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Editorial

Tuesday, July 19, 2011

Debt Ceiling Drama

By Ron Paul
42

Dr. Ron Paul

The debt ceiling debate is providing plenty of opportunity for political theater in Washington. Proponents of raising the debt ceiling are throwing around the usual scare tactics and misinformation in order to intimidate opponents into accepting more debt and taxes. It is important to distinguish the truth from the propaganda.

First of all, politicians need to understand that without real change default is inevitable. In fact, default happens every day through monetary policy tricks. Every time the Federal Reserve engages in more quantitative easing and devalues the dollar, it is defaulting on the American people by eroding their purchasing power and inflating their savings away. The dollar has lost nearly 50% of its value against gold since 2008. The Fed claims inflation is 2% or less over the past few years; however economists who compile alternate data show a 9% inflation rate if calculated more traditionally. Alarmingly, the administration is talking about changing the methodology of the CPI calculation yet again to hide the damage of the government's policies. Changing the CPI will also enable the government to avoid giving seniors a COLA (cost of living adjustment) on their social security checks, and raise taxes via the hidden means of "bracket creep." This is a default. Just because it is a default on the people and not the banks and foreign holders of our debt does not mean it doesn't count.

Politicians also need to acknowledge that our debt is unsustainable. For decades our government has been spending and promising far more than it collects in taxes. But the problem is not that the people are not taxed enough. The government has managed to run up $61.6 trillion in unfunded liabilities, which works out to $528,000 per household. A tax policy that would aim to extract even half that amount of money from American families would be unimaginably draconian, and not unlike attempting to squeeze blood from a turnip. This is, unequivocally, a spending problem brought about by a dramatically inflated view of the proper role of government in a free society.

Perhaps the most abhorrent bit of chicanery has been the threat that if a deal is not reached to increase the debt by August 2nd, social security checks may not go out. In reality, the Chief Actuary of Social Security confirmed last week that current Social Security tax receipts are more than enough to cover current outlays. The only reason those checks would not go out would be if the administration decided to spend those designated funds elsewhere. It is very telling that the administration would rather frighten seniors dependent on social security checks than alarm their big banking friends, who have already received $5.3 trillion in bailouts, stimulus and quantitative easing. This instance of trying to blackmail Congress into tax increases by threatening social security demonstrates how scary it is to be completely dependent on government promises and why many young people today would jump at the chance to opt out of Social Security altogether.

We are headed for rough economic times either way, but the longer we put it off, the greater the pain will be when the system implodes. We need to stop adding more programs and entitlements to the problem. We need to stop expensive bombing campaigns against people on the other side of the globe and bring our troops home. We need to stop allowing secretive banking cartels to endlessly enslave us through monetary policy trickery. And we need to drastically rethink government's role in our lives so we can get it out of the way and get back to work.




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Showing 1 - 20 of 42 - Newest on top - Reorder Feedback
  Posted by John Danforth on 07/21/11 01:09 AM

The law is, and always has been, what the man holding the gun says it is.

The only restriction on government power is that same as that on the playground -- what can be gotten away with up to the point where physical punishment will result.

It is, and always has been, a political problem.

Nobody follows the constitution because nobody is making them follow it. Judges don't follow the rules unless there are cameras there. Mostly, not even then.

And if you take an interpretation of the constitution, and take the position that the government is breaking the law, which it is, and you are right, it will not matter that you are right and they are breaking the law. If you become enough of a nuisance to them you are throwing yourself under the juggernaut. They will either roll over you quietly, or if there is anything to be gotten from it they will make a public example of you.

The only feasible approach is to keep educating people the best we can, so that when they are shaken off their apathy by disaster, the seeds will have been planted for them to hopefully not beg for a dictator to look after them.

  Posted by John Danforth on 07/21/11 01:03 AM

I'm pretty sure they can do it. They've been awful brazen about it.

  Posted by bob on 07/20/11 07:20 PM

The present Jewish=Khazar banking elite has lost their mind and their heads. They foolishly assumed that they are now-days Pharaohs.

These banking PE slave masters became too arrogant and too greedy trying to squeeze more and more from their slave. The ending is always the same: slaves revolt and kill their former masters.

If somebody think that "brilliant and intelligent" talk will change anything are too naive and poorly educated about the real history of world.

