, the Fed says that the rise in interest rates “could slow the pace of improvement in the economy and labor market” if they are sustained.
The Fed also lowered its economic growth forecasts for this year and next year slightly, likely reflecting its concerns about interest rates.
The statement was approved on a 9-1 vote. Esther George, president of the Federal Reserve Bank of Kansas City, dissented for the sixth time this year. She repeated her concerns that the bond purchases could fuel the risk of inflation and financial instability.
The decision to maintain its stimulus follows reports of sluggish economic growth. Employers slowed hiring this summer, and consumers spent more cautiously.
Super-low rates are credited with helping fuel a housing comeback, support economic growth, drive stocks to record highs and restore the wealth of many Americans. But the average rate on the 30-year mortgage has jumped more than a full percentage point since May and was 4.57 percent last week — just below the two-year high.
The unemployment rate is now 7.3 percent, the lowest since 2008. Yet the rate has dropped in large part because many people have stopped looking for work and are no longer counted as unemployed — not because hiring has accelerated. Inflation is running below the Fed’s 2 percent target.
The Fed meeting took place at a time of uncertainty about who will succeed Bernanke when his term ends in January. On Sunday, Lawrence Summers, who was considered the leading candidate, withdrew from consideration.
Summers’ withdrawal followed growing resistance from critics. His exit has opened the door for his chief rival, Janet Yellen, the Fed’s vice chair. If chosen by President Barack Obama and confirmed by the Senate, Yellen would become the first woman to lead the Fed.
Slow “growth”,GDP makeover, Keynesians demand more debt and inflation
The Fed, Ben Bernanke & the Economy (4/30/13)
Coming Economic Collapse Peter Schiff RT America
Austrian Theory of the Trade Cycle | Roger W. Garrison
Tom Woods Discusses his New Documentary, The Bubble
Director of “The Bubble” Jimmy Morrison interview with ManifestLiberty.com Part 1/2
Director of “The Bubble” Jimmy Morrison interview with ManifestLiberty.com Part 2/2
Fed Keeps Interest Rates Low, Continues Bond Buying Program
The Federal Reserve held fast to its ultra-accommodative monetary policy Wednesday, solidified by what board members described as an economy weakened by fiscal policy.
Interest rates will remain at historically low levels while the U.S. central bank will not alter its $85 billion a month asset purchasing program, the Fed’s Open Markets Committee decided at this week’s meeting.
While recent meetings have been remarkable for signs of dissent over the long-standing Fed policy, the sentiment this month turned towards concerns about “downside risks” to growth, though the FOMC made no mention of the recent set of weak economic data.
The Federal Reserve held fast to its ultra-accommodative monetary policy Wednesday, solidified by what board members described as an economy weakened by fiscal policy.
Interest rates will remain at historically low levels while the U.S. central bank will not alter its $85 billion a month asset purchasing program, the Fed’s Open Markets Committee decided at this week’s meeting.
While recent meetings have been remarkable for signs of dissent over the long-standing Fed policy, the sentiment this month turned towards concerns about “downside risks” to growth, though the FOMC made no mention of the recent set of weak economic data.
While stocks have soared to new highs, the economy remains in slow-growth mode as it has throughout Chairman Ben Bernanke’s term, which began just before the onset of the financial crisis.
The stock market reacted little to the 2 pm news, maintaining an earlier selloff spurred over jobs fears.
Fed officials have long bemoaned Washington fiscal policy, with Congress and the White House in a continued stalemate that has resulted in a raft of mandated tax increases and spending cuts known as the sequester.
The May FOMC statement kept up the heat.
“Household spending and business fixed investment advanced, and the housing sector has strengthened further, but fiscal policy is restraining economic growth,” the statement said.
The Fed’s decision came the same day as a report on private payrolls fell well below expectations, indicating just 119,000 new jobs created, a seven-month low.
While critics worry about inflation, the Fed continued to conclude that “expectations have remained stable.”
The Fed has vowed to keep interest rates exceptionally low until unemployment falls to 6.5 percent from its current 7.6 percent and until inflation reaches 2.5 percent from its current 1.5 percent.
Ben Bernanke Is The Most Dangerous Man In US History
US BOND BUBBLE’S READY TO BURST!
Max Keiser: Propped Up Bond Market Set To Burst In April
U.S. Government Bond Bubble to Burst, Faber Says
James Grant and James Turk discuss gold, the Fed and the fiscal situation of the USA
USA Will Die – Economic Collapse 2013 – Jim Rogers
JIM ROGERS – 2013 to Be Bad, ‘God Knows What Will Happen in 2014′
Jim Rogers Predicts Global Depression In 2013-2014
Peter Schiff on Max Keiser – Stopping the Global Financial Crisis
Keiser Report: Psyops & Debt Diets
Max Keiser: Will the next crash be on Bonds?
MAX KEISER: Colossal Collapse Coming! Keiser Report
MAX KEISER: Colossal Collapse Coming! Keiser Report
ALEX JONES & Max Keiser 2013, Year of The GREAT CRASH!
Peter Schiff – Dollar Could Collapse This Fall 2013
Peter Schiff – Economic Collapse 2013
Fed Will Keep Printing Until The Dollar Collapses~ Jim Rickards
Jim Rickards Gold is Money ($7,000 Gold Price)
James Rickards Predicts US Inflation in 2013 due to the Devaluation of the US dollar
Currency Wars: Jim Rickards
Financial Pearl Harbor’ is a Real Threat Warns a Pentagon Adviser
CNBC Global Recession Is Coming – Marc Faber
Dr. Marc Faber – US is in 50-100 trillion worth of debt!
Marc Faber ‘We Are in the End Game’ Part 1
Marc Faber ‘We Are in the End Game Part 2
Marc Faber – We Could See a 1987-Like Market Crash – Be Prepared and Get OUT!
Marc Faber-No Government Complies With Anything
Total Economic Collapse, Death of the Dollar, Impovershment, WWIII, Marc Faber Interview
Gerald Celente Deal Or No Debt Deal, The Debt Still Exists
Bill Gross: Economy Faces Structural Headwinds, “I Think We Are Facing Bubbles Almost Everywhere”
ECONOMIC CRASH WORLDWIDE STARTING
Harry Dent predicts global economic crash in 2013
Planned Economic Collapse 2013-2014
Background Articles and Videos
Meltdown (pt 1-4) The Secret History of the Global Financial Collapse 2010
Meltdown (pt 2-4) The Secret History of the Global Financial Collapse 2010
Meltdown (pt 3-4) The Secret History of the Global Financial Collapse.2010
Meltdown – pt 4-4 The Secret History of the Global Financial Collapse (2010)
The Fall of Lehman Brothers
Goldman Sachs: Power and Peril – Documentary
The Ascent of Money: A Financial History of The World by Niall Ferguson Epsd. 1-5 (Full Documentary)
The Fall of the Dollar – The Death of a Fiat Currency part 1
The Fall of the Dollar – The Death of a Fiat Currency part 2
The First 12 Hours of a US Dollar Collapse
LIFE HIDDEN TRUTH 2013 GLOBAL FINANCIAL CRISIS
Billionaires Dumping Stocks, Economist Knows Why
Despite the 6.5% stock market rally over the last three months, a handful of billionaires are quietly dumping their American stocks . . . and fast.
Warren Buffett, who has been a cheerleader for U.S. stocks for quite some time, is dumping shares at an alarming rate. He recently complained of “disappointing performance” in dyed-in-the-wool American companies like Johnson & Johnson, Procter & Gamble, and Kraft Foods.
In the latest filing for Buffett’s holding company Berkshire Hathaway, Buffett has been drastically reducing his exposure to stocks that depend on consumer purchasing habits. Berkshire sold roughly 19 million shares of Johnson & Johnson, and reduced his overall stake in “consumer product stocks” by 21%. Berkshire Hathaway also sold its entire stake in California-based computer parts supplier Intel.
With 70% of the U.S. economy dependent on consumer spending, Buffett’s apparent lack of faith in these companies’ future prospects is worrisome.
Unfortunately Buffett isn’t alone.
Fellow billionaire John Paulson, who made a fortune betting on the subprime mortgage meltdown, is clearing out of U.S. stocks too. During the second quarter of the year, Paulson’s hedge fund, Paulson & Co., dumped 14 million shares of JPMorgan Chase. The fund also dumped its entire position in discount retailer Family Dollar and consumer-goods maker Sara Lee.
Finally, billionaire George Soros recently sold nearly all of his bank stocks, including shares of JPMorgan Chase, Citigroup, and Goldman Sachs. Between the three banks, Soros sold more than a million shares.
So why are these billionaires dumping their shares of U.S. companies?
After all, the stock market is still in the midst of its historic rally. Real estate prices have finally leveled off, and for the first time in five years are actually rising in many locations. And the unemployment rate seems to have stabilized.
It’s very likely that these professional investors are aware of specific research that points toward a massive market correction, as much as 90%.
One such person publishing this research is Robert Wiedemer, an esteemed economist and author of the New York Times best-selling book Aftershock.
Before you dismiss the possibility of a 90% drop in the stock market as unrealistic, consider Wiedemer’s credentials.
In 2006, Wiedemer and a team of economists accurately predicted the collapse of the U.S. housing market, equity markets, and consumer spending that almost sank the United States. They published their research in the book America’s Bubble Economy.
The book quickly grabbed headlines for its accuracy in predicting what many thought would never happen, and quickly established Wiedemer as a trusted voice.
A columnist at Dow Jones said the book was “one of those rare finds that not only predicted the subprime credit meltdown well in advance, it offered Main Street investors a winning strategy that helped avoid the forty percent losses that followed . . .”
The chief investment strategist at Standard & Poor’s said that Wiedemer’s track record “demands our attention.”
And finally, the former CFO of Goldman Sachs said Wiedemer’s “prescience in (his) first book lends credence to the new warnings. This book deserves our attention.”
In the interview for his latest blockbuster Aftershock, Wiedemer says the 90% drop in the stock market is “a worst-case scenario,” and the host quickly challenged this claim.
Wiedemer calmly laid out a clear explanation of why a large drop of some sort is a virtual certainty.
It starts with the reckless strategy of the Federal Reserve to print a massive amount of money out of thin air in an attempt to stimulate the economy.
“These funds haven’t made it into the markets and the economy yet. But it is a mathematical certainty that once the dam breaks, and this money passes through the reserves and hits the markets, inflation will surge,” said Wiedemer.
“Once you hit 10% inflation, 10-year Treasury bonds lose about half their value. And by 20%, any value is all but gone. Interest rates will increase dramatically at this point, and that will cause real estate values to collapse. And the stock market will collapse as a consequence of these other problems.”
Mike Masters on Regulating Commodities Speculation
Michael W. Masters (Better Markets & Masters Capital Management)
Court Strikes Down CFTC Regulation to Limit Excessive Speculation
Michael Greenberger on Crude Oil Speculation
5th OPEC International Seminar – Michael Masters
Michael Masters Chairman, Better Markets Inc Michael W Masters is the founder and Managing Member of Masters Capital Management, an investment management firm. He is also a Partner in Masters Capital Nanotechnology, a venture capital fund. Mr Masters, an expert on the topic of commodities speculation and financial reform, has testified before many Congressional committees and government agencies, including the House Energy Subcommittee, the Commodity Futures Trading Commission (CFTC) and the Financial Crisis Inquiry Commission. Recently, he participated in joint SEC-CFTC roundtable discussions on a variety of security-based swaps issues. Speaking out about the far-reaching harmful effects of unregulated commodities speculation and the need for financial reform, Mr Masters has made numerous appearances in media outlets around the world. He has also addressed consumer and corporate groups, and has served as an expert panellist before international and investor groups. He is the founder of Better Markets, a Washington, DC-based non-profit, non-partisan organization established to promote transparency and accountability in the financial markets for the public interest. He was the 2004 winner of the “Open Your Heart” award from Hedge Funds Care and is a 1989 graduate of the University of Tennessee.
The OPEC International Seminar is now regarded as one of the premier events on the world energy calendar, bringing together Ministers from OPEC Member Countries and other oil-producing countries, heads of intergovernmental organizations, chief executives of national and international oil companies, other industry leaders, renowned academics, analysts and media.
The 5th OPEC International Seminar, held in Vienna’s historic Hofburg Palace on 13–14 June 2012, focussing on the theme ‘Petroleum: Fuelling Prosperity, Supporting Sustainability’. The latest in the series of Seminars, which began in 2001, provided fresh impetus to key industry issues and developed existing and new avenues of dialogue and cooperation.
Secret Exemptions Allowed Speculators to Distort FuturesMarkets
FACTBOX: NYSE enters the ICE Age
Intercontinental Exchange to buy NYSE
IntercontinentalExchange (ICE): Delivering same-day response to regulatory requests
Derivatives still a ticking time bomb! Sept 2011
Jeff Sprecher, Chairman & CEO, IntercontinentalExchange
**MUST SEE** The Real Reason Gas Prices Are High – Best Explanation!
Will CFTC Limit Excessive Speculation?
Gas Prices & Oil Speculation
Oil Market Manipulation, Gas Prices, Energy Exploration, Securities Exchange Commission
How Wall St Speculation Drives Up Gas Prices
Find Out How Gasoline Gets to Your Tank
“…IntercontinentalExchange, Inc., known as ICE, is an American financial company that operates Internet-based marketplaces which trade futures and over-the-counter (OTC) energy and commodity contracts as well as derivative financial products. While the company’s original focus was energy products (crude and refined oil, natural gas, power, and emissions), recent acquisitions have expanded its activity into the “soft” commodities (sugar, cotton and coffee), foreign exchange and equity index futures.
In 2011, ICE and NASDAQ OMX Group joined forces to bid against Deutsche Börse after the latter announced a $9.5 billion deal to merge with NYSE Euronext. The two U.S. bidders and then the German exchange ultimately withdrew after their bids encountered regulatory antitrust resistance. In December 2012 NYSE Euronext agreed to be acquired by ICE pending regulator approval.
ICE is organized into three business lines:
ICE Markets — futures, options, and OTC markets. Energy futures are traded via ICE Futures Europe; soft commodity futures/options are handled by ICE Futures U.S.
ICE Services — electronic trade confirmations and education.
ICE Data — electronic delivery of market data, including real-time trades, historical prices and daily indices.
Contracts sold through ICE Futures U.S. are processed through a subsidiary, ICE Clear U.S. (ICEUS). In May 2008, ICE launched its own Clearing House, ICE Clear, with divisions for Europe, US, Canada & Trust (ICEU).
Headquartered in Atlanta, ICE also has offices in Calgary, Chicago, Houston, London, New York and Singapore, with regional telecommunications hubs in Chicago, New York, London and Singapore.
In the late 1990s, Jeffrey Sprecher, ICE’s founder, chairman, and Chief Executive Officer, acquired Continental Power Exchange, Inc. with the objective of developing an Internet-based platform to provide a more transparent and efficient market structure for OTC energy commodity trading. In May 2000, IntercontinentalExchange (ICE) was established, with its founding shareholders representing some of the world’s largest energy traders. The company’s stated mission was to transform OTC trading by providing an open, accessible, multi-dealer, around-the-clock electronic energy exchange. The new exchange offered the trading community better price transparency, more efficiency, greater liquidity and lower costs than manual trading.
In June 2001, ICE expanded its business into futures trading by acquiring the International Petroleum Exchange (IPE), now ICE Futures Europe, which operated Europe’s leading open-outcry energy futures exchange. Since 2003, ICE has partnered with the Chicago Climate Exchange (CCX) to host its electronic marketplaces. In April 2005, the entire ICE portfolio of energy futures became fully electronic. In April 2010 ICE bought CCX’s owner Climate Exchange PLC for 395 million pounds ($622 million). Climate Exchange PLC also owns the European Climate Exchange (ECX).
ICE became a publicly traded company on November 16, 2005, and was added to the Russell 1000 Index on June 30, 2006. The company expanded rapidly in 2007, acquiring the New York Board of Trade (NYBOT), ChemConnect (a chemical commodity market), and the Winnipeg Commodity Exchange. In March 2007 ICE made an unsuccessful $9.9 billion bid for the Chicago Board of Trade, which was instead acquired by the Chicago Mercantile Exchange.
In January 2008, ICE partnered with TSX Group’s Natural Gas Exchange, expanding their offering to clearing and settlement services for physical OTC natural gas contracts.
In February 2011, in the wake of an announced merger of NYSE Euronext with Deutsche Borse, speculation developed that ICE and Nasdaq could mount a counter-bid of their own for NYSE Euronext. ICE was thought to be looking to acquire the American exchange’s derivatives business, Nasdaq its cash equities business. As of the time of the speculation, “NYSE Euronext’s market value was $9.75 billion. Nasdaq was valued at $5.78 billion, while ICE was valued at $9.45 billion.” Late in the month, Nasdaq was reported to be considering asking either ICE or the Chicago Merc (CME) to join in what would be probably be an $11-12 billion counterbid for NYSE. On April 1, ICE and Nasdaq made an $11.3 billion offer which was rejected April 10 by NYSE. Another week later, ICE and Nasdaq sweetened their offer, including a $.17 increase per share to $42.67 and a $350 million breakup fee if the deal were to encounter regulatory trouble. The two said the offer was a $2 billion (21%) premium over the Deutsche offer and that they had fully committed financing of $3.8 billion from lenders to finance the deal. The Justice Department, also in April, “initiated an antitrust review of the proposal, which would have brought nearly all U.S. stock listings under a merged Nasdaq-NYSE.” In May, saying it “became clear that we would not be successful in securing regulatory approval,” the Nasdaq and ICE withdrew their bid. The European Commission then blocked the Deutsche merger on 1 February 2012, citing the fact that the merged company would have a near monopoly.
In December 2012, ICE announced it would buy NYSE Euronext for $8 billion, pending regulatory approval. Jeffrey Sprecher will retain his position as Chairman and CEO. The boards of directors of both ICE and NYSE Euronext approved the acquisition.
Key subsidiaries subject to regulation
ICE Clear Credit LLC
see main article ICE Clear Credit LLC
Clearing entity for credit default swaps (CDS)
CFTC – Derivatives Clearing Organization
SEC – Registered Securities Clearing Agency
ICE Clear Europe Limited
Clearing entity for credit default swaps (CDS)
CFTC – Derivatives Clearing Organization
SEC – Registered Securities Clearing Agency
U.K. Financial Services Authority (FSA) – Recognised Clearing House
U.K Financial Services Authority (FSA) – Settlement Finality Designation (SFD) under the Financial Markets and Insolvency Regulations 1999
Bank of England (U.K.s central bank) – regulated as an Inter-Bank Payment System (Banking Act 2009)
ICE Futures U.S., Inc.
Trades futures and options in three main areas
Agricultural – e.g. Sugar No. 11, Cotton No. 2
Currency – e.g. U.S. Dollar Index, more than 50 currency pairs
Press Conference with FOMC Chairman Ben S. Bernanke
Federal Reserve Balance Sheet Illustrated
Fed Ties Interest Rates to Unemployment Rate
Fed links interest and unemployment rates
Ben Bernanke throws the dollar over the Currency Cliff
CNBC Marc Faber ‘Reduce Government by Fifty Percent Minimum’
Jim Rickards: the Fed is Racing to Create Inflation Before the US Economy Implodes
Stephanie Kelton on Modern Monetary Theory’s Goals for Full Employment and
Competitive Currency Devaluation
The GOLD standard, the DOLLAR standard & a New GLOBAL CURRENCY Order
The Truth about Gas Prices And Why It Is Like It Is! Shocking Truth Revealed
Peter Schiff on RT America – Financial Crisis
Jim Rickards Discusses **$4,000** Gold on CNBC
Fed Will Keep Printing Until The Dollar Collapses~ Jim Rickards
Jim Rogers – Fiat Currency aka Fake Money aka Worthless
Bernanke: We Cannot Offset Full Impact of Cliff
The Exit Strategy
Quantitative Easing Explained
Overdose: The Next Financial Crisis
Background Articles and Videos
Glenn Beck – Devaluing The Dollar
The Fed and the Power Elite | Murray N. Rothbard
01 – The Economic Crisis (The Fall of America and the Western World)
05 – The Power Elite Pt.1, with Alex Jones (The Fall of America and the Western
06 – The Power Elite Pt.2, with David Icke (The Fall of America and the Western
Federal Reserve Launches QE4!
By Eric McWhinnie
“…On Wednesday, the Federal Reserve concluded its two-day Federal Open Market Committee meeting. Despite launching a third round of quantitative easing known as QE-infinity in September, the central bank launched QE4.
In the latest FOMC statement, the Federal Reserve met market expectations and said it will buy $45 billion of long-term Treasury securities, in order to replace Operation Twist that expires at the end of the year. Furthermore, it decided to keep interest rates at historic lows until at least as long the unemployment rate remains above 6.5 percent.
