Home | About | Donate

Trumping the Federal Debt without Playing the Default Card


#1

Trumping the Federal Debt without Playing the Default Card

Ellen Brown

“The United States can pay any debt it has because we can always print money to do that. So there is zero probability of default.” — Former Fed Chairman Alan Greenspan on Meet the Press, August 2011

In a post on “Sovereign Man” dated August 14th, Simon Black argued that Donald Trump may be the right man for the presidency:


#2

DN today interviews David Cay Johnson on his recent article "21 Questions for Donald Trump". I am reminded of the game '21 questions' - which is of course a game of discovery of what exactly the right questions are.

"...and with automation and the availability of cheap labor in vast global markets today, supply (productivity) can keep up with demand for decades to come."

And what is the relationship of the "cheap labor" to the lives of those being paid wages that are low relative to the economies and civil rights, access to fully human necessities, land, et al - not only in the locales in which they live but the pressures on their employers from global markets and ecological and community health - what exactly does this say about what it means to be a human being ?


#3

Despite warnings, Woodrow Wilson signed the 1913 Federal Reserve Act. A few years later he wrote: “I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated Governments in the civilized world no longer a Government by free opinion, no longer a Government by conviction and the vote of the majority, but a Government by the opinion and duress of a small group of dominant men.” -Woodrow Wilson


#4

I do not know if every detail of this article is accurate or not, but, as Ellen says, if we do not have full employment then demand is too weak for inflation to take hold. Yes, we truly have been missing a fine opportunity to upgrade infrastructure and yes, there are lots of worthwhile jobs for people that do not require the use of large amounts of resources and environmental degradation.


#5

Ellen, always look forward to your articles regarding monies. Again inflation comes up and I have to say that people in the real world out here try to make ends meet see inflation as rising sharply. Not only the cost of food has double and tripled over the last decade, housing is so high and not just buying, rent is ridiculous and I understand why so many people and families are living under bridges. Energy is high and jumps around and most cannot afford to convert to the lowering cost of clean energy.

Inflation has hit the middle class and the poor very, very hard as wages have not kept up for 30 or more years.
If it is that easy and so understandable, why is it not being done? They want to keep we the people of the world desperate and stressed. For once in my life I am glad I am old and do have enough to keep me safe and fed but who knows if prices keep up at this pace and property taxes drive me out of my house.
Sounds like a well planned, orchestrated gutting of we the people.


#6

Yes, rents are high, but energy costs are low--too low. Somehow energy use must be lowered and that will not happen with low energy costs. If one is creative and shops bargains, then one can eat at fairly reasonable cost, but there are so many fine, interesting foods, that it is difficult to do without choices that we love.


#8

It also must be pointed out how it is that the very wealthy use debt to make themselves ever richer.

Puerto Rico and Greece are examples of this. Both entities are in debt and there hedge fund managers that buy up ths debt for pennies on the dollar. Now if that debt "high risk" why would they buy it as an investment?

Well it quite simple. The fund managers go to the courts and lobby the politicians to ensure this debt can not be defaulted on. They insist that REAL assets such as infrastructure be turned over to them. See Argentina as an example where "vulture funds" went to various courts to insist a full payout of debt they had bought out.


#9

Whether its Bernie or Trump, I hope they will nominate Ellen Brown for VP.


#10

What it says to me is that wealth must be shared more equitably and for that to happen, power must be decentralized and in the hands of the public, not concentrated in the hands of their representatives.


#11

Great quote, thank you.


#12

"If either candidate makes it to the White House, he will be in a position to stand up to Wall Street ..."
Now that's one time I would love to see the Donald say "You're fired!" laughing


#13

I assume Trump is friends with some of those Wall Street folks.


#14

I don't know about Trump, but I DO know the postmenopausal Killary is! smirk


#15

The Constitution is absolutely clear about how we must pay our national debt. Article 1, Section 8: Congress has the power to levy taxes to pay debts.

