The People’s State of the Union

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[So deep and pervasive are the economic lies in which we have all become immersed that few even question how the U.S. economy could be recovering when its foundations are rotted beyond remedy or repair.  A solution is at hand nonetheless, says Rick’s Picks contributor and forum regular Rich Cash, but it’s not going to come from the politicians or the Fed; rather, it will be punitively imposed on us by the collapse of a debt pyramid that as of this moment has placed a very real liability of $178,311 on every man, woman and child in America. Below, we give Rich free rein to say what cannot be said in a State of the Union speech – to say that the nation will not emerge from its long wallow until we face up to some hard economic truths. RA]

***

235 years after the first Declaration of Independence, a Revolution founded on the highest Constitutional principles of liberty and general welfare is well overdue according to Thomas Jefferson, who figured a revolution every twenty years was healthy for our Republic…

We the People hereby declare…

One definition of insanity is renominating to high office the same candidates and their friends representing special interests from both sides of the aisle, yet expecting different results. In January 2011, the usual suspects, some dating from the Nixon Administration and Vietnam War, began to throw their hats into the media-circus ring. It is finally time for fundamental reform, not just another quickie brand label or slogan change. A conspiracy of special revolving-door interests enriched themselves running this country into bankruptcy facing insolvency. We the people are on red alert. It is high time for real reform and repeal of white collar military Crime without Punishment. A passel of crooks took over Wall Street and Washington, D.C.  They took the majority of people to the cleaners and poorhouse, marketing moral hazard. Now generations face a dismal poor future; unpayable debts as far as the eye can see.

Jefferson would say a revolution is overdue...

There is no way government can grow or inflate its way out of this musical chairs mess by more borrowing, spending and taxing on a shrinking real economy. In the past two years, all the Federal debt in the history of the Union doubled.  Debt cannot double again because real economy and debt service were broken by government- and Wall Street-on-steroids with mark to fantasy gimmicks and special secret accounts.  One percent of the world owns 90 percent of the wealth. Much of it was financed by a banking taxation system based on debt that destroyed the majority of hard-working, law-abiding citizens with usury and hidden pay cuts and taxes.

So far, the failed system attempted to fix itself by creating yet more debts and not-so-hidden taxes, plus 8%-plus inflation of education, food, fuel, medical care, utilities and other necessities. This does not work. True economic politics consists of not merely gazing at short-term benefits for some, but long-term effects for all. Every Sunday School Child knows we can’t get to heaven on the highway to hell. America, one of the last bastions of freedom and prosperity in the world, was forced by money-trust interests to export her prosperity and productive work, while destroying family, importing and subsidizing illegals with a lower living standard, while making war breaking things, shooting, jailing and killing people.

Amazing Debt Clock

311,927,341 Americans, 138,588,037 working and 64,703,760 retired or disabled, face $14 Trillion in official U.S. debt, $55.6 Trillion in total debt, $112 Trillion in unfunded liabilities, $576 Trillion in unsecured currency and debt derivatives held by a few banks, and a $638 Billion trade deficit. [Click here to see the U.S. Debt Clock update in real time. You’ll be astounded. And by the way, your family’s share of the $55.6 Trillion is $681,000 and rising.  RA]

No wonder the overstretched dollar fell from $20 an ounce of gold to $1430.60, a -98.6% drop in the value of the dollar. If Wall Street Machiavellians have their way, revaluing the Chinese renminbi/yuan +40% to Big Mac Productive Purchasing Parity with the dollar to boost exports will deliver the final coup d’etat to the American Consumer as the dollar drops another -40% and prices soar on the other side of the seesaw, even though American workers are much more productive than Chinese per capita. We do not confuse quantity with quality. In theory, revaluing the Yuan would seem to generate windfall profits for multinational cash-rich corporations that pay less than 10% of American taxes, but who here could afford to buy their products?  Certainly not American, Chinese or Indian debt slaves or feudal peasants.  Already, with 29.78% of the workforce defacto unemployed, food companies raised their prices, an unpopular form of austerity. Can consumer-product price hikes and $4 gasoline be far behind?

Reagan’s Successes

Boeing celebrated their $19 Billion technology transfer D.C. Hu Wall Street deal with China by announcing the layoff of 1100 more employees, creating yet more wards of the State. Meanwhile, China arms herself to project power and keeps American businesses out as Japan did in 1989. Corporate government did neither God’s work nor faithfully served the public commonweal. Thirty three years ago a President with a degree in economics campaigned and won office with votes from both sides of the aisle by telling the majority, More government is not the solution, but the problem. He got the most votes by guaranteeing to get government off taxpayer backs and out of our pockets. He cut red tape and taxes and fired a government union on illegal strike. He faced down foreign threats by rearming American military strength while refusing, per Washington’s Farewell Address, to get bogged down in foreign entanglements and military misadventures.

His biggest mistake was listening to people who claimed more debts don’t matter. He doubled the debts, which made interest rates rise with an old-fashioned banker and Treasurer who did not bail out every bad bank, company or investment with funny fiat money.  He stayed the course through tough times instead of throwing taxpayer money to friends. By letting interest rates rise to 18% money with 28% second mortgages, he cleared the economic playing field of detritus, flotsam and jetsam with bankruptcy or rational reorganization.  He paved the way for profitable investments by savers that created more productive jobs and economic growth (8% GDP) than all Presidents since.

U.S. Bankruptcy Ahead

Thirty-three years later, we face the bankruptcy of America and her taxpayers, perhaps an upside-down Federal central bank and Treasury, with falling tax revenues and rising red tape and taxes. The predictable political turf response so far was to increase bureaucracy and print more money and new laws and rules for government takeover of the economy, with ineconomic oxymoron legislative acts and legal decisions like Food Safety, HAMP, Health Care, Patriot Act, TARP.  Along the way, America, Home of the Brave and Land of the Free, became a Birther Truther Prison State, more people incarcerated than any other nation, including Red China, with benefits, pensions and wages cut, while the number of billionaires soared.