Two Key Parts of the FOMC statement are listed below:
“To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee will continue purchasing additional agency mortgage-backed securities at a pace of $40 billion per month. The Committee also will purchase longer-term Treasury securities after its program to extend the average maturity of its holdings of Treasury securities is completed at the end of the year, initially at a pace of $45 billion per month. The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and, in January, will resume rolling over maturing Treasury securities at auction. Taken together, these actions should maintain downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative.”
“To support continued progress toward maximum employment and price stability, the Committee expects that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the asset purchase program ends and the economic recovery strengthens. In particular, the Committee decided to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that this exceptionally low range for the federal funds rate will be appropriate at least as long as the unemployment rate remains above 6-1/2 percent, inflation between one and two years ahead is projected to be no more than a half percentage point above the Committee’s 2 percent longer-run goal, and longer-term inflation expectations continue to be well anchored.”
Fed’s balance sheet is on pace to explode…
QE programs not only help to juice markets higher through dollar devaluation, they expand the Federal Reserve’s balance sheet to record breaking levels. The central bank’s balance sheet is already nearing $3 trillion and is now on pace to hit almost $4 trillion by the end of 2013 with the recently launched QE4. Francisco Blanch, a global investment strategist with Bank of America, believes the Federal Reserve will maintain bond purchases until the end of 2014, a move that could send the central bank’s balance sheet skyrocketing to $5 trillion.
Bill Gross, founder and co-chief investment officer of PIMCO, estimates that the economy will need to add roughly 200,000 jobs per month for the next 4-5 years in order to meet the Fed’s unemployment target. In other words, interest rates are not planned to rise anytime soon. However, he also says that believing the central bank can keep control of interest rates at current levels is a “decent stretch.” Furthermore, it should be noted that the Fed only pegged interest rates to the unemployment rate.
Bernanke Will Flood U.S. With Dollars In QE4. Now, He Needs Uncle Sam’s Help
“…Consider the millions of pounds of paper that the Federal Reserve will need to afford its easy monetary policy, which today further earned its latest epithet: quantitative easing infinity. Fed Chairman Ben Bernanke pledged to buy $85 billion a month in Treasurys and mortgage-backed securities starting in Jan., and will continue the program until unemployment falls to 6.5%.
Call it QE3.5 or QE4 or whatever. It’s all the same thing: a concerted effort to heal the economy and add some life to this lackluster recovery. Bernanke and the other central bank policymakers on the Federal Open Markets Committee will keep the printing press rolling for years to come. The Fed estimates that the jobless rate won’t hit the new benchmark for 2.5 years. Other economists expect the country will fall to that level before then, but even optimistic forecasts say it will likely take two years.
Bernanke can do little more to accomplish his goals. “Today’s moves indicate that the accommodation switch has been turned on, and the data have to tell the Fed when to stop,” says Barclays economist Michael Gapen. “There is little left for the Fed to do at this point, in terms of altering its policy. While these is ongoing uncertainty about the stance of fiscal policy, the FOMC has gone to great lengths in a short time to alter its policy framework completely.” Indeed, easing has already lowered interest rates to rock-bottom; the 10-Year T-bill yields a miniscule 1.81% (not far from the record lows, near 1.4%, that we saw this year). Despite this, great mounds—more than $500 billion by some estimates—of investable and spendable dollars sit unused, unproductive.
This is not to say that a fist-full-of-dollars monetary policy can’t buoy the markets, at least a small amount. Stocks rallied this afternoon, following the Fed’s announcement. The Dow Jones industrial average climbed 0.6% to 13,322.74. The S&P 500 gained 0.4%. And the Nasdaq composite went up 0.1%.
Consumer staples stocks performed the best. Ford added 0.4%. Luluemon Athletic increased 1.3%.
Financials also led the market higher. Wells Fargo rose 1.2%. Citigroup gained 1.6%, as Bank of America ticked up 0.8%.
Now, Bernanke needs cooperation from elsewhere in Washington, D.C. Monetary policy must run parallel to fiscal policy for the economy to truly pick up. Brinkmanship over the fiscal cliff—and whether any more fiscal stimuli will come—damages both business and consumer spending. Without that, the economy will remain stuck in neutral. Spending is the key economic driver in the United States, accounting for roughly 70% of all growth. No one can spend until firmly establishing the size of future paychecks.
There’s a problem with Bernanke’s ultra-accommodating posture, though. (More than one, of course, depending on where you land in Keynesian debates.) It might very well be encouraging the game of chicken that currently captivates our nation’s pols. “Maybe the people in Washington who are tussling over the fiscal cliff feel a little more comfortable in tussling because the Fed is giving us very easy money,” says Pierre Ellis, Decision Economics’ senior managing director. Significantly, with the Fed expanding its balance sheet, to keep all of us feeling more comfortable, and theoretically investing and spending, too, it may limit some effectiveness of any fiscal cliff agreement. Hope that Washington accounts for the burden that will come from the payments on all this debt when interest rates do start to rise again. …”
Wiedemer to Moneynews: More Fed Easing Is ‘Insurance Policy’ Against Market Collapse
By Forrest Jones and David Nelson
“…The Federal Reserve’s decision to beef up an existing monetary stimulus program may in reality be little more than a move to prevent stock prices from collapsing, said Robert Wiedemer, financial commentator and best-selling author of “Aftershock.”
At its December monetary policy meeting, the Fed announced plans to bolster its current quantitative easing (QE) program, a monetary stimulus tool that sees the U.S. central bank buy $40 billion in
mortgage-backed securities a month from banks on an open-ended basis to spur recovery.
Going forward, the Fed will now purchase an additional $45 billion in Treasury holdings from financial institutions alongside its purchases of mortgage debt.
QE functions by pumping liquidity into the economy in a way that keeps interest rates low to encourage investing and hiring, with rising stock prices and a weaker dollar as side effects.
The additional Treasury purchases will replace the Fed’s so-called Operation Twist program, under which the Fed swaps $45 billion a month in short-term Treasurys for long-termer U.S. government debt — that policy will expire at year end as planned.
The Fed will begin injecting $85 billion in freshly printed money into the economy a month to stave off economic decline by pushing down borrowing costs to encourage investing and hiring, though the idea may really be to keep stock prices high
and investors happy.
“I think it’s an insurance policy more for the stock market than it is for unemployment,” Wiedemer told Newsmax TV in an exclusive interview.
“I think it’s an insurance policy not necessarily against keeping the market where it is, but an insurance policy against any kind of collapse,” added Wiedemer, a managing director of Absolute Investment Management, an investment-advisory firm for individuals with more than $300 million under management.
“They may see a weakness in the stock market that we are not necessarily seeing. This should certainly prevent a collapse, but I don’t know if it is going to keep [the Dow] up at 13,000.”
The Fed added that it will keep benchmark interest rates at a target 0.25 percent until one of two things happen: the unemployment rate drops to 6.5 percent or inflation rates threaten to break 2.5 percent.
“The Committee decided to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates
that this exceptionally low range for the federal funds rate will be appropriate at least as long as the unemployment rate remains above 6-1/2 percent, inflation
between one and two years ahead is projected to be no more than a half percentage point above the Committee’s 2 percent longer-run goal and longer-term inflation expectations continue to be ell anchored,” the Fed said in its
December monetary policy statement. …”
“Whalen is smart. He’s one of the few worthy of your time. Others: Marc Faber, Hugh Hendry, Doug Dachille, David Rosenberg, Howard Davidowitz, James Grant, Peter Schiff, Niall Ferguson, Doug Casey, Jim Rogers.”
Chris Whalen Drops the F-Bomb on Wall Street while sounding the Bankruptcy Alarm
Whalen: Libor Is A Collusive Price Set By Collusive Banks
Whalen: Go Back To The Future To Fight Fraud With Equity Receivers
Value Investing Conference 2010 – Part 4
Inflated: How Money and Debt Built the American Dream | Christopher Whalen
‘Inflated: How Money and Debt Built the American Dream’
Chris Whalen: “The Fed let the real economy go to hell”
Web Extra Chris Whalen: Is JP Morgan blowing hot air with clawbacks? Plus, Natural Gas forecasts
CHRIS WHALEN: “PAPER ASSETS ARE HEADED TO ZERO” 7-6-2010
Christopher Whalen, A New Deal For The American Economy 1/7
Christopher Whalen, A New Deal For The American Economy 2/7
Christopher Whalen, A New Deal For The American Economy 3/7
Christopher Whalen, A New Deal For The American Economy 4/7
Christopher Whalen, A New Deal For The American Economy 5/7
Christopher Whalen, A New Deal For The American Economy 6/7
Christopher Whalen, A New Deal For The American Economy 7/7
Alan Greenspan ~ The Federal Reserve Is Above The Law
Dear America, Your Taxes Are Going Up 20%, Food and Gas Prices Will Skyrocket, Fed Drops Bomb On Us
Exposing the Federal Reserve!
CURRENCY COLLAPSE Why The Government Won’t Act
CURRENCY COLLAPSE: How the US Government Is Destroying the Dollar
CURRENCY COLLAPSE: Interest Rates, The Fed, and History Repeating
Press TV-On the Edge with Max Keiser-Global Banking Cartel-08-10-2010 (Part 1)
Press TV-On the Edge with Max Keiser-Global Banking Cartel-08-10-2010 (Part 2)
G Edward Griffin Creature From Jekyll Island A Second Look at the Federal Reserve
The Creature From Jekyll Island (by G. Edward Griffin)
Ron Paul on Understanding Power: the Federal Reserve, Finance, Money, and the Economy
The US Economy is Doomed
Masters of the Universe, The Secret Birth of the Federal Reserve
“Bernanke Threatens The Congress” We will cause an Economic Collapse if you audit the Fed!
Ron Paul to Ben Bernanke “What Would It Take For You To Admit You Were Wrong?
Bernanke signals Fed ready to act
By Robin Harding in Jackson Hole
“…Ben Bernanke sent a clear signal that the US Federal Reserve was ready to do more to support the US economy, saying that its condition was “far from satisfactory”.
Speaking at the Fed’s annual gathering in Jackson Hole, Wyoming, Mr Bernanke offered no direct promise of further intervention. But by spelling out the feeble state of the economy, the Fed’s intention to be forceful and its range of policy tools, he raised expectations of action in September.
“Taking due account of the uncertainties and limits of its policy tools, the Federal Reserve will provide additional policy accommodation as needed to promote a stronger economic recovery and sustained improvement in labour market conditions,” said the Fed chairman on Friday.
The clearest hint that Mr Bernanke is ready to do more came from his disappointment with the economy’s progress. He noted some recovery over the past few years but said that improvement in the labour market has been “painfully slow”.
He said “unless the economy begins to grow more quickly than it has recently, the unemployment rate is likely to remain far above levels consistent with maximum employment for some time”.
Much of the speech was taken up with a review of the Fed’s actions since the financial crisis. Mr Bernanke argued that large-scale asset purchases aimed at driving down long-term interest rates – known as quantitative easing, or QE – have worked.
“A balanced reading of the evidence supports the conclusion that central bank securities purchases have provided meaningful support to the economic recovery while mitigating deflationary risks,” he said.
Mr Bernanke reviewed four possible costs of additional asset purchases. He said they could damage the function of securities markets, raise inflation expectations, undermine financial stability or cause the Fed to make financial losses. He said those costs were uncertain, but concluded: “At the same time, the costs of non-traditional policies, when considered carefully, appear manageable, implying that we should not rule out the further use of such policies if economic conditions warrant.”
Paul Dales of Capital Economics in London, arguing that Mr Bernanke had paved the way for a third wave of quantitative easing, said: “The speech comes across as a staunch defence of the effectiveness of unconventional monetary policy.”
By midday, the S&P had rebounded from a drop after Mr Bernanke’s comments, and closed up 0.5 per cent. The 10-year Treasury note rose, pushing its yield 5 basis points lower to 1.58 per cent, as markets decided Mr Bernanke’s comments did signal further easing.
Mr Bernanke argued that the Fed’s forecasts of future interest rates – it anticipates rates staying low at least until late 2014 – illustrated its resolve in supporting a recovery.
In one possible hint of future policy, he said that the current late-2014 date “is broadly consistent with prescriptions coming from a range of standard benchmarks”, but that “a number of considerations also argue for planning to keep rates low for a longer time than implied by policy rules developed during more normal periods”. …”
“Pleasure chasing and dissipation are ineffective palliatives. Where people live autonomous lives and are not badly off, yet are without abilities or opportunities for creative work or useful action, there is no telling to what desperate and fantastic shifts they might resort in order to give meaning and purpose to their lives.”
Eric Hoffer, True Believer, page 54
Best of Obama Girl: Crush On Obama
Obama Boy – I Have A Crush On Obama
“It is the true believer’s ability to “shut his eyes and stop his ears” to facts that do not deserve to be either seen or heard which is the source of his unequaled fortitude and constancy. He cannot be frightened by danger nor disheartened by obstacle not baffled by contradictions because he denies their existence.”
~Eric Hoffer, The True Believer, page 76
Reality Check–Crush Obama
DEBT LIMIT – A GUIDE TO AMERICAN FEDERAL DEBT MADE EASY
The Collapse of The American Dream Explained in Animation
“…Spending has gone up from $2.98 trillion in 2008—the year before Obama came into office—to a proposed $3.80 trillion in 2013. That is a 28-percent increase in five years, which represents a compound annual growth rate of 5.0 percent. Because the economy has stagnated during this period, spending has increased as a share of GDP. …”
Although the federal deficit is the amount each year by which federal outlays in the federal budget exceed federal receipts, the gross federal debt increases each year by substantially more than the amount of the deficit each year. That is because a substantial amount of federal borrowing is not counted in the budget.
Janet Yellen, S.F. Federal Reserve Bank, discusses US recovery from recession – Haas School
Haas School Professor Emeritus Janet Yellen, CEO of the San Francisco Federal Reserve Bank, discusses the current US economy and her forecast for the remainder of 2009. Her presentation at the Haas School of Business, UC Berkeley, is part of the Dean’s Speaker Series focused on the recent financial crisis. (May 05, 2009)
Peter Schiff’s exclusive interview with Allan Meltzer at The Atlantic Economy Summit
Background Articles and Videos
Allan Meltzer on the History of the Federal Reserve – Part 1
Part 1 of 3: The Process of Writing the History of the Federal Reserve. Allan Meltzer’s much-anticipated second volume of the History of the Federal Reserve was released in spring 2010. These three videos feature Professor Meltzer talking about the Federal Reserve and the process of writing the book.
Allan Meltzer on the History of the Federal Reserve – Part 2
Part 2 of 3: Why Should We Care About The Fed Being Independent? Allan Meltzer’s much-anticipated second volume of the History of the Federal Reserve was released in spring 2010. These three videos feature Professor Meltzer talking about the Federal Reserve and the process of writing the book.
Allan Meltzer on the History of the Federal Reserve – Part 3
A History of the Federal Reserve: A Conversation between Paul Volcker and Allan H. Meltzer
As the Federal Reserve continues to take steps to boost the economy and navigate through an uncertain economic future, Allan H. Meltzer’s acclaimed history of the Federal Reserve uses the past to provide lessons for today’s policymakers and scholars. At this event, Meltzer participates in a discussion of his book A History of the Federal Reserve, 1913–1986 (University of Chicago Press, 2010) with Paul Volcker, former chairman of the Federal Reserve under presidents Jimmy Carter and Ronald Reagan. AEI economist and former Federal Reserve official Vincent R. Reinhart moderates.
US Sovereign Risk Part 1-1: Reality Bites Introduction
US Sovereign Risk Part 1-2: Reality Bites Introduction
US Sovereign Risk Part 2: Growth of Debt in the US
US Sovereign Risk Part 3-1: Political Economy of the Growth of Government Debt
US Sovereign Risk Part 3-2: Political Economy of the Growth of Government Debt
US Sovereign Risk Part 3-3: Political Economy of the Growth of Government Debt
US Sovereign Risk Part 4-1: Why the Financial Market Supports Treasuries Despite the Risk
US Sovereign Risk Part 4-2: Why the Financial Market Supports Treasuries Despite the Risk
US Sovereign Risk Part 5-1: How the Market Reins in an Out of Control Sovereign
US Sovereign Risk Part 5-2: How the Market Reins in an Out of Control Sovereign
US Sovereign Risk Part 6: Capital Safe Havens
The Spellman Report
“…Professor Lew Spellman Lew Spellman has taught financial markets at the McCombs School of Business at the University of Texas at Austin, where he is Professor of Finance since the 1970s. He has also been on the faculty of Stanford University, the LBJ School of Public Affairs, the UT School of Law, and the University of California, Berkeley.
Professor Spellman’s teaches financial markets and institutions at both the graduate and undergraduate level with an emphasis on analyzing and interpreting current financial market trends and policy developments. His academic publications appear in the Journal of Finance, Journal of Financial and Quantitative Analysis, The Journal of Money, Credit and Banking and the Journal of Banking and Finance among others. He is author of The Depositor Firm and Industry: History, Theory and Regulation.
His experience outside of academics includes government service as Assistant to the Chairman of the President’s Council of Economic Advisors and Economist with the Federal Reserve Board. His published works generally concern the market pricing of financial institution claims. Professor Spellman’s business interests include serving as Director and Chairman of Investments, Magna Carta Insurance Companies. Previously, he served as Chairman and CEO of Real Rate Financial and Electronic Exchange Technologies. He holds several U.S. patents relating to inflation adjusting financial instruments that led to the development of the Treasury TIPS instrument.
Lew Spellman holds the degrees of BBA and MBA from the University of Michigan and MA and PhD in economics from Stanford University. …”
In a nation whose debt has outgrown the size of its entire economy, the greatest threat comes not from any foreign force but from Washington politicians who refuse to relinquish the intoxicating power to borrow and spend. Senator Tom Coburn reveals the fascinating, maddening story of how we got to this point of fiscal crisis-and how we can escape.
Long before America’s recent economic downturn, beltway politicians knew the U.S. was going bankrupt. Yet even after several so-called “change” elections, the government has continued its wasteful ways in the face of imminent danger. With passion and clarity, Coburn explains why Washington resists change so fiercely and offers controversial yet commonsense solutions to secure the nation’s future.
At a time when millions of Americans are speculating about what is broken in Washington, The Debt Bomb is a candid, thoughtful, non-partisan expose of the real problems inside our government. Coburn challenges the conventional wisdom that blames lobbyists, gridlock, and obstructionism, and places the responsibility squarely where it belongs: on members of Congress in both parties who won’t let go of the perks of power to serve the true interests of the nation-unless enough citizens take bold steps to demand action.
“Democracy never lasts long. It soon wastes, exhausts, and murders itself. There was never a democracy yet that did not commit suicide.” -John Adams
Throughout a distinguished career as a business owner, physician, and U.S. senator, Tom Coburn has watched his beloved republic careen down a suicidal path. Today, the nation stands on the precipice of financial ruin, a disaster far more dangerous to our safety than any terrorist threats we face. Yet Coburn believes there is still hope-if enough Americans are willing to shake the corridors of Washington and demand action.
With an insider’s keen eye and a caregiver’s deft touch, Coburn diagnoses the mess that career politicians have made of things while misusing their sacred charge to govern.
Coburn’s incisive analysis:
· Reveals the root causes of America’s escalating financial crisis
· Exposes Washington’s destructive appetite for wasteful spending, power grabs, backroom deals, and quick non-fixes
· Rises above partisanship to implicate elected officials of all stripes in steering the nation off course
· Lays out a commonsense guide to restoring order
· Concludes with a clarion call and sound advice for Americans who would dedicate themselves to defusing the debt bomb
Above all, Coburn believes the United States can continue as a beacon of opportunity for future generations-but how we act today will determine whether we deliver the nation to our children and grandchildren fully alive, on life support, or without a pulse. …”
US National Debt Growing Faster Than GDP (4/9/2012)
U.S. National Debt Documentary Part 1
U.S. National Debt Documentary Part 2
U.S. National Debt Documentary Part 3
U.S. National Debt Documentary Part 4
U.S. National Debt Documentary Part 5
The award-winning documentary I.O.U.S.A. opened up America’s eyes to the consequences of our nation’s debt and the need for our government to show more fiscal responsibility. Now that more Americans and elected officials are aware of our fiscal challenges, the producers of I.O.U.S.A. created I.O.U.S.A.: Solutions, a follow-up special focusing on solutions to the fiscal crisis. Learn more at http://www.iousathemovie.com/.
Exclusive Video Tony Robbins Deconstructs the National Debt
Dr. Coburn on CNBC’s Mad Money discussing the budget deficit facing the U.S.
(Thursday, June 10 2010) Jim Cramer discusses importance of getting a handle on the national debt, the current budget deficit, and ways to expand Congress’ knowledge of economics and budgeting by cutting spending.