  Posted by David_Robertson on 07/20/11 04:41 PM

Thanks Mike and I now understand your point about the federal citizen situation. I didn't know that before. Or perhaps more precisely I didn't know that Americans had dual citizenship. It makes sense and makes it clear how the change in governance was effected.

There is an alternative that I have come across that in some ways solves the problem and challenges those like yourself who want to see constitutional change and Jedidiah Smith who believes it is only possible when Americans just say no to the voluntary slavery and break their chains. This alternative is the already restored Republic for the united States of America. I am not an American but I take an interest in what is happening over there because I lived in North America for thirty odd years and have many contacts in your country. Here is the link to the website: Click to view link

  Posted by David_Robertson on 07/20/11 04:25 PM

Thanks John. As the first article's author states he was surprised that the Fed accepted MBS against the additional reserves rather than T-Bills. He even used the term "open market operations" which is usually reserved for the government debt markets. This was my concern. I have always thought that government paper was the only security legally permitted to be held in bank reserves. This would include the cash held by the banks which is also backed by the government. He kind of backs off his shock by stating that of course they were MBS of the highest quality. By that I assume he meant they had a AAA rating. Didn't they all?

This is nevertheless the key issue. If indeed the Fed is accepting securities into bank reserves that are not permitted by law then that should be brought out into the open. It is my understanding that in the 1920-21 bond market turmoil the Fed introduced the acceptance of government securities as collateral against bank reserves instead of the commercial paper that was permitted by law.

This started the whole Fed system of treasury open market operations that exists today. This was then made legal post facto in 1935 but until then it was illegal. It may be that today we have a similar situation with regard to MBS and goodness knows what else. Is it time to blow the whistle? Or have they slipped the legalisation clause into one of these unread multi-thousand page laws they have passed since 2007?

  Posted by Jedediah Smith on 07/20/11 03:25 PM

Yes, I think we actually agree and are just focusing on different aspects of these issues. I also think that our best hope is to do all we can to inform our fellow Americans. The legal points you brought up are very good to share with people - - - most of them are absolutely shocked when they first learn about the legalities involved. I know I was ! Regards

  Posted by Jedediah Smith on 07/20/11 03:14 PM

The Fable of the Chained Elephant - - -
A man took his young son to the circus where they saw a large adult elephant. The little boy asked his father in alarm "Look Dad ! That elephant is only held to that pole with a little thin rope. I could break that rope. How come they don't have a strong heavy chain ?" His father explained, "When that elephant was only a baby they put a heavy chain around its leg attached to a heavy stake set deep in the ground. When the baby elephant pulled against the stake and heavy chain, he found he couldn't escape. Over time they progressively used smaller stakes and thinner chains, but after awhile the elephant 'knew' he was stuck and could do nothing about it. So now the elephant is full grown and could easily break the rope, but he doesn't realize that. The elephant handlers can easily move him wherever/whenever they want using the illusion of that weak thin rope and feeble stake."

  Posted by frick on 07/20/11 03:01 PM

"Ultimately its a matter of education & motivation. That is, helping all of us to understand our rights and be willing to reclaim them. Your rights arent granted by a lawyer."
I do agree with you here. We just see it differntly, perhaps?
Education is key. Unfortunately the federal government United States is not our freind, it is our master. Government controlled education will influnce our children to honor and respect their rulers.
The federal government United States is very powerful, the largest government in the history of earth. That kind of power draws men of dubious character, to say the least. Whoa be unto the lawers.
But I think Americans must look inside themselves before they grab up arms.
Peaceful remedies may still be available.

  Posted by Jedediah Smith on 07/20/11 02:56 PM

I know all those arguments.

The question is . . . if you asked a 1000 Americans if they realized that the various actions they took going about their daily lives made them citizens of the legal fiction the corporate "United States" versus free citizens of the United States of America they would not know that. They also would be shocked to know that they also apparently signed away their unalienable rights because of these lawyer fabricated inventions. Is it no surprise that this is not pointed out to them ? Is it no surprise that history, economics, and civics/law arent taught in public schools today, & that people are kept ignorant? There is a fudiciary responsibility that our representatives protect our best interests and point out the relevant issues in legal matters; its obvious this hasn't been done. Its nothing but fraud. - - -

The law is used as a weapon against us by con-men. The law is written,interpreted and changed to benefit the powers that be. One cannot win over the long term in the courts. That game is fixed. They own the courts.