Wall Street became a gambling casino instead of a source for productive capital. A leading investment house made a social software firm without notable profits priced more than larger firms employing far more people productively and profitably, then pulled American investors out of the pie. In the financial world half a century ago, I worked hard for silver dollars at parity, then worked with a main line Wall Street Wire House Firm and Investment Banker in Silicon Valley, funding a fast-growing medical device business eventually acquired and taken private for $11 billion. Nowadays red tape, lack of capital and the culture of cupidity could derail such productive enterprise.

The Lost Years

Never fear – there is a solution coming. It is not more bailouts with funny money and taxes, administrative legislative judicial edicts or domestic espionage red tape, or technology transfer to mercantile competitors who practice free unfair trade with child slave labor and prison camp organ harvesting of political enemies. How can some misguided American mouthpieces extol a communist totalitarian culture? What remains of pummeled American free markets is rising rates and lowering real paper asset prices, like the 16 lost years from 1966-1982, or 25 lost years from 1929 to 1954. While painful, these ultimately cleanse our markets of government excess and restore productive liberty with economy.

This solution may be coming quickly. These past five weeks we had a second series of Hindenburg Omens since the Chicken Little August Hindenburg series that presaged a mere -8% market decline, truncated for awhile by Fed Funny Money and Election Year spending. With Elections over, a fresh House slate sweeping clean and inflation choking markets, there may be actual spending cuts with legislative repeals, or two years of stalemate, amidst pomp, circumstance and austerity, but it does not matter. Declining markets do the heavy lifting as they always do. Neither POMO nor Government Trees can grow to the sky as much as they try. Inflation kills the best-laid plans of mice and men. The old hands in the Senate saw the writing on the economic wall, losing or resigning in record proportions. Perhaps some even fear pending backlash with congressional criminal procedures for embezzlement or war crimes.

Some Investment Ideas

Where are those missing tens of trillions? Our sense, after five decades in the markets, including the Reagan Task Force, is that the economic stage is set for some real political reform by a deleveraging paper chase to the bottom. We think it quite possible over the coming two years of correcting excess, that a billboard internet libertarian marginalized neighbor poster word of mouth Presidential Candidate may finally catch the fancy and votes of the majority of Americans to restore Constitutional liberties with the rule of justice to protect lives, prosperity and the general welfare, not special interests. A few popular $10 a donor internet fundraising bombs like before and he’s in the Oval Office delivering sanity to government.

Catch him Friday on infowars.com. In the meantime, the real $64 Trillion dollar question may be exactly where to best put our savings to protect it until economy and sanity return sometime ahead. Dollar-cost-averaging a leading energy company like Exxon Mobil could make dollars and cents, as it already did for those who averaged down to 55 suddenly last summer. XOM is currently targeting a reasonable +53% with a dividend that grew at a 9% rate the last five years ahead of the cost of living. In this world of pension defaults and contract deleveraging, select tax-exempt quality credits with monthly yields approaching 8% annual are currently available. One California example is NUC, targeting an unusual +157% at current prices. The dollar is a contrary crazy idea unless world trade falls off with higher prices and expatriated money comes back home with tax cuts to the good old USA to roost. Inflation sows the seeds of deflation. The dollar is currently targeting an unusual +46% from current prices.

Silver

Finally, for those who prefer money without counterparty risk, a monthly, quarterly, annual or lifetime dollar-cost averaging program with Silver American Eagles or a safe American silver stock could make dollars and sense to store value. While silver declines with industrial contraction, that did not stop it from hitting $50 in 1980 when the economy was punk.  Warren Buffett, Bill Gates, Charlie Munger, Ron Paul, Paul Revere, Carlos Slim, George Soros and the Founding Fathers had a good idea with a silver lining.

These are some ideas, not recommendations. They may not be suitable for all individuals or accounts. I am not looking for any more accounts, business or clients!

***

Rich Cash worked the better part of a decade with Merrill Lynch, taught Specials at Stanford University half a decade by Academic Senate Appointment, founded Stanford Capital Investment Banking, and wrote works like Options and Other Beasts, The Politics of Prosperity, for student and client circulation on mostly relevant or timely investment themes.  You can e-mail him by clicking here.

(If you’d like to have Rick’s Picks commentary delivered free each day to your e-mail box, click here.)

  • F. Beard January 30, 2011, 12:01 am

    There is no way government can grow or inflate its way out of this musical chairs mess by more borrowing, spending and taxing on a shrinking real economy. Rich Cash

    Indeed it could if it abolished the cause of the problem (fractional reserve lending) and applied just restitution to the victims of it:

    1) Set reserve requirements to 100% to put the banks out of the counterfeiting business. This eliminates the source of the problem and allows 2) to be done safely.

    2) Send every US adult citizen (INCLUDING SAVERS) a huge and equal check of new, debt and interest free legal tender fiat, United States Notes.

    3) After the private debt is cleared then implement fundamental reform in money creation, including separate government and private money supplies.

  • Steve January 27, 2011, 10:39 pm

    http://www.thenewamerican.com / index.php / usnews / constitution / 2957-state-vs-federal-th…

    State nullification movment is a reality. Under the Constitution the Federal Government can only tax one of the several States, its territory, and its legislatively created citizens domicled anywhere in the world. Under federal corporate law, and master/servant law the feds can internally tax all ‘subjectc’ [14th voluntary political amendment] via excises.