Coburn on CNBC’s Squawk Box: Healthcare Law Huge Contributor to Debt, Deficit
Oklahoma Senator Tom Coburn Blasts Everyone in New Book: Buzz Politics 4.17
Coburn Urging the Senate to End Duplication, Pass Amendment that Saves $10 Billion
HSGAC Hearing on Reducing Duplication
(Wednesday, March 21 2012) Dr. Coburn stressing the importance of taking advantage of the GAO’s recommendations for eliminating duplication and savings hundreds of billions in taxpayer dollars in today’s HSGAC hearing titled, “Retooling Government for the 21st Century: The President’s Reorganization Plan and Reducing Duplication”.
Coburn on The Kudlow Report on Problems w/ Obamacare & Gov’t-run Healthcare
Military spending, collapse of US empire
Deficits, Debts and Unfunded Liabilities: The Consequences of Excessive Government Spending
Four Reasons Why Big Government Is Bad Government
David Walker – America at a Crossroads
It’s Simple to Balance The Budget Without Higher Taxes
Eight Reasons Why Big Government Hurts Economic Growth
Free Markets and Small Government Produce Prosperity
Deficits are Bad, but the Real Problem is Spending
Spending Restraint, Part I: Lessons from Ronald Reagan and Bill Clinton
Spending Restraint, Part II: Lessons from Canada, Ireland, Slovakia, and New Zealand
Background Articles and Videos
Debt and Deficit in a Nutshell
Coburn book “The Debt Bomb” hits the shelf today
By Rick Couri
“…Senator Tom Coburn hates it when taxpayer money is wasted. Now he has a new book out that points directly at the people and organizations he thinks are the worst offenders. The book is called “The Debt Bomb” and he holds no punches. “We lack the courage to do what’s in the best long term interest of the country because we always put short term political considerations first” he explained.
The Senator says the book is easy to follow because it goes step by step “first of all we tell the story of where we are and how we got here” he said. So how did we get here? Coburn says it all stems from what he calls careerism. “Careerism tends to make members of congress do what’s best for their re-election and not what’s best for the country.” Coburn told us people who hold elected office are always careful to pick the timing of their battles “we’re always waiting for the right moment to fix things well guess what, that right moment doesn’t come.” …”
Ron Paul: The Worst Thing You Can Do For A People Is Purposely Devalue The Dollar
Obama’s Got America Singin’ the Blues
As Gas Prices Rise, White House Goes on Offensive, Defensive
Ron Paul tells the real reason for the oil prices in 2007 and today
END FED: Bernanke Explains How To Devalue the Dollar, Quantitative Easing AKA Asset Purchase
Glenn Beck – Devaluing The Dollar
Beck: Devaluing the Dollar
Iran Sanctions, War, Israel & Gas Prices
Ron Paul Doubles Down On War Stance
Armed Chinese Troops in Texas!
Why Gas Prices Are Rising
Playing the oil prices money game
Secret Exemptions Allowed Speculators to Distort Futures Markets
Regulations on Speculation Weak, But Better Than Nothing
The Price Of Oil
Bill Black: What I’d Demand of the Fed
Bill Black’s eye-popping opening statement at House FinServ hearing on Lehman Bros.
END FED: Goldman Sachs To Blame For Global Food-Oil Price Crisis; Speculators Outnumber Hedgers
CFTC Commissioner: “A Hair Trigger Away from Economic Calamity”
Will CFTC Limit Excessive Speculation?
Oil Supply and Demand and the Next Oil Price Spike
Bio-fuels, Speculation, Land Grabs = Food Crisis
Speculation And The Frenzy In Food Markets
Food, Speculation and Parasitical Trading
Speculation Drives Up Coffee Prices
Oil speculation and oil prices
The Real TRUTH Behind The OIL PRICES
Banks Behind High Gas Prices?
Rising Gas Prices Slowing Economy
Gas Prices Soaring
Ripple Effect Of Rising Gas Prices Hits Consumers
Krauthammer: Obama’s “war on fossil fuels” causes rising gas prices
Obama Wanted High Gas Prices…Gradually (2008 Election Campaign)
Ron Paul Expains High Gas Prices & War in 2008
Can We Stop A War With Iran?
Obama admits his intentions are to skyrocket oil prices
Ford O’Connell On Fox News – February 24, 2012
Ron Paul Expains High Gas Prices & War in 2007
Obama gas prices
A Coincidence Over High Gasoline Prices- MoneyTV with Donald Baillargeon
Obama Admits the Truth: He Can’t Do Much about Gas Prices
Jim Grant – Bloomberg Interview (30/6/11)
Government Theft 2012
Press Conference with Chairman of the FOMC, Ben S. Bernanke
Blame High Oil Prices on Speculators and Bernanke
Seven Bucks A Gallon For Gas!
2012 Energy Prices
“…That’s right, we not only reduced our overall gasoline use in America, reversing a century-long trend, but in 2011 we dropped our demand for gasoline once again. This likely explains why in December WTI oil jumped by close to $7 a barrel, but the futures market for gasoline barely budged, moving just a few cents in either direction.
Another way to look at it is in the percentage of utilization of our refineries for this time of year. According to the government’s data, the last week of December our refineries ran at 84.2 percent of capacity. But if one compares that week to the same week in the boom years, 2003 to 2007, our refineries were running at 91.7 percent, 94.2 percent, 88.9 percent, 90.9 percent and 89.4 percent. For those who have forgotten, that last figure in that chain, marking the last week of December 2007, also denotes the month we officially slipped into a recession. Interestingly, data released by the International Energy Agency in September of 2008 showed oil and fuel demand falling worldwide starting in August of 2007.
And yet with our refinery utilization running at far below normal, we managed to have the all-time-record year for the exportation of refined fuels. While the media speculation on where oil’s price is going is almost solely based on “Asian Demand” or the prospect of a total embargo on Iranian oil, the real problem is something completely different.
What is it? It’s refiners trying to find ways to get the price of gasoline on the futures market more in line with the high price of oil. To this end it appears that three refineries in the Northeast, including Sunoco’s Marcus Hook and Philadelphia refinery, along with Conoco’s Trainer unit, will be closed. To be sure, both Conoco and Sunoco claim their first choice is to sell those refineries, but failing that they will be closed.
What does that mean to you and me?
Dow Jones Newswire quoted Gene McGillian, an energy analyst with Tradition Energy, as saying, “Gasoline futures prices are based on New York Harbor prices. When you start to see disruptions in that Northeast market, it’s definitely reflected in gasoline futures.”
Translation: Close refineries and you can bump the futures price of gasoline – and by extension the retail price – regardless of where the price of oil is.
“…An oil futureis simply a contract between a buyer and seller, where the buyer agrees to purchase a certain amount of a commodity — in this case oil — at a fixed price
. Futures offer a way for a purchaser to bet on whether a commodity will increase in price down the road. Once locked into a contract, a futures buyer would receive a barrel of oil for the price dictated in the future contract, even if the market price was higher when the barrel was actually delivered.
As in all cases, Wall Street heard the word "bet" and flocked to futures, taking the market to strange new places on the fringe of legality. In the 19th and early 20th centuries it bet on grain. In the 21st century it was oil. Despite U.S. petroleum reserves being at an eight-year high, the price of oil rose dramatically beginning in 2006. While demand rose, supply kept pace. Yet, prices still skyrocketed. This means that the laws of supply and demand no longer applied in the oil markets. Instead, an artificial market developed.
Artificial markets are volatile; they’re difficult to predict and can turn on a dime. As a result of the artificial oil market, the average price per barrel of crude oil increased from $31.61 in July 2004 to $137.11 in July 2008 1. The average cost for a gallon of regular unleaded gas in the United States grew from $1.93 to $4.09 over the same period 1.
So what happened? …"
"…What speculators do is bet on what price a commodity will reach by a future date, through instruments called <strong>derivatives</strong>. Unlike an investment in an actual commodity (such as a barrel of oil), a derivative’s value is based on the value of a commodity (for example, a bet on whether a barrel of oil will increase or decrease in price). Speculators have no hand in the sale of the commodity they’re betting on; they’re not the buyer or the seller.
By betting on the price outcome with only a single futures contract, a speculator has no effect on a market. It’s simply a bet. But a speculator with the capital to purchase a sizeable number of futures derivatives at one price can actually sway the market. As energy researcher F. William Engdahl put it, "[s]peculators trade on rumor, not fact" 1. A speculator purchasing vast futures at higher than the current market price can cause oil producers to horde their commodity in the hopes they’ll be able to sell it later on at the future price. This drives prices up in reality — both future and present prices — due to the decreased amount of oil currently available on the market.
Investment firms that can influence the oil futures market stand to make a lot; oil companies that both produce the commodity and drive prices up of their product up through oil futures derivatives stand to make even more. Investigations into the unregulated oil futures exchanges turned up major financial institutions like Goldman Sachs and Citigroup. But it also revealed energy producers like Vitol, a Swiss company that owned 11 percent of the oil futures contracts on the New York Mercantile Exchange alone 1.
As a result of speculation among these and other major players, an estimated 60 percent of the price of oil per barrel was added; a $100 barrel of oil, in reality, should cost $40 1. And despite having an agency created to prevent just such speculative price inflation, by the time oil prices skyrocketed, the government had made a paper tiger out of it. …"
<h4>It’s no secret that speculators are driving up fuel prices. The surprise? It’s the Fed’s fault, writes Ed Wallace</h4>
<h4>"…The Fed’s Cheap Liquidity Flood</h4>
The problem starts with Ben Bernanke, no matter how many of his Fed presidents claim they are not to blame for the high price of oil. The fact is that when you flood the market with far too much liquidity at virtually no interest, funny things happen in commodities and equities. It was true in the 1920s, it was true in the last decade, and it’s still true today.
When Richard Fisher, president of the Dallas Federal Reserve, spoke in Germany late in March, Reuters quoted him as saying: "We are seeing speculative activity that may be exacerbating price rises in commodities such as oil." Fisher added that he was seeing the signs of the same speculative trading that had fueled the first financial meltdown.
Here Fisher is in good company. Kansas City Fed President Thomas Hoenig, who has been a vocal critic of the current Fed policy of zero interest and high liquidity, has suggested that markets don’t function correctly under those circumstances. And David Stockman, Ronald Reagan’s former budget director, recently wrote a scathing article for MarketWatch, "Federal Reserve’s Path of Destruction," in which he criticizes current Fed policy even more pointedly. Stockman wrote: "This destruction is namely the exploitation of middle-class savers; the current severe food and energy squeeze on lower income households … and the next round of bursting bubbles building up among the risk asset classes."
Let’s not kid ourselves. Oil in today’s world is worth far more than the $25 a barrel it sold for over a decade ago. But the ability of markets to function properly, based on real supply and demand equations, has been destroyed by allowing ridiculous leverage and the unlimited ability to borrow the leverage at historically low interest rates.
Fortunately for our elected officials, they’ve got the public convinced that the biggest threat from government is taxation and deficits. In reality the public should be infuriated with the rising costs of nondiscretionary items such as food and gasoline, which current Fed policy actively enables. …"
The price of a barrel of oil is highly dependent on both its grade, determined by factors such as its specific gravity or API and its sulphur content, and its location. Other important benchmarks include Dubai, Tapis, and the OPEC basket. The Energy Information Administration (EIA) uses the imported refiner acquisition cost, the weighted average cost of all oil imported into the US, as its "world oil price".
The demand for oil is highly dependent on global macroeconomic conditions. According to the International Energy Agency, high oil prices generally have a large negative impact on the global economic growth.<sup></sup>
The Organization of the Petroleum Exporting Countries (OPEC) was formed in 1960<sup></sup> to try and counter the oil companies cartel, which had been controlling posted prices since the so-called 1927 Red Line Agreement and 1928 Achnacarry Agreement, and had achieved a high level of price stability until 1972.
The price of oil underwent a significant decrease after the record peak of US$145 it reached in July 2008. On December 23, 2008, WTI crude oil spot price fell to US$30.28 a barrel, the lowest since the financial crisis of 2007–2010 began, and traded at between US$35 a barrel and US$82 a barrel in 2009.<sup></sup> On 31 January 2011, the Brent price hit $100 a barrel for the first time since October 2008, on concerns about the political unrest in Egypt.<sup></sup>
Price history before 2003
A low point was reached in January 1999 of 17 USD per barrel, after increased oil production from Iraq coincided with the Asian Financial Crisis, which reduced demand. Prices then increased rapidly, more than doubling by September 2000 to $35, then fell until the end of 2001 before steadily increasing, reaching $40–50 by September 2004.<sup></sup>
<h3>Price history from 2003 onwards</h3>
<div>Main article: 2003 to 2011 world oil market chronology</div>
<div>Further information: 2000s energy crisis</div>
<div>Main article: Benchmark (crude oil)</div>
After the collapse of the OPEC-administered pricing system in 1985, and a short lived experiment with netback pricing, oil-exporting countries adopted a market-linked pricing mechanism.<sup></sup> First adopted by PEMEX in 1986, market-linked pricing received wide acceptance and by 1988 became and still is the main method for pricing crude oil in international trade.<sup></sup> The current reference, or pricing markers, are Brent, WTI, and Dubai/Oman.<sup></sup>
<h4> Market listings</h4>
<div>Main article: Commodities markets</div>
Oil is marketed among other products in commodities markets. See above for details. Widely traded oil futures, and related natural gas futures, include:<sup></sup>
<li>Nymex Crude Future</li>
<li>Dated Brent Spot</li>
<li>WTI Cushing Spot</li>
<li>Nymex Heating Oil Future</li>
<li>Nymex RBOB Gasoline Future</li>
<li>Nymex Henry Hub Future</li>
<li>Henry Hub Spot</li>
<li>New York City Gate Spot</li>
Most of the above oil futures have delivery dates in all 12 months of the year.<sup></sup>
The surge in oil prices in the past several years has led some commentators to argue that at least some of the rise is due to speculation in the futures markets.<sup></sup>
<h4> Future price changes</h4>
In 2009, Seismic Micro-Technology conducted a survey of geophysicists and geologists about the future of crude oil. Of the survey participants 80 percent predicted the price for a barrel of oil will rise to be somewhere between $50 and $100 per barrel by June 2010.<sup></sup> Another 50 percent saying it will rise even further to $100 to $150 a barrel in the next five years.<sup></sup>
Oil prices could go to $200- $300 a barrel if the world’s top crude exporter Saudi Arabia is hit by serious political unrest, according to former Saudi oil minister Sheikh Yamani. Yamani has said that underlying discontent remained unresolved in Saudi Arabia. "If something happens in Saudi Arabia it will go to $200 to $300. I don’t expect this for the time being, but who would have expected Tunisia?" Yamani told Reuters on the sidelines of a conference of the Centre for Global Energy Studies (CGES) which he chaired on April 5th 2011.<sup></sup>
The U.S. Commodity Futures Trading Commission (CFTC) announced "Multiple Energy Market Initiatives" on May 29, 2008. Part 1 is "Expanded International Surveillance Information for Crude Oil Trading." The CFTC announcement stated it has joined with the United Kingdom Financial Services Authority and ICE Futures Europe in order to expand surveillance and information sharing of various futures contracts.<sup></sup> This announcement has received wide coverage in the financial press, with speculation about oil futures price manipulation.<sup></sup><sup></sup><sup></sup>
The interim report by the Interagency Task Force, released in July, found that speculation had not caused significant changes in oil prices and that fundamental supply and demand factors provide the best explanation for the crude oil price increases. The report found that the primary reason for the price increases was that the world economy had expanded at its fastest pace in decades, resulting in substantial increases in the demand for oil, while the oil production grew sluggishly, compounded by production shortfalls in oil-exporting countries.
The report stated that as a result of the imbalance and low price elasticity, very large price increases occurred as the market attempted to balance scarce supply against growing demand, particularly in the last three years. The report forecast that this imbalance would persist in the future, leading to continued upward pressure on oil prices, and that large or rapid movements in oil prices are likely to occur even in the absence of activity by speculators. The task force continues to analyze commodity markets and intends to issue further findings later in the year.
<div>Main article: Oil depletion</div>
<div>Main article: Peak oil</div>
Peak oil is the period when the maximum rate of global petroleum extraction is reached, after which the rate of production enters terminal decline. It relates to a long term decline in the available supply of petroleum. This, combined with increasing demand, will significantly increase the worldwide prices of petroleum derived products. Most significant will be the availability and price of liquid fuel for transportation.
The US Department of Energy in the Hirsch report indicates that “The problems associated with world oil production peaking will not be temporary, and past “energy crisis” experience will provide relatively little guidance.”<sup> …"</sup>
"…One of the biggest misnomers in finance and economics today is that prices work according to supply and demand. This was true when America performed in actual capitalist system, but since we moved to both fascism and crony capitalism, where corporations, banks, and government all work together at the betterment of themselves and not society, prices are fixed due to other factors such as dollar devaluation.
<div style="padding-left: 30px;"><strong><em>U.S. drivers used 2.8 percent less motor gasoline last year and consumed the smallest amount since 1999, the U.S. Department of Energy said Wednesday. Officials credited the decrease to more fuel-efficient cars and an aging population taking few trips.</em></strong></div>
<div style="padding-left: 30px;"><strong><em>Meanwhile, U.S. domestic oil production increased by more than 2 percent last year to 5.6 million barrels per day. – </em></strong><a href="http://www.desmoinesregister.com/article/20120209/BUSINESS/302090065/-1/TERMSOFSERVICE/Gas-consumption-lowest-since-1999"><strong><em>Des Moines Register</em></strong></a></div>
So… if consumption is way down, and production is actually up, should not gasoline prices be falling? They should, except if you take into consideration the amount of money printing and currency devaluation being done by the Federal Reserve over the past four years, the amount of inflation is being created by our own banking system, and not by a lack of products, or by higher demand.
In the end, Americans are being deceived by Fed Chairman Ben Bernanke. …"
"…Panic is in the air as gasoline prices move above $4.00 per gallon. Politicians and pundits are rounding up the usual suspects, looking for someone or something to blame for this latest outrage to middle class family budgets. In a rare display of bipartisanship, President Obama and Speaker of the House <a href="http://www.forbes.com/profile/john-boehner/">John Boehner</a> are both wringing their hands over the prospect of seeing their newly extended Social <a href="http://www.forbes.com/security/">Security</a> tax cut gobbled up by rising gasoline costs.
Unfortunately, the talking heads that are trying to explain the reasons for high oil prices are missing one tiny detail. Oil prices aren’t high right now. In fact, they are unusually low. Gasoline prices would have to rise by another $0.65 to $0.75 per gallon from where they are now just to be “normal”. And, because gasoline prices are low right now, it is very likely that they are going to go up more—perhaps a lot more.
What the politicians, analysts, and pundits are missing is that prices are ratios. Gasoline prices reflect crude oil prices, so let’s use West Texas Intermediate (WTI) crude oil to illustrate this crucial point.
As this is written, West Texas Intermediate crude oil (WTI) is trading at $105.88/bbl. All this means is that the market value of a barrel of WTI is 105.88 times the market value of “the dollar”. It is also true that WTI is trading at €79.95/bbl, ¥8,439.69/barrel, and £67.13/bbl. In all of these cases, the market value of WTI is the same. What is different in each case is the value of the monetary unit (euros, yen, and British pounds, respectively) being used to calculate the ratio that expresses the price.
In terms of judging whether the price of WTI is high or low, here is the price that truly matters: 0.0602 ounces of gold per barrel (which can be written as Au0.0602/bbl). What this number means is that, right now, a barrel of WTI has the same market value as 0.0602 ounces of gold.
During the 493 months since January 1, 1971, the price of WTI has averaged Au0.0732/bbl. It has been higher than that during 225 of those months and lower than that during 268 of those months. Plotted as a graph, the line representing the price of a barrel of oil in terms of gold has crossed the horizontal line representing the long-term average price (Au0.0732/bbl) 29 times.
At Au0.0602/bbl, today’s WTI price is only 82% of its average over the past 41+ years. Assuming that gold prices remained at today’s $1,759.30/oz, WTI prices would have to rise by about 22%, to $128.86/bbl, in order to reach their long-term average in terms of gold. As mentioned earlier, such an increase would drive up retail gasoline prices by somewhere between $0.65 and $0.75 per gallon.
At this point, we can be certain that, unless gold prices come down, gasoline prices are going to go up—by a lot. And, because the dollar is currently a floating, undefined, fiat currency, there is no inherent limit to how far the price of gold in dollars can rise, and therefore no ultimate ceiling on gasoline prices. …"
<strong>Why Gas Prices Are Actually Falling </strong>
<div><strong>By Gary Gibson</strong></div>
"…It’s not gold and silver prices that are volatile. Those have been incredibly consistent for thousands of years in terms of commodities they could buy. And because of the increasing standard of living being raised by free market economies, in a very real sense these eternal monies actually buy more. It’s the dollar that has been erratic in its overall declining trend ever since it’s been cut loose from gold (and silver).
Again, people looking at the cost of a gallon of gas, or of milk, or the cost of a nice suit, or rent from behind their piles of gold and silver are finding very little to worry about. In fact, to them, prices are lower than normal and declining.
