From Global Research:
U.S. Treasury Secretary Henry M. Paulson, Jr., has joined the chorus of those in high places who are warning of a major worldwide economic downturn.
Paulson was quoted at length in a July 23, 2007, article in Fortune by Rik Kirkland entitled, “The Greatest Economic Boom Ever: Enjoy It While It Lasts.” Paulson’s remarks came in the context of assessing the ability of the highly-leveraged equity, hedge, and derivative markets to withstand the shocks to come. He told Fortune in an interview:
“We haven’t had a global financial shock since 1998. I believe that these large and dramatic increases in private pools of capital and in the credit derivatives markets since then have helped manage and disperse risk and make the economy more efficient. When we do have one—and it’s when, not if; that’s not me being negative, it’s just that we’re not going to defy economic gravity—we’ll be seeing for the first time how some of these instruments perform under stress.”
The Fortune article notes that the fate of the global economy depends in large measure on the ability of the U.S. consumer to continue to buy what the rest of the world produces. But, as Fortune indicates, the economic fundamentals continue to move in the wrong direction.
The U.S. current account deficit, they point out, continues to plunge, heading toward the $900 billion mark, almost nine percent of GDP. U.S. household debt as a percentage of personal income has shot up almost thirty-five percent since 2000. While real income stagnates for the U.S. middle class, asset and commodity prices are surging, with gasoline prices leading the way and the Goldman Sachs Commodity Index doubling since 2001. Financing in the business world is increasingly shaky, with loans to companies with “junk” credit ratings soaring from under $50 billion a year in 2001 to over $200 billion in 2006.
So in other words, the economy has to obey the laws of Newtonian physics, “What goes up, must come down.”
No sh*t Sherlock. Everyone in alternative media on the InnerTubes here has known for quite a while now that that the falsely inflated property values and cheap credit allowing people to spend more than what that earn (which is falling by the day) has been fueling this fake “growing” economy. The sub-prime lending bust is just a precursor to further calamities. But our fearless leaders, Bu$hco and Cheneyburton have of course been silent about this:
What are the politicians saying? Both President George W. Bush and Vice President Richard Cheney, who may be hoping to escape in one piece after eight years of economic malpractice, are silent on the subject of a possible downturn.
Why should they say anything, as far as they’re concerned, especially the NWO patsy Bu$h, it’s “mission accomplished”. Having bankrupted the U.S. economy stupendously through wars for oil resources and cutting taxes for his elitist pals, Bu$h has virtually garuanteed that a crash is inevitable.
But what do the potential Presidential candidates have to say about it? Not much:
Also silent, unfortunately, are Republican and Democratic front-runners Rudy Giuliani and Hillary Clinton.
So obsessed with his image of having been in the vicinity of the Twin Towers on September 11, 2001, Giuliani seems blissfully unaware that there is such a thing as an economy.
Though Clinton speaks of the need for economic fairness, she has few concrete proposals for getting us there. She must also bear some degree of association with the failed policies of her husband’s administration which brought us the strong dollar, the dot-com bubble, and NAFTA, all of which led to the bust of 2000-2002 and the outsourcing of huge numbers of U.S. manufacturing jobs.
The only Republican who speaks to broad economic issues is Ron Paul, who has called for the Federal Reserve to be abolished as a step toward financial sanity. We’ll see how Dr. Paul, a long-shot to say the least, fares in the Republican primaries. Party kingmakers are terrified of his rising grassroots support.
On the Democratic side, John Edwards has established his credentials in speaking for the millions of Americans in poverty who have been left out and is broadening his message to include the middle class as well. At the end of a three-day poverty tour to Appalachia, Edwards said in a July 18 speech in Prestonburg, Kentucky, “This cause, this march we’re on, is not just about the poor. Everybody’s at risk. Everybody’s vulnerable.”
Candidate Barak Obama has also discovered the anti-poverty theme, while Congressman Dennis Kucinich has consistently been emphasizing ideas of economic reform while proposing the creation of jobs through such proposals as a Federal Infrastructure Modernization Bank.