    States can once again determine the legitimate tax owed by the state to the federal government, and have local representation determine the levy upon State Citizens if appropriate for defense of the Nation. Assent to Outlawry is the normal accepted now. As stated earlier, and above; Amos H. Short v. Francis Ertimanger cites that ‘any act not in conformity with this act is utterly null and void’. Now if everyone wants to be in rebellion. . .Answer to Mr. Pratt by justices Nelson and Strong on the ‘Locations Act’ [Amos H. Short, supra] “. . . in rebellion. . .”. Oregon General Laws 1872 [please note the corporate incorporation date] pg.55, ft.nt.2, “On either local, personal, or political grounds, the great body of the people, without nicely scanning the merits of the legal question, upheld “the locations act” and the subsequent proceedings under it, and practically, it became a valid act by sheer force of public opinion. . .”.

    This is best defined as Outlawry in assent to “. . .rebellion. . .” via mobocracy with no regard for Law.

    Soldiers Training Manual 1928
    TM 2000-25: 118-120
    DEMOCRACY:

    A government of the masses.

    Authority derived through mass meeting or any other form of direct expression.

    Results in mobocracy.

    Attitude toward property is communistic-negating property rights.

    Attitude toward law is that the will of the majority shall regulate, whether it be based upon delilbertation or governed by passion, prejudice, and impulse, without restraint or regard to consequences.

    Results in demagogism, license, agitation, discontent, anarchy.

    CAN THERE BE A BETTER DESCRIPTION OF the federal union of states corporate business?

    Mr. O knows exactly what he says when he claims power via ‘democracy’ as does your Republican leadership in the corporate governmental form.

    • Benjamin January 28, 2011, 1:14 am

      “States can once again determine the legitimate tax owed by the state to the federal government, and have local representation determine the levy upon State Citizens if appropriate for defense of the Nation.”

      But why not citizens making that decision? Are we not qualified to know we should defend ourselves when the nation and her interests are under attack?

      After all, there’s no saying that local and state reps can’t engage in mobocracy and/or serve themselves and other interests. And they would surely find reasons to levy taxes in order to pay for federal tyranny, here and abroad.

    • Steve January 28, 2011, 3:13 am

      Ben, the reason we are here in democracy is because the state Citizens went into rebellion, that according to the case I cite; Amos H. Short, supra. The citizens of enfranchisement have supported the governors of the state, who were given a trail to the pig pen via some agreements (interstate) that allowed the fed to tax citizens directly. In exchange for this rebellion of the office of governor, the governor got rich and was able to offend the constitution by getting kick backs from the federal government under territorial law. The switch is basically money laundering whereby the Original State constitution cannot be abused, but; by interstate contract funds are washed in the district of Columbia and sent back to the state mobocracy with the governor now the king. Base line is still the fact that the people are in rebellion and choose not to follow the law in preference of sin. We did it Ben, and We are untrustworthy of the great sacrifice of the Framers. Can We Change? Or, can we Obama?

  • RTS January 27, 2011, 10:16 pm

    Excellent article, Rich. Would love to read more.

  • Robert January 27, 2011, 8:06 pm

    This has been a great discussion.

    It IS the end of the world as we know it…

    and, strangely enough, I DO feel fine.

  • redwilldanaher January 27, 2011, 7:57 pm

    I enjoyed reading this good piece from Rich and I do not enjoy playing the endless cynicism card but I have to because it’s never let me down, not once. If Jefferson were alive and were to publicly utter that truth the department of “homeland security” would pick him up and hold him indefinitely. A revolution wouldn’t be worth undertaking in 2011. Why try to restore a centralized government? That’s what even a successful REV would be forced to do to placate the zombified. Most people would be happy to accept the US FED Govt. of the 50’s or 60’s and they’d be fools to do so. We all know what malignancies were already in place or well established by then. Good luck getting even modern so-called “conservatives” to enthusiastically accept the original “loose confederation of states” concept. And there’s ZERO chance that you can sell that to the indoctrinated in the wool pro-statists lefties that reside you know where. Nullifications followed by peaceful secession is much more appealing from where I sit.

    • Steve January 27, 2011, 10:20 pm

      Red, the republican party is only a wing of democracy and has nothing to do with the Constitution. This is corporate government under the authority of congress to domicle federal corporations within the district, and to allow said federal corporations to do interstate commerce giving congress absolute control of the residents doing business away from their domicle within the district of Columbia. One can look at the acts of 1872 creating a foreign corporation identified at 28 U.S.C. 3002(15). Great comments!

  • John Jay January 27, 2011, 3:40 pm

    Rich,
    Thanks for the Treasury duration explanation.
    So now I see why the Federal government is openly promoting allowing State bankruptcies.
    1) Precludes any bailout costs to Uncle Sam
    2) Forces more money into US Treasuries as real or percieved municipal bond defaults create another “flight to safety”, keeping Treasury interest rates lower.
    3) I am guessing as monies that were in municipal bonds vaporize, and lower cash flow due to state/local wage/pension cutbacks will help dampen any inflation consequences from all the Fed money creation.
    Not going to help the unemployment situation though.

  • Steve January 27, 2011, 2:38 am

    Thanks Rich; There should be a 1000 posts in regard to what you wrote. But then; that would put forth an expectation that there was a majority out there that care. Thanks again.

    • Rich January 27, 2011, 9:56 am

      Thanks Steve.
      As deleveraging of assets and inflation of necessities accelerate despite the best efforts of mice and men, more will care.
      Let’s look closely at what’s happening at riots around the world and be prepared…
      http://www.bloomberg.com/news/print/2011-01-26/wheat-corn-soybeans-jump-as-food-riots-bolster-demand-for-u-s-exports.html

    • Benjamin January 27, 2011, 2:59 pm

      From the link: “You artificially stimulate much higher demand when nations start to increase stockpiles.”

