Alan Greenspan admits Iraq War is for oil

[James_Potter]

Alan Greenspan claims Iraq war was really for oil (http://www.timesonline.co.uk/tol/news/world/article2461214.ece)

"In his long-awaited memoir, to be published tomorrow, Greenspan, a Republican whose 18-year tenure as head of the US Federal Reserve was widely admired, will also deliver a stinging critique of President George W Bush’s economic policies.

However, it is his view on the motive for the 2003 Iraq invasion that is likely to provoke the most controversy. “I am saddened that it is politically inconvenient to acknowledge what everyone knows: the Iraq war is largely about oil,” he says."

At least one politician is telling the truth now.

[Goats_On_Unicycles]

Y'know why he said that??

He's a COMMUNIST!!

That's why.

[Det-riot]

Y'know why he said that??

He's a COMMUNIST!!

That's why.
whats wrong with that?

just like gay communist does not mean stupid

[Gilby]

Y'know why he said that??

He's a COMMUNIST!!

That's why.
He calls himself a libertarian republican, and if you look at his writings and other actions from before he was involved with the fed, he was. But the very idea of a central bank goes totally against what his beliefs were before. He wrote an article called "Gold and Economic Freedom" which he argued for the use of gold as money and against a central bank. Given the powers that be in the Fed, he may not have had a choice in the matter when he did become the chairman, so he may still be a libertarian republican.

This week will be an interesting time to watch the fed. The Fed has a choice of kicking off a stagflation and potentially hyperinflation (by lowering the rate), or kicking off deflation (which is what caused the Great Depression). They are kinda stuck on this one, because any action will send a bad message. Deflation is actually good, but the price controls and other interventions done by the politicians is what causes all the problems. If rates are not lowered, you will see a crash on Wall Street, aka a price correction. Lowering rates will make the market happy for now, but will create a new bubble, this time, I expect it to be a food bubble (aka, a famine, but since it's a fed created problem, we'll call them bubbles).

There will also be a few banks issuing financial reports this week. If those are bad, we may see a good old fashion run on the banks, like what is happening now to a bank in the UK (http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article2457009.ece). Not even something like the FDIC can save this when it's market wide.

[john_childs]

There has been some irrational exuberance (http://en.wikipedia.org/wiki/Irrational_exuberance) in the sub-prime and other risky loans just like there was irrational exuberance during the internet stock bubble. All the promotions to get people to refinance with adjustable rate loans without properly factoring in the risks involved has not helped either. The irrational exuberance in the loan markets is having global repercussions now.

[wobbling bear]

Alan Greenspan claims Iraq war was really for oil (http://www.timesonline.co.uk/tol/news/world/article2461214.ece)
....
At least one politician is telling the truth now.
don' t attribute to clever scheming what could be attributed to sheer stupidity.
though some people that had oil in their mind were pushing for that I doubt this is the reason.
for sure those who decided on that did not really believe in the official reasons ... but I doubt they had clever consistent plans.
a thesis subject for future history students: what could stop the overthrow of a dictatorship turning into a chaos? (happily there are some successful examples... sadly many politicians did not read their history books).

[Gilby]

don' t attribute to clever scheming what could be attributed to sheer stupidity.
though some people that had oil in their mind were pushing for that I doubt this is the reason.
for sure those who decided on that did not really believe in the official reasons ... but I doubt they had clever consistent plans.

Looking at economics, the reason for the war is the petro-dollar. Forcing dollars on the oil producing countries has propped up the dollar, and now with the Euro providing competition to the dollar, the dollar will go downhill, as we've already seen is happening.

a thesis subject for future history students: what could stop the overthrow of a dictatorship turning into a chaos? (happily there are some successful examples... sadly many politicians did not read their history books).

Mind our own business.

[monkeyman]

"In his long-awaited memoir, to be published tomorrow, Greenspan, a Republican whose 18-year tenure as head of the US Federal Reserve was widely admired, will also deliver a stinging critique of President George W Bush’s economic policies.

My only comment about this is that I think it's completely pathetic that in today's political atmosphere, one must be explicitly identified as a Republican to criticize Bush and be taken seriously.

[UniBrier]

I'm sure a lot of people would have had a similar comment eight years ago:

My only comment about this is that I think it's completely pathetic that in today's political atmosphere, one must be explicitly identified as a Democrat to criticize Clinton and be taken seriously.

There is nothing new under the sun.

[JJuggle]

My only comment about this is that I think it's completely pathetic that in today's political atmosphere, one must be explicitly identified as a Democrat to criticize Clinton and be taken seriously.
To which Clinton are you referring?

[UniBrier]

Either one, the past or future President Clinton.

MM states a truism, but it works both ways. I could have said:

My only comment about this is that I think it's completely pathetic that in today's political atmosphere, one must be explicitly identified as a <insert politician's party> to criticize <insert politician's name> and be taken seriously.

But you knew that.

[Gilby]

The Fed choose to inflate, as expected. As usual, the Fed is bailing out the people who exhibited the irrational exuberance which was caused by the Fed's low rates from before. Now for some more irrational exuberance, but in another sector.

[feel the light]

Bush and Co. promised insiders that the Iraq war was a go. Told them what companies would get multi year billion dollar no bid contracts. Helped the well connected set up new contracting companies. My theory rests entirely on the idea that Bush and Co. knew that Sadam would not pass inspections and an invasion would be needed. Oh, he did pass inspections ?, well that just proves my point. Only the inner circle at Bush and Co. knew that secret. That shares in Haliburton and other stocks would quadruple in value, and yield huge dividends.
Others could take a guess, but then when Sadam passes inspections and there is no war, the stocks would drop. But not if you had the clear crystal ball. If Bush had told you a year before it was common knowledge. And so the Iraq war is in fact an enormous success. Bush doesn't look so depressed does he ? Don't expect to see Rumsfeld or Rove in tears anytime soon either. It is a success on par with the repeal of the death tax, tax cuts for the wealthy, and denying health care to millions. I don't think it's really about oil. Actually, the oil industry doesn't like cheap Arab oil. They make much more when energy prices are high. If you owned an oil field in Texas, what could you possibly see wrong with a war that raises prices ? Let's bomb Iran ! They would love 100$ a barrel oil. The coal companies love high oil to.
In sum, the Iraq war is best understood as an operation to maximize the profit that can be realized with insider information. That is the best way to understand Bush and Co. They are a business. And business is good. Viewed from that angle, their behavior seems very rational. Even inspired.

[monkeyman]

Either one, the past or future President Clinton.

MM states a truism, but it works both ways. I could have said:

My only comment about this is that I think it's completely pathetic that in today's political atmosphere, one must be explicitly identified as a <insert politician's party> to criticize <insert politician's name> and be taken seriously.

But you knew that.
I was mostly just commenting on this specific situation...but you are completely right. Any political criticism from the "other side" is just ___ wing lunacy.

[worldsun]

Our system of government is really a spectator democracy (like showbusiness is a spectator entertainment), and a big distraction from the winning players collecting ALL of the tokens. Of course they are. Capitalism is an everyone-for-themselves economic system, and a representative democratic political system under a capitalist economic system can necessarily be influenced by those with the most money.
Which, if Karl Marx was right, is a distraction from what really happens at the end of the game, whether it's monopoly or sim-city or dress-up or whatever political system. It ends in revolution, in decentralized power, in anarchism, in people working things out as a group.
To me, all of the party allegience in the media and from individuals is incredibly dumb. We need a whole different approach. Let's revolve.

[harper]

Your thread title is "Alan Greenspan admits Iraq War is for oil" as if he was somehow responsible for the war. Then your link in the opening post was entitled "Alan Greenspan claims Iraq war was really for oil" which is entirely different in that someone else is held responsible. I don't think you intended to introduce this discrepancy or any confusion it just reads that way.

I thought there was no question about the Persian Gulf wars being about oil. This would be true all the way back to the initial invasion of Kuwait by Iraq which was motivated by disagreements over oil rights. Any subsequent action has been based on that initial invasion. To believe otherwise I think would be naive.

[James_Potter]

He was partially responsible, Bush did not act alone in invading Iraq. I guess what I meant though is that he was one of the people who actually knew 100% that this was true, and he's the first one to say so (even though we all really know it already, there's just some people always ready to deny it...they can't anymore).

Bush claimed originally that he was invading Iraq to disarm them of WMDs, and then to overthrow Saddam and rebuild Iraq's government.
This was a lie all along.

[harper]

He was partially responsible, Bush did not act alone in invading Iraq. I guess what I meant though is that he was one of the people who actually knew 100% that this was true, and he's the first one to say so (even though we all really know it already, there's just some people always ready to deny it...they can't anymore).

Bush claimed originally that he was invading Iraq to disarm them of WMDs, and then to overthrow Saddam and rebuild Iraq's government.
This was a lie all along.

Remember that Iraq was invaded during the administrations of two different Bushes (if that is the correct plural for the proper name Bush) so it becomes necessary sometimes to distinguish. Under Bush I the U.N. supported the invasion of Iraq with the intent of liberating Kuwait. Under Bush II the justification to invade (or re-invade) Iraq was noncompliance of treaty conditions and interference with UN weapons inspectors.

In Gulf War I the US cooperated with the UN in the invasion of Iraq. In Gulf War II the United States Congress passed a law listed as Authorization for Use of Military Force Against Iraq Resolution of 2002 in effect declaring war against Iraq in accordance with the Constitution. (This differs from police states or occupations such as Vietnam. Congress never declared war on North Vietnam.)