Also the price of oil has tended to track the price of silver awfully closely for about as long as oil has been industrially useful. And so it’s no mistake that you can still get a gallon of gas for about about $0.20…as long as that $0.20 is composed of a pre-1964 90% silver dimes. …"
"…You see, the pre-1965 quarter is worth $6.38 as I type this. The pre-1965 dime is worth $2.55. These coins hail from a time when the dollar was still tied to gold (at the official price of $35 per ounce prior to Nixon nixing the gold standard). The dollar was still as good as gold — even though Americans themselves were forbidden to own gold bullion from 1933 till 1974 — and there was actual silver in the coinage until that content was reduced in 1964 and eliminated in 1965.
Those old silver coins shine the harsh light on the strength of the currency and the abuse that currency suffers from the feds and the Federal Reserve.
If you’d been saving in gold, then from your point of view gas prices have been coming down for the past few years. If you’d been saving in that old “junk” silver (pre-1965 quarters, dimes and half dollars), then gas prices are a downright bargain, too. …"
This would devastate the U.S. economy, which is already hanging by a thin thread. Iran has announced this past weekend it will cease all oil shipments to Britain and France in protest of their support of economic sanctions. This alone is causing oil to spike today. A global energy crisis will financially decimate average citizens who will have their savings sapped by extreme price inflation, not just in gasoline, but in all goods that require the use of gasoline in their production and shipping. If you like this idea, then by all means, support an invasion of Iran.
<strong>War Domino Effect</strong>
In January of 2010, I wrote an article for Neithercorp Press entitled <a href="http://www.alt-market.com/neithercorp/press/2010/01/will-globalists-trigger-yet-another-world-war/" target="_blank">“Will Globalists Trigger Yet Another World War</a>“. In that article, I warned about the dangers of an invasion of Iran or Syria being used to foment a global conflict, in order to create a crisis large enough to distract the masses away from the international banker created economic collapse.
In 2006, Iran signed a mutual defense pact with its neighbor, Syria, which is also in the middle of its own turmoil and possible NATO intervention. Syria has strong ties to Russia, and even has a revamped Russian naval base off its coast, a fact rarely mentioned by the mainstream media. Both Russia and China have made their opposition clear in the case of any Western intervention in Iran or Syria. An invasion by the U.S. or Israel in these regions could quickly intensify into wider war between major world powers. If you like the idea of a world war which could eventually put you and your family in direct danger, then by all means, support an invasion of Iran.
Make no mistake, the U.S. dollar is already on the verge of collapse, along with the U.S. economy. Bilateral trade agreements between BRIC and ASEAN nations are sprouting up everywhere the past couple months, and these agreements are specifically designed to end the dollar’s status as the world reserve currency. An invasion of Iran will only expedite this process. If global anger over the resulting chaos in oil prices doesn’t set off a dump of the dollar, the eventual debt obligation incurred through the overt costs of war will. Ron Paul has always been right; it doesn’t matter whether you think invasion is a good idea or not. We simply CANNOT afford it. America is bankrupt. Our only source of income is our ability to print money from thin air. Each dollar created to fund new wars brings our currency ever closer to its demise. …"
<div><strong> Security Futures—Know Your Risks, or Risk Your Future</strong></div>
<strong>"…Margin & Leverage</strong>
When a brokerage firm lends you part of the funds needed to purchase a security, such as common stock, the term "margin" refers to the amount of cash, or down payment, the customer is required to deposit. By contrast, a security futures contract is an obligation not an asset and has no value as collateral for a loan. When you enter into a security futures contract, you are required to make a payment referred to as a "margin payment" or "performance bond" to cover potential losses.
For a relatively small amount of money (the margin requirement), a futures contract worth several times as much can be bought or sold. The smaller the margin requirement in relation to the underlying value of the futures contract, the greater the leverage. Because of this leverage, small changes in price can result in large gains and losses in a short period of time.
<strong>Example:</strong> Assuming a security futures contract is for 100 shares of stock, if a security futures contract is established at a contract price of $50, the contract has a nominal value of $5,000 (see definition below). The margin requirement may be as low as 20 percent, which would require a margin deposit of $1,000. Assume the contract price rises from $50 to $52 (a $200 increase in the nominal value). This represents a $200 profit to the buyer of the futures contract, and a 20 percent return on the $1,000 deposited as margin.
The reverse would be true if the contract price decreased from $50 to $48. This represents a $200 loss to the buyer, or 20 percent of the $1,000 deposited as margin. Thus, leverage can either benefit or harm an investor.
Note that a 4 percent decrease in the value of the contract resulted in a loss of 20 percent of the margin deposited. A 20 percent decrease in the contract price ($50 to $40) would mean a drop in the nominal value of the contract from $5,000 to $4,000, thereby wiping out 100 percent of the margin deposited on the security futures contract. …"
Futures margin requirements are set by the exchanges and are typically only 2 to 10 percent of the full value of the futures contract.
Margins are financial guarantees required of both buyers and sellers of futures contracts to ensure that they fulfill their futures contract obligations.
Before a futures position can be opened, there must be enough available balance in the futures trader’s margin account to meet the initial margin requirement. Upon opening the futures position, an amount equal to the initial margin requirement will be deducted from the trader’s margin account and transferred to the exchange’s clearing firm. This money is held by the exchange clearinghouse as long as the futures position remains open.
The maintenance margin is the minimum amount a futures trader is required to maintain in his margin account in order to hold a futures position. The maintenance margin level is usually slightly below the initial margin.
If the balance in the futures trader’s margin account falls below the maintenance margin level, he or she will receive a margin call to top up his margin account so as to meet the initial margin requirement.
Let’s assume we have a speculator who has $10000 in his trading account. He decides to buy August Crude Oil at $40 per barrel. Each Crude Oil futures contract represents 1000 barrels and requires an initial margin of $9000 and has a maintenance margin level set at $6500.
Since his account is $10000, which is more than the initial margin requirement, he can therefore open up one August Crude Oil futures position.
One day later, the price of August Crude Oil drops to $38 a barrel. Our speculator has suffered an open position loss of $2000 ($2 x 1000 barrels) and thus his account balance drops to $8000.
Although his balance is now lower than the initial margin requirement, he did not get the margin call as it is still above the maintenance level of $6500.
Unfortunately, on the very next day, the price of August Crude Oil crashed further to $35, leading to an additional $3000 loss on his open Crude Oil position. With only $5000 left in his trading account, which is below the maintenance level of $6500, he received a call from his broker asking him to top up his trading account back to the initial level of $9000 in order to maintain his open Crude Oil position.
This means that if the speculator wishes to stay in the position, he will need to deposit an additional $4000 into his trading account.
. Futures offer a way for a purchaser to bet on whether a commodity will increase in price down the road. Once locked into a contract, a futures buyer would receive a barrel of oil for the price dictated in the future contract, even if the market price was higher when the barrel was actually delivered. …”
“…What speculators do is bet on what price a commodity will reach by a future date, through instruments called derivatives. Unlike an investment in an actual commodity (such as a barrel of oil), a derivative’s value is based on the value of a commodity (for example, a bet on whether a barrel of oil will increase or decrease in price). Speculators have no hand in the sale of the commodity they’re betting on; they’re not the buyer or the seller.
By betting on the price outcome with only a single futures contract, a speculator has no effect on a market. It’s simply a bet. But a speculator with the capital to purchase a sizeable number of futures derivatives at one price can actually sway the market. As energy researcher F. William Engdahl put it, “[s]peculators trade on rumor, not fact”
. A speculator purchasing vast futures at higher than the current market price can cause oil producers to horde their commodity in the hopes they’ll be able to sell it later on at the future price. This drives prices up in reality — both future and present prices — due to the decreased amount of oil currently available on the market.
Investment firms that can influence the oil futures market stand to make a lot; oil companies that both produce the commodity and drive prices up of their product up through oil futures derivatives stand to make even more. Investigations into the unregulated oil futures exchanges turned up major financial institutions like Goldman Sachs and Citigroup. But it also revealed energy producers like Vitol, a Swiss company that owned 11 percent of the oil futures contracts on the New York Mercantile Exchange alone
As a result of speculation among these and other major players, an estimated 60 percent of the price of oil per barrel was added; a $100 barrel of oil, in reality, should cost $40
. And despite having an agency created to prevent just such speculative price inflation, by the time oil prices skyrocketed, the government had made a paper tiger out of it. …”
“…For just current CPI data, see CPI page. The following table provides all the Consumer Price Index data CPI-U from 1913 to the Present.
The Consumer Price Index (CPI-U) is compiled by the Bureau of Labor Statistics and is based upon a 1982 Base of 100. A Consumer Price Index of 158 indicates 58% inflation since 1982. The commonly quoted inflation rate of say 3% is actually the change in the Consumer Price Index from a year earlier. By looking at the change in the Consumer Price Index we can see that what cost an average of 9.9 cents in 1913 would cost us about $1.82 in 2003 and $2.02 in 2007.
To find Prior Consumer Price Index (CPI) data on this table (back through 1913) click on the date range links below the table.
Note Effective January 2007 the BLS began publishing the CPI index to three decimal places (prior to that it was only one decimal place). But InflationData.com is still the only place to get the Inflation Rate calculated to two decimal places.
To calculate inflation from a month and year to a later month and year, try our Inflation calculator
The Shadows of Power: The Council on Foreign Relations and the American Decline
James Perloff exposes the subversive roots and global designs of the Council on Foreign Relations (CFR). Passed off as a think-tank this group is the “power behind the throne” with hundreds of top-appointed government officials drawn from its ranks – regardless of which party has occupied the White House. It began in 1921 as a front organization for J.P. Morgan and Company and by World War II it had acquired unrivaled influence on American foreign policy. In this presentation Mr. Perloff traces the CFR’s activity from the Wilson to Reagan administrations.
“…The Council on Foreign Relations (CFR) is an American nonprofit nonpartisan membership organization, publisher, and think tank specializing in U.S. foreign policy and international affairs. Founded in 1921 and headquartered at 58 East 68th Street in New York City, with an additional office in Washington, D.C., the CFR is considered to be the nation’s ‘most influential foreign-policy think tank.’  It publishes a bi-monthly journal Foreign Affairs.
As stated on its website, the CFR’s mission is to be “a resource for its members, government officials, business executives, journalists, educators and students, civic and religious leaders, and other interested citizens in order to help them better understand the world and the foreign policy choices facing the United States and other countries.”
The CFR aims to maintain a diverse membership, including special programs to promote interest and develop expertise in the next generation of foreign policy leaders. It convenes meetings at which government officials, global leaders and prominent members of the foreign policy community discuss major international issues. Its think tank, the David Rockefeller Studies Program, is composed of about fifty adjunct and full-time scholars, as well as ten in-resident recipients of year-long fellowships, who cover the major regions and significant issues shaping today’s international agenda. These scholars contribute to the foreign policy debate by making recommendations to the presidential administration, testifying before Congress, serving as a resource to the diplomatic community, interacting with the media, authoring books, reports, articles, and op-eds on foreign policy issues.
The council publishes Foreign Affairs, “the preeminent journal of international affairs and U.S. foreign policy.” It also publishes Independent Task Forces which bring together experts with diverse backgrounds and expertise to work together to produce reports offering both findings and policy prescriptions on important foreign policy topics. To date, the CFR has sponsored more than fifty reports.
The CFR aims to provide up-to-date information and analysis about world events and U.S. foreign policy. In 2008, CFR.org’s “Crisis Guide: Darfur” was awarded an Emmy Award by the Television Academy of Arts and Sciences, in the category of “New Approaches to News & Documentary Programming: Current News Coverage.” In 2009, the Crisis Guide franchise won another Emmy for its “Crisis Guide: The Global Economy,” in the category of business and financial reporting.
The earliest origin of the Council stemmed from a working fellowship of about 150 scholars, called “The Inquiry”, tasked to brief President Woodrow Wilson about options for the postwar world when Germany was defeated. Through 1917–1918, this academic band, including Wilson’s closest adviser and long-time friend “Colonel” Edward M. House, as well as Walter Lippmann, gathered at 155th Street and Broadway at the Harold Pratt House in New York City, to assemble the strategy for the postwar world. The team produced more than 2,000 documents detailing and analyzing the political, economic, and social facts globally that would be helpful for Wilson in the peace talks. Their reports formed the basis for the Fourteen Points, which outlined Wilson’s strategy for peace after war’s end.
These scholars then traveled to the Paris Peace Conference, 1919 that would end the war; it was at one of the meetings of a small group of British and American diplomats and scholars, on May 30, 1919, at the Hotel Majestic, that both the Council and its British counterpart, the Chatham House in London, were born.
Some of the participants at that meeting, apart from Edward House, were Paul Warburg, Herbert Hoover, Harold Temperley, Lionel Curtis, Lord Eustace Percy, Christian Herter, and American academic historians James Thomson Shotwell of Columbia University, Archibald Cary Coolidge of Harvard, and Charles Seymour of Yale.
In 1938 they created various Committees on Foreign Relations throughout the country. These later became governed by the American Committees on Foreign Relations in Washington, D.C.
Network diagram showing interlocks between various U.S. corporations and institutions and the Council on Foreign Relations, in 2004
The Council on Foreign Relations, a sister organization to the Royal Institute of International Affairs in London (now known as Chatham House), was formed in 1922 as a noncommercial, nonpolitical organization supporting American foreign relations. From its inception the Council was bipartisan, welcoming members of both Democratic and Republican parties. It also welcomed Jews and African Americans, although women were initially barred from membership. Its proceedings were almost universally private and confidential. A critical study found that of 502 government officials surveyed from 1945 to 1972, more than half were members of the Council.
Today it has about 5,000 members (including five-year term members between the ages of 30-41), which over its history have included senior serving politicians, more than a dozen Secretaries of State, former national security officers, bankers, lawyers, professors, former CIA members and senior media figures.
In 1962, the group began a program of bringing select Air Force officers to the Harold Pratt House to study alongside its scholars. The Army, Navy and Marine Corps requested they start similar programs for their own officers.
Vietnam created a rift within the organization. When Hamilton Fish Armstrong announced in 1970 that he would be leaving the helm of Foreign Affairs after 45 years, new chairman David Rockefeller approached a family friend, William Bundy, to take over the position. Anti-war advocates within the Council rose in protest against this appointment, claiming that Bundy’s hawkish record in the State and Defense Departments and the CIA precluded him from taking over an independent journal. Some considered Bundy a war criminal for his prior actions.
Seven American presidents have addressed the Council, two while still in office – Bill Clinton and George W. Bush.
The Council says that it has never sought to serve as a receptacle for government policy papers that cannot be shared with the public and does not encourage its members serving in government to do so. The Council says that discussions at its headquarters remain confidential, not because they share or discuss secret information, but because the system allows members to test new ideas with other members.
Arthur M. Schlesinger, Jr., in his book on the Kennedy presidency, A Thousand Days, wrote that Kennedy was not part of what he called the “New York establishment”:
“In particular, he was little acquainted with the New York financial and legal community– that arsenal of talent which had so long furnished a steady supply of always orthodox and often able people to Democratic as well as Republican administrations. This community was the heart of the American Establishment. Its household deities were Henry Stimson and Elihu Root; its present leaders, Robert Lovett and John J. McCloy; its front organizations, the Rockefeller, Ford and Carnegie foundations and the Council on Foreign Relations; its organs, the New York Times and Foreign Affairs.”
It has an extensive website, http://www.cfr.org, featuring links to its history, fellows’ biographical information, think tank, the David Rockefeller Studies Program, Independent Task Force reports and other reports, CFR books, expert interviews, meeting transcripts, audio, and videos, Emmy award-winning multimedia Crisis Guides and timelines, Foreign Affairs, and many other publications, biographies of notable directors and other board members, corporate members, and press releases.
Influence on foreign policy
Beginning in 1939 and lasting for five years, the Council achieved much greater prominence within the government and the State Department when it established the strictly confidential War and Peace Studies, funded entirely by the Rockefeller Foundation. The secrecy surrounding this group was such that the Council members who were not involved in its deliberations were completely unaware of the study group’s existence.
It was divided into four functional topic groups: economic and financial, security and armaments, territorial, and political. The security and armaments group was headed by Allen Welsh Dulles who later became a pivotal figure in the CIA’s predecessor, the OSS. It ultimately produced 682 memoranda for the State Department, marked classified and circulated among the appropriate government departments. As a historical judgment, its overall influence on actual government planning at the time is still said to remain unclear.
In an anonymous piece called “The Sources of Soviet Conduct” that appeared in Foreign Affairs in 1947, CFR study group member George Kennan coined the term “containment.” The essay would prove to be highly influential in US foreign policy for seven upcoming presidential administrations. 40 years later, Kennan explained that he had never suspected the Russians of any desire to launch an attack on America; he thought that was obvious enough he didn’t need to explain it in his essay. William Bundy credited the CFR’s study groups with helping to lay the framework of thinking that led to the Marshall Plan and NATO. Due to new interest in the group, membership grew towards 1,000.
Dwight D. Eisenhower chaired a CFR study group while he served as President of Columbia University. One member later said, “whatever General Eisenhower knows about economics, he has learned at the study group meetings.” The CFR study group devised an expanded study group called “Americans for Eisenhower” to increase his chances for the presidency. Eisenhower would later draw many Cabinet members from CFR ranks and become a CFR member himself. His primary CFR appointment was Secretary of State John Foster Dulles. Dulles gave a public address at the Harold Pratt House in which he announced a new direction for Eisenhower’s foreign policy: “There is no local defense which alone will contain the mighty land power of the communist world. Local defenses must be reinforced by the further deterrent of massive retaliatory power.” After this speech, the council convened a session on “Nuclear Weapons and Foreign Policy” and chose Henry Kissinger to head it. Kissinger spent the following academic year working on the project at Council headquarters. The book of the same name that he published from his research in 1957 gave him national recognition, topping the national bestseller lists.
On 24 November 1953, a study group heard a report from political scientist William Henderson regarding the ongoing conflict between France and Vietnamese Communist leader Ho Chi Minh’s Viet Minh forces, a struggle that would later become known as the First Indochina War. Henderson argued that Ho’s cause was primarily nationalist in nature and that Marxism had “little to do with the current revolution.” Further, the report said, the United States could work with Ho to guide his movement away from Communism. State Department officials, however, expressed skepticism about direct American intervention in Vietnam and the idea was tabled. Over the next twenty years, the United States would find itself allied with anti-Communist South Vietnam and against Ho and his supporters in the Vietnam War.
The Council served as a “breeding ground” for important American policies such as mutual deterrence, arms control, and nuclear non-proliferation.
A four-year long study of relations between America and China was conducted by the Council between 1964 and 1968. One study published in 1966 concluded that American citizens were more open to talks with China than their elected leaders. Kissinger had continued to publish in Foreign Affairs and was appointed by President Nixon to serve as National Security Adviser in 1969. In 1971, he embarked on a secret trip to Beijing to broach talks with Chinese leaders. Nixon went to China in 1972, and diplomatic relations were completely normalized by President Carter’s Secretary of State, another Council member, Cyrus Vance.
In November 1979, while chairman of the CFR, David Rockefeller became embroiled in an international incident when he and Henry Kissinger, along with John J. McCloy and Rockefeller aides, persuaded President Jimmy Carter through the State Department to admit the Shah of Iran, Mohammad Reza Pahlavi, into the US for hospital treatment for lymphoma. This action directly precipitated what is known as the Iran hostage crisis and placed Rockefeller under intense media scrutiny (particularly from The New York Times) for the first time in his public life.
Current policy initiatives
The CFR started a program in 2008 to last for 5 years and funded by a grant from the Robina Foundation called “International Institutions and Global Governance” which aims to identify the institutional requirements for effective multilateral cooperation in the 21st century.
The CFR’s Maurice C. Greenberg Center for Geoeconomic Studies, directed by scholar and author Sebastian Mallaby works to promote a better understanding among policymakers, academic specialists, and the interested public of how economic and political forces interact to influence world affairs.
The CFR’s Center for Preventive Action (CPA) seeks to help prevent, defuse, or resolve deadly conflicts around the world and to expand the body of knowledge on conflict prevention. It does so by creating a forum in which representatives of governments, international organizations, nongovernmental organizations, corporations, and civil society can gather to develop operational and timely strategies for promoting peace in specific conflict situations.
Main article: Members of the Council on Foreign Relations
There are two types of membership: life, and term membership, which lasts for 5 years and is available to those between 30 and 36. Only U.S. citizens (native born or naturalized) and permanent residents who have applied for U.S. citizenship are eligible. A candidate for life membership must be nominated in writing by one Council member and seconded by a minimum of three others.
Corporate membership (250 in total) is divided into “Basic”, “Premium” ($25,000+) and “President’s Circle” ($50,000+). All corporate executive members have opportunities to hear distinguished speakers, such as overseas presidents and prime ministers, chairmen and CEOs of multinational corporations, and U.S. officials and Congressmen. President and premium members are also entitled to other benefits, including attendance at small, private dinners or receptions with senior American officials and world leaders.