      That comment made me do a double-take. What an odd thing to say! But consider the “viability” of today’s system, and it makes perfect sense. Even the otherwise sound act of saving becomes detrimental!

      And a “minor” point on Australian agricultural production…

      Although they’ve had some rather nasty droughts in recent years, their carbon reduction quotas (as per the Kyoto Protocol) forbid many farmers from even clearing their lands to control for brush fires, let alone growing anything.

      http://www.smh.com.au/national/fined-for-illegal-clearing-family-now-feel-vindicated-20090212-85bd.html

      http://joannenova.com.au/2009/12/wholesale-theft-in-the-name-of-carbon/

      So there it is. And if I had to venture a “guess”, as this is happening in many parts of the world (even here, where all this supposedly can’t), the problems caused by “drought” are more because of the refusual to update/expand/maintain infrastructure to provide water than they are of natural phenomenon. I have to wonder something else, too…

      Econ 101 says that when excess production cannot be utilized for even marginal profit, the excess production disappears, corrects. The problem isn’t (yet?) so much that there wasn’t food to buy, but peoples’ ability to afford it.

      Now, supposing econ 101 is correct, might the rising costs that put it out of reach for a growing number of people account for part of the gradually rising prices? If so, then there will be a point when affordibility of (more or less) abundant production isn’t the problem, so much as a lack of food to buy.

      ie Reverse-engineered food shortages, and thus, by extension, water shortages, and again by extension… “too many people” chasing too little production. A vicious cycle.

      On a final note, I’m sure we’ve all seen a documentary or read a book about why such-and-such a civilization fell. Why did it happen, the author/narrator asks. Certain problems are blammed, where known, but even those haven’t a solid explanation for having been.

      So maybe, just maybe, many long-gone civilizations on this planet disappeared because they, like the Aussies and everyone else, were governed by a bunch of theiving and devaluing dickheads.

  • DG January 26, 2011, 9:49 pm

    In response to the SOTU speech, on ZH last night there was a comment that produced milk out my nose:
    by Sofa King

    BO’s speech: “the nation of Edison and Wright Brothers: of Google and Facebook…”

    SK’s comment: Nice that Edison and Wright brothers get recognition by name, but Page and Brin and Zuckerman get crap. Then again you are comparing the invention of electricity and flight to an ad engine and wasted time.
    ………………
    THAT is some funny stuff.
    But it is so true. I wrote a rant three years ago, when Rick was asking for an essay on “what we need to do to get America back on track”, and I posited that the only thing, technologically, that we should focus on was new energy.

    not $6.80 corn gasoline. not 60 cents a kwhr subsidized solar. but new, non-fossil, economical energy.

    and we laud facebook and google. ad engine and wasted time.LOL.
    BTW, I read that Facebook is involved in 20% of all divorces. You know, hooking up disgruntled spouses with old flames. Best to keep the matches away from gasoline.

    • Benjamin January 26, 2011, 10:27 pm

      “not $6.80 corn gasoline. not 60 cents a kwhr subsidized solar. but new, non-fossil, economical energy. ”

      What’s wrong with another 400 years or so of “fossil” energy? Maybe a better question to ask is what’s so good about nuclear…

      http://network.nationalpost.com/np/blogs/fpcomment/archive/2008/05/13/the-limits-to-nuclear-mccain-shouldn-t-try-to-follow-french-disaster.aspx

      That’s why, imo, we don’t need a good ol’ fashioned space-age energy race, but for cooler and wiser heads to prevail.

      By that I mean getting government out of energy altogether. The private sector in a truly free market will get us to the point of actually needing nuclear much, much sooner, as well as provide it much, much more economically than government-induced races for space-age pizzazz ever will.

  • Rich January 26, 2011, 9:33 pm

    JJ:
    $2.2 T Tax revenues are currently about ten times debt service, $203.7 B, still the third largest budget item after transfer payments and war.
    http://usdebtclock.org/
    On the other hand, usury is now accelerating faster than income or revenues, with 0 on track to quadruple W deficits.
    http://www.independent.co.uk/news/world/americas/obamas-economic-kickstart-will-quadruple-us-debt-1633418.html
    One estimate of interest service, currently $204.7 B, was that it would quadruple in four years.
    http://seekingalpha.com/article/183315-debt-and-debtors-a-global-picture-of-deleveraging-part-i
    If interest rates go appreciably higher because of credit insolvency risk, rather than economic recovery as claimed by DC and Wall Street, the quadrupling in debt service could happen a lot sooner than a presidential election cycle…

    • John Jay January 27, 2011, 5:35 am

      Rich, my math may be off but if the National Debt is North of 14 trillion dollars and interest service is 203 billion does that compute to about an average interest rate of 1.45%?
      A 1.45% average interest rate seems rather low, considering all the legacy debt at higher rates.
      Or am I over simplifying the math equation by using an average when there are so many maturities with so many various interest rates?

    • Rich January 27, 2011, 9:49 am

      JJ identified the Fed Treasury strategy:
      Use shorter maturities with manipulated lower interest rates to keep funding costs down.
      But then there were higher rates as debt markets discounted the inflation risks of fiscal and monetary policies including TARP and QE, so the Treasury extended maturities to around 58 months at last report to lock in lower rates.
      Hard to hide a hungry leviathan from smart markets, so Five-Year Treasury rates doubled from 1.016% in November 2011 when QEII began, to 2.188% in Dec 2011, meaning debt service costs rose as the Fed monetized Treasuries and Government Primary Dealers monetized their inventories.
      Hard to fool the market, and QE could be called off well before the end of June if Treasury rates continue to rocket.
      Meanwhile, higher Treasury and Municipal Rates compete with equities and drive their prices down, the opposite of what mass media headlines trumpet…

  • John Jay January 26, 2011, 9:06 pm

    On taxes.
    I see the latest estimate for 2011 is a 1.5 trillion dollar deficit. Probably a lowball number too.
    Some combination of accumulated National Debt and rising interest rates is going to mean 100% of taxes collected will go to interest, leaving nothing to run the government.
    They could make Treasury interest tax free as a last ditch measure to hold rates down, but that would only help domestic purchases, correct?
    I’m afraid the impending collapse is going to be worse than what we have now.
    I wish Obama would park Air Force 1, and ride the jump seat in a C-5 with his armored column parked in the back.
    He is beginning to look like a ridiculous third world dicatator compared to the condition of his subjects.