As for oil, I think everyone had to know that. This is what triggered the UN involvement. I don't think that was any big secret.

[phthoruth]

earlier today, I asked myself,
Alan Greenspan - unicyclist?
As much as I admire him, I dont see him riding a unicycle.

[wobbling bear]

Y This would be true all the way back to the initial invasion of Kuwait by Iraq which was motivated by disagreements over oil rights. Any subsequent action has been based on that initial invasion. To believe otherwise I think would be naive.
then I am naïve: as far as I remember the reasons for kuwait's invasion by iraq were a bit more complex.
for sure you can cite oil as a primary source of everything: the creation of kuwait as a "special" state distinct of its neighbors,...iran/iraq war .... iraq's nationalistic rethoric .... all this could have been motivated by oil .... only? not so sure.
yes yes you're right: UN intervention was not so swift in similar circumstances devoid of oil. but if you notice the big differences in international reactions between the 2 iraq's wars then oil is just part of the story.
I remember angry columnists accusing some European governements (France, Germany) of opposing this Iraq war because they had major economical interests in Iraq: though those interests were real
(and often a shame) this was certainly not the only reason for their opposition. ..... I hope I will live 30 more years to read the historians analysis of all this.

[Gilby]

In Gulf War I the US cooperated with the UN in the invasion of Iraq. In Gulf War II the United States Congress passed a law listed as Authorization for Use of Military Force Against Iraq Resolution of 2002 in effect declaring war against Iraq in accordance with the Constitution. (This differs from police states or occupations such as Vietnam. Congress never declared war on North Vietnam.)

In accordance with the constitution? I don't think so. Congress needs to look at the facts, debate it, and declare war, but they passed all this on to the President to enforce UN resolutions.

[harper]

In accordance with the constitution? I don't think so. Congress needs to look at the facts, debate it, and declare war, but they passed all this on to the President to enforce UN resolutions.

I don't want to drag this discussion into the gutter, but....everyone knows you wear funny looking shorts.

[BluntRM]

From the Carter Doctrine, 1980:

Let our position be absolutely clear: An attempt by any outside force to gain control of the Persian Gulf region will be regarded as an assault on the vital interests of the United States of America, and such an assault will be repelled by any means necessary, including military force.

--http://www.jimmycarterlibrary.org/documents/speeches/su80jec.phtml

[Gilby]

Very telling interview of Greenspan:
http://www.comedycentral.com/motherload/player.jhtml?ml_video=102970&is_large=true


I think Jon Stewart is the smarter one, pointing out that the very existence of the Fed means it's not a free market and that the rate being changed is a transfer of wealth from the savers and workers to the investors.

[feel the light]

To expand the money supply in a limited, controlled way. Otherwise, if we were using gold, there would be constant deflation. As the population grows, and the amount of valuable goods expands, the limited supply of gold would mean every year everyone must face a pay cut. Because burying your money would be the safest investment (since it will be worth more later), people wouldn't want to give loans. There would be no mortgages, so we would return to feudalism. There would be no way for the young to pay for their own houses. The old will not loan their money. In a way, the dark ages can be seen as one long depression, the inevitable result of a gold based economy. Money is a tool, and with a shortage of gold (money), the work of an economy stops.
The job of the Fed is to decide how much to expand the money supply. They just print more ! Ideally, you want a 2 or 3 % inflation rate. Then rich old folks will loan money to young workers so they can buy their own homes.
The cranky conspiracy buffs, who claim it is all a house of cards, and must collapse any day, because the money is not backed by gold, are free to buy gold and silver. Historically, the appreciation in metal prices has been low. But no one can claim anyone is stopping them from hoarding gold. The gold economy is limited by the supply of gold. The paper dollar economy is not, and is much superior for that reason. :)

[Gilby]

Those are all myths.

The gold economy is limited by the resources available. The fiat dollar economy is limited by the resources available. The difference is the allocation of those resources.

Burying money is the safest investment because it's a store of value for later consumption. If someone knows they need a certain amount some time in the future, then this is a logical thing to do, and is good for the economy. People would give loans in a gold economy, with an interest based on the risk of the loan, and it would likely be worth more later than saving it.

Deflation is the result of increased efficiency. As we have seen in the electronics industry, there is no problem with lower prices. Deflation is a good thing.

But no one can claim anyone is stopping them from hoarding gold. It was illegal to own gold from 1933 to 1974. Further, laws punish the owning of gold... capital gains tax, and legal tender laws.

The real purpose of fiat currency is legal plunder, the transfer of wealth by the government to the proponents of the welfare-warfare state. Most the welfare is corporate welfare and most the warfare is for the military industrial complex. It's a transfer of wealth from the working class and poor to wall street.

Why a 2 or 3% inflation? Why not a 50% inflation? What's the reasoning behind this amount versus others? BTW, right now, inflation, as measured by the increase of the money supply is 14%.

[johnfoss]

An attempt by any outside force to gain control of the Persian Gulf region will be regarded as an assault on the vital interests of the United States of America, and such an assault will be repelled by any means necessary, including military force.No wonder it feels like we're at war with ourselves...


Of course, Iraq invading Kuwait was not an outside force in relation to the Persian Gulf.

[feel the light]

Once people realized there was not enough gold to pay them their promised debts, credit collapsed. World wide enormous suffering and massive 35% unemployment world wide. This was the reason that the gold standard was abandoned as a basis for global, or national economic exchange. The expandable money supply allows the amount of money in the world to grow and match the needs of the expanding economy of a growing nation and world. We can't go back to the gold based monetary system without suffering the same complete collapse of the economy that occurred 77 years ago.
Why not just buy gold and silver to your hearts content, and get a pathetic return on your investment. Be happy with that, and be glad that your total ignorance of economic history and theory is not so shared by others as to return the world to the sufferings of that most sad decade. The great depression has not been even remotely approached since. This fact is because the Fed can print more money. No one can make more gold. Buy gold if you wish. But I am so totally glad that it is no longer money. Gold is now what it should be. A commodity metal. Money is much more important then that. It is an indispensable economic tool. As the economy grows, we need more money. Or we won't have enough to conduct business. People will lose their jobs, banks can not give loans, credit must dry up. There is a fixed amount of gold. An expanding economy needs more money. This lesson was learned long ago, and thankfully, the Fed is only quasi federal. Difficult for the general politician to screw up. They have done an excellent job of creating more cash at a slow rate. Yes, it is not a sin to just create cash. We must!:)

[Goats_On_Unicycles]

Ian and Gilby, I was joking!

I call everybody who challenges the status quo either "a dirty, 'Merica hatin' hippie" or "an evil COMMYNIST!!"

[Gilby]

Once people realized there was not enough gold to pay them their promised debts, credit collapsed. World wide enormous suffering and massive 35% unemployment world wide. This was the reason that the gold standard was abandoned as a basis for global, or national economic exchange. The expandable money supply allows the amount of money in the world to grow and match the needs of the expanding economy of a growing nation and world. We can't go back to the gold based monetary system without suffering the same complete collapse of the economy that occurred 77 years ago.
The error in your explanation is the exact opposite. What caused the great depression? In 1913, the Federal Reserve was created. This allowed the government and banking system to have a monopoly on counterfeiting -- increasing the money supply. This was inflation. A transfer of wealth to the banking industry and the government. This inflation was through WWI and then the roaring 20's. It crashed when the money supply was contracted -- people trying to redeem their government issued promisory notes for gold. Since the government allowed the printing of more notes than there was gold on hand, their wasn't enough gold to redeem the notes. The government defaulted on their obligation.

The problem was then worsened by price controls and new deal programs. What would've been a quick adjustment turned into a long depression.

The problem you claim is not a problem from using gold as money, but is a problem with fractional reserve banking, which the government has created an unconstitutional cartel for.

Why not just buy gold and silver to your hearts content, and get a pathetic return on your investment.
It's not that simple. I wish I could opt out of it, but it's forced on us. Income taxes are a requirement of the fiat currency that we have. Fiat currency can not work without it. Afterall, what's the value of paper money? The supply of it and the demand for it. That demand is the result of the government forcing us to pay taxes with it. That demand is the result of the courts requiring all debts and contracts to paid with it.

Be happy with that, and be glad that your total ignorance of economic history and theory is not so shared by others as to return the world to the sufferings of that most sad decade. The great depression has not been even remotely approached since. This fact is because the Fed can print more money. No one can make more gold. Buy gold if you wish. But I am so totally glad that it is no longer money. Gold is now what it should be. A commodity metal. Money is much more important then that. It is an indispensable economic tool. As the economy grows, we need more money. Or we won't have enough to conduct business. People will lose their jobs, banks can not give loans, credit must dry up. There is a fixed amount of gold. An expanding economy needs more money. This lesson was learned long ago, and thankfully, the Fed is only quasi federal. Difficult for the general politician to screw up. They have done an excellent job of creating more cash at a slow rate. Yes, it is not a sin to just create cash. We must!:)
Your confusion is that you think wealth can be created with a printing press. It cannot. It can only be transfered with one. All wealth is created by the production of useful goods and services. Goods and services can be used in exchange directly, or people can use a common medium as money, such as gold. You don't have to save in gold. We can hold our wealth in anything we choose. If suddenly gold became in high demand because a new use for it is discovered, we would probably choose to sell our gold and then use something else of value as our common medium of exchange. If I have a contract that is specified for a certain amount of gold, but there isn't enough gold, I really don't have to be paid in gold, but I can be paid in anything of the same value that is easily exchangable. With the digital age, we can use a large basket of commodities as our money unit and transfer shares digitally, and if we don't trust our bank, we can go in and withdraw whatever the non digital money is, which may be gold, silver, copper, nickel, platinum, etc.

