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  • Obama, the Fed, Jobs and the U.S. Economy

    by Founder on April 4, 2011

    in Voice of the People

    Our economic decline is all around us, there for anyone to see. It manifests itself in the empty stores, closed restaurants, a house that can’t be sold, the story of a young college graduate unable to find a job, an older person laid off and losing hope of once again being a productive member of society, a homeless person when none stood before and tent cities.

    The old media outlets tell us that we are in the midst of a recovery and site, for instance, that 192,000 new jobs were created last month. That statistic, like almost all that come from Washington DC, is a lie – meant to mislead us into supporting the current regime.

    According to statistician John Williams, and Paul Craig Roberts, former Assistant Secretary to the U.S. Treasury, there were NOT 192,000 jobs created, the reported gain was overstated by 230,000 jobs! In other words the reality is that about 38,000 jobs were lost in February!

    The job gains are overstated and the losses understated by the Bureau of Labor Statistics Birth-Death Model which assumes that – if a company goes out of business and, therefore, doesn’t report its payroll, the previously reported employees are still in place! In addition, the BLS adds 30,000 jobs to the monthly numbers as an estimate of new start-ups!

    Just what causes an economy to grow, and provide people with an increasing number of better jobs?

    The answer? – An increasing pool of private savings invested in private productive enterprises. That increased capital accumulation leads to more goods and services being produced, and causes their prices to fall which allows the average person to buy more with their income!

    Surplus production is exported, and as those exports are paid for, the inflow of foreign capital can further finance an increase in domestic production, creating more jobs.

    The Chinese have figured this out. They have been saving 50% of their income and that capital has created a vast increase in better jobs. Over the past decade, U.S. savings averaged less than 5%, and after the politicians took what they could to pay their debts, there was little left for private investment. We are daily told to consume, using more of our scarce capital everyday.

    A free economy perfects its balance of savings and consumption by spontaneously adjusting the interest rates paid. If more savings are needed, a free market will cause interest rates to rise, enticing people to save more. If a surplus of savings were available, the interest rates would fall, enticing people to save less and consume more.

    Regrettably,  we enjoy no free market in interest rates. Instead we are saddled with a Socialist central planning, banking cartel – called the Federal Reserve – that has suppressed the interest rates to near zero percent by creating TRILLIONS of dollars – out of thin air! The Fed not only destroyed our savings, it has:

    • Enabled the massing of a debt so large that defaults are inevitable
    • Created the bubbles, booms and busts in our economy
    • Financed endless wars
    • And has guaranteed massive price inflation

    Our 22% total unemployment is one consequence of this government made disaster.

    In the 1930′s long lines of hopeless people applying for jobs or waiting at a soup kitchen were seen , but today politicians have dispersed these lines by converting our scarce capital, that would have created jobs, into consumptive hush money called, in Orwellian newspeak, unemployment compensation.

    The Fed should be immediately liquidated so we can return to our honest, legal money and market based interest rates, but we can do much more to free up capital for investment.

    We can do what President Harding did in 1920 when faced with a great depression caused by the Feds financing of WWI – he slashed government spending in half! This freeing up of capital for private use quickly ended the depression of 1920 and fueled a decade of great prosperity – the roaring twenties!

    How can we do the same? By focusing on our military budget, whose total annual and direct opportunity costs now exceed $2 TRILLION!

    If the purpose of the “defense budget” is to “defend” us, just who are we defending ourselves from? Any ground invasion of our country would need to proceed across the Mexican or Canadian borders. Does anyone really believe this might happen?

    The alternative is that our coastlines be invaded by naval forces, yet no other country has a navy of any significance. It should be obvious that almost all of our military budget is NOT to provide for our defense – but rather it is designed to expand an empire for the benefit of the politicians and the Military/Industrial Complex.

    In the unlikely event that we are invaded, our Founders wisely laid out the means by which we are to defend ourselves. Article 1, Section 8 of the United States Constitution states “the Congress shall have the power to raise and support armies, but no appropriation of money to that use shall be for a longer term than two years”. In other words a “standing army” can be raised only temporarily to address an emergency.

    The Constitution also says “Congress shall have the power to provide for calling forth the Militia to execute the Laws of the Union, suppress insurrections and repel invasions”. In other words a “Militia” was to provide for the National defense, much as it successfully does today in Switzerland. The militia was the whole of the able bodied people, to be called up if needed, to repel invasions.

    The Founding generation considered the need to rely on State Militias so obvious that they stated it with just that much confidence in the 2nd Amendment to the Constitution. It asserts “A well regulated militia, being necessary to the security of a free state…”.

    Let’s follow the wisdom of the Founders by bringing home all our soldiers from around the world, and sell their bases thereby eliminating almost the entire Defense Department budget, end the Fed, and restore our Constitutional militia system. Doing so will restore our freedom, and improve our security through decentralization, non-intervention and by improving our economic strength.

    In freeing ourselves we will likely find that we enable the struggling peoples of the world yearning to breathe free - to also break free of their oppressors.

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