Tag Archives: the fed

The Fed and its Corporate Welfare Plan, Headline VS Core CPI and More!

This post is a continuation of the train of thought I had going on my last post, A Paradigm Shift in the American Economy.  I mentioned a New York Times article that attributed the Fed’s continued manipulation of the Fed Fund Rate (keeping it close to zero), as one reason for the current boom in the stock market and corporate bottom lines.

At the same time, we continue to see current jobless rates remain around 8% according to the US Bureau of Labor Statistics, while realistically the unemployment rate is much higher hovering around 14.4% if you prefer the BLS’s less optimistic/more realistic U-6 unemployment statistics.

What does all this mean? It means that business is good, real good, but not so much for the common man. The reason being is that what growth we are experiencing at the moment is purely based off stimulus. The stimulus being a result of The Federal Reserve’s manipulation of interest rates, pumping/propping up the economy by minimizing a ton of risk associated with investing.

Theoretically, this should allow companies to invest and grow, creating jobs. Well… investing and growing they are, but creating jobs, they are not. The reason being, as I pointed out in my last post, is at least partially thanks to our leaps forward in automation technology. We have simply automated away a lot of our work.  While this is painful in the short term, it is to be seen what happens to our economy and the global economy at large, but I digress.

The current situation with the fed has led some forecasters like Peter Schiff to call this a “Lance Armstrong Economy.” Check out his youtube rants, they’re pretty good. He thinks it’s pretty damn funny that America is outraged that a cyclist used artificial stimulus to win a race, but that it is perfectly acceptable for our central bank to artificially stimulate the economy.

Just who is the Fed Looking out for?

The Federal Reserve’s official goals are to promote “maximum” sustainable output and employment and to promote “stable” prices. Meaning, keep unemployment and inflation in check with one another. When inflation and unemployment are either too high or too low, things go south.

Yes, absolute zero unemployment is actually bad news. It equals unhealthy inflation.

The Fed manipulates interest rates through Open Market Operations, a central bank buying its own government’s debt—yes that’s a real thing, or through monetary policy, adding/reducing the money supply—aka, printing/shredding money. There are some other fancy maneuverings our bank has done lately, but these are its fundamental tools.

From here the bank hopes to see a trickle-down effect take effect. They help the banks out by making money really cheap for them to borrow and lend to businesses/people (businesses get cheap lines of credit, people get cheap mortgage rates), the business uses cheap credit to invest in more risky ventures and new jobs abound!

The only problem is the trickle-down effect doesn’t appear to be happening. Businesses aren’t investing in ways that create jobs.  And so, we see the Fed policy really do nothing more than provide steroids to Wall Street and fuel the corporate bottom line.

Headline VS Core Consumer Price Index (Inflation)

Wait, we’re not finished yet! We’ve covered the Feds two objectives– Keep both unemployment and inflation at a healthy level. Well, they’re apparently failing at keeping unemployment in check, how about inflation? Surely they have that under control, right? Depends who you ask….

Statistics are a funny thing. Everyone loves to throw numbers around as FACT, but in reality there is almost always more to the story. If you happen to flip on CSPAN of CNN or whatever your favorite news network is and catch Ben Bernanke talk about inflation, he’ll probably say it has remained relatively stable over the past few years.

Mr. Bernanke would most likely refer to the Consumer Price Index (CPI). The CPI is supposed to gauge the fluctuation of prices of goods typically consumed by the average Joe. It turns out that like unemployment, there are multiple official CPI statistics. The two being tracked by the Bureau of Labor Statistic are healine CPI and Core CPI.

Headline CPI tracks:

  • FOOD AND BEVERAGES (breakfast cereal, milk, coffee, chicken, wine, full service meals and snacks);
  • HOUSING (rent of primary residence, owners’ equivalent rent, fuel oil, bedroom furniture);
  • APPAREL (men’s shirts and sweaters, women’s dresses, jewelry);
  • TRANSPORTATION (new vehicles, airline fares, gasoline, motor vehicle insurance);
  • MEDICAL CARE (prescription drugs and medical supplies, physicians’ services, eyeglasses and eye care, hospital services);
  • RECREATION (televisions, cable television, pets and pet products, sports equipment, admissions);
  • EDUCATION AND COMMUNICATION (college tuition, postage, telephone services, computer software and accessories);
  • OTHER GOODS AND SERVICES (tobacco and smoking products, haircuts and other personal services, funeral expenses).