  • Benjamin January 26, 2011, 8:12 pm

    There is not much room to discuss or debate anything, imo, so just letting you know, Rich, that I read and thought it was a great article today.

    • Rich January 26, 2011, 8:23 pm

      Thanks B…

  • Robert January 26, 2011, 8:09 pm

    Rich-

    Fantastic essay.

    Here’s where it get’s interesting for me- Why hasn’t the country woken up to the fact that the revolution can occur in one day (April 15) without any violence, bloodshed, or riots ?

    I think we all already know that the blank 1040 form is the shining symbol of the ultimate middle finger to Washigton DC, and by extension to Wall Street…

    So, the question is just how thin will our patience have to wear before the triggers get pulled?

    • Benjamin January 26, 2011, 8:21 pm

      You know, for years I wondered the same thing (tax revolt) but it’s probably been as many years since I last bothered to inform people of the very simple fact that millions of blank tax return forms vs very limited armed agents = Success.

      But here’s why people don’t: They want that tax return check. And therein lies the answer to your question. When the tax returns won’t buy much, if anything, we’ll see millions not filing, among other interesting things. And unlike the past and present, even the welfare recipients (or former welfare recipients, I should say) won’t just stand there, idle and indifferent.

    • Rich January 26, 2011, 9:15 pm

      Interesting setup points R&B:

      Constitutional “Frivolous” returns with a penalty of $5000 were prosecuted by the IRS, spending a big proportion of what was collected, one reason the Fed preferred inflation and mandatory payroll taxes, with half the people not paying income taxes.

      POTUS Wilson signed the Fed Act and IRS Amendment that was previously ruled unconstitutional by SCOTUS.

      POTUS FDR added payroll withholding on 94% tax-brackets over $200,000 with 3% war surcharges on all brackets.

      http://www.taxfoundation.org/publications/show/151.html

      Peter Schiff’s father Irwin wrote books on the Biggest Con: How The Government is Fleecing You, Government at the Point of a Gun and The Federal Mafia. He testified on the Gold Standard to the Senate and went to prison multiple times over 17 years with others after Judges first tried Summary Judgment without Constitutional trial by jury of peers.
      http://en.wikipedia.org/wiki/Irwin_Schiff

      Bill Benson et al went to prison four years for The Law That Never Was: The Fraud of the 16th Amendment and Personal Income Tax, itself ruled as fraudulent.
      http://en.wikipedia.org/wiki/The_Law_that_Never_Was

      CPA, former Special Agent of the Criminal Investigation Division of the Internal Revenue Service (IRS) and IRS whistleblower Joe Bannister told his clients although he filed taxes, there was no law requiring it. His clients went to prison 6 years and he lost his CPA license and was disbarred from IRS practice.
      http://en.wikipedia.org/wiki/Joe_Banister

      After giving 1994 published testimony to House Ways and Means on Replacing the IRS Income Tax with a 10% Flat Tax, and then publishing for the 28 basis point Automated Payment Transparent Transaction Tax, (http://www.apttax.com/) an improper levy without notice or due process was attached to income and not refunded despite repeat requests to a Republican US Representative who did not respond to written correspondence and a Democrat US Senator who did.

      One of these days, using due process, we may be able to prosper our country again…

    • Steve January 27, 2011, 2:34 am

      Interesting; the I.R.S. will fine someone 5k for expressing their beliefs under Article I of Amendment, Free Speech.

    • Benjamin January 27, 2011, 5:06 pm

      Ain’t it lovely how they rule out anything against them as lies, damn lies?

      But it’s even more lovely how they’re going to have to accept it anyway. We don’t have the money means we don’t have the money, just as surely as we’ve had enough means no more! But that’s what the government is like. One of those rapists that thinks no means yes, because they decided it means yes.

      Anyway, I don’t think abolishing income taxes alone is a radical enough change, the kind that Jefferson was talking about. Taxation at all, as you know well from my ample posting on the matter, is best handled by coining at the Mint, thus allowing the individual on up to the collective decide the weight of the dollar. Which would be the tax burden, as the heavier the weight is, the less the people decide they should have in place of government, and vice versa. And this would also revive the lost practice of saving and sound lending and settlement. We that restored, more than ever.

    • Steve January 27, 2011, 10:16 pm

      Ben, there is a “nullification movement” afoot in the states. There is history and case law to support the matter from two points. The supreme court has opined ‘the people by their quiet assent allow the lawlessness to continue’, and Amos H. Short v. Francis Ertimanger 5 Opin 354, 524 (summary) ‘. . .any law in violation. . . is utterly null and void. . .” Cert. Denied s.C.U.S.

  • DG January 26, 2011, 7:46 pm

    Rich: Great piece. Didn’t hear one note of it last night. What the heck is going to make all the electricity for those electric cars? Those nasty fossil fuel companies? Nah, we will punish them.

    It seems like poorly conceived ideas, summarized with sweet sounding platitudes. Green! Carbon neutral! Healthcare for all! Reduce spending through investment! Will it work? Who cares, it sounds good!