The Council has been the subject of debate, as shown in the 1969 film The Capitalist Conspiracy by G. Edward Griffin, the 2006 film by Aaron Russo, America: Freedom to Fascism and a 2007 documentary Zeitgeist: The Movie, as well as the book The Naked Capitalist which reviewed Carroll Quigley’s book Tragedy and Hope from a less supportive standpoint.
This is partly due to the number of high-ranking government officials (along with world business leaders and prominent media figures) in its membership, its secrecy clauses, and the large number of aspects of American foreign policy that its members have been involved with, beginning with Wilson’s Fourteen Points. Wilson’s Fourteen Points speech was the first in which he suggested a worldwide security organization to prevent future world wars.
The John Birch Society believes that the CFR is “Guilty of conspiring with others to build a one world government…”. Conservative Democratic congressman from Georgia Larry McDonald, the second head of the John Birch Society, introduced American Legion National Convention Resolution 773 to the House of Representatives calling for a congressional investigation into the Council on Foreign Relations, but nothing came from it.
Carroll Quigley claimed it “became well known among those who believe that there is an international conspiracy to bring about a one-world government.” In Tragedy and Hope, he based his analysis on his unsourced research in the papers of an Anglo-American elite organization that, he held, secretly controlled the U.S. and UK governments through a series of Round Table Groups. Critics assailed Quigley for his approval of the goals (not the tactics) of the Anglo-American elite while selectively using his information and analysis as evidence for their views. Speaking of Carroll Quigley, Rep. Larry McDonald said, “He says, sure we’ve been working it, sure we’ve been collaborating with communism, yes we’re working with global accommodation, yes, we’re working for world government. But the only thing I object to is that we’ve kept it a secret.”. CFR publications discuss multilateralism and global governance as well.
In response to the allegations, the CFR’s website contains a FAQ section about its affairs. …”
“I want to use all my strength, to resist the notion that I can run your lives, or run the economy, or run the world. I want to use that strength to repeal and reject that notion, and stand up and defend the principles of liberty.”
~Congressman Ron Paul
Ron Paul Money Bomb Dec. 16, 2011 – Pledge Now!
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Ron Paul Predicted 9/11 a Decade Ago!!!!!!!!!!!!
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James Rickards on the IMF becoming a Central Bank and the Fed becoming a Hedge Fund
Angell Says Fed Not Pushing ECB to Lower Interest Rates
US to bail out Europe because Germans refuse to
US banks downgraded
Eurozone debt vs US debt
Is The US Bailing Out Europe ?
Soaring Markets Reveal Clues About Big Banks’ Levels of Trust, Comfort
Background Articles and Videos
Has the Fed saved Europe? – MoneyWeek Investment Tutorial
Central bank liquidity swap
“…Central bank liquidity swap is a type of currency swap used by a country’s central bank to provide liquidity of its currency to another country’s central bank. 
On December 12, 2007, the Federal Open Market Committee (FOMC) announced that it had authorized temporary reciprocal currency arrangements (central bank liquidity swap lines) with the European Central Bank and the Swiss National Bank to help provide liquidity in U.S. dollars to overseas markets. Subsequently, the FOMC authorized liquidity swap lines with additional central banks. The swap lines are designed to improve liquidity conditions in U.S. and foreign financial markets by providing foreign central banks with the capacity to deliver U.S. dollar funding to institutions in their jurisdictions during times of market stress.
As of April 2009[update], swap lines were authorized with the following institutions: the Reserve Bank of Australia, the Banco Central do Brasil, the Bank of Canada, Danmarks Nationalbank, the Bank of England, the European Central Bank, the Bank of Japan, the Bank of Korea, the Banco de Mexico, the Reserve Bank of New Zealand, Norges Bank, the Monetary Authority of Singapore, Sveriges Riksbank, and the Swiss National Bank. The FOMC authorized these liquidity swap lines through October 30, 2009.
The Federal Reserve operates swap lines under the authority of Section 14 of the Federal Reserve Act and in compliance with authorizations, policies, and procedures established by the FOMC.
These swaps involve two transactions. When a foreign central bank draws on its swap line with the Federal Reserve, the foreign central bank sells a specified amount of its currency to the Federal Reserve in exchange for dollars at the prevailing market exchange rate. The Federal Reserve holds the foreign currency in an account at the foreign central bank. The dollars that the Federal Reserve provides are deposited in an account that the foreign central bank maintains at the Federal Reserve Bank of New York. At the same time, the Federal Reserve and the foreign central bank enter into a binding agreement for a second transaction that obligates the foreign central bank to buy back its currency on a specified future date at the same exchange rate. The second transaction unwinds the first. At the conclusion of the second transaction, the foreign central bank pays interest, at a market-based rate, to the Federal Reserve.
When the foreign central bank lends the dollars it obtained by drawing on its swap line to institutions in its jurisdiction, the dollars are transferred from the foreign central bank’s account at the Federal Reserve to the account of the bank that the borrowing institution uses to clear its dollar transactions. The foreign central bank remains obligated to return the dollars to the Federal Reserve under the terms of the agreement, and the Federal Reserve is not a counterparty to the loan extended by the foreign central bank. The foreign central bank bears the credit risk associated with the loans it makes to institutions in its jurisdiction.
Revenue and cost impacts
The foreign currency that the Federal Reserve acquires is an asset on the Federal Reserve’s balance sheet. In tables 1, 9, and 10 of the H.4.1 statistical release, the dollar value of amounts that the foreign central banks have drawn but not yet repaid is reported in the line “Central bank liquidity swaps.” Because the swap will be unwound at the same exchange rate that was used in the initial draw, the dollar value of the asset is not affected by changes in the market exchange rate. The dollar funds deposited in the accounts that foreign central banks maintain at the Federal Reserve Bank of New York are a Federal Reserve liability. In principle, draws would initially appear in tables 1, 9, and 10 in the line “foreign and official” deposits. However, the foreign central banks generally lend the dollars shortly after drawing on the swap line. At that point, the funds shift to the line “deposits of depository institutions.”
When a foreign central bank draws on its swap line to fund its dollar tender operations, it pays interest to the Federal Reserve in an amount equal to the interest the foreign central bank earns on its tender operations. The Federal Reserve holds the foreign currency that it acquires in the swap transaction at the foreign central bank (rather than lending it or investing it in private markets) and does not pay interest. The structure of the arrangement serves to avoid domestic currency reserve management difficulties for foreign central banks that could arise if the Federal Reserve actively invested the foreign currency holdings in the marketplace.
The Federal Reserve Board issues a weekly release that includes information on the aggregate value of swap drawings outstanding. With the onset of the Global financial crisis of 2008–2009 and the collapse of Lehman Brothers on September 15, 2008, the balance grew rapidly. As of April 2009[update] the balance was $293,533 million. Central bank liquidity swaps have maturities ranging from overnight to three months. Table 2 of the H.4.1 statistical release reports the remaining maturity of outstanding central bank liquidity swaps. …”
“…The Federal Reserve moved in coordinated action with foreign central banks this morning in order to provide a pressure-release valve for funding markets without exposing the U.S. central bank to much risk.
The Fed announced an expansion of its program that supplies dollars to overseas markets at a cheaper rate. Basically, the Fed lends dollars to foreign central banks in return for their local currency for a specific period. Since the Fed isn’t lending to banks directly, the risk is essentially nonexistent, and it also isn’t exposed to changes in currency rates since the exchange rate is set for the duration of the swap.
The liquidity swap arrangements have a history of use when there are tensions in funding markets. They were used following the terrorist attacks of September 11, 2001and were revived in 2007 and used extensively during the financial crisis, especially after the collapse of Lehman Brothers when credit markets dried up. As market conditions improved, they were shut down in February 2010, but revived in May 2010 as sovereign debt problems began to emerge in Europe. (The Fed has a useful Q&A you can find here, and New York Fed research noted the success of the lines during the financial crisis) …”
Congressman Ron Paul delivered a speech for the National Association of Home Builders at the 29th Annual Cato Monetary Conference yesterday. The key topics were the US monetary policy and the Federal Reserve.
Ron Paul Highlights at the Thanksgiving Family Forum (Family Leader Debate)
Ron Paul Explains the Economic Crisis
Ron Paul Tied for 1st in Iowa
First note that unlike President Barack Obama, Congressman Ron Paul is not reading from a telepromter.
Only a individual who truly understands what he is talking about can deliver such a address.
Second, Paul focuses on the key issue, the American people must decide what the functions of federal government should be.
The Business Cycle Dating Committee of the National Bureau of Economic Research determines the beginning and ending dates of U.S. recessions. http://www.nber.org/cycles.html
It has determined that the U.S. economy experienced 10 recessions from 1946 through 2006. The committee determined that the 2007-2009 recession began in December 2007 and ended in June of 2009. Ending dates are typically announced several months after the recession officially ends. Read the June 2009 trough announcement by the NBER.
Length of Recessions
The 10 previous postwar recessions ranged in length from 6 months to 16 months, averaging about 10 1/2 months. The 2007-09 recession was the longest recession in the postwar period, at 18 months.
Depth of Recessions
The severity of a recession is determined in part by its length; perhaps even more important is the magnitude of the decline in economic activity. The 2007-09 recession was the deepest recession in the postwar period; at their lowest points employment fell by 6.3 percent and output fell by 5.1 percent.
The 1960s and 1980s were periods of sustained high growth rates in the economy. The major reason for this growth is the tax cuts enacted in the beginning of each decade. President Kennedy’s and President Reagan’s tax cuts resulted in higher investment, lower unemployment, and improved overall economic performance.
Since March 1991, the U.S. economy has been expanding, though at a slower rate than previous post-war expansions. Productivity growth has been weak and must be improved. A tax cut that improves incentives to work, save, and invest is necessary to provide a framework for prosperity. As President Kennedy said, “A rising tide lifts all boats.”
Excerpts from President John F Kennedy’s speech delivered on December 14, 1962 to the Economic Club of New York.
Income Tax Cut, JFK Hopes To Spur Economy 1962/8/13
JFK speech on tax cuts
John F. Kennedy State of the Union Address to a Joint Session of the United States Congress (1963)
JFK State of the Union Address (1963) (Part 1)
Interesting that the audio for the tax cut part of the speech is missing. “This net reduction in tax liabilities of $10 billion will increase the purchasing power of American families and business enterprises in every tax bracket, with greatest increase going to our low-income consumers. It will, in addition, encourage the initiative and risk-taking on which our free system depends–induce more investment, production, and capacity use–help provide the 2 million new jobs we need every year…”
January 14, 1963 – John F. Kennedy’s delivers the State of the Union address
State of the Union Address (January 14, 1963)
John Fitzgerald Kennedy
“…At home, the recession is behind us. Well over a million more men and women are working today than were working 2 years ago. The average factory workweek is once again more than 40 hours; our industries are turning out more goods than ever before; and more than half of the manufacturing capacity that lay silent and wasted 100 weeks ago is humming with activity.
In short, both at home and abroad, there may now be a temptation to relax. For the road has been long, the burden heavy, and the pace consistently urgent.
But we cannot be satisfied to rest here. This is the side of the hill, not the top. The mere absence of war is not peace. The mere absence of recession is not growth. We have made a beginning–but we have only begun.
Now the time has come to make the most of our gains–to translate the renewal of our national strength into the achievement of our national purpose.
America has enjoyed 22 months of uninterrupted economic recovery. But recovery is not enough. If we are to prevail in the long run, we must expand the long-run strength of our economy. We must move along the path to a higher rate of growth and full employment.
For this would mean tens of billions of dollars more each year in production, profits, wages, and public revenues. It would mean an end to the persistent slack which has kept our unemployment at or above 5 percent for 61 out of the past 62 months–and an end to the growing pressures for such restrictive measures as the 35-hour week, which alone could increase hourly labor costs by as much as 14 percent, start a new wage-price spiral of inflation, and undercut our efforts to compete with other nations.
To achieve these greater gains, one step, above all, is essential–the enactment this year of a substantial reduction and revision in Federal income taxes.
For it is increasingly clear–to those in Government, business, and labor who are responsible for our economy’s success–that our obsolete tax system exerts too heavy a drag on private purchasing power, profits, and employment. Designed to check inflation in earlier years, it now checks growth instead. It discourages extra effort and risk. It distorts the use of resources. It invites recurrent recessions, depresses our Federal revenues, and causes chronic budget deficits.
Now, when the inflationary pressures of the war and the post-war years no longer threaten, and the dollar commands new respect-now, when no military crisis strains our resources–now is the time to act. We cannot afford to be timid or slow. For this is the most urgent task confronting the Congress in 1963.
In an early message, I shall propose a permanent reduction in tax rates which will lower liabilities by $13.5 billion. Of this, $11 billion results from reducing individual tax rates, which now range between 20 and 91 percent, to a more sensible range of 14 to 65 percent, with a split in the present first bracket. Two and one-half billion dollars results from reducing corporate tax rates, from 52 percent–which gives the Government today a majority interest in profits-to the permanent pre-Korean level of 47 percent. This is in addition to the more than $2 billion cut in corporate tax liabilities resulting from last year’s investment credit and depreciation reform.
To achieve this reduction within the limits of a manageable budgetary deficit, I urge: first, that these cuts be phased over 3 calendar years, beginning in 1963 with a cut of some $6 billion at annual rates; second, that these reductions be coupled with selected structural changes, beginning in 1964, which will broaden the tax base, end unfair or unnecessary preferences, remove or lighten certain hardships, and in the net offset some $3.5 billion of the revenue loss; and third, that budgetary receipts at the outset be increased by $1.5 billion a year, without any change in tax liabilities, by gradually shifting the tax payments of large corporations to a . more current time schedule. This combined program, by increasing the amount of our national income, will in time result in still higher Federal revenues. It is a fiscally responsible program–the surest and the soundest way of achieving in time a balanced budget in a balanced full employment economy.
This net reduction in tax liabilities of $10 billion will increase the purchasing power of American families and business enterprises in every tax bracket, with greatest increase going to our low-income consumers. It will, in addition, encourage the initiative and risk-taking on which our free system depends–induce more investment, production, and capacity use–help provide the 2 million new jobs we need every year–and reinforce the American principle of additional reward for additional effort.
I do not say that a measure for tax reduction and reform is the only way to achieve these goals.
–No doubt a massive increase in Federal spending could also create jobs and growth-but, in today’s setting, private consumers, employers, and investors should be given a full opportunity first.
–No doubt a temporary tax cut could provide a spur to our economy–but a long run problem compels a long-run solution.
–No doubt a reduction in either individual or corporation taxes alone would be of great help–but corporations need customers and job seekers need jobs.
–No doubt tax reduction without reform would sound simpler and more attractive to many–but our growth is also hampered by a host of tax inequities and special preferences which have distorted the flow of investment.
–And, finally, there are no doubt some who would prefer to put off a tax cut in the hope that ultimately an end to the cold war would make possible an equivalent cut in expenditures-but that end is not in view and to wait for it would be costly and self-defeating.
In submitting a tax program which will, of course, temporarily increase the deficit but can ultimately end it–and in recognition of the need to control expenditures–I will shortly submit a fiscal 1964 administrative budget which, while allowing for needed rises in defense, space, and fixed interest charges, holds total expenditures for all other purposes below this year’s level.
This requires the reduction or postponement of many desirable programs, the absorption of a large part of last year’s Federal pay raise through personnel and other economies, the termination of certain installations and projects, and the substitution in several programs of private for public credit. But I am convinced that the enactment this year of tax reduction and tax reform overshadows all other domestic problems in this Congress. For we cannot for long lead the cause of peace and freedom, if we ever cease to set the pace here at home.
Tax reduction alone, however, is not enough to strengthen our society, to provide opportunities for the four million Americans who are born every year, to improve the lives of 32 million Americans who live on the outskirts of poverty.
The quality of American life must keep pace with the quantity of American goods.
This country cannot afford to be materially rich and spiritually poor.
Therefore, by holding down the budgetary cost of existing programs to keep within the limitations I have set, it is both possible and imperative to adopt other new measures that we cannot afford to postpone. …”
History of Federal Individual Income Bottom and Top Bracket Rates
Historical Income Tax Rates & Brackets
Tax Rates 1
Taxable Income Up to
1 Taxable income excludes zero bracket amount from 1977 through 1986. Rates shown apply only to married persons filing joint returns beginning in 1948. Does not include either the add on minimum tax on preference items (1970-1982) or the alternative minimum tax (1979-present). Also, does not include the effects of the various tax benefit phase-outs (e.g. the personal exemption phase-out). From 1922 through 1986 and from 1991 forward, lower rates applied to long-term capital gains.
2 After earned-income deduction equal to 25 percent of earned income.
3 After earned-income deduction equal to 10 percent of earned income.
4 Exclusive of Victory Tax.
5 Subject to the following maximum effective rate limitations.
[year and maximum rate (in percent)] 1944-45 –90; 1946-47 –85.5; 1948-49 –77.0; 1950 –87.0; 1951 –87.2; 1952-53 –88.0; 1954-63 –87.0.
6 Includes surcharge of 7.5 percent in 1968, 10 percent in 1969, and 2.6 percent in 1970.
7 Earned income was subject to maximum marginal rates of 60 percent in 1971 and 50 percent from 1972 through 1981.
8 Beginning in 1975, a refundable earned-income credit is allowed for low-income individuals.
9 After tax credit is 1.25 percent against regular tax.
10 The benefit of the first rate bracket is eliminated by an increased rate above certain thresholds. The phase-out range of the benefit of the first rate bracket was as follows: Taxable income between $71,900 and $149,250 in 1988; taxable income between $74,850 and $155,320 in 1989; and taxable income between $78,400 and $162,770 in 1990. The phase-out of the benefit the first rate bracket was repealed for taxable years beginning after December 31, 1990. This added 5 percentage points to the marginal rate for those by the phaseout, producing a 33 percent effective rate.
11 Rates for 2003 are after enactment of the Jobs and Growth Tax Relief Reconciliation Act. Prior to enactment the rates were 10% up to $12,000 and 38.6% on amounts over $311,950.
12 The 2011 rates were extended for two years after enactment of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010.
Sources: Joint Committee on Taxation, “Overview of Present Law and Economic Analysis Relating to Marginal Tax Rates and the President’s Individual Income Tax Rate Proposals” (JCX-6-01), March 6, 2001, and Congressional Research Service, “Statutory Individual Income Tax Rates and Other Elements of the Tax System: 1988 through 2008,” (RL34498) May 21, 2008. Tax Foundation, “Federal Individual Income Tax Rates History: Income Years 1913-2011,”
Paul Samuelson and Tax Policy in the Kennedy
Joseph J. Thorndike
“…Recovery from the recession of 1958 had been anemic. The nation had never
returned to anything like high employment, with more than 5 percent of workers
continually idle: “A most disappointing performance in comparison with earlier
post-war recoveries and desirable social goals.” Such sluggishness threatened to
become permanent, unless Congress did something to foster not just short-term
recovery, but long-term growth.
Expansionary fiscal policy was the only viable solution, Samuelson explained,
because monetary policy was constrained by a chronic balance of payments
deficit. Policymakers should move quickly to increase and accelerate spending
programs that were “desirable for their own sake.” They should also boost
unemployment benefits, foster residential housing construction through various
incentives, and pursue a variety of other socially desirable spending programs,
including urban renewal and natural resource development.
Samuelson warned that additional spending might not be
enough to win the battle against recession — and keep it won. In that case, the
nation must turn to a second line of economic defense: tax cuts. Samuelson
understood that expansionary tax cuts were controversial, not least because they
seemed to flout the hoary traditions of fiscal conservatism. If deficits were a
natural byproduct of recession, then making them even bigger by slashing tax
rates seemed rash — at least to many policymakers.
But Samuelson directly challenged such atavistic orthodoxies. Deficits that
arose from stimulatory fiscal policy were not just tolerable, but desirable.
They had to be distinguished, he insisted, from shortfalls brought on by
The deficits that come automatically from recession or which are a necessary part of a determined effort to restore the economic system to health are quite different phenomena [from deficits driven by out-of-control spending].They are signs that our automatic built-in stabilizers are working, and that we no longer will run the risk of going into one of the great depressions that characterized our economic history before the war.
In the face of persistently high unemployment, policymakers should enact temporary tax cuts,
Samuelson advised. “Congress could legislate, for example, a cut of three or
four percentage points in the tax rate applicable to every income class, to take
effect immediately under our withholding system, in March or April and to
continue until the end of the year,” he wrote. Also, the president might be
granted authority to extend those tax cuts for six months or a year after their
Tax cuts must be temporary, however, if only to preserve the nation’s
long-term fiscal health. “With the continued international uncertainty and with
new public programs coming up in the years ahead,” Samuelson wrote, “sound
finance may require a maintenance of our present tax structure, and any
weakening of it in order to fight a recession might be tragic.”
The report left room for more permanent reductions in personal income tax
rates, which most economists considered excessively high. But such cuts should
be part of more fundamental tax reform, including efforts to broaden the tax
base by reducing preferences. That sort of tax program should be advanced on its
own merits, Samuelson wrote, not as part of an antirecession package.