Core CPI tracks:

All the same stuff minus high price volatility items such as food and energy.

The fed is concerned primarily with the less volatile Core CPI. The numbers they are reporting to us are essentially heavily padded and sedated. Of course, they have their reasons for this, but regardless, it is more than a little confusing to the guy who hears reports that inflation is steady on one hand while his healthcare, gasoline and grocery bill are skyrocketing.

And just to top this all off with a cherry, check out this comparison of Headline and Core CPI! The figure you’ll hear government officials mostly refer to is the line in blue, which looks much less scary than the roller coaster ride in red that we’re experiencing here in the real world.

CPI-headline-core-since-2000

(borrowed without permission. Click the graphic for a link back)

Conclusion

In short, the government is bullshitting us. Their unemployment statistics are pure horse shit. Their inflation statistics are pure horseshit, and they’re really doing nothing to help anyone out. The real winners again, are the top 1%. And I’m not even an Occupy Wallstreet type of guy! I have no issue with corporations being profitable and making bucket loads of money, if done so legitimately.

That is not the case as of now. As of now, the average Joe has little reason to be optimistic. The only thing most of us have going for us is we don’t understand what the hell is going on. We just know something smells funky and it doesn’t look good.

If you have any critiques, criticisms, corrections, praises, etc. I’d love to hear them. I’m in no way an expert, just an anonymous blogger.

-Holden

Over 50% of my income to taxation: Why I’m mad as hell and you should be too!

I think we’ve been bamboozled. We’ve been tricked by catch phrases and fun words like “liberty” and “freedom”. We’ve been fooled into thinking we are somehow better off than everyone else. We’ve been lied to and told that our “capitalist” economy is the strongest, our people the most free, and our opportunity the most rich. Lies.

We are as taxes, as spied on, as lied to, and as manipulated as almost any other Government on Earth. We are kept fat and happy with illusions. By the media telling us how bad it is everywhere else, by “Honey Boo Boo” and cheap hamburgers. Too fat and brainwashed to care. To apathetic to do anything about it.

“At least we aren’t over there.”  We say.

A First For Me

Today marks the first major tax hike I have experienced since the start of my career. I’m mad. I can’t justify this setback internally. Why am I giving away more security for myself and family to an entity that is making no investment in me? How do I benefit? My family? My community? How can I give away over 50% of my income and still the Government ask for take more?

Payroll/Income Taxes. Property Taxes. Sales Taxes. Communication (phone/cell phone) Taxes. Social Security Taxes. State Taxes. City Taxes. Fuel and Energy Taxes. Taxes to pay for my car tags each year. Increased costs of goods via trade and import taxes. Fees for passports and licences. Inheritance Tax. The list goes on forever.

The myth is that the Government is spreading the wealth. Helping the poor. Taxing the rich to give to the needy. Robin Hood. This is a lie – not just because I say so, but because it’s a fucking lie. This increased tax is for everyone. Not just by means of increased costs of goods and services, but actually and really a higher tax for nearly everyone.

Over Taxed, Under Serviced

We may all see at least a 2% loss of take home pay. Is it fair that a guy making $50,000 is expected to survive off of $25,000 a year (or less!)? That person would be considered fairly poor by almost any standard. At what point are we over taxed and under serviced?

Is that point when our nation is 15 Trillion in debt? Is that point when our country has recession as a direct result of our Government’s fiscal policy? Is that point when other nations hate us because our Government instills a feeling of dread and terror on them in the form of Drones and military superiority? Is that point when a man who takes home $25,000 a year is considered middle class? What are we thinking?

Obama promised no new taxes for the middle class. The super-rich begged for more taxes, it seemed. Yet today, while I watch my income fall by at least 2% I see the stock market fly upward at over 200 points. Someone is getting rich today, not me. Someone is laughing about the end of the fiscal cliff, not me. The super-rich are more rich than ever – smart enough to avoid the Government and capitalize on new legislation. We’ve been fooled.

Where do we go from here?

I don’t know. I just want people to stand up and say: “This isn’t right.” Something is broken. We have to admit that when a Government takes by force half your income, there is a problem.

You can’t leave the country. Too much social stigma, too expensive, to much Government, too costly personally. You can’t complain. You are labelled crazy or jailed. You can’t refuse to participate – you will be breaking the law and jailed.

To be honest, nothing will happen. Most people will be happily abused until they become uncomfortable. Until they become hungry, until their cable is shut off, until they can’t drive to Wal-Mart, until it’s too late.