I don’t agree with Ron Paul’s economic policies per se, because he advocates no help for the poor and indigent, other than private charities. But I do agree with his stand on abolishing the Federal Reserve System, which he knows is a tool for the NWO and government fascism. His grass-roots support is a surprise for the NWO elites and there’s an extensive campaign to discredit him. It ain’t workin’. But the chances of him getting nominated on the GOPer ticket is zero given that he’s a classic conservative, not a fascist neocon imperialist.
Back on topic, the article’s author offers up a solution to the coming crash and the point of my screed today:
A truly comprehensive program of monetary reform, as I have described in other articles, would provide purchasing power to consumers, businesses, and government at a rate that would match the incredible productivity brought into existence by modern science and technology. This injection of purchasing power, over and above earnings, should no longer be carried out through the unfair and outmoded methodology of bank-created debt.
In other words, there should be enough cash and credit in circulation to purchase what industry can produce, and for people to obtain what they need for a decent life, without our economy constantly having to go deeper and deeper into the red.
To accomplish this, the government can and should make direct cash allocations to individuals without recourse to taxation or borrowing. This infusion of purchasing power is needed because income from jobs cannot keep up with total production when a large portion of industrial earnings is withheld for future innovation, as must be done in today’s technology-rich environment.
For a business entity to remain profitable, it must save and reinvest. These savings are recovered through prices that exceed purchasing power distributed through wages, salaries, and dividends. This leaves a “gap” which today is filled by bank-credit. But it’s the wrong way to run an economy. The gap, which is a normal feature of industrial production, should instead be filled by free government-distributed credit through what has been called a National Dividend.
A National Dividend should not be tied to employment. It should be obvious that as fewer workers are needed to produce more and more goods and services, the benefits of rising productivity can only be realized if the government provides purchasing power to individuals and families whether they are working at the moment or not. Such allocations could be made without inflationary pressures as long as they did not exceed the economy’s producing potential.
Similarly, the system of public finance whereby the banking system creates credit out of nothing in order to lend money back to the government has never made sense. As Thomas Edison and others in U.S. history have pointed out, the government can just as well create and spend interest-free money directly into circulation as was done successfully with the Greenbacks during the nineteenth century.
A comprehensive system of reform measures suitable to today’s conditions would include 1) cancellation of substantial portions of existing debt; 2) direct issuance by the government of a guaranteed basic income/National Dividend that would average at least $12,500 per person per year; 3) direct spending by government on infrastructure improvements; 4) a new system of low-cost credit for consumers and small businesses; 5) abolishment of the Federal Reserve as a bank of issue with its retention only as a financial transaction clearinghouse; and 6) elimination from the capital markets of all bank lending for financial speculation through return to the “real bills” doctrine of lending.
These provisions would acknowledge the awesome power of credit creation as a public utility as provided for by the U.S. Constitution in the section that grants Congress the authority to regulate the money supply. Such a program would also allow a significant reduction in taxation. Day-to-day responsibility should be vested in a Monetary Control Board reporting to the executive branch, as provided for in the model American Monetary Act drafted by the American Monetary Institute.
If I read this correctly, he is advocating direct government income to citizens in order for them to survive economic down-turns and to buy the everyday necessities. Small businesses would also receive direct payment from the government. But what does this plan eerily sound like?
If you said communism, give yourself a reward of your choice. My theory is that in order to accomplish this plan, the economic system has to be totally destroyed first before any of this can be implemented, the whole shooting match has to be done from scratch. Wouldn’t that be an opportune time for the amero to be introduced? Wouldn’t that also be a good time to form an economic zone that encompasses Canada, U.S. and Mexico, because government officials would bloviate the benefits of joining the economies of all of North America to recover from financial ruin?
Am I nuts? Am I a tinfoil hat crazy? You bet. But look around yourself for a change. What do you see?