    BTW, XOM paid $15B in cash tax last year on $34.8B income. (another $26B tax was paid for severance and ad valorem) (and they got some of the $2B BO spoke of, I assume…
    compare AAPL paid $4.5B on $18.5B (not one manufacturing job in the US, here – oh, and a few suicides at Foxcon)
    It probably is not a good idea to give XOM any subsidy, but puh-leez, again, who the heck is going to provide the power so you can charge your “Leaf” and iphone? XOM is your ally, not your foe. Coal is half of all electricity, jackwagon and there is no viable plan to change that.

    BO’s energy policy is the same as it has been since hope and change started (and stopped). 40% of this year’s corn crop will go in your gas tank at $6.80 a gallon. The Tunisians may not agree with this policy. While you “stand with them”, bring some corn.

    I saw a gripping documentary last week “Century of Self”
    Google it and you will discover how we have become a mass of selfish idiots. From the pig banker to the entitled public worker, corporate plunderer to the religious greenie…Nearly every issue we have comes back to elevating the self over the system. Selfish politicians (re-election), bankers (kill everything if necessary in order to keep my bonus), selfish environmentalist (academic grants, Al Gore $1B, and the thrill of “I saved the world”, and the sheeple-selfishly drunk on their idle ignorance -unwilling to do the heavy lifting of critical thinking and self analysis and critique.

    Critical thinking AND common sense knows what is right and what is wrong and it is not selfish. Nothing will change until we abandon our dogma and are willing to challenge everything, even if it means everything we thought was true is actually false.

    • Rich January 26, 2011, 8:22 pm

      DG:
      Great examples of DC analysis a nanometer deep and 0 rhetoric a mile high. Ayn Rand or Thomas Sowell could not have said it better re the virtues of enlightened selfishness versus the self-anointed Tsars mouthing pious platitudes while plundering…

    • Robert January 27, 2011, 7:47 pm

      Agree on Rand…

      Funny how so many chastise (or even vilify) her for her “enlightened selfishness” principles…

      They only comprehend (and therefore zero in on)the “selfish” half of the premise, which indicates to me that “enlightenment” might well be the ultimate economic shortage that this retarded species currently faces.

  • roger erickson January 26, 2011, 7:14 pm

    You guys have got to be kidding! Any group always has full potential to grasp the return on coordination.

    Everyone in the world seems to be “running out of money!” Why, we’re right back where we were before we invented the stuff. 🙂

    As you say, it’s hopeless. [& “short people got nobody”]

    The defense against any arbitrarily imposed currency shortage is a shortage of transactions denominated in said currency. Andrew Jackson was smarter than this, he threw out the crooked bankers, not the currency.

    The only thing we’re ever lacking is will to think. There is no fiat debt that can’t be paid by fiat. It’s meaningless to the issuer. Only inflation matters, and can be handled separate from the issue of matching currency supply to growing population & transaction rates. Lord have mercy!

    ps: In a fiat currency system that recycles bookkeeping by issuing, then taxing, then letting people utilize what’s left in circulation the “debt clock” you fear is also the “private savings clock”, to the penny. A “balanced budget”, by definition, means one where all issued currency is reacquired via taxation.

    Answer me this:
    Where the hell is the utility in a fiat currency supply “balanced” per an accountants retroactive whim vs the projected needs of a living population?

    Y’all need to burn your economics books & pick up a reality book. Reality has been here a lot longer.

    Public initiative and the beginning of US currency: A confused electorate can end up pretending to borrow it’s own currency, instead of creating it? http://www.monetary.org/briefusmonetaryhistory.htm

    “Almost everybody talks about budget deficits. Almost everybody seems in principle to be against them. And almost no one, literally, knows what [they are] talking about.”    Robert Eisner, The Misunderstood Economy, p.90;  
    http://books.google.com/books?id=jTSddYcGA6gC&printsec=frontcover&dq=Robert+Eisner,+The+Misunderstood+Economy&source=bl&ots=nz6wJ-sCnK&sig=6Vli8JdSQLSwlg9K1rVcdnW2SIc&hl=en&ei=KeQxTJ3JBoGclgePgaXACw&sa=X&oi=book_result&ct=result&resnum=1&ved=0CBIQ6AEwAA#v=onepage&q&f=false

    • Steve January 27, 2011, 2:27 am

      Me thinks your theory is based upon a presumption of honesty in the persons who control money. Bad assumption Roger. Me thinks your theory is that fiat has value beyond the tally for slaves. Bad assumption Roger. Reality is only the things you know you know, and the things you know you don’t know (like brain surgery). Reality is that the majority of eveything is the things that Roger doesn’t know he does not know. It is my reality Roger; there is so much, so very important to accomplish via the facts that I just don’t know I do not know. Reality escapes most all and most everyone.

    • Robert January 27, 2011, 7:23 pm

      Roger-

      If your theory of issuance to taxation and balance is valid, then why is there the continuing need to issue (or inflate supply) at all?

      They could stop issuing, and reduce taxes, and the net effect should be the same in your “perfect balance” model… no?

      Reality is simply that neither “you”, nor “they” should be allowed to dictate to me what instrument(s) I must use as capital, or as savings; nor should “you” or “they” be allowed, either by faith or policy, to assign to my chosen savings instrument an arbitrary denominator that allows the confiscation of some portion for purposes not mandated by the owner of said captital (me)…

      Stewardship and tithe are, at their very core, elective acts freely born ONLY of the individual’s presonal willingness to share.

      What part of “personal freeedom of choice” eludes you?

      I do completely agree with you that the “return on coordination” that you espouse is failing all over the globe, and this is due simply to a global Sola Fide in those who supposed themselve to be the elite recipients of the common faith in our present currency system (and have subsequently driven it into the dirt).

      Once the “fiat” is no more, then the currency system has no rational justification, and only true capital (work, resources, and their proxies) survive the resulting chaos to underpin the new economic order.