For now, I’ll keep complaining here. A blog no one reads anyways.

Taxes – I bring home 66% of my gross income

I am the prime example of the broken tax system. I make about $70k a year. I am married and I have no children. My wife works as a part time school teacher because in Georgia there are no teaching jobs for Art teachers available due to lack of funding. (That means half the pay with all the hours.) Together we bring in around 90k a year in gross income, but much less after taxes.

I have worked very hard to get where I am today. I paid my way through school (yes, with help of government grants), I found a good job, I bought a house that was well under my budget in hopes of paying it off quickly, I own two small fuel efficient cars (one of which is paid off), and I am a stickler about savings, energy costs, and budget. My reward? I get to take home only 66% of my gross income.

The Problem with taking home 66% of your income

I’m a middle class guy. I’m certainly not rich and I am well above the poverty line. I am thankful for that and constantly working to improve my state and put more and more cushion between my wife and I and poverty. I want security. Yet – I have a certain amount of difficulty understanding how the system justifies taking from me such an amount. Taxes and insurance alone at a rate well above 25%!

The thing that gets me is that when I see where my money goes I don’t think of some poor kid who’s parents are addicted to drugs. I see my Mom and Dad. Two people who have abused the system for 20 years, lived off tax dollars, and refuse to help themselves. Sure, I admit, there was a time when I was a kid that Government money was putting food into my mouth. However; why has the system allowed them to keep those same benefits 10 years later? Is the system making them complacent, enabling them, or providing a good service? I think infinite Government help does more harm than good.

Tax the rich?

This is the point a lot of people would make the argument we should increase the taxation on the rich to ease the load for the middle class. I would agree with that if I felt that the Government was using our current funds efficiently.

The way I see it we could do a whole lot more with less. Spend less on military efforts abroad, fix our broken welfare systems, ensure that those who need help get it and those abusing the system are dropped from it, scale back the scope of the Government where they add no or little value, and stop asking the Government to be involved where it shouldn’t!

Implosion for my Generation

What’s worse is that there are countries (Canada, Japan, Netherlands) that even provide Universal healthcare with less tax dollars per person than we do. We can’t do it all without straining the system. Period.

We can’t have the worlds largest military, provide Universal healthcare, maintain massive entitlement systems, pay for public services, and all the other various functions Government has taken on and expect it not to put a strain on the people. Something has to change. The system has to be ran better, cuts will have to be made, or we will suffer. My generation specifically, my children’s generation probably even more.

Those are the thoughts that keep me up at night.

I don’t want to be extreme

I’m not going to go all Ayn Randian on you here and advocate we eliminate Government and taxes completely. There are a lot of opportunities and benefits from certain programs. I get that, but if anyone looks at the current system, the current tax rates, and the current received benefits and doesn’t find something wrong – then I don’t understand.

It’s easy for me to see why some people would be liberal on the issue. Especially wealthy people in cities. If your needs are taken care of and you rely on many Government services (public transit, public parks) than to you high tax rates are justified.

However, if you take a guy like me – or even more so in rural communities – who uses their own care, the public park is their own land, and they see no benefit from federal income tax except the pictures of central park – then why is it a surprise we have varying opinions?

I’m all for reasonableness. Right now I think we are veering off that path. I mean when the Governing body decides the best place to cut funding is from schools and creative programs and not from their own salaries – then we know we have a problem!

Government Control

Sometimes it can feel helpless. The Government takes away from my paycheck via taxes, hinders our children’s education via cuts in funding, and then inhibits my wife from being able to get a full time job teaching children. This is all out of our control – and that’s the part I can’t stand – not being able to control our own destiny. I think that is the frustration many Americans feel.

I’m not rich enough to shelter my family from the problems. I can’t send my kid to private school to avoid the problems with public ones. Yet, the Government thinks I’m plenty rich enough to be in the highest tax bracket. It’s a little strange when you consider who makes those rules – let’s just say they haven’t taken a pay cut recently and I’ll bet kids are in private schools.

Why Taxation is Necessary

If you have been reading this blog for any amount of time you probably know that I am generally against taxation and especially against increased taxation.  That being said SOME taxation is absolutely necessary.  Necessary for the running of a country and certainly necessary to increase the overall standard of living for everyone involved.

