Governments Borrow Money

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Public verses Private Debt

When a person BORROWERS money to consume, he is borrowing against his  own future. That encumbers both the person and his future.    When the Nation CREATES money to build the future, it enriches the Nation and the Future.
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If money is used to build roads and bridges, we have roads and bridges. If money is used to created a modern energy transmission system, we have modern energy transmission . If money is used to give health care we have saved lives and improved the National Health care system. If we use money to educate, doctors, nurses, scientist, engineers and technologist for all areas of the application of science we have a modern and successful nation moving its citizens into the future.
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As to paying for it, we still have debt on the Civil War, World War I, World War II, the Korean War, The Cold War, two Bush Wars, and tax cuts for the rich by both Reagan and Bush. We have just rolled over the debt for 150 years Not one dime has been paid.
Can you point out to me how much your future has suffered for the debt we created 150 years ago. 

The only thing we paid for and received nothing for was the interest Corporate Banks and Investors in Money charge us. National Debt is always created and then rolled over at maturity to support The Money changers.  When it is borrowed outside of the Federal Reserve System for the purpose of helping private Investors and foreign Sovereign interest to hold their reserve currency in US dollars to earn interest, the tax payer is charged and receives no benefit in Goods & Services

 It eventually ends up as debt held by the Federal Government at the highest interest Money Changers can get and still keep the system viable.  If the Debt were financed by the Federal System itself at 0% interest, all the money would be used to benefit the needs of taxpayers and not people who had more money than they could spend

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The Politicians have created a great Lie about the dangers of debt to your grandchildren that has become conventional wisdom. They have had at least two reasons to do this. The want to be sure that inflation does not harm the value fixed capital interest of the very Rich.  The other reason is that they fear the creation of Social Safety network programs financed with free money. 

The Corporate Capitalist want a work force that is compelled to work at minimum wages without benefits or they starve. It is a labor solution based on the existence of wage-slaves This is the reason for the Debt Mantra ”You will destroy your Grandchildren” that we now repeat as if it were a prayer to the God of  Mammon

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Our Republic was founded on debt, the Revolution was not subsidized by the tooth fairy. The Revolutionary War was fought with notes issued by the Continentel Congress. The were assumed to be valid debt when the Constitution created the new Nation.  Our Railroads were built with Government Land Grands and subsidies before and after the Civil war. Only then they didn’t have to put up “Your Tax Dollars at Work” signs in those days.
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After the creation of the Federal Reserve System it became possible for the Government to finance all of its Debt with created money. It wasn’t usually done because that was not the reason the Private Bankers created the System. They simply need a method to create money for themselves and have it recognized as legal tender nation wide. They really preferred that the Treasure borrow money directly from them because it earned them a secure return on their surplus funds.
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Today Money is borrowed by Corporate Banks to provide a Debt Instrument for people to safely hold and profit from their savings [mostly the very rich]. In addition it gives foreign nations a place to hold the surplus dollars they accumulate from selling us more stuff than they buy.
-In addition we create money in the Federal Reserve System to buy US treasury Bonds & Notes on the secondary market to stabilize Debt in circulation . It is useful during times of war and times of high unemployment. It can be harmful during times of low unemployment because it causes inflation. 

It requires only the will to create the right tax policy to make surplus during good times and debt during hard times and stopping wars that just blow up money and only help the War Industries.

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The next logical move for the Fed is to require all Corporate Banks to remove their Reserves from Federal Reserve Banks and surrender their control of the Governing Body of the Fed.  It needs to be a Government operation only. 

We should serve as a lender to them at interest to earn money for the Government and provide them the money to finance the Capitalist Corporations as they conduct the normal business of the economy. It is time for Bankers to stop creating fortunes by moving money around and confine themselves financing the production of Goods & Services. Our Grandchildren will be all the better for it.


Copyright © William Hodge 2010

Rich & Poor

Using Money is the Creator of Value 

How to Cook a Goose in Three Decades.

The Capitalist economic system is based on the private

production of goods & services for the consumption of

the private citizen, Public institutions of government

and social institutions,

1. Employer (consumer)

2. Employee (consumer)

3. Government (consumer)

4. Social Institutions (consumer)

5. Consumer (employer – employee – government – social institutions.

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The Two major parts for most of our American history

was the interaction between employee and employer.

In the earlier years of this nation the employers were

entrepreneurs with very few employees. The only large

employers were governments who only represented a

small part of the of the work force except in time of war.