      Same story, different millenium. We’ve all been here before.

    • Steve January 27, 2011, 10:12 pm

      Roger, why not get a life. You can do as you want now under private contract. You can leave the democracy and go somewhere else. As long as one uses the benefits of the democracy and their territorial script one owes a debt under the Clearfield Trust Doctrine use=debt=trust. There is one correct assumption on the cycles of money, or economies presented. They have always cycled. Will be interesting to see if Bernanke and crew can circumvent the Laws of Nature.

  • dlweld January 26, 2011, 6:40 pm

    Reagan did a lot of Ok things, but his big error was paying attention to Greenspan and deregulating the financial sector – like taking the referrees out of a football game – how does that work out? Meanwhile, the real crime appears to be the huge compensation still paid to the bankers – 140 billion in bonusses this year. All coming out of taxpayer bailouts – where can we get that money?

    I suggest mothballing 4 aircraft carriers per year (TCO for a carrier is 32 billion) to help pay our bankers. I’m obviously being ironic here, but it shows just how much the bankers are weakening the USA but sucking out massive resources – Al Queda is cheering for the real pros here!!

    • Rich January 26, 2011, 8:18 pm

      Just heard Eric Cantor speak to the Heritage Foundation saying every morning as Hoiuse Majority Leader he asks three things:
      1) Are we encouraging more productive jobs than the 8 M lost and 1 M makework?
      2) Are we really cutting spending?
      3) Are we shrinking government and expanding Freedom?
      In three months we may know, perhaps why Faber saw a three month rally in Bonds and three month fall in Commodities, Gold and Equity…

    • Steve January 27, 2011, 2:19 am

      I tend to believe Cantor is part of the problem, not a solution. Cantor is corporate U.S. 28 U.S.C. 3002(15), see; my response to his demurre on Obama:

      The issue(s) is/are of admissible fact, and Standing! Demurrer is the ancient attorney form of answer without addressing the actual question. (Mr. Cantor). A question for a question, an answer that has nothing to do with the question in the first place. (cantor on Obama’s birth). Does Barack H. Obama have Standing to take beneficial use of Public Trust Office of President (Article II, Const.) as contemplated by the Framers in contract endorsement A.D. 1787, Constitution for the united States of America?

      Can Barack H. Obama hold foreign corporate office created legislatively, and domiciled in the district, and territories, as a corporate enfranchisee of dual citizenships, no matter what its name, or names? (see; 28 U.S.C. 3002(15) foreign corporation)

      In regard to Mr. Cantor; The question is; Does the Constitution contemplate a person of dual citizenship, legislatively created, holding the office of President for the several States as endorsed by the Original Intent of the Framers in A.D. 1787?

      What is the citizenship of Mr. Barack Obama (I, II, III, IV, V, etc. & etc. etc.)’s mother at the time of his birth?

      What is the citizenship of Mr. Barack Obama et.al.’s father at the time of birth for I, II, III, IV, V, etc. & etc. etc.?

      What positive steps did Mr. Barack Obama et.al. take to remove u.s. legislative citizenship, like; obtaining foreign passport to enter Pakistan, taking foreign loans?, claiming foreign nationality to obtain benefits on a several State?, claiming foreign nationality on any ‘form’, or form of the federal union of states, and/or any educational body anywhere?

      Cantor a solution – I do not believe so!

    • Rich January 27, 2011, 10:02 am

      One of the Cantor CSPAN3 comments was by a retired Navy man who observed there are now more Admirals than Ships…

    • Rich January 27, 2011, 6:56 pm

      Re Reagan deregulating the financial sector, Reg Q for S&Ls was removed in 1980 under Carter.
      Most Glass Steagall Bank protections were in place from 1933 until 1999, keeping Commercial Banks, Investment Banks and Insurance Companies separate for safety. The Clintons were President and signed the legislation into law, pushed by Hank Paulson and Robert Rubin, sponsored by Phil Gramm, Jim Leach and Tom Bliley GOP Congressmen.
      Allowing banks with deposits and insurance companies with premiums to merge and play unsupervised with derivatives set up the great fall.
      C was a prime example, although many corporations like AIG, GE and GM became shadow banks issuing credit cards or loans and using derivatives.
      C currently targeting 1.25 from 5.15:
      http://stockcharts.com/freecharts/gallery.html?c
      http://en.wikipedia.org/wiki/Glass-Steagall_Act
      http://en.wikipedia.org/wiki/Gramm%E2%80%93Leach%E2%80%93Bliley_Act
      http://en.wikipedia.org/wiki/Robert_Rubin

  • marco January 26, 2011, 6:02 pm

    Rick Cash has it mostly right, but his masonic numerology “Thirty- three years ago a President with a degree in economics campaigned and won office ” detracts from a otherwise powerful message. Thirty- three years ago a peanut farmer from Georgia was elected president– not Ronald Reagan.