Arguments Against Taxation

There are about as many arguments against taxation  as there are opinions.  Since taxation is not voluntary, but mandatory – people claim it is equivalent to stealing, thus immoral.  People claim the Government creates no value and much of the value of taxation is lost in transfer cost as it runs through the Government – so it’s not worth it.  Others simply claim the market and capitalism could do it all better.  Perhaps some or all of that is true, but I still contend (some) taxation is necessary and beneficial.  Here’s why.

Collectivism is sometimes necessary:

I am the secretary of my Home Owners Association.  We have 184 houses in my neighborhood and of those less than 25% pay the voluntary annual fee of $25.  Yep, $25, a year.  This isn’t a poor neighborhood either – I mean we aren’t rich, but everyone there could afford $25 a year!

The worst part is 100% of the fees collected go back into the neighborhood via landscaping, painting, upkeep, etc.  There is no paying government employees – no nothing!   Yet, despite our best efforts, we cannot get the other 75% of home owners to participate.  Instead they pass the buck and people like me end up donating flowers and pine straw every so often to pick up the slack.  The classic free loaders problem.

Similarly, without a mandatory taxation of the population I wonder what the US would really look like?  Would it be a society where a few responsible citizens do a disproportionate amount of work to pick up the slack of the free loaders?  Would it be a society where everyone’s standard of living was lower because working together was just too much work?  I think the answer is most obviously yes.

While I would never implement a mandatory “tax” on my neighborhood – if the consequences were national – I think almost everyone would agree a tax is necessary and even beneficial.

What I learned in the Third World:

When I was in Guatemala I really began to appreciate the idea of “public good” and the services that are generated via tax dollars.  Sure Guatemala and most of the rest of the third world has a lot more problems (corruption) than taxation, but the lack of services really highlighted a few of the things we have here in America.

For example, Guatemala is one smoggy place.  There is no or little Government regulation or enforcement of air quality control.  There are no catalytic converters on cars and from what I could tell – companies could pretty much pollute uninterrupted.  In America we put a tax on pollution.  Some of those tax dollars go to parks and public facilities (some of it goes to war too, unfortunately) which in turn makes living here better for everyone.

Another thing were public spaces.  Except for the touristy parts of town there were basically no parks nor public facilities.  This hurt the homeowners by driving down prices and hurt everyone else because it simply drove down the standard of living.  At one point we stopped at a station headed to lake Atitlan to get a view of the Lake and Volcanoes.  It was one of the most beautiful places on earth yet this little stop remained undeveloped and un-kept.

A free market thinker might argue that if a profit was to be made on an area then it will be developed – well what about publically used spots like this one.  Maybe this is the perfect opportunity for the Government to develop a non-profitable area to be used for public good.  So next time you are in the Mountains of America and you see a nice little well maintained watch tower – just say “thank you”.

Taxation not Socialism:

The dangers of socialism from an economic perspective are many.  Most notably the fact that it is unsustainable over the long run.  That, of course, is NOT what I am advocating.  Rather I am talking about a system in which the poorest of our society are taken care of (inevitably in a capitalist environment there will be those in poverty – everyone can’t be rich) and society as a whole benefits by the fruits of working together.

Today we spend far too much on military, our social programs are not well run, our political officials are no longer public servants, and we are living in a border line oligarchy.  What we should do is not eliminate the Government, but put it in its place.  That, I think, is an idea we can all get behind.

The Problem with the Buffet Rule

I follow Barrack Obama on twitter. Recently every tweet has been about the “#BuffetRule”. Reason after reason why the rich should pay as much or more as a percent of their income in taxes as the middle class and poor. On the surface I get it – but are we asking the wrong questions?

I mean I saw this push a mile away. When Buffet first published “his” article (or at least an article he endorsed that his secretary probably wrote for him) I knew a push for higher taxes was coming. All in the name of “the rich paying their fair share”. But why are we asking ANYONE to pay more taxes. The rich paying more taxes doesn’t mean the rest of us win, just that we all lose.

Instead of asking the rich to pay more taxes to catch up with the rest of us, why not lower taxes for everyone else? I know an increased tax on the rich will not benefit me. They’ll probably use it to buy more body scanners that I’ll have to opt out of in the airport. Or maybe they’ll find another country to invade in Africa.

If Obama wants this so bad why doesn’t he promise 100% of it to education or food for the poor? No one knows for sure where the extra cash is going. I mean, why are we trusting the Government with MORE or OUR money? Oh, all for Universal Healthcare and to “level the playing field.” Right? I doubt it.