Ultimately this isnt a legal issue, but an educational and motivational issue. If Americans became educated and outraged at this scam, they would Truly throw the statist rascals out and they would be replaced by true public servants and judges who would interpret the law quite differently. Does anyone not think a Ron Paul or Judge Andrew Napolitano would have a much different take on the law ?

  Posted by frick on 07/20/11 02:28 PM

Are you claiming then, that you did not sign an SS-5 form placing yourself into the Social Security system?
You did not then sign your childrens Birth Certificate?
You have never claimed under penalty of perjury that you are a "citizen of the US"? Check your voter registration, and your bank account agreements.
And yet you are claiming to be mistreated?
Honestly?

  Posted by Jedediah Smith on 07/20/11 02:19 PM

Mike - - - I understand where youre coming from, and am very familiar with all the points you bring up, including the court rulings.

But lets say we acknowledge the existence of the legalistic box that we seem to be locked into - - - what is the ultimate result of that ? De facto slavery for the American people.

I'm sure there were all sorts of laws in Germany, the USSR, and China when Hitler, Stalin, and Mao were in power. I bet the government lawyers could point to all the legalistic language that made tyranny and murder 'legal'. In my opinion, - those who stress this miss the mark. They see our condition as primarily a legal problem. That isnt the way to look at it. What happens if one or a few people are successful in their legal arguments against the powers that be ? Well, they just change the law or ignore it.

This is not a legal problem, but a political problem. Ultimately its a matter of education & motivation. That is, helping all of us to understand our rights and be willing to reclaim them. Your rights arent granted by a lawyer.

  Posted by frick on 07/20/11 01:48 PM

"All men are created equal."
Americans were free men. And free men are free to place themselves into 'voluntary servitude'. "Involuntary servitude" is unlawful in America.
"Neither slavery nor involuntary servitude, ... shall exist within the United States."
---13th Amendment---
Can any man subject to compelled and coerced taxation honestly be considered free?
Of course not. The question then is, is that servitude voluntary, or involuntary?
This is the nature of federal citizenship under the Fourteenth Amendment as stated by the Supreme Court of the United States: 'It is the natural consequence of a citizenship [92 U.S. 542, 551] which owes allegiance to two sovereignties, and claims protection from both. The citizen cannot complain, because he has voluntarily submitted himself to such a form of government. He owes allegiance to the two departments, so to speak, and within their respective spheres must pay the penalties which each exacts for disobedience to its laws.' U.S. v. Cruikshank, 92 U.S. 542 (1875)
Obviously it is presumed to be voluntary servitude.
One can claim constitutional protected unalienable Rights till the cows come home. But voluntary contracts supersede the Constitution.
This is the unseen cage in which Americans find themselves.
The solution then is elementary. However, actually releasing oneself from his self inflicted obligations is quite another matter entirely.
Mike

  Posted by frick on 07/20/11 01:31 PM

Restore the Constitution?
Americans have no lawful standing as federal citizens in enforcing the Constitution on the federal government United States.

This is the nature of federal citizenship under the Fourteenth Amendment as stated by the Supreme Court of the United States: 'It is the natural consequence of a citizenship [92 U.S. 542, 551] which owes allegiance to two sovereignties, and claims protection from both. The citizen cannot complain, because he has voluntarily submitted himself to such a form of government. He owes allegiance to the two departments, so to speak, and within their respective spheres must pay the penalties which each exacts for disobedience to its laws.' U.S. v. Cruikshank, 92 U.S. 542 (1875)

The federal citizen cannot claim that he has been injured or damaged by unconstitutional acts of the federal government United States because "The citizen cannot complain, because he has voluntarily submitted himself to such a form of government." Therefore the US federal citizen will be found to have "no standing" on constitutional matters.

  Posted by Jedediah Smith on 07/20/11 01:27 PM

I think the key is turning around the attitude of the American people - - and that means helping all of us to understand the principles on which our country was founded. From that basis, anything is possible.
I recently read an account where the author argued that (as alleged to have been said by George Bush) "yes, the Constitution IS just a *$%# piece of paper". The author's point was that we, as human beings - have God given rights (in whatever manner you may personally view & understand this. Even atheists can recognize basic human rights.) Your rights as a human being don't come from a piece of paper, or the ruling of a judge. As stated in the Declaration of Independence - - these are unalienable rights - that means they cannot be taken away, violated, or transferred from one person to another. . . . "We hold these truths to be self evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty, and the pursuit of Happiness."