A Moderate Manifesto
Samuelson’s report was ambitious, but it
was hardly radical. By stressing a few relatively moderate spending increases –
and the acceleration of existing spending programs — it sought to draft
expansionary fiscal policy out of existing spending priorities. It also stressed
that major new spending programs should await further analysis of the
“It is just as important to know what not to do as to know what to do,” the
report noted. “What is definitely not called for in the present situation is a
massive program of hastily devised public works whose primary purpose is merely
that of making jobs and getting money pumped into the economy.” The New Deal was
replete with such spending, but 1961 was not 1933. There was no need to “push
the panic button and resort to inefficient spending devices,” the report said.
The Samuelson report received a generally warm welcome, especially from the
press. Most observers seemed to understand that it was carefully designed to put
a moderate face on Democratic policies, and they valued the effort. Still, not
everyone was convinced that it would succeed. “The recommendations, of course,
are those of a small group of men operating independently of the many political
and bureaucratic factors that go into the formation of national policy,” The
New York Times observed. “That gives the recommendations the virtue of being
relatively ‘pure,’ but it also makes them subject to some revision in the
The Kennedy Tax Cut John F. Kennedy took office as the country was
already beginning its recovery from the Recession of 1960, but unemployment
remained high. Kennedy’s advisors realized the government would soon be taking
in ore than it was spending. That surplus would stop economic growth, well short
of full employment. That could be corrected in two ways: by tax cuts or
increased expenditures. Kennedy was committed to tax cuts despite calls from
John Kenneth Galbraith, a long-time friend, who lobbied that social programs on
the behalf of the poor were in need of more support. The Treasury Department was
dubious about a big tax-cut and wanted only a 4 billion cut. Kennedy advisor and
chairman of the Council of Economic Advisors Walter Heller was pushing for a 12
billion cut. Kennedy tried to sell the $12 billion tax-cut to a reluctant
congress. Congress passed the Kennedy tax program following his death. The
economy immediately took off in a burst of prosperity.
Analysis by Richard Gill. What the tax cut did was simply give more
disposable income to consumers. It shifted private spending up. The gap between
spending and full employment was eradicated.. The apparent success of the
tax-cut of 1964 was hailed by many as a total vindication of Keynesian ideas
Economic Policy and the Road to Serfdom: The Watershed of 1913
“…The answer to the ﬁrst question is that the saved pay did not retain its value, meaning that one cannot really hold that there had been a true return to full employment during the war. From 1944 to 1948, the United States experienced inﬂation of 42 percent (the Fed had been expansionist again), devaluing savings accrued before that time. Moreover, redemptions of U.S. war bonds (where so much of workers’ pay had gone during World War II) were taxed at one’s marginal income tax rate, and rates were jacked up across the board, the top one reaching 91 percent. Therefore, when World War II employees redeemed the bonds after the war, the World War II employer—the government—recovered much of what it had laid out in pay to its workers. A conservative estimate is that given inﬂation and taxes, the average World War II worker lost half of his or her pay to the government. In economic terms, this means that World War II solved the unemployment problem of the 1930s only half as much as is commonly supposed.
As for the second question, GDP fell precipitously from 1944 to 1947, by 13 percent, as prices soared. This was a clear indication that the growth of the war years was artificial. Nonetheless, living standards improved, as the real sector made huge inroads into the government’s share of economic production. Then a transition hit: the postwar inﬂation stopped. This occurred because the U.S. government focused on its commitment to the world made at the 1944 Bretton Woods conference that it would not overproduce the dollar so as to jeopardize the $35 gold price. And when Republicans won control of Congress in 1946, they insisted on getting a tax cut; they ﬁnally passed it over President Harry Truman’s veto in April 1948. The institutions of 1913 had signaled a posture of retreat.
That is when postwar prosperity got going. From 1947 to 1953, growth rolled in at the old familiar rate of 4.6 percent per annum, as unemployment dived and prices stayed at par except for a strange 8 percent burst just as the Korean War started.
Taxes were still high, however, with rates that started at 20 percent and peaked at 91 percent. When recession hit in 1953, a chorus rose that they be hacked away. But for the eight years of his presidency, Dwight D. Eisenhower resisted these calls for tax relief. Despite the common myth of “Eisenhower prosperity,” the years 1953 to 1960 saw economic growth far below the old par, at only 2.4 percent, and there were three recessions during this period. Monetary policy, for its part, was unremarkable. Once again the coincidence held: unremarkable monetary policy and aggressive tax policy led to a half-baked result.
Much ink has been spilled on how the JFK tax cuts of 1962 and 1964 were “Keynesian” and “demand-side.” Whatever we want to call the policy mix of the day, in the JFK and early Lyndon B. Johnson years, ﬁscal and monetary policy clearly retreated. Income taxes got cut across the board, with every rate in the Eisenhower structure going down, the top from 91 percent to 70 percent, the bottom from 20 percent to 14 percent. And monetary policy zeroed in (at least through 1965) on a stable value of the dollar, with the gold price and the price level sticking at par after making startling moves up with the ﬁnal Eisenhower recessions. The results: from 1961 to 1968, real U.S. growth was 5.1 percent yearly; unemployment hit peacetime lows; and inﬂation held in the heroic 1 percent range before the latter third of the period, when it began creeping up by a point a year. The real effects inspired slogans. If four decades prior had been the “Roaring ’20s,” these were the “Swingin’ ’60s” and “The Go-Go Years.”
At the end of the decade, however, the government loudly signaled a reversal in ﬁscal and monetary policy. The Fed volunteered that it would ﬁnance budget deﬁcits, and LBJ pleaded for and got an income tax surcharge, soon accompanied (under Richard M. Nixon) by an increase in the capital-gains rate on the order of 100 percent. This two-front reassertion of ﬁscal and monetary policy held for a dozen years. The nickname eventually given to that period, in view of the real effects, was the “stagﬂation era” (for stagnation plus inﬂation). From 1969 to 1982, real GDP went to half that of the Go-Go Years, to 2.46 percent; the price level tripled (with gold going up twentyfold); average unemployment roughly doubled to 7.5 percent; three double-dip recessions occurred; and stocks and bonds suffered a 75 percent real loss. It was the worst decade of American macroeconomic history save the 1930s …”
Since the Great Depression, presidents have frequently experimented with Keynesian economics to combat recessions. Three economists chronicle the history of government policy during past recessions and explain what worked and what didn’t.
FISCAL POLICY: ITS MACROECONOMIC PERSPECTIVEby James Tobin
“…In making a major cut in federal income taxes the centerpiece of his program, George w. Bush has followed two influential precedents, one of Democratic
Presidents Kennedy and Johnson in 1962-64 and the other of course that of
Republican President Reagan in 1981. Candidate Bob Dole obeyed Republican
tradition by proposing in his 1996 campaign a 15% across-the-board cut in income
tax rates. Instead the reelection of Bill Clinton continued the regime of fiscal
discipline and monetary wisdom begun by Treasury Secretary Rubin and Federal
Reserve Chairman Greenspan in 1993. The economy and the federal budget were
doing so well in election year 2000 that it seemed unlikely that young Mr. Bush
could be elected, much less succeed in reviving Reaganomic fiscal policies. Yet
now in 2001 it seems quite probable that a substantial permanent cut in income
taxes will be enacted, along with an emergency package to encourage spending
soon this year.
The story of macroeconomic and fiscal developments over the last
forty years is an amalgam of economic theory, politics, and ideology. I admit to
being both a Keynesian and a neoclassical economist and both a liberal and a
conservative in public policy. I was an adviser to President Kennedy, and an
informal consultant to other Democratic candidates. Win or lose, my advice was
very often not taken. In 1962-64, when JFK first considered and then recommended
cutting taxes, the economy was hesitantly recovering from the 1959-60 recession.
Kennedy’s first measures were incentives for business plant and equipment
investments, accelerated depreciation allowances and tax credits. The major tax
legislation, in 1964, was intended to keep the recovery from petering out
prematurely. Unemployment had fallen from 7% at JFK’s inauguration in 1961 to
the 5-6% range, but the Administration’s target was 4%. It was reached in 1965.
The stimulus of the tax cut was unexpectedly augmented by spending for Vietnam.
The combined spending was excessive, reducing unemployment a point below the 4%
target and unleashing unwelcome inflation in 1966-68. President Johnson
belatedly and reluctantly was persuaded to prevail on the Congress to raise
taxes temporarily in 1968. It was too late, and the Nixon Administration
inherited a difficult economy. Moral: unforeseen events may make you regret a
permanent loss of federal revenue, and it is awfully difficult ever to raise
taxes. This is even truer now that any tax increase is a deadly sin in the
litany of the G.O.P.
REAGAN’S 1981 CUT: SUPPLY-SIDE REFORM WAS DEMAND STIMULUS
Ronald Reagan’s tax cut took effect at the depths of the worst
recession since World War II. Unemployment had hit double digits. This was the
cost of the crusade of the Federal Reserve under Chairman Paul Volcker against
an inflation that itself had in 1979-80 hit double digits. The tax cut was a big
stimulus to consumer and business spending, reinforced by Reagan’s buildup of
the U.S. military.
The period 1981-88 was one of recovery from the recession,
bringing unemployment back down to 6%. The high year-to-year rates of increase
of economic activity and real Gross Domestic Product (GDP) during such
business-cycle upswings reflect the re-employment of idle resources, both
workers and industrial capacity. This additional output growth is the essence of
prosperity. But this pace cannot be sustained. Once the economy returns to full
employment, the economy can grow only at its long-run sustainable rates of
increase in the supplies of economic resources and, especially, in their
The architects of Reaganomics styled themselves Supply-Siders.
They scorned the Demand-Side theories and policies they attributed to John
Maynard Keynes and to his “liberal” followers, whom they held responsible for
the stagflation of the 1970s. In their view the Federal Reserve could and should
control inflation by stabilizing the supply of money, as preached in the
Monetarism of Milton Friedman. Keynesians were, they argued, dangerously wrong
to think that demand-side stimuli to spending could lift employment, GDP, and
economic welfare. Instead what the country needs are policies to enhance supply,
in particular by lowering taxes, providing incentives to work, save, innovate,
take risks. That was the spirit and the purpose of Reagan fiscal policy.
In practice Reaganomics turned out to be the biggest and most
successful Demand-side fiscal gambit in peacetime U.S. history. What it was not
was what it was intended to be, a Supply-side transformation of the economy.
There was zero evidence that the American economy’s capacity to produce goods
and services at full employment was any greater at the end of the
eighties than would have been prophesied a decade earlier without Reagan fiscal
policy. The trend of productivity growth was the same as before.
These Supply-side failures may seem surprising, since income tax
cuts were meant to embody incentives for more productive and innovative
behavior. Unfortunately these cuts in tax rates also bring windfalls for
behavior that already took place. For example, offering concessions for capital
gains on future acquisitions of assets might be socially useful, while reducing
taxes on gains realized on holdings bought years ago clearly is not. The test is
whether the taxpayer must in order to benefit change his behavior in the desired
supply-side direction. If yes, the touted incentives work. If no, the individual
taxpayers’ gains have to be defended otherwise, as deserved and just.
Undergraduate microeconomics students know the difference between the “income
effects” and “substitution effects” of variations in prices or taxes. The
substitution effects are responses to incentives, but they are often outweighed
by income effects in the perverse direction. Income effects may sometimes be
what the doctor ordered, more consumer spending. But those effects can overwhelm
Supply-side objectives. A cut in marginal income tax rates may elicit more work
from some taxpayers, but workers whose taxes are reduced anyway may take some of
their gains in leisure. The same objections apply to tax credits intended to
induce desirable behavior, for example saving or paying school and college
tuitions. These devices have long been favorites of politicians in both
Police arrest protesters on ‘day of action’ – ‘Occupy Wall Street’
Occupy: Soros, Piven and SEIU Working to Destroy Americas Financial System to Create Revolution
How ‘Occupy Wall Street’ Was Organized From Day One by SEIU
SEIU President Arrested At Occupy Brooklyn Bridge Protest
Occupy Wall Street Was Organized by SEIU, ACORN Front Group ‘The Working Family Party’
(Communist Party Member)
Angela Davis…Occupy Oakland
Angela Davis Occupy Wall St @ Washington Sq Park Oct 30 2011 General Strike November 2
Glenn Beck: Soros connections to OWS
Glenn Beck: Occupy is SEIU world Marxist movement
Glenn Beck: Tea Party vs Occupy Wall Street
GBTV: What is Occupy Wall Street going to do for the their two month anniversary
Occupy Wall Street = What Democrats, Nazis And Communists All Have In Common
OWS – ACORN Behind Occupy Wall Street Movement!
The Greatest Revolution in History has Begun! BEST OCCUPY DOCUMENTARY
Growing Anti-Semitism In The Occupy Wall Street Movement! (They’re EVIL I Tells Ya! E V I L !)
Voices from Occupy Wall Street (Nov-2011)(POLITICS IS ACTION series)
OCCUPY OAKLAND Police launch tear gas, flash bang canisters into crowd of protesters OWS Wall Street
Fox News says, OCCUPY WALL STREET are FAR-LEFT ANTI-AMERICAN SOCIALISTS
OWS: Occupy Oakland Anarchists Smash Windows and Destroy Business Property
Fox News says, OCCUPY WALL STREET are DEMONIC, BRAINLESS, LOSERS
TEA PARTY Invades OCCUPY DC- (explicit)
Occupy Wall Street Protestor on Federal Reserve
A great and brilliant speech from a young Ron Paul supporter. Three cheers for capitalism!
My advice to classical liberals or libertarians and Ron Paul supporters is to stay clear of the Occupy Wall Street mob.
The primary organizers of Occupy Wall Street are radical left political parties and unions.
All of them are collectivists that oppose limited government and instead want to increase government dependency.
Just to name a few, they include the Communist Party USA, Socialist Party USA, Democratic Socialists of America, Maoist Revolutionary Communist Party, Trotskyist Socialist Workers Party, Worker’s World Party, SEIU, and AFL-CIO.
Do not become one of the dupes.
The entire Occupy Wall Street action is a distraction from the Obama Administration’s and Democratic Party’s failed economic policies resulting in even higher unemployment rates and more people dependent upon government.
This is exactly why Obama intentionally implemented the first stimulus package and now asks for a second one relabeled the American Jobs Act.
Both Obama and Occupy Wall Street are executing the Cloward-Piven strategy to blame the high unemployment on business and not the government.
Government is the problem not the solution.
All the far left radical parties are advocating more government in the form of socialism and communism as the solution.
Simply ignore Occupy Wall Street.
They will quickly fade into history and be soon forgotten.
Judge Napolitano: Freedom Is The Law Of The Land! ( Occupy Wall Street Protest ) ( OWS )
Afterburner with Bill Whittle: Three and a Half Days
OCCUPY WALL STREET = BRAINWASHED SHEEP HIPPIES SOCIALISTS COMMUNISTS
Budding Occupy Wall Street Movement Gives Voice to Anger Over Greed, Corporations
What We Saw at the Occupy Wall Street Protest
Occupy Wall Street Organized by Acorn Front; Connection to Obama Admin & Socialist Parties
‘Occupy Wall Street’ Growing More Organized
Freedom Watch – Judge Napolitano’s Open Letter to Occupy Wall Street Oct 13, 2011
Obama SEIU’s Agenda is My Agenda
Andy Stern, SEIU President and Communist
AFL-CIO President Richard Trumka Supporting Occupy Wall Street
Unions join w/ Occupy Wall St.
Occupy Wall Street Journal is Funded By George Soros’ Tides
Alex Jones – Webster Tarpley – George Soros Hijacking Occupy Wall Street – part 1/2
Alex Jones – Webster Tarpley – George Soros Hijacking Occupy Wall Street – part 2/2
Communist Jed Brandt_ We Need To Destroy The United States (Occupy Wall Street).
Communist Party Occupy Wall Street Conference Call 10/11/11
Occupy Wall Street: Communist and Marxist professor, Slavoj Zizek, galvanizes the crowd
Communist and Marxist Slavoj Zizek en Occupy Wall Street
Cornel West in Liberty Plaza Warns Protest Will Grow
Occupy Protests in LA and DC: Are Socialists, Crazies and Hate-Mongers Really the 99%?
[#OccupyWallstreet] Socialist Revolution at occupy wall street
#Occupy Wall Street Frances Fox Piven ‘We Desperately Need a Popular Uprising in the US’
Frances Fox Piven Fellow Professors Indoctrinating College Students at CUNY
Occupy Wall Street Journal is Funded By George Soros’ Tides, Code Pink and Michael Moore
George Soros backs anti-Wall Street protests
The Cloward/Piven Strategy 1
The Cloward/Piven Strategy 2
The Cloward/Piven Strategy 3
The Cloward/Piven Strategy 4
The Cloward/Piven Strategy 5
The Cloward/Piven Strategy 6
Background Articles and Videos
The Decline and Triumph of Classical Liberalism, Part 1
The Decline and Triumph of Classical Liberalism, Part 2
In Obama’s book, Dreams from My Father, a man named Frank is mention. Frank is Frank Marshall Davis, member of the Communist Party an an early mentor of Barack Obama.
Paul Kengor (1 of 3)
Paul Kengor (2 of 3)
Paul Kengor (3 of 3)
Angela Davis interviewed by Julian Bond: Explorations in Black Leadership Series
Angela Y. Davis
“…Angela Y. Davis (born January 26, 1944) is an American political activist, scholar, and author. Davis was most politically active during the late 1960s through the 1970s and was associated with the Communist Party USA, the Civil Rights Movement and the Black Panther Party. Prisoner rights have been among her continuing interests; she is the founder of “Critical Resistance”, an organization working to abolish the “prison-industrial complex”. She is a retired professor with the History of Consciousness Department at the University of California, Santa Cruz and is the former director of the university’s Feminist Studies department. Her research interests are in feminism, African American studies, critical theory, Marxism, popular music and social consciousness, and the philosophy and history of punishment and prisons.
Her membership in the Communist Party led to Ronald Reagan’s request in 1969 to have her barred from teaching at any university in the State of California. She was tried and acquitted of suspected involvement in the Soledad brothers’ August 1970 abduction and murder of Judge Harold Haley in Marin County, California.
She was twice a candidate for Vice President on the Communist Party USA ticket during the 1980s. …”
Working Families Party: Agendas, Activities, and Alliances
By Richard Poe
Discover The Networks
Democratic Socialists of America
“…The Working Families Party (WFP) is a front group for the radical cult ACORN. It functions as a political party in New York State and Connecticut, promoting ACORN-friendly candidates. Unlike conventional political parties, WFP charges its members dues – about $60 per year – a policy characteristic of ACORN and its affiliates.
According to the party’s Web site, WFP is a coalition founded by ACORN, the Communications Workers of America, and the United Automobile Workers. However, ACORN clearly dominates the coalition. New York ACORN leader Steven Kest was the moving force in forming the party. WFP headquarters is located at the same address as ACORN’s national office, at 88 Third Avenue in Brooklyn.
“The [Working Families Party] was created in 1998 to help push the Democratic Party toward the left,” noted the Associated Press on March 28, 2000. In pursuit of this goal, WFP runs radical candidates in state and local elections. Generally, WFP candidates conceal their extremism beneath a veneer of populist rhetoric, promoting bread-and-butter issues designed to appeal to union workers and other blue-collar voters, Republican and Democrat alike.
The Working Families Party benefits from a quirk of New York State election law, which allows parties to “cross-endorse” candidates of other parties. Thus when Hillary Clinton ran for the Senate in 2000, she ran both on the Democratic Party ticket and on the Working Families Party ticket. Of the 3.4 million popular votes Hillary received from New Yorkers, the Working Families Party delivered 103,000. …”
Works closely with the radical Democratic Progressive Caucus
At the height of the Cold War and the Vietnam War era, the Socialist Party USA of Eugene Debs and Norman Thomas split in two over the issue of whether to criticize or even denounce the Soviet Union, its allies, and Communism: One faction rejected and denounced the USSR and its allies, including Castro’s Cuba, the Sandinistas, North Vietnam and the Viet Cong, and supported Poland’s Solidarity Movement, etc. This anti-Communist faction took the name Social Democrats USA. (Many of its leaders — including Carl Gershman, who became Jeane Kirkpatrick’s counselor of embassy at the United Nations — grew more conservative and became Reagan Democrats.) The other faction, however, refused to reject Marxism, refused to criticize or denounce the Soviet Union and its allies, and continued to support their policies — including the Soviet-backed nuclear-freeze program that would have consolidated Soviet nuclear superiority in Europe. This faction, whose leading figure was Michael Harrington, in 1973 took the name Democratic Socialist Organizing Committee (DSOC), whose membership included many former Students for a Democratic Society activists. By 1979 DSOC had made major inroads into the Democratic Party and claimed a national membership of some 3,000 people. In 1982 DSOC merged with the New American Movement to form the Democratic Socialists of America (DSA).