Currently the US pays as much or more in taxes as any country on the planet. Notice how many of those countries have Universal Healthcare. In fact I just returned from Japan who pays about the same tax rate as us, but has Universal Healthcare. How can they do it, but we can’t? Maybe it’s because WE are the Japanese military!

So why are we agreeing to MORE taxes again?

Any good business man (even bad ones) will tell you that the easiest way to add to your bottom line is to cut expenses NOT add revenue (via taxation for the government). So why aren’t we focused on balancing the budget and maybe, just maybe, cutting back on the military. Why are we concerned about getting involved in Africa and staying involved in the Middle-east. I thought this was the “peaceful” democratic party!

If it doesn’t bother you that our Government can find excuse after excuse to increase taxes instead of lowering them for the rest of us – then we have lost. We will continue war-mongering. We will continue deficit spending. We will continue giving more and more power to those who already have it.

If you really think that raising taxes on the “rich” will in any way benefit you, you’re crazy. If you think this isn’t benefiting the most powerful “1%” – then you’re wrong.

The Proper Role of Government in the Market Place (Part 1/2)

Almost everyone agrees that the Govermment has far too much control in the Marketplace.  Whether it’s the federal reserve adjusting interest rates to give people incentive to buy homes at astronomically high prices (housing bubble), whether it’s a politician making a back room deal and accepting lobbyist dollars in promise to vote for a corrupt bill in return (oil industry, auto industry, communication industry), whether its using tax payer dollars to bail out big business (banking industry, mortage industry, auto industry), or even your local mayor approving a corporate construction zone near your neighborhood to make a few extra bucks – Government corruption and market intervention are rampant – we can all agree there are some problems.

What is the right amount of Government?

Government has two basic roles when it comes to business.  Enforcing Contract Law and protecting personal property rights.  Enforcing contract law basically involves upholding any contract made between two concenting adults.  This is necessary because if there is a disagreement the two parties may have a judgement made based on the predetermined agreement.  So if I agree to sell you my house for $200k, but never move out after you’ve paid me – then legally the Government should help you enforce the agreement.   Contracts are important to business as they are the foundation of confidence between two parties.  If two parties feel they cannot in good confidence make agreements they will not do business or the more powerful of the two parties will almost always abuse the weaker when it is advantageous to do so. 

The second role of Government in the marketplace is the protection of personal property rights.  That is the guarantee that one businesses actions do not interfere with the personal liberty of other individuals.  For example, a business can’t start a nuclear testing facility next to your neighborhood.  Though they certainly have the right to have their business the consequences faced by the individuals (radiation) is a violation of property rights.  (You can do anything you want as long as you don’t violate the liberty of others.)

Those two roles of Government applied fairly throughout the market place virtually guarantee a productive and fair place to do business.  So a drastic, not absolute, reduction of Government is necessary. 

Local vs. National Government

The constitution does an excellent job of providing what role the national and local governments would play.  Local governments have the ability to cater to local needs and perferences.  Local governments give people choice move to an area that better suits their needs.  Hypothetically 99% of issues would be decided by local and state governments.

National government is reserved for issues that involve the international community or cross state lines (per the constitution).  For example, a conflict by two companies in different states would involve the national government.  A nuclear facility’s radiation spreading across multiple states would be a federal issue – and so on. 

Today, due to juducial activism (the interpretation of interstate commerce, mostly) and enforcement by the executive branch the federal government has grossly overstepped its bounds.  This has made corruption among politicians and corporate bodies far easier – especially since the best interest of the people in the local communities mean almost nothing. 

To solve this we should revert back to a stronger local government.

Why Abolishing Government is a Bad Idea

I am a strong advocate of allowing the market to sort things out.  99.9% of the time that is the best thing to do.  However, the market can only work effectively if their is a fair playing field.  It’s important to remember that Government is not the only body of power that has the ability to artificially influence the free market.  So ideally, a just Government would stay out of the business of Market manipulation - and make sure others stay out of it too.  The Government must be non-biased, elected, and have no coflicts of interest to do this effectively (of course that’s not happening today).

Right now its very difficult to imagine a Government that would work.  The Government is so closely linked to business that we have a virtual oligarchy.  Big business sees fit that the right politicans are elected and corporate media ensures that the people agree to it.  Meanwhile, politicians are getting fat off our tax dollars AND corporate kickbacks.  It’s broken.