Many talk about the various amendments and judidicial findings and administrative & maritime law etc, etc, etc - - - They throw up their hands and seem to think that these fabrications ultimately place shackles on us. Somehow, a slick liar/lawyer politician or government lawyer in a long black dress can ultimately determine our rights. No, - - its the people themselves who are responsible for recognizing their own God given rights, and what they are willing to tolerate. - - - If by a magic wand, tomorrow the American people decided they have had enough of all the baloney - - - in a totally peaceful manner, it would be over. The majority of the people cannot be forced to do, what they really don't want to do. (Remember all the propaganda about the last flu vaccine. They put out scare stories and trial balloons that it may be forced on people. - - Didn't matter. The vast majority of people said 'forget it' and refused to take their vaccine. - - They had to dump thousands of dosages & afterwards the information came out that it was all a big scam.)

Our responsibility as Americans and human beings is to learn as much about Americas founding principles & history as possible, and then to pass that knowledge on to everyone we can. Our country isn't perfect, it has its flaws. All things established by mere humans have flaws. - - But it was the first time in history where the rights of common men over kings was recognized. If we want our Liberty, its up to us to reclaim it.

Ron Paul can't do it all alone. But his election would be passing a litmus test by the American people. His election would show that the people Finally understand that theyve been shafted for a long time by politicians from both parties and those who pay them off for their own benefit.

  Posted by frick on 07/20/11 01:06 PM

If you recall, prior to the so-called "Civil War", we were not "one nation"..."indivisible". We were a confederation, a voluntary Union, of seperate and idependant nation States. Francis Bellamy, a socialist, wrote those words of the Pledge of Allegiance.
Reclaim the Republic?
The republic was abandoned when all Americans became "citizens of the United States" federal government.
"All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and the State wherein they reside."---Amendment XIV, Section 1.
Were the people of the original republic citizens of the federal government? The answer is no, they were not. The federal government had no jurisdiction over the people of the original republic. The federal government can only have jurisdiction over federal citizens of the United States federal government.
'Constitutional' and 'federal citizen'; oxymoronic. Federal citizenship is anti-constitution, anti-(original)republic.
If not the republic and republican form of government, what form of government then do citizens of the federal government United States consent to? A "national" socialist democracy. Democracy being the antithesis of constitutional republic. Anti-republic democracy. Democracy and republic being mutually exclusive, one necessarily destroying the other. Republic - Rule of Law - the Constitution. Democracy - Rule of Men - the Vote. Elected officials in a representative republic are bound by the Constitution, the Supreme Law of the Land. Not so in a democracy where elected officials make law through their vote, "living breathing law". Who can say they have not seen this to be true?

  Posted by frick on 07/20/11 12:52 PM

As I see it, because Americans are "citizens of the United States" federal government, whereas the poeple of the consttutional republic were not, Americans have (unknowingly) abandonded that republic and their allegiance now lies with the federal government and not the republic. In order to restore the republic and the Constitution, Americans must abandon the central State United States and return to their onstitutional republic (nation) State.
Click to view link
Mike

  Posted by Deliberatus on 07/20/11 11:23 AM

We were deceived many years- indeed, partly by people who believed that T-bills were a safe secure way to store and increase social security trust fund monies. NOW we know bette, but uit's too late. Can we save the nation from economic chaos? I hops so, but I am beginning to truely wonder.

  Posted by John Danforth on 07/20/11 10:25 AM

Dotti, I hope everything works out well for you and Hubby.

  Posted by John Danforth on 07/20/11 10:22 AM

From an article defending the practice, back in 2007,

"New deposits can only be created by an act of the Fed itself, either in the form of an open market operation (in which the Fed credits a particular bank with new deposits in exchange for receipt of another asset of equal value) or a discount window loan (in which the Fed loans deposits to the bank, holding other assets from the bank as collateral)."

Click to view link

Like I said, pure smoke. A lot of what the FED is holding is 'toxic derivatives'. The FED simply created dollars in exchange for them.

Scroll down the page at the link below and view the FED's own chart to see the relative impact of this:

Click to view link

The whole charade has been hidden in plain sight since before either of us were born.

  Posted by John Danforth on 07/20/11 10:11 AM

I can't say for sure, but I'm pretty sure these trillions were simply made from smoke. They called it 'liquidity injections' in the press. They were more than 2x the size of TARP. And that's just the ones they put on their books and released to the public. No audits, remember.

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