MartinG - I agree about the deficit spending - it is primarily a fiscal issue not monetary, meaning it's the legislature and executive branches responsibility. As for the source of the rat stench - don't forget, the Fed has regulatory powers as well - powers that it ignored for the benefit of the Commercial Banks. And yes, the Congress and Presidency share in the blame, but the Fed shouldn't be off the hook either. My prior post also brings up other Fed actions that are extremely questionable in my view.
Firstly, it's "PRINCIPAL", not "PRINCIPLE". Secondly, you have absolutely no idea how the banking system works, do you? It's really pointless for me to try to point out to you just how completely absurd what you wrote above is. Let me instead just tell you a couple of very quick things and I do hope you have the inclination to learn further yourself: a) the Fed does not, I repeat DOES NOT, create debt; b) the Fed creates bank reserves, but it PAYS, rather than receives, interest on these; c) the Fed's profits, excluding running costs, are returned to the US treasury in full. Please read a textbook, visit the Fed website, do some basic research, before you deem yourself worthy of passing judgement.
Misthos, I am not disagreeing with you on this. If people at the Fed (e.g. Greenspan, Geithner, etc) did stupid/criminal things, let them be held responsible. All I am saying is that, over the course of the past couple of years, as I have read and thought more and more about the various issues, it's become increasingly clear to me that the majority of the blame rests with the politicians. In fact, even now my mind boggles at how screwed up the US political process has to be to virtually guarantee the "cot death" of the Volcker Rule. So I'll just reiterate something I already mentioned in our previous conversation. Given a choice between the Fed and Congress, I'd go with the Fed any day, in spite of it having a record that is far from spotless.
I dislike your chart. why don't we point out all the entitlement programs, shameless redistribution, nationalization of industries, "free" healthcare, etc., as the "cause" for the projected deficit. posting a chart blaming tax cuts for the deficit insists on the premise that the cut taxes were formerly spent on worthwhile stuff that warrant continued spending.
The U.S. Government needs to obtain new sources of revenue that I believe will reverse the national deficit, state and local deficits, win all our wars, and just as a side-note, will substantially increase the quality of life in Africa. We need to legalize marijuana and use the Carbon Futures Energy Contract as reparations against countries that pollute excessively, and, essentially, pay off our debt by forcing the sale of pollution to every polluter. On November 21st, 2010 in California, I see an easy $200 billion to be made within the first six months following decriminalization, full legalization, taxation, and regulation.
thinking of this makes me snicker every time. It's like having all your stooges shill bidding your ebay auction. "hey japs, chinese: look at this demand!!! these things are flying off the shelf at 99 bucks! better bid the price up some more to make sure you get enough to meet your currency shennanigan needs!!" and then afterwards you wink and high five with all your shill buddies, laughing your ass off about screwing the only people that actually really traded some of their money for them... then have your buddies "buy" even more off the market when prices sag like a mofo, and you have enother auction coming up at which you want to screw the same customers some more. Having the fed just wipe all the treasury debt would be one of those "HA ha!" moments from the simpsons (the fat mean kid, whatever his name is). I just cant stop giggling about it...
Not sure what marijuana has to do with africa, but I like the idea of making up random charges for stuff we don't exacty do and then tell all our creditors that it offsets our obligation. It's like calling your car company and telling them your car has some sort of defect, and that you spent 150 hours identifying and correcting it, and that value directly offsets the loan liability, so you're all even-steven now. I think I'm starting to understand where marijuana fits in...
I do not smoke marijuana, but I doubt that the effects on individual health and on our society would be significantly different than the effects of alcohol. The people I have known who use marijuana are otherwise law abiding citizens. The revenue saved on law enforcement and imprisonment along with the financial benefits of tax revenue would be a significant boon for our economy. People who smoke marijuana are going to do so whether it is legal or not, so we may as well keep the money in the US rather than sending it to Central America. Legalization in California is simply a matter of time and the financial crisis will only facilitate the process due to the financial advantages. I say, the sooner the better.
Maybe have signed waivers. Health care waivers for smokers, dopers, and drinkers ... that must be signed stating that they waive any right for free health care and their organs can be had for free and do not resuscitate ... in order to buy any of these unhealthy products ... OH ... and the same goes for any and all politicians. Let the dead bury the dead? Or get sick at your own risk? It would up revenue a lot. Cut health-care costs and reduce the surplus population and provide a lot of extra organs for export and profit. [/rant]