A system in place with the ability to enforce property rights is necessary though.  Without it we will have the same problems we have now.  Resources people need to survive and have a civilized standard of living (i.e., Medication, Metals, Food, Oil) all have the potential to be utilized for the greed of a few at the expense of many.  Without the enforcement of property rights the strong and wealthy will always be able to take advantage of the weak and poor.  It is the flawed nature of men – an empathy gap between those who are well fed and those who are not. 

We can see prime examples in the diamond fields of Africa where the corrupt rich rule the dying poor or the oil Shieks in the middle east.  An agency of justice is necessary – to lovel the playing field, ensure a truly free market exists, and allow everyone to compete.  Government should be a referee, not a participant.

The Folly of Impossibility

Free Markets or full government control – no matter your poison of choice – there is one major problem.  Men are flawed.  Some men will always exploit and desire to rule over others.  It doesn’t matter if they are in the form of a President or an Oil Tycoon unfair play is inevitable. 

Free markets with a dash of Government refereeing, I believe, give the people the best chance of success.  A free market gives people the opportunity to vote with their wallets and pocket books – to stop businesses who do bad and reward those who do good.  I think we’ve all had enough of these back door deals and lies by our “leaders”.

(Check out Part 2 where I will examine a few examples and discuss the data.)

Consistent and Consistently Right

Two of the MOST important issues I think ALL of the other candidates seriously fail to address are America’s destructive foreign and monetary policy.  Those are two issues that the President could have direct and immediate impact on.  Often people like to argue about what I call “surface differences” between the Republican and Democratic parties.  Highlighting differences when it comes to civil liberties and human rights.  In the end, both parties are essentially the same when it comes to their support for big business and the policing of other nations.  Remember both Republican and Democrats are guilty of taking away American’s liberties in recent history (Patriot Act, NDAA) and if not from protest from the people it is highly likely that the internet would also be restricted today (SOPA). Both parties are parties of overspending and debt.

Even the years of the Clinton administration when the budget was “balanced” were only balanced because they used BILLIONS of dollars from the social security fund – OUR retirement.  Real change is addressing our foreign policy, spending, civil liberties, and monetary policy. I feel that Ron Paul has been consistent and consistently right on each of those issues for decades.

Poorer in 2012: Increased Social Security and Income Taxes in 2012

I was paid today. That’s normally a good day, but when I saw that my paycheck was about $20 less than it was in 2011 I became angry. I decided to do a quick bit of research to make sure there were no errors. I mean that’s about $250 a year I could be giving away for nothing. After a few quick Google searches I learned that there was a tax increase in Social Security. Great.

A program that I will probably never benefit from in any way is taking more money out of my wallet. The funny thing is – the government pulls cash out of the Social Security savings fund all the time – like some sort of emergency savings fund! So right when you think, “at least the people who have paid into the system their whole life are getting something back” you realize the guys in control in Washington are stealing from you.

You might also be interested to know that the guys stealing from us in Washington aren’t tied to Social Security. Congressional pensions are seperate – they don’t pay into Social Secuirty and do not recieve any.  (They actually do pay into Social Secuirty, sorry for the bad information – most ARE wealthy enough not to have to rely on it though…)Funny the guys deciding the rest of the countries fate have almost no stake in the outcome. What incentive do they have to use the system fairly? They can tax us, use the money, and then tax us again to prop up the system a little longer. What a flawed system.

You might even be thinking – well at least we have a few rich lobbyist fighting for us “regular” guys, but you’d be wrong. Rich peopld don’t care. There is a $110,000 cap on taxable income for social security. That means a guy making $110,000 is taxed the same as a guy making $110 million. I’m not for higher taxes – not for anyone, but it’s no wonder main street doesn’t have a say in this whole thing. Social Secuirty is a failed program paid for by the poor and middle class, used by the political machine, and designed to make everyone feel okay about it.

Personally, I wish I could opt out.

We may also see a 2% hike in taxes come March 2012. The renmints of the Bush era tax cuts are coming to a close and congress just approved an extension through February. If nothing more is done the rest of us migh see about a 2% total decrease in their take home pay come March. (For a grand total of about 5-6% in 2012) Inflation and taxation – Happy days!

I’m sure my analysis and summary of what’s going to happen is off here and there. You can check it out for yourself here or here.

An organization every intellectually honest American should question: THE FEDERAL RESERVE

What is the Federal Reserve?