    • Rich January 27, 2011, 9:06 am

      President Carter was elected in 1976, 35 years ago.
      33 years ago was 1978.
      In 1978 Reagan campaigned behind the scenes by lining up key funding during a period of stagflation and political turmoil in Iran. He knew David Rockefeller from the Bohemian Grove and lunch as far back as 1962.
      http://www.corbisimages.com/Enlargement/U2072723.html
      Brian Quig wrote:
      Goldwater’s Administrative Director Tom Dunlevy… was an insider at the [1980 GOP] convention… I will always remember the very words of Tom Dunlevy following my protest of the selection of George Bush for VP. They were etched into my mind. “We didn’t like that either. It was a deal with the Devil. Henry Kissinger and Gerald Ford, present at the convention as agents of David Rockefeller, assured Reagan the presidency if he accepted Bush on the ticket. Otherwise Rockefeller would swing the election to Carter.”
      Cleon Skousen spoke with Reagan at the convention, both before and after the Bush decision, and related how Reagan told how Kissinger and Ford, with the support of Walter Cronkite, coerced him. According to Skousen these are Reagan’s very words “They showed me the brush by which I would be tarred if I did not go along.” After the election, when George Bush’s top man, campaign manager James Baker, became Reagan’s chief of staff — the one person who controlled who saw the president — the betrayal of conservatism was complete…

  • John Jay January 26, 2011, 5:36 pm

    Good synopsis by Rich Cash.
    So many thinking people now agree that we are bankrupt as a country, that it is bizarre to see the DC gang of criminals act as though everything is fine, and talking about 100 billion in cuts like that would make any difference.
    I think the USA is now at about the same financial and political condition as the Confederate states were in 1866, after they lost the war.
    We have just lost an economic war to China, and a political/financial war to Wall Street, complete with the final, crushing, GS/JPM “March to the Sea” AKA the MBS debacle.
    Same landscape, same devastation, same bewildered populace, same worthless currency, same carpetbaggers.
    Let’s hope the G.A.R. occupation troops (GS/JPM) cut us some slack!

    • Rich January 26, 2011, 8:13 pm

      Carpetbaggers brilliant simile JJ, as well as chronic preemptive wars of oil producer nation occupation, with China and BP getting much of the spoils…

    • redwilldanaher January 27, 2011, 6:14 pm

      This may be a little picky but I’ll ask anyway. Did the US really lose an economic war vs. China or was it brought down from within?

  • fred January 26, 2011, 5:05 pm

    “Thirty three years ago a President with a degree in economics campaigned and won office with votes from both sides of the aisle by telling the majority, More government is not the solution, but the problem. He got the most votes by guaranteeing to get government off taxpayer backs and out of our pockets. ”

    Not exactly. The dementing Reagan actually expanded the federal government to the fastest degree seen to that time. He is idolized by those who don’t check his record.

    • redwilldanaher January 27, 2011, 8:15 pm

      I’m interested Fred. By what measure? Did his party control congress each and every year of his 8? Did he do this on his own? Did Tommy O’Neill get stream rolled by “demented” Reagan into this massive expansion? Adjust for inflation and let me know how he stacks up against FDR and LBJ both of whom had more allies in congress during their terms.

  • David Tanner January 26, 2011, 4:38 pm

    Wish you were right about the coming “political” solution. However, never gonna happen. The government guards let the sheeple inmates vote so that they don’t rebel. It gives the sheeple a sense of control and let’s them continue to think they live in a free society. But in the end, the guards choose the candidates, not the inmates. And even if an outsider were to garner support, it’s the guards that are counting the votes.

    • Rich January 26, 2011, 5:19 pm
    • redwilldanaher January 27, 2011, 5:45 pm

      Well stated David. I’d only co-opt your theme a little to add: “and most importantly, it’s the guards that broadcast “the news” and “the results”.

    • Rich January 27, 2011, 6:32 pm

      When people disengage from the political process by not casting their vote or not speaking up, fears become a self-fulfilling prophecy…

    • redwilldanaher January 27, 2011, 8:05 pm

      Rich, with all due respect and quite sincerely, when people delude themselves into thinking that that process still matters…they only end up getting their clock cleaned. For support, I’ll cite the last 45 years in the USSA. Has voting mattered? NO, it hasn’t materially. Changes the flavor slightly. The puppet may look and sound different but if you trace the strings back to the source you’ll end up committing suicide or get put away for possession of drugs or worse. We’re up against omnipotence. Out slug or outmaneuver? I choose the latter.

  • dan January 26, 2011, 4:27 pm

    from an economical opinion I agree with the writer…but from a PTB agenda, the enslavement has just begun and will not let up until this country is begging on its knees to the givamint for rescue…as in UN agenda 21 and many more..who ever owns gold will make the rules…got some yet

  • C.C. January 26, 2011, 9:20 am

    “We think it quite possible over the coming two years of correcting excess, that a billboard internet libertarian marginalized neighbor poster word of mouth Presidential Candidate may finally catch the fancy and votes of the majority of Americans to restore Constitutional liberties with the rule of justice to protect lives, prosperity and the general welfare, not special interests.”

    Credit Gerald Celente for giving rise to this exact point back in ’07 as a presage of major changes to come in the socio-economic sphere of the U.S.

    The ‘Tea Party’, as it were – either the original article via Ron Paul, or the co-opted Neo-Con variant that garners most of the media attention, is but a stepping stone to a Constitutionalist/Libertarian rising. Much more corruption and pain is in store for this American-Idol-addled electorate however, before the sentiment is finally translated into voter form punch holes.

    Either rising prices for necessities and/or, the clamoring for (yet another) military adventure in some far off land, that we cannot afford, I think will be the catalysts for change (not hope…)

    • Rich January 26, 2011, 8:09 pm

      CC, GC has my respect, angry as he is about what’s going down on the global stage…

    • Robert January 27, 2011, 6:37 pm

      I love Gerald Celente.

  • Rich January 26, 2011, 8:59 am

    Aloha All.
    Thanks Rick for the good timing.
    If the does not work, the dynamic link is:
    http://www.usdebtclock.org/
    It shows over a million dollars of unfunded liabilities per taxpayer, with drugs and medicare leading the parade.
    There are lots of interesting tabs on Auto Sales (Chevy GM and Ford Buy American kicking butt), Energy Consumption and Gold Supply.
    Mea culpa on the trade deficit, actually $640 B, not T.
    What’s a few hundred trillion IOUs among friends?
    Regards*Rich

    • Rich January 26, 2011, 8:08 pm

      Also upper left tabs on State and Foreign debt clocks…


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