It is a sin to create cash from nothing, because it is theft.

[Gilby]

I call everybody who challenges the status quo either "a dirty, 'Merica hatin' hippie" or "an evil COMMYNIST!!"

The status quo is progressing towards communism. Those who challenge that are the opposite of communists, they are free market individuals who want the constitution to be followed.

[wobbling bear]

All wealth is created by the production of useful goods and services.
....
It is a sin to create cash from nothing, because it is theft.
can you "touch" some services as you can "touch" gold?

The status quo is progressing towards communism. Those who challenge that are the opposite of communists, they are free market individuals who want the constitution to be followed.
having seen communists in action I would say that they were living proof that bunch of well wishing people could lead to catastrophic realities ... and this definition also applies to lot of idealists (I am not saying that one should not have ideals, or theories about the world).
As I always say: what most resembles a communist party? a so called
"market oriented" corporation! for sure the later is not going to deport you in Siberia .... though may be to hotter climates ... :D

[Gilby]

can you "touch" some services as you can "touch" gold?
You're right, services aren't really wealth, but services are added-value in that it allows one to produce goods more efficiently. Therein lies part of the problem today in the US. We are mostly a service oriented country. Since we are set up for services instead of manufacturing, we will suffer when the dollar does collapse and we can no longer import the goods we need, which may be soon (http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/09/19/bcnsaudi119.xml&DCMP=EMC-mcn_20092007).

[feel the light]

But when the government prints more money, the profit is used to reduce the taxes that would otherwise be needed to run the gov. It is the difference between one person gaming the system to enrich themselves, and all the people(gov), expanding the money supply to cause controlled inflation, for the benefit of all. Since the wealth is used to lower the common tax burden, this cannot be seen as theft, unless you consider other forms of taxation as theft as well. It is just the gov making money one way rather then another.
Giby's explanation that we can revert to barter to solve the money shortage a gold based system would suffer, illustrates the complete poverty of that idea better then anything I could say. Money is an indispensable tool of the modern economy. Imagine a fisherman trying to order a new computer online. In the comments section he can ask "can I have that sent second day delivery, or do I have to wait until you get the fish ? I promise big fish that smell good !
:)

[Gilby]

But when the government prints more money, the profit is used to reduce the taxes that would otherwise be needed to run the gov. It is the difference between one person gaming the system to enrich themselves, and all the people(gov), expanding the money supply to cause controlled inflation, for the benefit of all. Since the wealth is used to lower the common tax burden, this cannot be seen as theft, unless you consider other forms of taxation as theft as well. It is just the gov making money one way rather then another.
Yes, most taxation is theft. Most of what government does is unconstitutional. If it infringes on the life, liberty, or property of someone, then it is not constitutional. The sole purpose of government is to protect the life, liberty, and property of it's citizens. Unfourtunately, the government is the very institution that has infringed on that the most.

Constitutional taxation are tarriffs, duties and excises and can only be on such things the constitution grants the government authority over, such as imports, crossing the border, and other similar privileges. The federal government has no jurisdiction over you making a living and therefore they can not tax that.

If the government followed the constitution and limited itself to what we the people granted to them, we would not need the massive taxation and ability of them to inflate.

Further, the inflation tax is a more hidden tax. People don't understand it and what causes it. If people were directly taxed for all the government spends, then there would be less transparency in government and there would be a quick rebellion. People would see the true cost of government.

I reject the idea that central planning works. I reject communism.

Giby's explanation that we can revert to barter to solve the money shortage a gold based system would suffer, illustrates the complete poverty of that idea better then anything I could say. Money is an indispensable tool of the modern economy.
You're clearly misunderstanding what I said. Money comes about in a society based on what is easy to use as a common medium. Gold and silver have historically been the most common ones that have happened. If what is currently being used becomes in high demand from some new use, then people will likely determine that they will sell it in exchange for something else and profit from the immediate need that is in the marketplace. The item would probably still be used, but the value is just higher. If it's hard to cut that item for smaller transactions, then some other commodity would probably be used. In the history of the US before fiat currency, we have had coins in silver, gold, copper, and nickel. If gold happened to rise in value, we would likely use more silver, or maybe introduce platinum or paladium as currency. The free market will choose a common medium that works for society.

Imagine a fisherman trying to order a new computer online. In the comments section he can ask "can I have that sent second day delivery, or do I have to wait until you get the fish ? I promise big fish that smell good !
:)
If the computer company accept such payment, then so what? But the realistic situation is that this person will sell their fish to someone that needs it and then receive whatever is the currency to then pay for the computer. If fish is directly accepted through the market maker, then so what, the market maker will buy the fish and exchange it for whatever the computer company wants payment in. My ideal bank acount would be where I could accept anything as payment and instantly sell that for whatever I have configured my account to do, or whatever funds my bank provides. Unfourtunately, government forces their fiat currency on our bank accounts.

[monkeyman]

can you "touch" some services as you can "touch" gold?

Have you ever been to Amsterdam?

[feel the light]

"The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration."- The 16 th amendment of the USA constitution.


"Constitutional taxation are tarriffs, duties and excises and can only be on such things the constitution grants the government authority over, such as imports, crossing the border, and other similar privileges. The federal government has no jurisdiction over you making a living and therefore they can not tax that."- Gilby

I don't disagree that the government is an intrusive pain. However, taxes are constitutional. Even if they disturb our pursuit of happiness. The supreme court has the constitutional authority to to read the document and declare it's meaning. They strongly suggest you pay your taxes !!:rolleyes:

[Jerrick]

Have you ever been to Amsterdam?

Thank you. :D

[Gilby]

However, taxes are constitutional. Even if they disturb our pursuit of happiness.
Yes, taxes are constitutional, but the income tax as being applied today is not. Like I said before, the only lawful taxes are for privileges the constitution grants the federal government regulate. Your own living is not one of them.

The supreme court has the constitutional authority to to read the document and declare it's meaning. They strongly suggest you pay your taxes !!:rolleyes:
Nah, they strongly suggest that taxpayers pay their taxes. The problem is that most people are nontaxpayers, though the state allows people to voluntarily be a taxpayer if they so choose.

The 16th amendment allows the taxation of income on taxable entities and activities. It was intended to tax the States and the businesses that incorporate with the state. It was never intended to tax ones own labor. The 16th amendment does not replace the 5th amendment.

Since you point out the federal court, here is their rulings:
"The individual, unlike the corporation, cannot be taxed for the mere privilege of existing. The corporation is an artificial entity which owes its existence and charter powers to the state; but the individuals' Right to live and own property are natural rights for the enjoyment of which an excise cannot be imposed." Corn v. Fort, 95 S.W.2d 620 (1936)

"The Treasury Department cannot, by interpretive regulations, make income out of that which is not income within the meaning of the revenue acts of Congress, nor can Congress, without apportionment, tax as income that which is not income within the meaning of the 16th Amendment."
Helvering v. Edison Bros. Stores, 133 F.2D 575

"[Income] must be given the same meaning, in all the Income Tax Acts of Congress that it was given in the Corporate Excise Tax Act, and what that meaning is has become definitely settled by the decisions of this court".
Merchants Loan & Trust v. Smietanka, 255 US 509 (1921)

"As has been repeatedly remarked, the corporation tax act of 1909 was not intended to be and is not, in any proper sense, an income tax law. This court had decided in the Pollock case that the income tax law of 1894 amounted in effect to a direct tax upon property, and was invalid because not apportioned according to populations, as prescribed by the Constitution. The act of 1909 avoided this difficulty by imposing not an income tax [direct], but an excise tax [indirect] upon the conduct of business in a corporate capacity, measuring however, the amount of tax by the income of the corporation".
Stratton's Independence, LTD. v. Howbert, 231 US 399, 414 (1913)

After talking about the incorrectly supreme court ruling in the Pollock case, President Taft said: "...I therefore recommend an amendment imposing on all corporations an excise tax measured by 2% in the net income of such corporations. This is an excise on the privilege of doing business as an artificial entity"
Congressional Record, June 16, 1909, Pg. 3344

"The revenue laws are a code or system in regulation of tax assessment and collection. They relate to taxpayers, and not to nontaxpayers. The latter are without their scope. No procedure is prescribed for nontaxpayers, and no attempt is made to annul any of their rights and remedies in due course of law. With them [nontaxpayers] Congress does not assume to deal, and they are neither of the subject nor of the object of the revenue laws".
Economy Plumbing and Heating Co. v. United States, 470 F. 2d 585 (1972)

[feel the light]

If it were not I could find 19th century rulings, and state that blacks must be counted as 3/5 th's of a person, and woman can not vote. There have been no supreme court rulings from the period AFTER the passage of the 16th amendment, declaring individuals incomes may not be taxed. If I am wrong, please quote one.
Why do you suppose all those lawyers have paid income tax their entire lives ?Because they lack your knowledge of law ?
"The Congress shall have power to lay and collect taxes on incomes, from whatever source derived", this statement is know as the income tax amendment.
Seems pretty clear to me. Maybe thats why the wealthiest and smartest lawyers in the land have been paying it for 93 years.