“The Federal Reserve System (also known as the Federal Reserve, and informally as the Fed) is the central banking system of the United States…The task of the Federal Reserve System is to maintain employment, keep prices stable, and keep interest rates at a moderate level by regulating monetary policy. Components of the Federal Reserve System also supervise banks, provide financial services, and conduct research on the United States economy and the economies in the surrounding region.” (wikipedia)

That sounds great, right?  Well, there are some problems.  First off our currency has no real value.  You can’t redeem your dollar for a certain amount of gold or silver – the value of the dollar is only perceived.  As in what a dollar can purchase today might be drastically different from what it can purchase next year.  (re: problems with fiat currency, what has the government done to our money)  However, problems with inflation or the federal reserve constantly printing money and further devaluing our currency is not what I want to talk about.  Rather, the glaring problem, in my opinion, is the secrecy.

“…under current law the Federal Reserve cannot be audited.  As well, its decisions do not require ratification by anyone in the executive or legislative branches of government.  Each time Congress has requested that the Federal Reserve submit to a voluntary audit, only refusals have been recieved.  The Chairman of the Fed is therefore free to say anything he wants to Congress, and there is no way to verify the truth of his statements.

The Monetary Policy decisions made by the Fed are made at secret meetings, and Congress, as well as the public, are only made privy of brief reports released weeks later.  Any transcripts made of the deliberations are destroyed.  Every other government agency, even the CIA and NSA, are required by law to maintain all documents and transcripts of their activities.  Since the Federal Reserve is not a government agency, these laws do not apply.”  (Judge Andrew Napolitano)

Does it sound funny to anyone else that an organization that is in control of and put in charge of the entire country’s (one may argue world’s) money supply is not monitored or audited?  I mean damn, every public company in the US is subject to an audit under Sarbanes Oxley!  Why is arguably the most powerful organization on earth exempt from any accountablility?

If printing money as if was a manufacturer of monopoly bills or the secrecy doesn’t bother you perhaps the way the founding of the Federal Reserve occurred will. The first draft of the Federal Reserve Act of 1913 was drafted, in secret, by none other than a few of the most powerful bankers and their associates  in U.S. history: Senator Nelson Aldrich, father in law of John D. Rockefeller; Frank Vanderlip, vice President of Rockefeller’s National city Bank of New York, Charles Norton, president of Morgan’s First National Bank of New York, Henry Davison, senior partner of J.P. Morgan Company, Benjamin Strong, head of J.P. Morgan’s Banker’s Trust Company, Paul Warburg, representative of the Rothschilds, and Abraham Andrew, Assistant Secretary of the Treasury.  Anyone else find this an interesting group of people to propose and organization that would control the money supply?  More importantly – why would they want to? (why would bankers want to control the money supply, seems like an easy one…)

” [The Banks] argue that the Federal Reserve Act…ensured that our currency was flexible…that if state banks did not have someone to look out for them, they would in essence over issue their notes and reduce the amount of money they dept in reserve because of their need to make a profit.  They can make an agreement to warn each other when reserves are low and therefore not cash the checks from the deposits of banks whose reserves are low…when banks work together and work from one central place, no one needs to worry about crashing because it cannot pay back its debts, since it and its competition are all backed by a “lender of last resort.” It’s like a teenager with an unlimited credit card who knows that no matter how much money she spends, her parents will always pat the bill.  Ant then imagine that the parents were able to force their neighbors to contribute to payments for the bill.  Well, we are those neighbors…”  (Lies the Government told You” pg. 153-156)

It sounds like the perfect scheme.  The banks can overextend, lend more money, take on more risks, and collect more money via interest payments – and when they fail WE PAY THE BILL via taxes and inflation.  I’ll bet some people would argue this would never happen – if it hadn’t already happened. (re: the Bank Bailout List) Great.  Does no one else have a problem with this?

Hey, I’m no expert in monetary policy.  Not even close, but it seems like everyone should agree that something is wrong when you can’t audit the very organization that controls the money and when no one holds the organization accountable.  If money is power, it looks like the Fed can create power out of thin air.

Like Thomas Jefferson said, “If the American people ever allow private banks to control the issue of their money, first by inflation and then by deflation, the banks and corporations that will grow around them will deprive the people of their property until their children wake up homeless on the continent their fathers conquered.”

You only THOUGHT you had freedom of your OWN BODY

Over the past week or so I have been reading the book “Lies the Government Told You” by Judge Andrew P. Napolitano. Don’t worry, its not quit as nutty as it sounds. (No conspiracy theories, here.) Really it just talks about how the government has infringed on many of our rights and personal freedoms. The book has been fairly solid, but I haven’t really felt the “call to action” to write about it until today.