DSA describes itself as “the principal U.S. affiliate of the Socialist International” and ranks as the largest socialist organization in the United States. “We are socialists,” reads the organization’s boilerplate, “because we reject an international economic order sustained by private profit, alienated labor, race and gender discrimination, environmental destruction, and brutality and violence in defense of the status quo.” “To achieve a more just society,” adds DSA, “many structures of our government and economy must be radically transformed. … Democracy and socialism go hand in hand. All over the world, wherever the idea of democracy has taken root, the vision of socialism has taken root as well—everywhere but in the United States.”
DSA summarizes its philosophy as follows: “Today … [r]esources are used to make money for capitalists rather than to meet human needs. We believe that the workers and consumers who are affected by economic institutions should own and control them. Social ownership could take many forms, such as worker-owned cooperatives or publicly owned enterprises managed by workers and consumer representatives. Democratic Socialists favor as much decentralization as possible. … While we believe that democratic planning can shape major social investments like mass transit, housing, and energy, market mechanisms are needed to determine the demand for many consumer goods.”
DSA seeks to increase its political influence not by establishing its own party, but rather by working closely with the Democratic Party to promote leftist agendas. “Like our friends and allies in the feminist, labor, civil rights, religious, and community organizing movements, many of us have been active in the Democratic Party,” says DSA. “We work with those movements to strengthen the party’s left wing, represented by the Congressional Progressive Caucus. … Maybe sometime in the future … an alternative national party will be viable. For now, we will continue to support progressives who have a real chance at winning elections, which usually means left-wing Democrats.”
Until 1999, DSA hosted the website of the Progressive Caucus. Following a subsequent expose of the link between the two entities, the Progressive Caucus established its own website under the auspices of Congress. But DSA and the Progressive Caucus remain intimately linked. All 58 Progressive Caucus members also belong to DSA. In addition to these members of Congress, other prominent DSA members include Noam Chomsky, Ed Asner, Gloria Steinem, and Cornel West, who serves as the organization’s honorary Chair.
DSA was a Cosponsoring Organization of the April 25, 2004 “March for Women’s Lives” held in Washington, D.C., a rally that drew more than a million demonstrators advocating for the right to unrestricted, taxpayer-funded abortion-on-demand.
DSA was also a signatory to a petition of self-described “civil society” organizations that opposed globalization and “any effort to expand the powers of the World Trade Organization (WTO) through a new comprehensive round of trade liberalization.”
DSA endorsed Pay Equity Now! – a petition jointly issued in 2000 by the National Organization for Women, the Philadelphia Coalition of Labor Union Women, and the International Wages for Housework Campaign – to “expose and oppose U.S. opposition to pay equity” for women. The petition charged that: “the U.S. government opposes pay equity – equal pay for work of equal value – in national policy and international agreements”; “women are often segregated in caring and service work for low pay, much like the housework they are expected to do for no pay at home”; and “underpaying women is a massive subsidy to employers that is both sexist and racist.”
In the wake of 9/11, DSA characterized the terror attacks as acts of retaliation for American-perpetrated global injustices. “We live in a world,” said DSA, “organized so that the greatest benefits go to a small fraction of the world’s population while the vast majority experiences injustice, poverty, and often hopelessness. Only by eliminating the political, social, and economic conditions that lead people to these small extremist groups can we be truly secure.”
Strongly opposed to the U.S. War on Terror and America’s post-9/11 military engagements in Afghanistan and Iraq, DSA is a member organization of the United For Peace and Justice anti-war coalition led by Leslie Cagan, a longtime committed socialist who aligns her politics with those of Fidel Castro’s Communist Cuba.
DSA publishes a quarterly journal titled Democratic Left, which discusses issues of concern to the organization and its constituents. The Founding Editor of this publication was Michael Harrington. DSA has also created a youth association called Young Democratic Socialists.
Annual fees for membership in DSA range from $15 to $60 per year. DSA raises additional funds via sales made through its online Book Shop, which features dozens of titles by leftist authors, among whom are Michael Harrington, Barbara Ehrenreich, Cornel West, Todd Gitlin, Stanley Aronowitz, Howard Zinn, Eric Foner, Tom Hayden, Manning Marable, Michael Eric Dyson, and Frances Fox Piven and Richard Cloward.
As of March 2010, some of DSA’s most notable honorary chairs included Barbara Ehrenreich, Dolores Huerta, Frances Fox Piven (co-creator of the Cloward-Piven Strategy), Eliseo Medina (executive vice president of the Service Employees International Union), Gloria Steinem, and Cornel West.
“…George Soros is one of the most powerful men on earth. A New York hedge fund manager, he has amassed a personal fortune estimated at about $13 billion (as of 2009). His company, Soros Fund Management, controls at least another $25 billion
in investor assets. Since 1979, Soros’s foundation network — whose flagship is the Open Society Institute (OSI) — has dispensed more than $5 billion to a multitude of organizations whose objectives are consistent with those of Soros. With assets of $1.93 billion as of 2008, OSI alone donates scores of millions of dollars annually to these various groups. Following is a sampling of the major agendas advanced by groups that Soros and OSI support financially. Listed under each category heading are a few
OSI donees fitting that description. …”
“…The Open Society Institute is not the only vehicle by which George Soros works to reshape America’s political landscape. Indeed, Soros was the prime mover in the creation of the so-called “Shadow Democratic Party,” or “Shadow Party,” in 2003. This term refers to a nationwide network of labor unions, non-profit activist groups, and think tanks whose agendas are ideologically to the left, and which are engaged in campaigning for the Democrats. This network’s activities include fundraising, get-out-the-vote drives, political advertising, opposition research, and media manipulation.
The Shadow Party was conceived and organized principally by George Soros, Hillary Clinton and Harold McEwan Ickes – all identified with the Democratic Party left. Other key players included:
Morton H. Halperin: Director of Soros’ Open Society Institute
John Podesta: Democrat strategist and former chief of staff for Bill Clinton
Jeremy Rosner: Democrat strategist and pollster, ex-foreign policy speechwriter for Bill Clinton
Robert Boorstin: Democrat strategist and pollster, ex-national security speechwriter for Bill Clinton
Carl Pope: Co-founder of America Coming Together, Democrat strategist, and Sierra Club Executive Director
Steve Rosenthal: Labor leader, CEO of America Coming Together, and former chief advisor on union matters to Clinton Labor Secretary Robert Reich
Peter Lewis: Major Democrat donor and insurance entrepreneur
Rob Glaser: Major Democrat donor and Silicon Valley pioneer
Ellen Malcolm: Co-founder and President of America Coming Together, and founder of EMILY’s List
Rob McKay: Major Democrat donor, Taco Bell heir, and McKay Family Foundation President
Lewis and Dorothy Cullman: Major Democrat donors
To develop the Shadow Party as a cohesive entity, Harold Ickes undertook the task of building a 21st-century version of the Left’s
traditional alliance of the “oppressed” and “disenfranchised.” By the time Ickes was done, he had created or helped to create six new groups, and had co-opted a seventh called MoveOn.org.
Together, these seven groups constituted the administrative core of the newly formed Shadow Party:
America Coming Together
Center for American Progress
Joint Victory Campaign 2004
Thunder Road Group
These organizations, along with the many leftist groups with which they collaborate, have played a major role in helping Soros
advance his political and social agendas.
According to Richard Poe, co-author (with David Horowitz) of the 2006 book The Shadow Party:
“The Shadow Party is the real power driving the Democrat machine. It is a network of radicals dedicated to transforming our constitutional republic into a socialist hive. The leader of these radicals is … George Soros. He has essentially privatized the Democratic Party, bringing it under his personal control. The Shadow Party is the instrument through which he exerts that control…. It works by siphoning off hundreds of millions of dollars in campaign contributions that would have gone to the Democratic Party in normal times, and putting those contributions at the personal disposal of Mr. Soros. He then uses that money to buy influence and loyalty where he sees fit. In 2003, Soros set up a network of privately-owned groups which acts as a shadow or mirror image of the Party. It performs all the functions we would normally expect the real Democratic Party to perform, such as shaping the Party platform, fielding candidates, running campaigns, and so forth. However, it performs these functions under the private supervision of Mr. Soros and his associates. The Shadow Party derives its power from its ability to raise huge sums of money. By controlling the Democrat purse strings, the Shadow Party can make
or break any Democrat candidate by deciding whether or not to fund him. During the 2004 election cycle, the Shadow Party raised more than $300 million for Democrat candidates, prompting one of its operatives, MoveOn PAC director Eli Pariser, to declare, ‘Now it’s our party. We bought it, we own it…’”
Peter Schiff, John Lonski, Dennis Berman – on Inflation, Deflation & Recession
Mitt Romney Presidential Announcement
Obama Isn’t Working: Chicago
Obama Isn’t Working: Allentown, PA
Obama Isn’t Working: New Hampshire
Obama Isn’t Working: Where are the Jobs?
Gov. Rick Perry Blasts Obama’s Record on Jobs as an “Economic Disaster”
Rick Perry announces he will run for President (Part 1 of 2) — August 13, 2011
Rick Perry announces he will run for President (Part 2 of 2) — August 13, 2011
Ron Paul Ad – “The one who can beat Obama”
Ron Paul on America Live with Megyn Kelly
Ron Paul: Perry Makes Me Look Like a Moderate
Ron Paul – the Most Untalked About Top Tier Presidential Candidate
Ron Paul Ignored By The Media
Editor-in-Chief Insights: Intense Favorites
Face The Nation with B…: Michele Bachmann wins straw poll, lays out
Face The Nation with B…: GOP presidential race picks up the pace
Newt Gingrich Releases 2012 Presidential Candidacy Announcement Video
A new job’s plan
Obama Plans Major Jobs/Debt Speech
Obama’s jobs plan – What’s the holdup [CNN 8-18-2011]
Obama says new job creating plan on the way 8/17/2011
SR Allstars – August 17 – Part 1: Obama Jobs Plan?
SR Allstars – August 17 – Part 2: 2012, Perry, Ryan, Paul
Fox’s Andrew Napolitano Predicts Obama’s Jobs Plan Will Be A ‘Giveaway To Select Groups That He And
The Triumph of Human Freedom: THE PLAIN TRUTH by Judge Napolitano 8/18/11
Obama’s approval rating on economy hits new Gallup Poll low of 26 percent
Republican presidential candidates Romney, Perry, Paul and Bachmann attack Obama’s job creation record
By Raymond Thomas Pronk
In Feb. 2009 President Barack Obama’s Gallup Poll approval rating on the economy was at its highest at 59 percent and his disapproval rating was at its lowest of 30 percent. The official unemployment rate was 7.8 percent in Jan 2009. In Aug. 2011 Obama’s Gallup Poll approval rating on the economy was 26%, a new low, and his disapproval rating was 71%, a new high. The July 2011 unemployment rate was 9.1%. The unemployment rate has been over 8% for the last 31 months. Obama’s overall job approval rating according to the Gallup’s daily three-day rolling average tracking poll of Aug. 11-13 dipped below 40 percent for the first time when it hit a new low of 39 percent. It fell again on Aug. 20 to 38 percent.
Unemployment Rate Percent from Jan. 2001-Aug. 2011
Source: Bureau of Labor Statistics, Department of Labor
In the Rasmussen Reports daily Presidential Tracking Poll for Aug. 23, 2011 President Obama also hit a new low on the Presidential Approval Index of -26 with 45 percent strongly disapproving and 19 percent strongly approving. Rasmussen Reports on Aug. 23, 2011 that among likely voters Obama is at 39 percent and Paul at 38 percent. In a matchup between Obama and a generic Republican candidate among likely voters, Obama is at 43 percent and the generic Republican at 48 percent.
The Misery Index is an economic indicator that is the sum of the unemployment and inflation rates. When President Obama entered office, his Misery Index stood at 7.73 percent. Today it is over 12.7 percent. Obama’s average Misery index is 10.52 which is greater than George W. Bush’s average Misery Index of 8.11 and Bill Clinton’s average misery index of 7.8 percent.
Should the U.S. economy enter another recession, the unemployment rate will most likely again exceed 10 percent. Obama’s approval rating on the economy will most likely fall even lower and his Misery Index will be even higher. However, it is unlikely that Obama’s Misery Index will beat President Jimmy Carter’s June 1980 record Misery Index of 21.98. Ronald Reagan beat Jimmy Carter in the 1980 presidential election with 489 electoral votes and 43,903,230 popular votes to Jimmy Carter’s 49 electoral votes and 35,480,115 popular votes—a landslide Republican victory over an incumbent Democratic president.
Jobs and the economy will be the number one political issue in the 2012 Presidential election. The leading Republican candidates, former Massachusetts’s Governor Mitt Romney, Texas Governor Rick Perry, Texas Congressman Ron Paul and Minnesotan Congresswoman Michele Bachmann have been very critical of President Obama’s performance in terms of job creation and the growth in the economy measured by the Gross Domestic Product.
A television attack ad paid for by Romney ends with the tagline, “Obama isn’t working”, with a photo of an unemployment office with a long twisting line of Americans looking for jobs. This is one of a series of one minute attacks ads where the phrase, “Obama isn’t working” is repeated and the employment situation prior to the Obama administration is compared with the employment situation today in a particular city or state. Another attack ad in the series is directed at college students and begins with Obama promising students at the University of Maryland a better future in 2009 and ends with the questions, “Where is the opportunity? Where are the jobs?”
Perry recently entered the presidential race and does not have any Obama attack ads to date. However, Perry in a recent speech to the South Carolina GOP blasted Obama’s record on job creation comparing it to his record on job creation in Texas. Perry stated “The fact is one in six work eligible Americans cannot find a full time job. That is not a recovery, it is an economic disaster.” Perry continued that “we tried for two and half years government trying to create jobs. It is time for the private sector to be given the chance to create jobs.” Perry is proud of his job creation record in Texas and pointed out that “since June of 2009 my home state has created 40 percent of all new jobs created in America.”
Paul has a one minute TV attack ad which asserts that he was the one “voting against every tax increase, every unbalanced budget, every time, standing up to the Washington machine, guiding by principle, Ron Paul who will stop the spending, save the dollar, create jobs, bring peace, the one who will restore liberty. Ron Paul the one who can beat Obama and restore America now.”
Bachmann in an interview on Face the Nation emphasized that she is the chief author of two bills that would repeal Obamacare (the Patient Protection and Affordable Care Act)and the Dodd–Frank Wall Street Reform and Consumer Protection Act. Companies are telling her “that those bills are leading them not to be able to create jobs.” Bachmann also favors “repeal of the existing tax code in its current form, it is 3.8 million words”; “we need a tax code that is job friendly, this is not a job friendly tax code. When you have one of the highest corporate tax rates in the world at 34 percent that is not going to incentivize people to start new businesses.”
President Obama announced that he will release his new jobs plan after Labor Day. He said “I will be putting forward when they come back in September a very specific plan to boost the economy, to create jobs, and control our deficit.” Two of the specifics of Obama’s plan that have leaked to the press include an extension of unemployment benefits and extension of the payroll tax cut. The Romney and Paul ads, Perry speech, Bachmann interview and Obama announcement can be viewed in their entirety on YouTube.com with links to them on www.pronkpops.wordpress.com .
In a recent Gallup Poll released on Aug. 22, President Obama is running neck and neck with the top four Republican candidates. Romney leads Obama 48 percent to 46 percent. Perry and Obama are tied in the poll at 47 percent each. Obama leads Republican candidates Paul, 47 percent to 45 percent and Bachmann, 48 percent to 44 percent.
Among independents Romney and Paul lead Obama by 3 percent and Perry leads Obama by 2 percent. Obama beats Bachmann by 6 percent among independents. The Gallup Poll was conducted on Aug. 16 and 17 and has a margin of error of 3.3 percent. For the American people, jobs and the economy are the leading issues of the 2012 presidential election.
[Raymond Thomas Pronk is host of the Pronk Pops Show on KDUX web radio from 3-5 p.m. Wednesday and author of the companion www.pronkpops.wordpress.com blog with links to online videos and articles and past radio show podcasts and downloads—Give It A Listen!]
Background Articles and Videos
Gallup poll: GOP contenders neck-and-neck with Obama
Republicans line up behind candidates to a greater extent than Dems behind president
By Steven Shepard
“…The poll, conducted last week as Obama’s approval rating cratered around 40 percent, shows Obama leading Rep. Michele Bachmann, R-Minn., 48 to 44 percent, and Rep. Ron Paul, R-Tex., 47 to 45 percent.
Texas Gov. Rick Perry ties the president at 47 percent each, and former Massachusetts Gov. Mitt Romney leads Obama, 48 to 46 percent.
At this early stage of the campaign, Republicans are largely lined up behind their candidates to a greater extent than Democrats are behind the incumbent president.
Republicans are firmly behind Perry (92 percent) and Romney (91 percent). Bachmann (86 percent) and Paul (82 percent) perform slightly worse among members of their own party. …”
“…Independents are split: Romney and Paul lead among that group by three points, Perry by two, but Obama leads Bachmann among independents by six points. …”
This is the lowest Approval Index rating yet measured for President Obama. The previous low was -24 reached yesterday and also in September 2010. Additionally, the level of Strong Approval matches the lowest yet recorded. By way of comparison, President Bush had ratings near the end of his second term in the minus 30s. …”
“…The president and the maverick are running almost dead even in a hypothetical 2012 election matchup.Texas Republican Congressman Ron Paul earns 38% of the vote to President Obama’s 39% in the latest Rasmussen Reports national telephone survey of Likely U.S. Voters. Fourteen percent (14%) like some other candidate, and eight percent (8%) remain undecided. (To see survey question wording, click here.)
Just a month ago, Obama posted a 41% to 37% lead over Paul, who ran second to Minnesota Congresswoman Michele Bachmann in the recent high-profile Ames Straw Poll in Iowa.
Paul, whose long run afoul of the GOP establishment with his libertarian policy prescriptions, picks up 61% of the Republican vote, while 78% of Democrats fall in behind the president. Voters not affiliated with either of the major political parties prefer the longtime congressman by 10 points – 43% to 33%. …”
“… A generic Republican candidate now holds a five-point advantage over President Obama in a hypothetical 2012 election match-up for the week ending Sunday, August 21. The latest Rasmussen Reports national telephone survey of Likely U.S. Voters finds the generic Republican earning 48% of the vote, while the president picks up support from 43%. Two percent (2%) prefer some other candidate, and seven percent (7%) are undecided. ,,,”
August 12th 2011 CNBC Stock Market Squawk on the Street (Consumer Sentiment)
MORE THAN HALF OF AMERICANS SAY ECONOMY IS WORSENING CCTV News
The truth about the unemployment rate
US FED TO KEEP RATES LOW FOR AT LEAST 2 YEARS
Peter Schiff – ‘The world is propping up the Dollar’ (10-Aug-11)(FINANCE & ECONOMICS series)
Peter Schiff telling it like it is!
S&P Explains Rating Downgrade
Ron Paul: I’m Surprised AAA Downgrade Didn’t Happen A Lot Sooner
Economic Data Show U.S. Growth Slowing Considerably
Ryan, Obama Budget Plans Both Fail in Senate
U.S. Consumer Confidence Drops to Three-Decade Low Amid Economic Headwinds
By Jillian Berman -Aug 12, 2011
“…Confidence among U.S. consumers plunged in August to the lowest level since May 1980, adding to concern that weak employment gains and volatility in the stock market will prompt households to retrench.
The Thomson Reuters/University of Michigan preliminary index of consumer sentiment slumped to 54.9 from 63.7 the prior month. The gauge was projected to decline to 62, according to the median forecast in a Bloomberg News survey.
The biggest one-week slump in stocks since 2008 and the threat of default on the nation’s debt may have exacerbated consumers’ concerns as unemployment hovers above 9 percent and companies are hesitant to hire. Rising pessimism poses a risk household spending will cool further, hindering a recovery that Federal Reserve policy makers said this week was already advancing “considerably slower” than projected.
“The mood is very depressed,” said Chris Christopher, an economist at IHS Global Insight Inc. in Lexington, Massachusetts. “Consumers are very fatigued and very uncertain. In the short term, people are going to pull back on spending.”
The American people oppose adding between $7,000 billion to $8,000 billion to the National debt over the next ten years.
The American people oppose the tax hike of repealing Bush tax rate cuts and locking in tax hikes for Obamacare that this bill would enable.
The American people are not fooled by the so-call spending cuts that are in fact only cuts in the rate of growth of the budget baseline and not actual cuts in the budget baseline itself.
The American people oppose yet another increase the national debt ceiling without either a balanced budget amendment being passed by two-thirds majorities in the House and Senate or a balanced budget within three years.
Now is the time for all good tea party members to come to the aid of their country and vote against the Democratic and Republican Party establishment’s compromise bill to raise the National debt ceiling by over $900 billion for Fiscal Year 2011 and add over $7,000 in additional deficit spending and more national debt over the next ten-year.
