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Published:March 28th, 2012 16:25 EST
FED Printing Cash for Prosperity

FED Printing Cash for Prosperity

By Harvey Carroll, Jr.

 

The FED Printing Cash for Prosperity "IN GOD WE TRUST"

 

Before I go into the plan, I wish to get you thinking a bit and tell a parable story so that you sort of grasp the current Federal Reserve System "The FED" that so many talk bad about and would like to do away with or convert back to a "Gold Standard", or "Tulip Standard", or "Shell Standards." They are pretty much all the same.

 

Okay, let`s say you are a great explorer like Christopher Columbus sailing to America for the First Time, or if you are a Science Fiction Fan you can think of visiting Earth in a spaceship. It does not really matter to me as to how you end up in America, just as long as you see the progress of the monetary system.

 

We see this great land, cruse up the Potomac River to find a Primitive Washington, D.C. We see these people are quite resourceful, very productive, have crops, dried fish and other goods; all in all, a very decent primitive society.

 

These people tend to like us very much and welcome us to become part of their community. They are very enthusiastic of our advancements in transportation, food storage and preparation, defensive weaponry, and our seriousness of purpose. We agree to work closely with this new land called America and form a Government that is to be of the people, by the people and for the people. These people have fears and wish to form a strong Defense and to focus on the General Welfare of its citizens. They hold elections and vote in a President, whose job it is to encourage economic activities, innovations and improve the quality of life via hard work and benefits of their labor.

 

The citizens of America have been conducting business with the use of trading goods and services among each other and using such things as seashells and even beads to represent money. There was talk of a tribe up north in New York that would trade and entire state for a few beads, but we did not need any more land that we had, so we just decided to stay there a bit longer and continue their progress.

 

Progress was made, as these people were very smart and innovative. We knew a bit about printing and offered to make things a bit simpler for the folks in America. We offered to modernize their economy and make it much more productive by printing money "Fiat Currency" more commonly known as "Paper Money."  

 

Fiat or Paper Money made vast improvement in the economy as transactions became much easier, simpler and convenient. Carrying around a bag full of seashells, beads and animal skins and other forms of barter was difficult and the new paper money became widely accepted. Some people were a bit skeptical and felt they should hoard and hold on to their seashells and beads and stated that the money may be pretty, but it is just paper and what good is paper, other than it is a bit more comfortable than the leaves after a trip to the outhouse.

 

So, the President makes it clear that they will be "Reserve Notes", and that the modernized economy will keep a strong record of the money, the economic transactions and that it will be the best and most efficient and convenient form of exchange. People trusted the elected President and agreed to swap in their existing seashells and beads for the paper money.

 

Even in primitive days, it was not free to live in America and it got even more expensive as it modernized more and more. The new American Government went through a series of Presidents over a few decades and the public wanted more and more public services (Police, Fire, Utilities, etc.); however, with each new project that improved the overall quality of living it needed to be paid for. So, a tax system was created to collect funds from citizens. Many said that why should they pay when the Government is the one printing the money; why can`t they just print themselves some money and pay for it.

 

This was a great point, but people accepted the idea of working, paying taxes as it tended to make them more comfortable as new roads, jobs and education was offered in exchange for taxes and money paid back to the Government. Almost made one feel good about working for something`s that improved their lives beyond, food, clothing and shelter that they spent most of their money on. In many ways they felt as if they were partners with the Government as they cared for it, it cared for them.

 

Yet, the Government and those of us that printed the money had a tough job, it had to be regulated and it had to be monitored as not to become disorderly. We wanted to earn our living as sort of bankers that would give us wealth to do what we wanted and we wanted to let only a reasonable amount of money out as not to create vast inflation or create so much money that people would leave private jobs to go work at much higher Government jobs. Therefore, we tried to keep Government and Private ventures separate, but offer Government work to private contractors to keep up the new Cities, and infrastructure.

 

NOW THAT THE STORY IS OVER, you can see that this is basically what the United States Government, the Treasury Department and the Federal Reserve System does. In Theory this is how the Government should operate and how they should be stewards of your money; however, we have seen during the Bush Administration, that Defense (which has been receiving 52% of the Discretionary Funds) has squandered Trillions of Dollars and the American Taxpayers have gotten little in return that improves their quality of life. Education only 7% and few infrastructure project funding going to our cities. All collected, sent to the Federal Government and squandered as opposed to doing what the Federal Government is supposed to do.

 

America is 15.4 Trillion in Debt; what will keep its value? Or modern monetary system is very complex; it is much more than making a simple deposit in a bank and using your ATM when you need it.

 

Like the use of seashells, beads, paper money, or now ATM Cards or Wire Transactions they are backed by the Federal Government`s ability to pay, based upon GDP (overall output and productivity of the country) " Money in its paper form is nothing more than well toilet paper like in our story; however, since it is backed by and required as our Federal Governments medium of exchange to purchase goods and services it becomes accepted as what it is intended to just like the conversion from seashells and beads in our story.