[Gilby]

The 16th ammendment was passed in 1913, the same year as the Federal Reserve Act was passed. Now look at the years of the caselaw I quoted. Taxes are enforced with the use of guns. That's why attorney's have paid taxes. Some people have gotten away with not paying taxes, in fact, millions of people don't pay taxes.

[wobbling bear]

Have you ever been to Amsterdam?
:p :p :p :p
yes .... but

1) I won't even _breathe_ smoke
2) I'm a shy guy : I wouldn't talk to a lady unless she is properly veiled under the requirements of the $Holy_book :rolleyes:

[Gilby]

He wrote an article called "Gold and Economic Freedom"
Here is that article:

Gold and Economic Freedom

by Alan Greenspan
[written in 1966]

An almost hysterical antagonism toward the gold standard is one issue which unites statists of all persuasions. They seem to sense - perhaps more clearly and subtly than many consistent defenders of laissez-faire - that gold and economic freedom are inseparable, that the gold standard is an instrument of laissez-faire and that each implies and requires the other.

In order to understand the source of their antagonism, it is necessary first to understand the specific role of gold in a free society.

Money is the common denominator of all economic transactions. It is that commodity which serves as a medium of exchange, is universally acceptable to all participants in an exchange economy as payment for their goods or services, and can, therefore, be used as a standard of market value and as a store of value, i.e., as a means of saving.

The existence of such a commodity is a precondition of a division of labor economy. If men did not have some commodity of objective value which was generally acceptable as money, they would have to resort to primitive barter or be forced to live on self-sufficient farms and forgo the inestimable advantages of specialization. If men had no means to store value, i.e., to save, neither long-range planning nor exchange would be possible.

What medium of exchange will be acceptable to all participants in an economy is not determined arbitrarily. First, the medium of exchange should be durable. In a primitive society of meager wealth, wheat might be sufficiently durable to serve as a medium, since all exchanges would occur only during and immediately after the harvest, leaving no value-surplus to store. But where store-of-value considerations are important, as they are in richer, more civilized societies, the medium of exchange must be a durable commodity, usually a metal. A metal is generally chosen because it is homogeneous and divisible: every unit is the same as every other and it can be blended or formed in any quantity. Precious jewels, for example, are neither homogeneous nor divisible. More important, the commodity chosen as a medium must be a luxury. Human desires for luxuries are unlimited and, therefore, luxury goods are always in demand and will always be acceptable. Wheat is a luxury in underfed civilizations, but not in a prosperous society. Cigarettes ordinarily would not serve as money, but they did in post-World War II Europe where they were considered a luxury. The term "luxury good" implies scarcity and high unit value. Having a high unit value, such a good is easily portable; for instance, an ounce of gold is worth a half-ton of pig iron.

In the early stages of a developing money economy, several media of exchange might be used, since a wide variety of commodities would fulfill the foregoing conditions. However, one of the commodities will gradually displace all others, by being more widely acceptable. Preferences on what to hold as a store of value, will shift to the most widely acceptable commodity, which, in turn, will make it still more acceptable. The shift is progressive until that commodity becomes the sole medium of exchange. The use of a single medium is highly advantageous for the same reasons that a money economy is superior to a barter economy: it makes exchanges possible on an incalculably wider scale.

Whether the single medium is gold, silver, seashells, cattle, or tobacco is optional, depending on the context and development of a given economy. In fact, all have been employed, at various times, as media of exchange. Even in the present century, two major commodities, gold and silver, have been used as international media of exchange, with gold becoming the predominant one. Gold, having both artistic and functional uses and being relatively scarce, has significant advantages over all other media of exchange. Since the beginning of World War I, it has been virtually the sole international standard of exchange. If all goods and services were to be paid for in gold, large payments would be difficult to execute and this would tend to limit the extent of a society's divisions of labor and specialization. Thus a logical extension of the creation of a medium of exchange is the development of a banking system and credit instruments (bank notes and deposits) which act as a substitute for, but are convertible into, gold.

A free banking system based on gold is able to extend credit and thus to create bank notes (currency) and deposits, according to the production requirements of the economy. Individual owners of gold are induced, by payments of interest, to deposit their gold in a bank (against which they can draw checks). But since it is rarely the case that all depositors want to withdraw all their gold at the same time, the banker need keep only a fraction of his total deposits in gold as reserves. This enables the banker to loan out more than the amount of his gold deposits (which means that he holds claims to gold rather than gold as security of his deposits). But the amount of loans which he can afford to make is not arbitrary: he has to gauge it in relation to his reserves and to the status of his investments.

When banks loan money to finance productive and profitable endeavors, the loans are paid off rapidly and bank credit continues to be generally available. But when the business ventures financed by bank credit are less profitable and slow to pay off, bankers soon find that their loans outstanding are excessive relative to their gold reserves, and they begin to curtail new lending, usually by charging higher interest rates. This tends to restrict the financing of new ventures and requires the existing borrowers to improve their profitability before they can obtain credit for further expansion. Thus, under the gold standard, a free banking system stands as the protector of an economy's stability and balanced growth. When gold is accepted as the medium of exchange by most or all nations, an unhampered free international gold standard serves to foster a world-wide division of labor and the broadest international trade. Even though the units of exchange (the dollar, the pound, the franc, etc.) differ from country to country, when all are defined in terms of gold the economies of the different countries act as one-so long as there are no restraints on trade or on the movement of capital. Credit, interest rates, and prices tend to follow similar patterns in all countries. For example, if banks in one country extend credit too liberally, interest rates in that country will tend to fall, inducing depositors to shift their gold to higher-interest paying banks in other countries. This will immediately cause a shortage of bank reserves in the "easy money" country, inducing tighter credit standards and a return to competitively higher interest rates again.

A fully free banking system and fully consistent gold standard have not as yet been achieved. But prior to World War I, the banking system in the United States (and in most of the world) was based on gold and even though governments intervened occasionally, banking was more free than controlled. Periodically, as a result of overly rapid credit expansion, banks became loaned up to the limit of their gold reserves, interest rates rose sharply, new credit was cut off, and the economy went into a sharp, but short-lived recession. (Compared with the depressions of 1920 and 1932, the pre-World War I business declines were mild indeed.) It was limited gold reserves that stopped the unbalanced expansions of business activity, before they could develop into the post-World War I type of disaster. The readjustment periods were short and the economies quickly reestablished a sound basis to resume expansion.

But the process of cure was misdiagnosed as the disease: if shortage of bank reserves was causing a business decline-argued economic interventionists-why not find a way of supplying increased reserves to the banks so they never need be short! If banks can continue to loan money indefinitely-it was claimed-there need never be any slumps in business. And so the Federal Reserve System was organized in 1913. It consisted of twelve regional Federal Reserve banks nominally owned by private bankers, but in fact government sponsored, controlled, and supported. Credit extended by these banks is in practice (though not legally) backed by the taxing power of the federal government. Technically, we remained on the gold standard; individuals were still free to own gold, and gold continued to be used as bank reserves. But now, in addition to gold, credit extended by the Federal Reserve banks ("paper reserves") could serve as legal tender to pay depositors.

When business in the United States underwent a mild contraction in 1927, the Federal Reserve created more paper reserves in the hope of forestalling any possible bank reserve shortage. More disastrous, however, was the Federal Reserve's attempt to assist Great Britain who had been losing gold to us because the Bank of England refused to allow interest rates to rise when market forces dictated (it was politically unpalatable). The reasoning of the authorities involved was as follows: if the Federal Reserve pumped excessive paper reserves into American banks, interest rates in the United States would fall to a level comparable with those in Great Britain; this would act to stop Britain's gold loss and avoid the political embarrassment of having to raise interest rates. The "Fed" succeeded; it stopped the gold loss, but it nearly destroyed the economies of the world, in the process. The excess credit which the Fed pumped into the economy spilled over into the stock market-triggering a fantastic speculative boom. Belatedly, Federal Reserve officials attempted to sop up the excess reserves and finally succeeded in braking the boom. But it was too late: by 1929 the speculative imbalances had become so overwhelming that the attempt precipitated a sharp retrenching and a consequent demoralizing of business confidence. As a result, the American economy collapsed. Great Britain fared even worse, and rather than absorb the full consequences of her previous folly, she abandoned the gold standard completely in 1931, tearing asunder what remained of the fabric of confidence and inducing a world-wide series of bank failures. The world economies plunged into the Great Depression of the 1930's.

With a logic reminiscent of a generation earlier, statists argued that the gold standard was largely to blame for the credit debacle which led to the Great Depression. If the gold standard had not existed, they argued, Britain's abandonment of gold payments in 1931 would not have caused the failure of banks all over the world. (The irony was that since 1913, we had been, not on a gold standard, but on what may be termed "a mixed gold standard"; yet it is gold that took the blame.) But the opposition to the gold standard in any form-from a growing number of welfare-state advocates-was prompted by a much subtler insight: the realization that the gold standard is incompatible with chronic deficit spending (the hallmark of the welfare state). Stripped of its academic jargon, the welfare state is nothing more than a mechanism by which governments confiscate the wealth of the productive members of a society to support a wide variety of welfare schemes. A substantial part of the confiscation is effected by taxation. But the welfare statists were quick to recognize that if they wished to retain political power, the amount of taxation had to be limited and they had to resort to programs of massive deficit spending, i.e., they had to borrow money, by issuing government bonds, to finance welfare expenditures on a large scale.