For the proposed Fiscal Year 2012 and 2013 budgets the total effect on deficits is only a reduction of $21 billion and $42 billion respectively excluding any future reductions of the Joint Select Committee on Deficit Reduction.
The American people are watching to see if the Tea Party caucus votes as a block to defeat this bill.
Those tea party members who vote in favor of the bill will be challenged in the primaries next year and defeated.
The tea party patriots are not pleased with those Tea Party member who apparently sold out and betrayed the tea party.
The tea party and the American people will be watching.
Should this bill pass the Federal Reserve will start printing money with quantitative easing 3 or creating money to purchase Treasury securities or more debt.
Quantitative Easing 3 or creating more money to buy U.S. Treasury securities will begin in the fall after the National Bureau of Economic Research’s Business Cycle Dating Committee officially determines that the U.S. Economy has been in a recession since the middle of 2010.
Once it is announced the U.S. economy is again in a recession, the Federal Reserve will use this fact to justify another massive money printing program of over $1,000 billion to finance the deficit spending in Fiscal Year 2012 of over $1,000 billion.
This in turn will lead to inflation or a general rise in the price level.
The economy is currently in a another recession that started in July 2010–the dreaded double dip recession.
The result will be even higher unemployment rates and inflation–stagflation.
This bill is not only not perfect, it is an economic disaster in the making.
Vote for this bill and you will be wrecking the economy, destroying jobs and killing the American dream.
The American people will not forget those who voted for this bill–both Democrats and Republicans.
You do not compromise your principles to vote for this bill especially given the damage this bill will cause to the American people and economy.
In 2012 the tea party will double its numbers in the Congress and the Senate with over 100 Representatives and over 12 Senators who have signed the Fiscal Responsibility Pledge.
Judge: You Can’t Get Out of Debt By Spending
American Citizens for Fiscal Responsibility
“A wise and frugal government, which shall leave men free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned – this is the sum of good government.” ~Thomas Jefferson
Fiscal Responsibility Pledge
I, ________________________________________, pledge to the taxpayers of the state
of ____________________________, and to the American people that I will:
1. Support and vote for only balanced budgets or surplus budgets where total estimated Federal government tax revenues for each fiscal year equals or exceeds total estimated Federal government spending outlays.
2. Support and vote for only decreases in the national debt ceiling.
3. Support and vote for the FairTax. The FairTax abolishes all federal personal and corporate income taxes, gift, estate, capital gains, alternative minimum, Social Security, Medicare, and self-employment taxes and replaces them with one simple, visible, federal retail sales tax on new goods and services, and administered primarily by existing state sales tax authorities. Once enacted any changes in the FairTax or increases in the FairTax rate will require two-thirds roll call vote of the House of Representatives and Senate.
4. Support and vote for the repeal of the 16th Amendment to the Constitution of the United States.
5. Support and vote for a balanced budget Amendment to the Constitution of the United State which allows budget surpluses or requires the balancing of tax revenues and spending outlays each fiscal year, limits Federal Government spending to eight-teen percent (18%) of Gross Domestic Product or less, requires a two-thirds majority roll call vote for any proposed tax increase in the House of Representatives and Senate and where the only exception to a surplus budget or balanced budget is the passage of a declaration of war that would require unbalanced budgets and increases in the national debt.
“…The NBER’s Business Cycle Dating Committee maintains a chronology of the U.S. business cycle. The chronology comprises alternating dates of peaks and troughs in economic activity. A recession is a period between a peak and a trough, and an expansion is a period between a trough and a peak. During a recession, a significant decline in economic activity spreads across the economy and can last from a few months to more than a year. Similarly, during an expansion, economic activity rises substantially, spreads across the economy, and usually lasts for several years.
In both recessions and expansions, brief reversals in economic activity may occur-a recession may include a short period of expansion followed by further decline; an expansion may include a short period of contraction followed by further growth. The Committee applies its judgment based on the above definitions of recessions and expansions and has no fixed rule to determine whether a contraction is only a short interruption of an expansion, or an expansion is only a short interruption of a contraction. The most recent example of such a judgment that was less than obvious was in 1980-1982, when the Committee determined that the contraction that began in 1981 was not a continuation of the one that began in 1980, but rather a separate full recession.
The Committee does not have a fixed definition of economic activity. It examines and compares the behavior of various measures of broad activity: real GDP measured on the product and income sides, economy-wide employment, and real income. The Committee also may consider indicators that do not cover the entire economy, such as real sales and the Federal Reserve’s index of industrial production (IP). The Committee’s use of these indicators in conjunction with the broad measures recognizes the issue of double-counting of sectors included in both those indicators and the broad measures. Still, a well-defined peak or trough in real sales or IP might help to determine the overall peak or trough dates, particularly if the economy-wide indicators are in conflict or do not have well-defined peaks or troughs.
FAQs – Frequently asked Questions and additional information on how the NBER’s Business Cycle Dating Committee chooses turning points in the Economy …”
“…In spite of the rhetoric being thrown around, the real debate is over how much government spending will increase. No plan under serious consideration cuts spending in the way you and I think about it. Instead, the cuts being discussed are illusory and are not cuts from current amounts being spent, but cuts in prospective spending increases. This is akin to a family saving $100,000 in expenses by deciding not to buy a Lamborghini and instead getting a fully loaded Mercedes when really their budget dictates that they need to stick with their perfectly serviceable Honda.
But this is the type of math Washington uses to mask the incriminating truth about the unrepentant plundering of the American people. The truth is that frightening rhetoric about default and full faith in the credit of the United States being carelessly thrown around to ram through a bigger budget than ever in spite of stagnant revenues. If your family’s income did not change year over year, would it be wise financial management to accelerate spending so you would feel richer? That is what our government is doing, with one side merely suggesting a different list of purchases than the other.
In reality, bringing our fiscal house into order is not that complicated or excruciatingly painful at all. If we simply kept spending at current levels, by their definition of cuts that would save nearly $400 billion in the next few years, versus the $25 billion the Budget Control Act claims to cut. It would only take us five years to cut $1 trillion in Washington math just by holding the line on spending. That is hardly austere or catastrophic.
A balanced budget is similarly simple and within reach if Washington had just a tiny amount of fiscal common sense. Our revenues currently stand at approximately $2.2 trillion a year and are likely to remain stagnant as the recession continues. Our outlays are $3.7 trillion and projected to grow every year. Yet we only have to go back to 2004 for federal outlays of $2.2 trillion, and the government was far from small that year. If we simply referred to that year’s spending levels, which would hardly do us fear, we would have a balanced budget right now. If we held the line on spending and the economy actually did grow as estimated, the budget would balance on its own by 2015 with no cuts whatsoever. …”
“…Tea party favorite and presidential candidate Michele Bachmann, R-Minn., countered that the deal “spends too much and doesn’t cut enough. … Someone has to say no. I will.”
The government presently borrows more than 40 cents of every dollar it spends, and without an infusion of borrowing authority, the government would face an unprecedented default on U.S. loans and obligations — like $23 billion worth of Social Security pension payments to retirees due Aug. 3.
The increased borrowing authority includes $400 billion that would take effect immediately and $500 billion that Obama could order unless specifically denied by Congress. That $900 billion increase in the debt cap would be matched by savings produced over the coming decade by capping spending on day-to-day agency budgets passed by Congress each year.
A special bipartisan committee would be established to find up to $1.5 trillion in deficit cuts, probably taken from benefit programs like farm subsidies, Medicare and the Medicaid health care program for the poor and disabled. Republicans dismissed the idea that the panel would approve tax increases.
Any agreement by the panel would be voted on by both House and Senate — and if the panel deadlocked, automatic spending cuts would slash across much of the federal budget. Social Security, Medicaid and food stamps would be exempt from the automatic cuts, but payments to doctors, nursing homes and other Medicare providers could be trimmed, as could subsidies to insurance companies that offer an alternative to government-run Medicare.
Sen. John McCain, R-Ariz., said he’d have to “swallow hard” and vote for the legislation even though he is worried about cuts in defense spending. …”
The Tea Party Caucus is a caucus of the United States House of Representatives and Senate launched and chaired by Minnesota Congresswoman Michele Bachmann on July 16, 2010. The caucus is dedicated to promoting fiscal responsibility, adherence to the movement’s interpretation of the Constitution, and limited government. The idea of a Tea Party Caucus originated from Kentucky Senator Rand Paul when he was campaigning for his current seat.
The caucus was approved as an official congressional member organization by the House Administration Committee on July 19, 2010 and held its first meeting on July 21. Its first public event was a press conference on the grounds of the U.S. Capitol, also on July 21. Four Senators joined the caucus on January 27, 2011.
Members, 112th Congress
The caucus chairman is Michele Bachmann of Minnesota. As of March 31, 2011 the committee has 60 members, all Republicans.
Sandy Adams, Florida
Robert Aderholt, Alabama
Todd Akin, Missouri
Rodney Alexander, Louisiana
Michele Bachmann, Minnesota, Chairman
Roscoe Bartlett, Maryland
Joe Barton, Texas
Gus Bilirakis, Florida
Rob Bishop, Utah
Diane Black, Tennessee
Michael C. Burgess, Texas
Paul Broun, Georgia
Dan Burton, Indiana
John Carter, Texas
Bill Cassidy, Louisiana
Howard Coble, North Carolina
Mike Coffman, Colorado
Chip Cravaack, Minnesota
Ander Crenshaw, Florida
John Culberson, Texas
Jeff Duncan, South Carolina
Blake Farenthold, Texas
Stephen Fincher, Tennessee
John Fleming, Louisiana
Trent Franks, Arizona
Phil Gingrey, Georgia
Louie Gohmert, Texas
Vicky Hartzler, Missouri
Wally Herger, California
Tim Huelskamp, Kansas
Lynn Jenkins, Kansas
Steve King, Iowa
Doug Lamborn, Colorado
Jeff Landry, Louisiana
Blaine Luetkemeyer, Missouri
Kenny Marchant, Texas
Tom McClintock, California
David McKinley, West Virginia
Gary Miller, California
Mick Mulvaney, South Carolina
Randy Neugebauer, Texas
Rich Nugent, Florida
Steve Pearce, New Mexico
Mike Pence, Indiana
Ted Poe, Texas
Tom Price, Georgia
Denny Rehberg, Montana
Phil Roe, Tennessee
Dennis Ross, Florida
Ed Royce, California
Steve Scalise, Louisiana
Tim Scott, South Carolina
Pete Sessions, Texas
Adrian Smith, Nebraska
Lamar Smith, Texas
Cliff Stearns, Florida
Tim Walberg, Michigan
Joe Walsh, Illinois
Allen West, Florida
Lynn Westmoreland, Georgia
Joe Wilson, South Carolina
Members of Senate Caucus
Jim DeMint (South Carolina)
Mike Lee (Utah)
Jerry Moran (Kansas)
Rand Paul (Kentucky)
Aronoff: Media’s Disgraceful Coverage of Debt-Ceiling Debate
“…The general performance of the media during the debt ceiling debate has been atrocious. The currency of journalists consists of words, and by completely debasing that currency, they are undermining their profession. They are also making it that much more difficult for the public to understand the choices and the consequences they are facing.
The constant reference to August 2nd being the date we default on our debt is utterly false. ABC has shown a “Countdown to Default” clock, ticking away to August 2nd. CNN has run similar graphics, as have all the networks, including the Fox News Channel. Even today MSNBC is showing a graphic that says, “Four Days to Default.” They have continued right through this week. Default occurs only if and when the U.S. fails to make interest payments to the bondholders on the debt it owes. Not only is August 2nd not the day the U.S. defaults on its debt, but the issue could easily be taken off the table, and President Obama could calm the markets by announcing that under no circumstances will he allow the U.S. to default, and he could assure that by saying he will definitely make that payment the highest priority until a deal is reached in Congress. Instead, he chose to have the debt ceiling “used as a gun against the heads” of Americans, which is exactly what he accused the Republicans of doing earlier this month, in language that was supposed to be no longer acceptable after the tragic shooting of Rep. Gabrielle Giffords in Tucson last January.
Charles Gasparino of Fox Business News reported this week that the Obama administration has begun calling major Wall Street banks to assure them that the U.S. won’t default on its debt. Sources have told me that the administration is also trying to get the banks to lobby on its behalf.
The other egregious falsehood reveals an astounding lack of knowledge, or willingness to deceive, about the difference between the deficit and the national debt. Here, for example, from Jake Tapper of ABC News: “The president continues to push for a ‘grand bargain,’ buoyed by the bipartisan ‘Gang of Six’ proposal that would reduce the deficit by $3.7 trillion over the next decade through spending cuts and tax increases.”
And here, from Stephanie Condon of CBS News: “The deal would reduce the deficit by nearly $4 trillion…”
President Obama in his July 25th prime time address to the country said, “This balanced approach asks everyone to give a little without requiring anyone to sacrifice too much. It would reduce the deficit (emphasis added) by around $4 trillion and put us on a path to pay down our debt.
This misuse of the language has been the rule, not the exception. As explained on the Treasury Department’s own website, “The deficit is the difference between the money Government takes in, called receipts, and what the Government spends, called outlays, each year.” (emphasis added) The same website says that “One way to think about the debt is as accumulated deficits.” This is basic economics, but astonishingly, the President and most of the media constantly get it wrong. Is it on purpose, to mislead, or do they not understand the difference? …”
S-1 FY2012 Tea Party’s Balanced/Surplus Budget(Nominal Dollars in Billions)
Debt Held By Public
“…Baseline budgeting is a method of developing a budget which uses existing spending levels as the basis for establishing future funding requirements. The concept assumes that the organization is generally headed in the right direction and only minor changes in spending levels will be required. The baseline is normally enhanced by adding adjustment factors based on issues such as inflation, new programs, and anticipated changes to existing programs.
The genesis of baseline budget projections can be found in the Congressional Budget Act of 1974. That act required the Office of Management and Budget (OMB) to prepare projections of federal spending for the upcoming fiscal year based on a continuation of the existing level of governmental services. It also required the newly established Congressional Budget Office to prepare five-year projections of budget authority, outlays, revenues, and the surplus or deficit. OMB published its initial current-services budget projections in November 1974, and CBO’s five-year projections first appeared in January 1976. Today’s baseline budget projections are very much like those prepared more than two decades ago, although they now span 10 years instead of five.
The Budget Act was silent on whether to adjust estimates of discretionary appropriations for anticipated changes in inflation. Until 1980, OMB’s projections excluded inflation adjustments for discretionary programs. CBO’s projections, however, assumed that appropriations would keep pace with inflation, although CBO has also published projections without these so-called discretionary inflation adjustments.
CBO’s budget projections took on added importance in 1980 and 1981, when they served as the baseline for computing spending reductions to be achieved in the budget reconciliation process. The reconciliation instructions contained in the fiscal year 1982 budget resolution (the so-called Gramm-Latta budget) required House and Senate committees to reduce outlays by a total of $36 billion below baseline levels, but each committee could determine how those savings were to be achieved. The CBO baseline has been used in every year since 1981 for developing budget resolutions and measuring compliance with reconciliation instructions.
The Deficit Control Act of 1985 provided the first legal definition of baseline. For the most part, the act defined the baseline in conformity with previous usage. If appropriations had not been enacted for the upcoming fiscal year, the baseline was to assume the previous year’s level without any adjustment for inflation. In 1987, however, the Congress amended the definition of the baseline so that discretionary appropriations would be adjusted to keep pace with inflation. Other technical changes to the definition of the baseline were enacted in 1990, 1993, and 1997.
Baseline budget projections increasingly became the subject of political debate and controversy during the late 1980s and early 1990s, and more recently during the 2011 debt limit debate. Some critics contend that baseline projections create a bias in favor of spending by assuming that federal spending keeps pace with inflation and other factors driving the growth of entitlement programs. Changes that merely slow the growth of federal spending programs have often been described as cuts in spending, when in reality they are actually reductions in the rate of spending growth.
There have been attempts to eliminate the baseline budget concept and replace it with zero based budgeting, which is the opposite of baseline budgeting. Zero based budgeting requires that all spending must be re-justified each year or it will be eliminated from the budget regardless of previous spending levels.
“An estimate of spending, revenue, the deficit or surplus, and the public debt expected during a fiscal year under current laws and current policy. The baseline is a benchmark for measuring the budgetary effects of proposed changes in revenues and spending. It assumes that receipts and mandatory spending will continue or expire in the future as required by law and that the future funding for discretionary programs will equal the most recently enacted appropriation, adjusted for inflation. Under the Budget Enforcement Act (BEA), which will expire at the end of fiscal year 2006, the baseline is defined as the projection of current-year levels of new budget authority, outlays, revenues, and the surplus or deficit into the budget year and outyears based on laws enacted through the applicable date.
Projected levels of governmental receipts (revenues), budget authority, and outlays for the budget year and subsequent fiscal years, assuming generally that current policies remain the same, except as directed by law. The baseline is described in the Congressional Budget Office’s (CBO) annual report for the House and Senate Budget Committees, The Budget and Economic Outlook, which is published in January. The baseline, by law, includes projections for 5 years, but at the request of the Budget Committees, CBO has provided such projections for 10 years. In most years the CBO baseline is revised in conjunction with CBO’s analysis of the President’s budget, which is usually issued in March, and again during the summer. The “March” baseline is the benchmark for measuring the budgetary effects of proposed legislation under consideration by Congress.” …”
Most Voters Are Unhappy With Both Sides in the Debt Ceiling Debate
“…Most voters don’t care much for the way either political party is performing in the federal debt ceiling debate.
The latest Rasmussen Reports national telephone survey finds that 58% of Likely U.S. Voters at least somewhat disapprove of the way President Obama and congressional Democrats are handling the debate over the debt ceiling, with 38% who Strongly Disapprove. But 53% also disapprove of how congressional Republicans are handling the debate, including 32% who Strongly Disapprove.
Just 36% approve of how Obama and Democrats are doing, with 10% who Strongly Approve. Forty percent (40%) approve of the GOP’s performance, including 13% who Strongly Approve. (To see survey question wording, click here.)
While the two sides continue to wrangle over how to avoid defaulting on the government’s massive debt load, most voters nationwide are worried the final deal will raise taxes too much and cut spending too little.
Whatever spending cuts are in the final deal, 49% of all voters don’t think the government will actually cut the spending agreed upon. A commentary by Scott Rasmussen,published in Politico, put it this way: “Based on the history of the past few decades, voters have learned that politicians promising unspecified spending cuts should be treated with all the credibility of a six-year old boy caught with his hand in the cookie jar promising to be good for the rest of his life.” …”
“…As the Beltway politicians try to figure out how they will raise the debt ceiling and for how long, most voters oppose including tax hikes in the deal.
Just 34% think a tax hike should be included in any legislation to raise the debt ceiling. A new Rasmussen Reports national telephone survey finds that 55% disagree and say it should not. …”
“…There is a huge partisan divide on the question. Fifty-eight percent (58%) of Democrats want a tax hike in the deal while 82% of Republicans do not. Among those not affiliated with either major political party, 35% favor a tax hike and 51% are opposed.
Americans who earn more than $75,000 a year are evenly divided as to whether a tax hike should be included in the debt ceiling deal. Those who earn less are opposed to including tax hikes.
Voters remain very concerned about the debt ceiling issue. Sixty-nine percent (69%) believe that it would be bad for the economy if a failure to raise the debt ceiling led to government defaults. Only 6% believe it would be good for theeconomy. Fourteen percent (14%) believe it would have no impact and 11% are notsure. These figures are little changed from a few weeks ago. …”
House passes Ryan’s ’12 budget; conservatives want more cuts
By Erik Wasson and Pete Kasperowicz – 04/15/11
“…The House on Friday approved a fiscal year 2012 budget resolution from Budget Committee Chairman Paul Ryan (R-Wis.) that seeks to drastically limit government spending next year and in years to follow.
But the vote on the measure — which imposes $5.8 trillion in spending cuts over the next decade — came after a clear sign that at least half of the Republican Caucus supports even tougher spending cuts.
The final tally was 235-193, with four Republicans opposing it. They were Reps. Ron Paul (Texas), Denny Rehberg (Mont.), Walter Jones (N.C.) and David McKinley (W.Va.).
Rehberg, the appropriator in charge of health spending, is running for Montana’s Senate seat.
Majority Whip Kevin McCarthy (R-Calif.) said listening sessions with Republican members made it the strongest vote of the year.
“This is the process we should follow on all votes,” he said.
“…The Republican-controlled House defied a presidential veto threat Tuesday night in approving a bill to amend the Constitution to require a balanced federal budget. But Speaker John A. Boehner acknowledged that a backup plan is needed, and a Senate GOP leader said he expects such an alternative to win his chamber’s approval.
The House voted 234 to 190 in favor of the “Cut, Cap and Balance Act,” which the White House has said will be vetoed in the unlikely event it passes the Senate and reaches President Obama’s desk. Faced with those prospects, Boehner told reporters that it would also be responsible to consider a backup plan for raising the federal debt ceiling and thus averting a potentially disastrous default on U.S. obligations.