 

The Bush Administration were not good stewards of American`s money. It squandered trillions and exceeded the will of its citizens and their output and productivity. The Bush Administration from the year 2000 to now was directly and indirectly responsible for vast economic downturns in the American economy. Those downturns according to www.usdebtclock.org resulted in welfare tripling from 15 to 15 million people, the national debt tripling from around five trillion to over 15 trillion today (with a few trillion added by President Obama in the form of interest on the huge debt left him, and the needing to deal with health care, continue to bail out banks, industry and about 2/3rds of the American states that lost vast revenues in the economic downturn).

 

To add insult to economic injury the trade imbalance also tripled to nearly a 1 trillion dollar a year problem that has reduced America`s output and productivity as jobs shifted to the cheaper producers that have a percapita income of $1,000 to $4,000 a year while America`s percapita income is about $55,000 a year. Huge gaps that has cost American jobs, output and productivity that is destabilizing the American monetary system.

 

American`s and the world economy use the American Dollar or Federal Reserve Notes and expect America to be good stewards of their monetary system. Just like a family budget the Federal Government has to look at its income and expenses and recognize that the bond that holds the American monetary system together is the value of the output and productivity, along with the government`s ability to be a fiscally responsible.

 

Output or Productivity Jobs, money management, and taxes and regulations are the bonds that hold the American/World Economy together. If these three interconnected items become separated then the nation`s currency is at risk of collapse like occurred in the former Soviet Union. Jobs are of most important in America today as we hold a near 1 Trillion a year Trade Imbalance.

 

Ross Perot warned America about going down this path nearly twenty years ago. Perot was a wise man and I value him as a mentor and I have not only achieved many great things in Politics, but I have also obtained vast economic and finance skills to add to my Professional Public Administrators background because of the Perot movement. I even tried to carry on the Perot movement with a run for President in 2000 " Perot was also a solid advocate for money management and debt reduction; however, America`s national debt has more than Tripled since I ran for President in 2000.

 

Taxes have meandered all over the road, they have been cut as a tool to bribe Americans into keeping the Bush Administration in power while he raised Gas prices to the 2008 high that collapsed the Oil speculators bubble and the Biggest Fool`s were found left holding the speculative commodities as well as the inflated housing bubble holdings. Obviously, the American pension funds and the like, for it is usually the middle class and the poor the take the brunt of any policy or failed economic downturn. Yet, the current President Obama is now left with the must of raising unpopular taxes and dealing with higher and higher gas prices and being stuck in a conflicting world and being able to offer little in the form of improving the national economy and/or the standards of living that Government is designed to do.

 

If you liked this story I will offer a few links to prior stories that somewhat support this story. I will start by recognizing that President Obama has tried to reduce spending and focus on money management via his budget proposal here. I also discuss how the State and local Governments can benefit from Federal funds by expanding upon noted Economist Paul Krugman here, which discusses how important Comprehensive Planning " at the Local Level can enhance growth and development. I talk about a few of our failures in the American Economy in the Housing Market and our vast Defense blunders such as still being in Afghanistan even though the major combat operations were called off in 2003 by President Bush andDefense Secretary Rumsfeld as well as offering Peace Solutions in Israel which is the fuel for much of the near ½ trillion dollar Defense spending in the Middle East that is draining Americas blood and treasure.

 

In my beginning story I described the concept of seashells and beads being converted into the Fiat paper money system; I see seashells and beads as nothing more than a "Gold Standards" that people like Ron Paul and the end the FED movement is pushing. They have no clue that it is not the FED, but the lack of Government management, sound stewardship of money as I mentioned above; however, I will offer my opinion of the lack there of about Ron Paul and I give my dislike opinion of Senator Mitch McConnell (R) from Kentucky, which I feel he and his wife who was the longest serving Labor Secretary in history and lost more jobs in history of America.

 

While I am at it, I may as wells throw in the Mexican/American border issue in just for good measure. Lastly, since Republican Presidential Candidate Romney is appearing to have lost is mind. He recently is pointing to Russia as the number one threat to America trying to bring back the paranoid policies of the past that brought on the Cold War Arms Race, which was little more than a race with Russia to see who could go broke first. Russia just barely beat us. I feel it appropriate to close by recognizing that I have spent a great deal of time near, and travels through Russia in order to improve relations and I have seen them go through a couple decades of vast economic hardships, and I warned America as did Ross Perot not to take these same paths. Therefore, in order to try to prevent another Cold War I thought I would offer a new race with Russia... "An Education Race"...

 

Thank you and I hope we begin to get a more constructive government that can care for citizens as they deserve.

 

Harvey Carroll, Jr.