Under a gold standard, the amount of credit that an economy can support is determined by the economy's tangible assets, since every credit instrument is ultimately a claim on some tangible asset. But government bonds are not backed by tangible wealth, only by the government's promise to pay out of future tax revenues, and cannot easily be absorbed by the financial markets. A large volume of new government bonds can be sold to the public only at progressively higher interest rates. Thus, government deficit spending under a gold standard is severely limited. The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit. They have created paper reserves in the form of government bonds which-through a complex series of steps-the banks accept in place of tangible assets and treat as if they were an actual deposit, i.e., as the equivalent of what was formerly a deposit of gold. The holder of a government bond or of a bank deposit created by paper reserves believes that he has a valid claim on a real asset. But the fact is that there are now more claims outstanding than real assets. The law of supply and demand is not to be conned. As the supply of money (of claims) increases relative to the supply of tangible assets in the economy, prices must eventually rise. Thus the earnings saved by the productive members of the society lose value in terms of goods. When the economy's books are finally balanced, one finds that this loss in value represents the goods purchased by the government for welfare or other purposes with the money proceeds of the government bonds financed by bank credit expansion.

In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.

This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard.

###

Alan Greenspan
[written in 1966]

[monkeyman]

From what I've read in here, Gilby, the pros for the golds standard seem to outweigh the pros of the Fed system. But, I'm still not sure on what the effect would be on the total amount of money vs. the population. If gold is the standard, that limits the available amount of money (which is a good thing, according to that article), but then what happens when the population rises to the point where many people can't get a portion of that available money big enough to survive?

[Tellurider]

The status quo is progressing towards communism. Those who challenge that are the opposite of communists, they are free market individuals who want the constitution to be followed.

" Franklin Roosevelt said during World War II that "the domination of the government by corporate power is 'the essence of Fascism.'" Benito Mussolini, who had an insider's view of that process, said essentially the same thing. He complained that "Fascism should not even be called Fascism. It should be called corporatism because it was the merger of corporate state and corporate power."
What we have to understand in our country is that the domination of business by government is called Communism. The domination of government by business is called Fascism. What our job is, is to walk that narrow trail in between, which is free market capitalism and democracy, and hold big government at bay with our right hand and big business at bay with our left. In order to do that, we need an informed public that can recognize all the milestones of tyranny. We need an independent and aggressive press that is willing to stand up and speak truth to power.

We no longer have either of those things in the United States and our democracy is broken.


This is taken from a speach given by RFK Jr.

I would say what we have is Fascism not Comunism

[feel the light]

Really ?, on what planet ? Have we been living on the same one for the last 41 years since Mr. Greenspan penned this proven mistake ?

"In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves." - Greenspan in 1966
When he made this poor prediction, we were on a semi gold standard economic system. Fort Knox was full of gold bars, valued officially at 35 $/oz. But private citizens were not allowed to own bullion, in 1966.
Private gold ownership was legalized in the 70's. The US mint started issuing gold coins. Gold prices were completely unregulated, and it became what it should be. A not particularly useful commodity with no "magical money" value.
Of course, many were so unfortunate as to have taken Mr. Greenspans '66 advice. They withdrew their money from the bank, real estate, and stock markets. Bought gold with it, driving it's price up to over 800$/oz. Silver to 50 $/oz. In 1980 dollars. Since that point, of course, the value of these commodities has plunged. In fact, you would be much wealthier now had you invested your money in anything else. Even burying paper bills in a jar in your backyard for 30 years would have been better. Despite the recent increase in the gold price, an oz. of gold today buys about 25 % of what it would buy in 1980.
So what was the point you were trying to make quoting discredited stuff from '66 ? I hope it is not that gold is a protection against inflation. We have learned a lot in 40 years of record economic growth and prosperity. Like that the Fed is doing a good job. And that a momentary system not backed by gold can work extremely well for at least 41 years. :)
I agree with Tell ^ above. We are no where near communist. Sadly, the Bushies are moving us closer to fascism. We aren't there yet, and I hope the pendulum will swing back a little more towards enlightened socialism.

[Gilby]

I would say what we have is Fascism not Comunism Yes, the current situation is that we are more fascist than communist. It's more of a mix of the two. The main difference is that fascism is a public-private relationship, and communism/socialism is a public-public relationship. In other words, fascism is the government awarding a monopoly to a corporate entity, and communism/socialism is the actual government that provides the service. The difference between them is pretty minor.

[Gilby]

If gold is the standard, that limits the available amount of money (which is a good thing, according to that article), but then what happens when the population rises to the point where many people can't get a portion of that available money big enough to survive?

There is no limit like that. The value of it is based on supply and demand. If the supply is small, then the value is higher for the same demand. Further, savings is not limited to a single commodity. Today, in a digital world, I think that the best unit of account is a basket of a large number of commodities, though you'd want to find some way to limit the government from defining it and manipulating it. BTW, the official unit of account in the US is 0.7734375 troy ounces of silver, which we call a dollar. This is based on the spanish milled dollar which was in circulation as money when the constitution was adopted. Silver is very abundant and therefore is about 1/50 the value of the same mass of gold.

The real limit with a gold standard, is that government can't just print the money and confiscate the wealth from the people. Their ability right now to be able to borrow an unlimited amount of money from a cartel that just prints it, means that the government will expand and engulf everything, which as we have seen since 1913, it has. If the government were limited by a 100% backed currency, we wouldn't be a welfare-warfare state (an empire), and the people would be free.

[Gilby]

Of course, many were so unfortunate as to have taken Mr. Greenspans '66 advice. They withdrew their money from the bank, real estate, and stock markets. Bought gold with it, driving it's price up to over 800$/oz. Silver to 50 $/oz. In 1980 dollars. Since that point, of course, the value of these commodities has plunged. In fact, you would be much wealthier now had you invested your money in anything else.

Ah, so what caused the gold boom of the 70s? In 1971, the US defaulted, by breaking away from the Bretton-Woods agreement and no longer accepting the redemption of dollars for gold. This, among other things, caused massive inflation for the dollar. With high inflation (13%) and low interest rates (8%) in 1979, it was not smart to hold the dollar assets because it loses it's value by about 5%. This created a boom in gold because everyone was rushing to buy gold. That boom collapsed when the fed set the interest rate to 15% and got inflation to 6% which made holding securities in dollars increase in value. This gold boom is a fed created problem, like all booms and busts. So if you got into the market at the wrong time, you would have lost big time, as with any investment. The fed is calling the shots on the booms and busts, which means there will be plenty of malinvestments. The latest boom and bust is the housing market. That artificially created boom caused a lot of malinvestment, and many people are suffering today because of it, and we're just seeing the beginning of it. Like 1979, today the inflation rate is high and the interest rate is low, so it's a good time to hold gold but you need to watch the market. Today, using the same method inflation was calculated in 1980, instead of the substitution way it is done now, inflation is 10%. Interest rates are 4.75%, so you lose about 5% value in dollar assets today.

So what about the value of gold and silver? The federal reserve was created in 1913, so we'll start with that as our base year. We'll use the official inflation rate from the government, even though it's not accurate anymore (unless you really think fillet mignon is equivalent to hamburger). Today, the buying power is:
Dollar: 1/21 times
Gold: 1.7 times
Silver: 1.1 times
DJIA: 8 times

And that a momentary system not backed by gold can work extremely well for at least 41 years. :)

Extremely well for statism. But I prefer freedom.

I agree with Tell ^ above. We are no where near communist. Sadly, the Bushies are moving us closer to fascism. We aren't there yet, and I hope the pendulum will swing back a little more towards enlightened socialism.

The solution for a pendulum that goes back and forth between communism (your enlightened socialism) and fascism is to cut the rope of the pendulum and reclaim freedom.

[feel the light]

Using your numbers, the value of gold has risen 70 % since 1913 ? I will take your word on this. I guess it sounds better then the large loss in value since 1980. You would still have the same amount of gold, but it will buy 1.7 times as much bread now then it could in 1913.

My grandfather died at 90, 17 years ago. If he had taken his 10 $ of paper route money and buried the coins in a jar in 1913, and I found it today, I would have 17 $ value in 2007 money ! Wow!:rolleyes:

Instead, he quite stupidly used it as a down payment on a 100 acre farm in Bethany, Ct., in 1933. Paid 500$ for it, and because he had to borrow most of the cash from an old lady, he lived in slavery for 20 years, debt hanging off his neck like a chain. We are so ashamed. I bet his 4 children, who sold their shares of the farm 12 years ago, for 1.3 million dollars each, must be. They sold at the beginning of the housing bubble. Just around the time of my own enslavement, when I bought my home for $ 50,000 in '94, with 5K down. I have lost $100,000 in value since the bubble burst. I would struggle to sell it for $250,000 now. Oh well, at least I have a place to live, (try living in a jar of coins).

My point is that a 70 % return on a 94 year gold investment is not so good. I will not point out that the 10% return on 94 years in silver is even worse. It's not. That would have been the coins from a child's paperboy delivery route. I really wish I had a handful of my grandfathers childhood coins. But I am even happier that he didn't have someone like you as his investment counselor.:)

[Gilby]

Geez, you are totally missing the point. I never recommended keeping your assets in gold or silver as a long term investment. But still, a 70% gain is better than the 96% loss the dollar would give you. The point is that with a hard asset as the currency, nobody can be Rumpelstiltskin and just create money from nothing and therefore decrease the value of the money everyone else is holding. To introduce more of the hard asset, effort has to be used to mine it and produce the final product. Taxes are not needed to give it value, and war is not needed to force it on oil producing countries to prop up the value. In other words, we can have freedom, instead of an empire where the people work harder for less. The value of paper money is the power of government to force it on it's subjects. The US government has been lucky to have been able to get the dollar as the reserve currency, but the tides are turning and it might not be pretty.