If Congress today were to follow the Constitution, as the first Congress did, we wouldn't have a national debt. Our first debt was incurred fighting the Revolutionary War. Alexander Hamilton (probably the smartest guy in the room) knew what the Constitution says (probably because he was among the Founding Fathers who wrote it), so he proposed an excise tax on grain used to make whiskey to pay the debt (no income tax in the good old days). Hamilton, unlike anti-tax Republicans today, understood that if you want to raise revenue through taxation, you must tax the rich because they have the money to pay the tax. Since everybody drank a lot of whiskey in the good old days, the grain farmers were rich. As Willie Sutton famously said when asked why he robbed banks: "Because that is where the money is."

Anti-tax Republicans are supply-siders who want to cut taxes on the wealthy (Mitt Romney said on "60 Minutes" that he deserved to pay lower taxes because he created jobs"). We must somehow get them to understand that the Constitution mandates that they increase taxes on the wealthy to pay our debt.


#16

Woodrow Wilson was a racist who said he would not go to war (when he ran in 1916) and then proceeded to do just that after he was elected. America's entry into the Great War violated the Monroe Doctrine. William Jennings Bryan (Wilson's Secretary of State) resigned over Wilson taking the country to war.

When our nation began there was a debate between the Federalists (John Adams and Alexander Hamilton) who wanted a strong central government and a central bank to finance industrialization of the US, and Jefferson who wanted a small agrarian nation where yeomen farmers in sovereign states would preside over an evil federal government (not surprisingly Jefferson owned slaves). Jefferson was opposed to a central bank. We had a central bank until Old Hickory (Andrew Jackson, a southern Democrat from Tennessee--a pro-slave state--like Jefferson) killed the bank. This is why it had to be restored when Wilson was president.

We now are a world industrial power, not an agrarian nation of yeomen farmers, proving the Federalists correct and Jefferson wrong. We have the thinking of people like Hamilton to thank. The thinking of people like Wilson should be ignored.


#17

Are you aware the president appoints the chairman of the Fed? The Fed is a national bank, like the Bank of England.

Are you aware that TARP nationalized the big Wall Street banks (the government gave the banks money and got preferred stock; i.e., the government became part owner of the banks)? Socialism is when the government owns the means of production. So, TARP was socialism; socialism for the rich, that is.

Debt occus when Congress uses deficit spending instead of spending tax revenues. Slick Willie Clinton was able to produce a surplus at the end of his presidency because he raised taxes on the wealthy and held spending down.

George W. Bush cut Clinton's taxes on the wealthy and increased spending to fight two wars in the Middle East and institute Medicare Part D without paying for it. When you spend more money than you raise through taxation, you must borrow the difference. This creates a deficit. All the deficits produced after Bush became president ate up Clinton's surplus and increased our federal debt.


#18

The Civil War began because the pro-slave states opposed the power of the central government to end slavery. Are you sure you want to decentralize power today?

The best way to deal with wealth inequality would be to do what Teddy Roosevelt proposed. Teddy was so outraged by the excesses of the Gilded Age that he proposed steeply graduated income and inheritance taxes to redistribute the wealth.


#19

Agreed. We have to dream before we can materialize it. It's pretty clear the system is ready for an overhaul. We just need to design a program that works and some sort of computer model or video game to demonstrate it.


#20

Who wasn't a racist back then? Wilson was a puppet. Col. House ran the show and hired Lippmann and Bernays into selling the war to the American public. It's easy to whack people from yesteryear with today's more progressive standards; it is not always right to do so.


#21

The best democracies like Scandinavia, have near 100% voter turnout. They are some of the best examples of decentralization of power by democratic means. Bernie Sanders uses these as examples of good social democracies. Autocracy is dictatorship, rarely benevolent.

Progressive taxation in America has not worked because its Wall Street oligarchy makes the tax laws and most other laws. It does that through the politicians it owns. Their continuing voter suppression has resulted in 36% voter turnout that has allowed them to take over our government by tiny electoral margins.

Power decentralization works in Scandinavia, Switzerland and other democracies because the tax laws are made by the public through the politicians it votes for.

I don't expect to change your mind. Studies show that conservatism is a physical-anatomical trait that cannot be changed:

https://www.psychologytoday.com/blog/the-human-beast/201104/conservatives-big-fear-brain-study-finds