“Lie #7: Your Body Is Your Temple”

Basically the argument goes – you can do whatever you want with your own body as long as you don’t hurt anyone else in the process. I would say that this may be the single most important right according to people (myself included) who argue for personal responsibility and personal liberties. That is on the surface.  There are a couple of discussion points that really made me think twice – and I believe are worth taking note.

So the question really is – should the government be able to legislate what you do with your own personal self? Should the government be able to outlaw certain substances? (Drugs, Trans Fat, Alternate Healthcare Options?) Where do we draw the line from what the government can “protect us from” and what we can do with/to ourselves?

“…there is a Natural Law argument that if Diane Monson and Angel Raich thought using marijuana would help their chronic pain, who is the government to stop them?  Even if there may be certain personal health risks involved in smoking marijuana, there are certain pain-relief benefits that Monson and Raich value over any possible risks.  These are decisions that for individuals and no the federal government to make.”

Quotes like this one are a no-brainer for me – because of course Marijuana should be legalized. (for a variety of reasons) However, following this same logic of personal rights – should we legalize heroin, LSD, or other more potent drugs?  For me the answer is YES, but with a caveat.

I believe that all drugs should be legal (I’ll write about the failing drug war soon). (re: Walter Cronkite on the Failing Drug War) However, I do believe that drugs , especially highly addictive ones, should be carefully monitored – much like alcohol is today. Basically my reasoning is that a person should be able to do whatever they want as long as they aren’t infringing on the property rights of someone else.  Of course, I do believe that with potentially harmful products a certain amount of education should be required. For example, who has access and the warning labels on a gallon of milk should be much different that how one would package, present, and vend a packet of Cocaine.

Also, it would be very easy for a person using drugs to infringe on the rights of their family. How can a person with an addiction support children or a spouse? Also, many people are violent or non-function when on drugs. We see this same affect on alcohol. My argument is rather than a ban on drugs being a legal issue, it should be a societal issue. Families should encourage each other not to do drugs, companies can refuse to employ individuals who take drugs, and using drugs inappropriately (i.e., driving while on drugs) should be illegal. However, the consequences, as we have seen in the prohibition era, of the war an drugs as well as the infringment on personal liberties are to grave to accept.

“If you were diagnosed with a rare disease and had only a few months to live, would you try an experimental drug that may save your life?  Would you like the choice to do so?  To Bad; your government won’t let you.

In addition to prohibiting people from easing their pin with medical marijuana and growing wheat for their own consumption , the federal government’s red tape often makes i difficult for people who are ding to access potentially lifesaving drugs.  The FDA’s approval process is painfully long (the average time from lab to shelf is about twelve years), and in the meantime people are dying.”

Mentally, I have often found myself defending the FDA, because hey, we really don’t want people dying from blood pressure medicine and such. On the other hand, if a person understands the risks, and would like to take a risk to save their own life – who are we to stop them? I mean, three states will let people kill themselves if they so choose, so why not? A person has a right to do whatever they can to survive or end their pain with dignity if they so choose – right? (re: assisted suicide)

In addition, the vast majority of people do not have access to clinical drug trials, even when people are begging to take part, so what should we do? How do we balance the safety of the people, prevent the pharmacy companies from taking advantage of sick people, give people the right to try to survive, and help the most people?

I’m sure that I do not have an easy answer and I’m not sure that Judge Napolitano does either – he ends the chapter like this:

“As adults, our bodies belong to us.  They don’t belong to anyone else, let alone the government.  The purpose of the federal government is to protect our constitutional and natural rights, not to restrict them.  As children, our mothers and fathers know better than the government does how to raise us, and it is their job as parents to educate and groom us to make important divisions in life. Some of us will make conservative decisions, and others will make risky ones.  Some of us will lead healthy lives, while others will pollute their bodies.  Contrary to the government’s belief, however, we have the right to make poor decisions and go against the “mainstream” ideas.  We’re allowed to be individuals.  We have the natural right to control our bodies.  The government has not right to make decisions for us and thus infringe upon this sacred right”

In genreal, I agree. I think that while people are entitled to make decisions -  even “poor decisions”, as Judge Napolitano said – there is a fine line we are walking here. To make decisions we have to have adequate information and really understand the risks. It’s all about obtaining the fact and interpreting them – baring we have that – I think the government should let people govern their own lives.

This is a very complex issue – I’d love to hear what everyone else things about the subject.