[feel the light]

3% inflation is much better then deflation. It makes it profitable for the old and wealthy to lend money to the young and hard working. The money supply must expand as the economy expands, and if the gov can't be entrusted with this task, who can ?
In a gold currency, fixed money supply economy, work devalues work. If I have a factory making 100 $ computer chips from sand, every day our work turns sand into 1 million dollars worth of chips, the gold mines must produce 1 million dollars of gold, or the gold coin must increase in value (deflation).

I think this is where it gets confusing. Most people will say inflation is bad. Their money is worth less. But that doesn't mean deflation is good. It is much worse. Only the old fat cats like deflation. No risk. Every year, their pile of gold is worth more and more. There is no incentive to loan any of it to the young. What are you to promise the old rich lady. That if she loans you 1000 gold today, you will repay her with 900 gold in ten years, that will buy twice as much bread then as 1000 gold does now ? The math in a deflationary economy is wrong. It rewards hoarders, while making investors idiots. Not that you will have much luck finding a wealthy idiot.

By definition, a gold based monetary system must be deflationary
in an expanding successful economy, because we can't make more gold. Since the central bank system has proved so successful, our generation (world wide) has enjoyed the largest economic expansion in history. Not a single country on earth retains the gold standard now, and non shall return to it IMHO.

But you may rejoice that you are as free from paper money as you wish to be. I have had the option to store my savings in gold or silver coins for decades, and we enjoy this freedom now. What more can you ask for ? I am just so glad I lived these decades in an economy with an expanding money supply. Or I wouldn't own my own home now.

[feel the light]

Sounds crazy. Mark Twain said they weren't making no more. Of course, he was right. But even the richest must die, and their land be sold. How much more fun it has been for me, and the other born poor SOB's , that the old rich can perceive a profit in selling property, through mortgages created by paper money.
They will sell it before they die.
Otherwise the rich will not hoard just gold and silver, but land and houses as well. The dark age of perpetual feudalism was real, and ended with the printing press. In many ways of course. The irresponsible printing of currency gave it a bad name it has yet to shake in some minds. But freedom, true freedom, comes from paper. And the ability of the people to come together for the common good. We shall rise or fall as a people together. The credit system that has allowed me, and millions of others, to own their homes, is a great blessing.:)

[Gilby]

3% inflation is much better then deflation. It makes it profitable for the old and wealthy to lend money to the young and hard working.

News flash: In a growing economy, it's always profitable to loan money to the producers.

The money supply must expand as the economy expands, and if the gov can't be entrusted with this task, who can ?

As the economy expands, the wealth is growing, by definition. Wealth is essentially the money supply as anything of value can be exchanged.

In a gold currency, fixed money supply economy, work devalues work. If I have a factory making 100 $ computer chips from sand, every day our work turns sand into 1 million dollars worth of chips, the gold mines must produce 1 million dollars of gold, or the gold coin must increase in value (deflation).

Totally wrong. If you are making $100 computer chips, then the raw materials (sand) need to be mined and/or refined if they aren't available yet. Imagine that. Here's how it works:
You have $100 computer chips. Someone else wants to buy it. The agreed upon medium of exchange is gold, so the buyer sells an asset of theirs for the amount of gold they need and then they buy the computer chip. You take that gold and sell it to buy raw materials. Net additional gold needed in this transaction is zero.

I think this is where it gets confusing. Most people will say inflation is bad. Their money is worth less. But that doesn't mean deflation is good. It is much worse. Only the old fat cats like deflation. No risk.

There is always risk. There is no guarantee that the value will go up or down.

Every year, their pile of gold is worth more and more. There is no incentive to loan any of it to the young. What are you to promise the old rich lady. That if she loans you 1000 gold today, you will repay her with 900 gold in ten years, that will buy twice as much bread then as 1000 gold does now ?

That's an unrealistic example, because nobody would do that. Like I said in another thread (http://www.unicyclist.com/forums/showpost.php?p=883880&postcount=29), it's all about risk. If the loan is denominated in gold then the repayment would have to be for a higher amount later. No matter what it is denominated in, it would have to be higher later. Let's use your example. Lets say that today 1000 gold buys a truckload of bread. The old lady could say they will loan you 1000 gold and have you repay it as two truckloads of bread sometime in the future. We can't predict the future, so we do not know what is a better investment, holding on to the gold, or loaning it out for an additional 100% return in bread. As far as we know the value of two truckloads of bread in the future could be 1500 gold, or 900 gold. That's the risk, but this old lady needs two truckloads of bread in the future, so it's less risky for her to do this, regardless of what it's worth relative to gold in the future.

The math in a deflationary economy is wrong. It rewards hoarders, while making investors idiots. Not that you will have much luck finding a wealthy idiot.

Hoarders are rewarded for their foresight of economic troubles in the future. Hoarding is a natural function of a free market economy. If I expect there to be a drought next year, I may hoard some grain. If I am correct, my hoarding resulted in there being more food available that next year. If I am wrong, then I lost value in the grain I held. My money would have been better used elsewhere.

By definition, a gold based monetary system must be deflationary
in an expanding successful economy, because we can't make more gold.

By definition, finished products in an expanding successful society become cheaper, because we get more efficient at using raw materials, and get more efficient with our labor. As long as noone else is stealing the profits from that extra efficiency, then yes, this is deflation -- a higher standard of living.

Since the central bank system has proved so successful, our generation (world wide) has enjoyed the largest economic expansion in history. Not a single country on earth retains the gold standard now, and non shall return to it IMHO.

Causing a Great Depression, creating massive malinvestments, usurping power, largest and most warfare, etc. If you call that success, then you are correct. Fiat money is for tyrants because it helps them retain power. They can print the money with minimal effort. Corporate america loves fiat money because they are sitting at the coffers of that government creation of money and recieve the money first while it's worth a little more than when the market prices adjusts to the increased supply. That's corporate welfare. To maintain a high price for our fiat money, we use military force to make other countries accept it for oil. That's the warfare state. Then since the government is printing more money and taxing the people, which are both theft, we need the welfare state because the poor and middle class are hurt the most from this confiscation of wealth.

Let's look at some numbers. The Real GDP, which is the annualized GDP adjusted for inflation, for 1790 to 1913 is 4.14%. From 1914 to 2005, it's 3.48%. In US history, we were more successful when we did not have a central bank.

But you may rejoice that you are as free from paper money as you wish to be. I have had the option to store my savings in gold or silver coins for decades, and we enjoy this freedom now. What more can you ask for ?

The fiat money is forced on us. They tax the increase in value denominated in USD from savings of anything that retains it's value. I ask for freedom, I ask for a government that limits itself to the powers the charter We the People gave it. The purpose of government is to secure the rights of the people, but it has grown, thanks to their unconstitutional power to print money, and has taken many of our freedoms from us.

I am just so glad I lived these decades in an economy with an expanding money supply. Or I wouldn't own my own home now. Loans would still exists under a free market monetary system. You would still be able to get a mortgage.

The dark age of perpetual feudalism was real, and ended with the printing press. You are still a serf. Can you work without paying your master? Can you buy or sell anything without giving your master a cut? Can you do anything you want without asking your master for permission? Yes, you are a serf.

But freedom, true freedom, comes from paper.

True freedom comes from voluntary exchanges. Freedom is the absence of government involvement.

And the ability of the people to come together for the common good.

In a free market people come together for a common good. I produce something. You produce something. We then choose to exchange what we produce with each other, equal value for equal value.

We shall rise or fall as a people together.

You can keep your bad economic choices to yourself. You may learn from your economic mistakes and then I will likely loan you some money, invest in you, for a return appropriate to the risk involved.

[Gilby]

Make mine freedom: http://www.youtube.com/watch?v=fhDgnzEAmvY

[feel the light]

"Let's look at some numbers. The Real GDP, which is the annualized GDP adjusted for inflation, for 1790 to 1913 is 4.14%. From 1914 to 2005, it's 3.48%. In US history, we were more successful when we did not have a central bank".- Gilby

The % of year to year production increase during the 1800's was quite modest. There was no agency keeping GDP data. But we can use our imagination.

I imagine my great great grandfather walking behind a horse all day holding onto a plow. I imagine my great grandfather plowing 10 x as much acres driving a tractor, and bragging to great grandma about it by candlelight.

I see my grandfather driving a model T to go to work at the combine factory, on the night shift, made possible by electricity.

I see my father driving on the interstate to go to work at the jet engine factory. I imagine my cousin can run the whole farm himself now and produce enough food for 5000 people, who all have non farm jobs now.

I see myself trying to explain to you, using a computer connected to an internet, something.

I expect your reply to come back much faster, even if you lived in Japan, then the mailman could carry a letter on his horse to my great great grandfather from across the street in the 1800's.

So I imagine the the rate of growth in the GDP during the 1800's was some small fraction of what it was in the 1900's.

Indeed, year to year growth of the economy then was largely driven by population growth, rather then by technologically driven production increases.

It was perhaps possible in that case for mining to produce new coinage as fast as it was needed. But those mines are largely closed now, and we need to move on.

[Gilby]

I can't find the raw yearly data for the GDP. And beside, GDP isn't a good measure of economic growth since it includes replacement after destruction (such as from war) instead of net increase in wealth. So, let's imagine, imagine that you are right about the GDP increasing higher annually since we've had a central bank and the necessary taxes to make it work. I would hypothesize that the increase is because of the massive theft from the producers. Since the producers are being stolen from with inflation and taxes, they have to work more. Both parents in a family now have to work and many people are forced to work more than one job to make ends meet.

It was perhaps possible in that case for mining to produce new coinage as fast as it was needed. But those mines are largely closed now, and we need to move on.The supply of the medium of exchange does not need to increase. Is it really that hard to understand that? The supply of raw materials does need to be increased. No amount of printing numbers on paper is going to magically increase that supply. Actual effort needs to be expended to make material ready for use in production.

[feel the light]

Technology. The tractor, combine, fertilizer. Electricity, container shipping, instant communication of business desires. Instant culmination of business deals and instant wire transfers of money . These are just a few of the reasons the rate of economic growth was much faster in the 1900's then the previous century. It is still obviously accelerating. The money system was not as significant a factor, although the availability of credit does spur economic growth.

The reasons families have as hard a time now as in the past are numerous.

Population increase raising housing costs is #1.

Old people living longer increases
SS tax,they don't pass on their wealth, don't have their home up for sale cause they didn't die. Sorta related to population increase. Not that I don't love them.

The increase in the USA gov debt, which is from deficit spending, now increases the tax burden to pay interest. It is interesting to note how inflation does quite a lot to reduce this burden.

The rising cost of raw materials.

The cost of health insurance. Your employer will deduct this from what would have been your wage. It may not be convenient to die of cancer, but it was a lot cheaper then curing it. Then your house used to go up for sale. See #1 above.

The rising cost of liability insurance. Law suits used to be extremely rare. Now your doctor may pay several hundred K /yr. for coverage. Many other business's got it almost as bad.

There is obviously other things I might add. But let's look at the cost of banking. For me it's zero. I paid off my mortgage a few years ago and have no debt at all. It is hard to understand why I should feel like a slave when I come and go and live like I please. If I wanted to borrow money now, I think I could get it for about 6-7 %. Considering that the bank will only make about 3-4 %, because of inflation, I wouldn't feel abused at all. Out of that 3-4%, they must write off bad debts, pay their employees, local property tax, and corporate tax. And then both their employees and share holders must pay income tax. All of which should reduce the need for the gov to tax me (I like to be optimistic). I have no numbers, but I suspect that the cost of credit is at a historic low. This is also the reason for the insane run up in housing prices IMHO. See #1 above.

Overall, I think that economically, these are fine times indeed. We have learned from our mistakes of the past , and I see no reason that a great depression will occur again.



"Some Federal Reserve watchers are not surprised that chairman Ben Bernanke opted to lower interest rates. Mr. Bernanke is a keen observer of the Great Depression in the 1930s. "In his studies of the Depression, one of his main criticisms is that the US was on the gold standard and did not get off of it," says Axel Merk, president of Merk Hard Currency Fund in Palo Alto, Calif. "Had they been able to lower the value of the dollar, Bernanke argues, "the officials could have reduced the hardship." - from an article in yahoo business this week

[Gilby]

[snip... lots of things the government has done to increase the cost of living]
There is obviously other things I might add. But let's look at the cost of banking. For me it's zero. I paid off my mortgage a few years ago and have no debt at all. It is hard to understand why I should feel like a slave when I come and go and live like I please.
Nothing is free. The banking industry gets it's money from the fractional reserve system. I deposit $100, they then go and loan out $900 based on a 10% reserve requirement. If that $100 made up the entire money supply, then I just lost a lot of buying power and the bankers are making a killing. Their biggest fear though is if I were to withdraw all that $100. That's basically what happened in the Great Depression.

And don't you pay taxes? The sole purpose of the income tax is to support the money system. Without it, the paper dollar would be worthless because nobody would demand it.

Overall, I think that economically, these are fine times indeed. We have learned from our mistakes of the past , and I see no reason that a great depression will occur again.
Have we? I agree, only in that we will not have the same situation. The current economic situation is not bad, but drastic changes can happen suddenly as markets correct from the prior malinvestments.

The Great Depression happened from a deflation. The inflationary bubble that occurred in the 1920s eventually collapsed and then there wasn't enough gold to cover the redemption on the paper notes for real money. Now, we dropped the gold part of it, applied an unconstitutional income tax on everyone, and now the policy is to inflate. The next major depression will be caused by hyperinflation. Much of the benefits that the US gained under our current system is because the US dollar has been the world's reserve currency. There is a lot of money out there that is not being used in circulation. But as the US dollar drops in value other countries are not going to want to have the US dollar as the reserve currency, which will cause a sudden inflow of money into the economy and trigger the hyperinflation.

"Some Federal Reserve watchers are not surprised that chairman Ben Bernanke opted to lower interest rates. Mr. Bernanke is a keen observer of the Great Depression in the 1930s. "In his studies of the Depression, one of his main criticisms is that the US was on the gold standard and did not get off of it," says Axel Merk, president of Merk Hard Currency Fund in Palo Alto, Calif. "Had they been able to lower the value of the dollar, Bernanke argues, "the officials could have reduced the hardship." - from an article in yahoo business this week
The problem wasn't that there was a gold standard, the problem was that they inflated -- issued more paper money than they had gold to back it up. The gold standard referred to here is different than using gold and silver as the current money.

I like Axel Merk. Thanks for quoting him. :) He runs a mutual fund (http://www.merkfund.com/fund/index.html) that is aimed at protection against the decline in the dollar by putting assets in hard currency (http://www.merkfund.com/merk-perspective/glossary/hard-currency.html), including gold. He endorses the monetary policy of Presidential candidate Ron Paul:
We don’t agree with all of his views, but highly respect his no-nonsense approach to fiscal and monetary policy issues. We encourage everyone to familiarize themselves with the fiscal views of Congressman Ron Paul. He is living proof that it is possible to be a fiscally conservative politician with integrity.
Ron Paul (http://www.ronpaul2008.com) wants to abolish the Federal Reserve. Here's a short video of his monetary policy: http://www.youtube.com/watch?v=8-W-ef7GmT4
And of course he wants to abolish the IRS (slavery): http://www.youtube.com/watch?v=PCgHRoB6xUw

You can read Ron Paul's comment on last week's rate cut on Merk's site: http://www.merkfund.com/money/authors/ronpaul/money-has-to-come-from-somewhere.html

And you can see Ron Paul take on Bernanke last week: http://www.youtube.com/watch?v=AeHWW5gbc0w
Bernanke doesn't even answer the real question.

[feel the light]

I always liked Ron Paul. He is interesting, and is my favorite Republican. Sorta like saying chicken pox is my favorite disease. I will vote for chicken pox rather then cancer any day.

I would prefer, in order, Gravel, Kucinich, Obama. But will end up voting for Hillary over Darth Vader, who looks likely to be Gulliani.

It sounds like Paul is having some fun. He is smart enough to know that a doubling of the money supply does not mean the value of the dollar is halved, but plays the card anyway to wow the table. To double the money supply takes many years, and the Fed uses GNP growth as one of it's guides. So despite the enormous increase in the money supply since 1913, the purchasing power of an oz. of silver has not changed. He makes no mention of what happened to the common man when the money supply shrank by 1/3 between 1929, and 1933. I wonder why he didn't point out how happy everyone was that their dollars bought so much more.

Even if hell freezes and he flys into the white house riding on the back of a pig, it would take a constitutional amendment to abolish the Fed. So I find his demagoguery amusing, rather then as a real threat. The president cannot introduce a motion in congress for an amendment to abolish the Fed. That's a congressman's job ! He is much closer to having the power to abolish the Fed now then if he were prez ! LOL

Bashing the IRS and promising to reform it to reduce your taxes is as great an American tradition as going to campaign in Iowa and pledging support for farm price subsidies. But I must admit that the suggestion to completely abolish it, and make up the budget shortfall by having your local church volunteer to pay for all social and medical care is a novel new twist. Let's tell the sick children to pray or die !

I thought that the Fed chair held up well to Paul's wacko assertion that we are in an inflationary crisis that is the burning moral issue of our time. He pointed out that the current rate of inflation was 2 %. He could of pointed out that he had done a lot of hard work to get the target smack on and was proud of himself. But he he just tossed out the fact and gave Paul a chance to say, "that's to high", which Paul was smart enough not to take.:)

[Gilby]

Even if hell freezes and he flys into the white house riding on the back of a pig, it would take a constitutional amendment to abolish the Fed.

It would not take a constitutional amendment to abolish the Federal Reserve since it's unconstitutional for it to exist to begin with.

Eliminate the income tax, which the president can do since they can refuse to enforce something that is unconstitutional. Lift the restrictions on gold and silver from being used as money at market value. Competition will naturally select the better money in the economy, and since the Federal Reserve, like all fractional reserve banks, is bankrupt, they will close.

So I find his demagoguery amusing, rather then as a real threat. The president cannot introduce a motion in congress for an amendment to abolish the Fed. That's a congressman's job ! He is much closer to having the power to abolish the Fed now then if he were prez ! LOL

If he gets elected the views will get noticed by the representatives and the mainstream and this would affect the chances of laws to make it happen.

Bashing the IRS and promising to reform it to reduce your taxes is as great an American tradition as going to campaign in Iowa and pledging support for farm price subsidies. But I must admit that the suggestion to completely abolish it, and make up the budget shortfall by having your local church volunteer to pay for all social and medical care is a novel new twist. Let's tell the sick children to pray or die !

And thus that demonstrates your clear misunderstanding of how free markets and real compassion works.

Oh, and Ron Paul wants to end farm price subsidies too, as well as all subsidies. He even has the guts to campaign in Iowa and tell them that.

I thought that the Fed chair held up well to Paul's wacko assertion that we are in an inflationary crisis that is the burning moral issue of our time. He pointed out that the current rate of inflation was 2 %.

The CPI-U excludes energy, food, and housing. Does that 2% figure mean anything to you on how good the economy is really doing? It's a lagging indicator, and the fed is reactionary to this lagging indicator.

He could of pointed out that he had done a lot of hard work to get the target smack on and was proud of himself. But he he just tossed out the fact and gave Paul a chance to say, "that's to high", which Paul was smart enough not to take.:) Paul already said that real inflation as felt by the people for their living expenses was 10%.

[feel the light]

I wasn't so sure, so I looked it up. From the BLS.gov FAQ.......

"What goods and services does the CPI cover?

The CPI represents all goods and services purchased for consumption by the reference population (U or W) BLS has classified all expenditure items into more than 200 categories, arranged into eight major groups. Major groups and examples of categories in each are as follows:

* FOOD AND BEVERAGES (breakfast cereal, milk, coffee, chicken, wine, 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, 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).

Also included within these major groups are various government-charged user fees, such as water and sewerage charges, auto registration fees, and vehicle tolls. In addition, the CPI includes taxes (such as sales and excise taxes) that are directly associated with the prices of specific goods and services. However, the CPI excludes taxes (such as income and Social Security taxes) not directly associated with the purchase of consumer goods and services. "

I copied this from the official .gov page that is in charge of making this index. Here is the link.

http://www.bls.gov/cpi/cpifaq.htm#Question_13

This jibs with my experience. If prices had gone up 10 % a year I wouldn't have been spending about the same 50-60 $/wk. at the grocery store. This number sticks in my head because the local Winn Dixie has been sending me coupons for years that are good for 10$ off on a 50 $ or greater purchase. So I have to make an effort to spend at least 50 $ to save 10. The difficulty of doing that has stayed about the same.

I don't think it is fair to blame the Fed for the housing run up. They are SOB's when interest rates are high. It's all part of an evil plan to put more interest money in the pockets of greedy bankers, at the expense of the poor man trying to pay off his mortgage. And they are causing unemployment and recession. Have they no morals at all ?
But when interest rates are lowered, they are SOB's , part of an evil plan to
to expand the money supply and causing inflation to rob the poor ! They are immoral ! LOL Actually, the housing prices rise because the mortgage interest is lowered, people bid more on property when they have more. Those evil schemers ! They just want you in debt so they can foreclose and take your land! (that you would have no hope of buying without credit). I just kinda think some jobs aren't for people that love being loved. The IRS and Fed chairman seem to be always unpopular. Paul exploits this well.

I am surprised that no one seems to say much about Paul's health care plan. The number of sick people that will suffer and die if we suddenly shut down all government payments is staggering, in the thousands. Should we shut down SS also? Nothing lowers housing prices like lot's of dead old peoples homes flooding the market.

I much prefer Michael Moores health care plan. Copy the rest of the civilized countries that have eliminated the multi billion dollar insurance leeches and just cover everyone. It is not only compassionate to avoid the suffering and death of millions, it will save money as well.

I mistakenly thought that the Fed was established with a constitutional amendment, like the income tax, but I couldn't find it. It was an act of congress. I got this from Wiki

"After months of debates, votes and amendments, the proposed legislation, with 30 sections, was enacted as the Federal Reserve Act. The House, on December 22, 1913, agreed to the conference report on the Federal Reserve Act by a vote of 298 yeas to 60 nays with 76 not voting. The Senate, on December 23, 1913, agreed to it by a vote of 43 yeas to 25 nays with 27 not voting. The record shows that there were no Democrats voting "nay" in the Senate and only two in the House. The record also shows that almost all of those not voting on the bill had previously declared their intentions and were paired with members of opposite intentions."

So I think a simple congressional act could abolish the Fed. They are still independent from the Prez and congress. Congress get's the blame for the deficit, and the Fed for the money supply. In a way, it is cool that all the Fed governors are rich bankers. They won't allow the congress to try to print their way out of the deficit. Having all their mortgages paid off with hyper inflated dollars is a bankers nightmare ! The poor borrower gets to keep the farm, while the banker gets a pile of devalued paper !

[Gilby]

What is the CPI-U?

Sorry, I meant "core inflation" is what excludes food and energy. When financial analysts talk about inflation, that's usually the one they are referring to.

But the CPI-U is not accurate. The big incentive for government to miscalculate the figure is that they have a ton of expenses that are adjusted for inflation, such as social security. It also looks good on economic reports such as the GDP calculation. There were some changes in the 80s on how the CPI is calculated and some more again when Clinton got office. Before, the CPI was a fixed basket of goods, meaning that the cost for the same standard of living was calculated. They changed it to a variable basket of goods and use geometric weighting. Essentially, if an item falls in price, it gets weighted more and if an item increases in price it gets weighted less. The logic behind that is that people on fixed incomes will replace the expensive items for cheaper items. I can't afford the 8.99/lb steak, so I'll now buy the 2.99/lb hamburger.

Alan Greenspan was one that pushed for these changes.

This jibs with my experience. If prices had gone up 10 % a year I wouldn't have been spending about the same 50-60 $/wk. at the grocery store. This number sticks in my head because the local Winn Dixie has been sending me coupons for years that are good for 10$ off on a 50 $ or greater purchase. So I have to make an effort to spend at least 50 $ to save 10. The difficulty of doing that has stayed about the same.

Aha, so you are going in with a fixed amount you want to spend. You likely buy the cheaper item now instead of the more expensive one. Further, packaging sizes have changed. Some items that used to be sold as gallons are now 3 liters. The question is, have you paid the sameamount and gotten the same quantity and quality?

I don't think it is fair to blame the Fed for the housing run up.

Whose to blame then? The government for spending too much? The public for not buying bonds? When credit is made cheap, the market responds with malinvestments. This time it happened to be in the housing market. People bought houses they could not afford. They were told real estate always go up, so you can't lose. Now people are stuck with mortgages they can not afford, and it's the poorer that got stuck with that. Since it's marketwide due to the massive amount of easy credit, it's affecting almost every housing market, which means a huge drop in real estate prices as a flood of homes go up for sale. The even poorer didn't benefit either because they didn't get the money inflows before inflation hit. The wealthier were able to refinance their houses and essentially got free money.

Put simply, you can not live beyond your means without it coming back to burn you later.

They are SOB's when interest rates are high.

No, high interest rates just mean that they are tight and not increasing the money supply, and instead let the market determine the rates with the existing money.

The banks would not want to buy the treasury bonds because they do not offer a high enough interest to compensate for the amount they'd have to borrow at.

It's all part of an evil plan to put more interest money in the pockets of greedy bankers, at the expense of the poor man trying to pay off his mortgage. And they are causing unemployment and recession. Have they no morals at all ?

I guess so.

But when interest rates are lowered, they are SOB's , part of an evil plan to
to expand the money supply and causing inflation to rob the poor ! They are immoral !

Anything that takes away the rights of others is immoral. This system is backed by forceful theft.

LOL Actually, the housing prices rise because the mortgage interest is lowered, people bid more on property when they have more. Those evil schemers ! They just want you in debt so they can foreclose and take your land! (that you would have no hope of buying without credit).

Credit is still available in a free market. It's just that you would have to live within your means.

I just kinda think some jobs aren't for people that love being loved. The IRS and Fed chairman seem to be always unpopular. Paul exploits this well.

Rightly so. Why would anyone love the people who steal from them?

I am surprised that no one seems to say much about Paul's health care plan. The number of sick people that will suffer and die if we suddenly shut down all government payments is staggering, in the thousands.

You need to take care of the people who became dependent on the system and help them transition. That's his plan. The rest is to eliminate all the unconstitutional meddling the federal government has been doing. The problems of today are from the move towards a fascist system in the late 1960s and early 1970s. Moore even pointed that origin in his documentary.

Where in the constitution does it say anything about health care? Quit stealing from the people and causing economic problems and people will be able to afford health care and will be able to be compassionate with their extra capital to help those in their community. Healthcare insurance should be for major expenses, putting the control of one's health back in the patients hands instead of the insurance companies and your employers.

Should we shut down SS also?

YES! It's a ponzi scam. Like all ponzi scams, they collapse. Ron Paul's position is follow through with the obligations, but let us opt out. Why should someone my age be required to be in Social Security? It's not going to be there when I get to be retirement age. I can handle my financial planning much better.

I much prefer Michael Moores health care plan. Copy the rest of the civilized countries that have eliminated the multi billion dollar insurance leeches and just cover everyone. It is not only compassionate to avoid the suffering and death of millions, it will save money as well.

Ha, avoiding the deaths and suffering. Socialized care is known for long waits to get treatment (and deaths from waiting so long).

Let's copy the long waits, the high taxes, the care restrictions, the massive forced abortion rates, etc. of Canada, France, UK and Cuba. Sorry, I prefer health care, not rationed and forced miscare.

I mistakenly thought that the Fed was established with a constitutional amendment, like the income tax, but I couldn't find it. It was an act of congress.

A completely unconstituional act.