Because of a shortage of labor outside of the plantation

slavery system of the South, the earlier years were marked

by a balance of economic strength between components in

the free market system. In someways the Plantation system

was a precursor to Corporate America. It was the ultimate

imbalance between Employer and employee.

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Corporation began to become more important early in the

1800′s when some states began to grant them more flexible

powers of operations. In 1819, the U.S. Supreme Court granted

corporations a wider range of rights. The Corporation as a

whole was labeled an “artificial person,” possessing both

individuality and immortality. Because of the limited liabilities

of corporation they have become the primary method of doing

business of both the big and small employers.

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One of the growing needs of larger employer units was a

constant and universal currency to conduct efficient

transactions in the market place of the growing consumer.

The tension between Banking power and government

power had made a National Currency. The Greenbacks of Abraham Lincoln’s Treasury Department was the closest

creation until the birth of the Federal Reserve Banking System

in 1913.

In the interim there were some major bank Panics

that wrecked havoc between the production and consuming

components of the capitalist economy. Unfortunately the

Federal Reserve did not prevent the Greed of Banking interest

from causing two large Economic disasters including the

Great Depression triggered by the levered Stock market

Bubbled of 1929.

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The Banking reforms and Labor reforms of Roosevelt

during the 1930′s set up a stabilized condition between

the rise of Corporate Capitalism and Union Labor.

The Wealth spread between the Middle Class and the

wealthy elite narrowed and 50 Years of prosperity ensued.

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Then came Reaganomics. The Banking reforms were gutted.

The Rich were give the larger slice of the Economic pie and

were trusted to trickle down on the Middle Class. He broke

the back of of the Union movement and made the wage

earner a slave without power to the Corporate Capitalist.

The Middle Class languished and is now dieing. The Corporate

Capitalist shifted the wealth to themselves at the same

percentage that existed under the imperial rule of Hoover and

the Bankers. Once again Bankers had the power to leverage

money to make money with out adding anything to the

consumption equation.

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The Corporate Capitalist that were engaged in the

Production, Employment, Consumption cycle were

in the meantime killing the Goose in the search of the

Gold they wanted so badly. Technology and offshore

job transfers were expanding the profit with great

rapidity while the purchase power of the working class

was rapidly declining. The Middle Class was sliding

into limbo. The economy was being carried on the backs

of the Credit cards that Banking was getting rich on and

the inflation of the Housing Boom was creating a spending

boom among the privilege class of home owners.

The Boom Busted, the Bankers begged, Bushed Bailed.

Every Banker took home a Bonus and all was happy 

among the Financial Barons.

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There was one small flaw in the plan. With credit dead

in the water due to the the Housing mess and the tight

credit market and the rash of Bankruptcies destroyed the

 consumption by the labor market .

Business is recovering because Technology and layoff

have made them profitable. But consumption and hiring

will be slow returning.   Republicans were in House and Senate

 Screaming “Burn baby Burn”   

It is their hope to pick up the pieces of power and they could

care less about who pays the price. They have and will block

every piece of legislation that is designed to uplift the

American worker and try to force the Congress to save the

unseemly rewards that have been reaped by the most wealthy

among us.

 I have news for the Corporate Capitalist who want

someone to buy their stuff. The Bankers have cleaned your clock

And they are busy resetting time to make another rape of the

old system and you will be among the victims.

Copyright © William Hodge 2010

1. Jennifer Lancey Says:
   August 3rd, 2010 at 10:22 pm
   Great Blog post. I am going to bookmark and read more often. I love the Blog template
   

Invention and Farming

Technology will create Social Change

I know that Technology and the Information age is dramatically changing the world we live in. I often hear the complaint that we are shipping our jobs off shore. Yet my own observation has been that a lot more jobs have disappeared from the advent of automation. With the rapid development of computer power and the role I have seen it play in my lifetime, I know that it is going to dramatically change the way we live and what we are going to have to know to survive in the Future World. I also know that the future is closer than we think.

…

In order to get a clear picture how invention of new ways to do things can change the way of life in a society, I researched the effect of Inventions on agriculture. I already knew the effect of the Cotton Gin on Southern Plantation lifestyle and the spread of slavery. I also knew that invention of the Harvester had dramatically change the productivity of Grain in this country and in the world. This link provides a good summary of those changes over time

…

A History of American Agriculture

1776-1990

http://inventors.about.com/library/inventors/blfarm1.htm

…

How invention increased wheat production

1830 – About 250-300 labor-hours required to produce 100 bushels (5 acres) of wheat with walking plow, brush harrow, hand broadcast of seed, sickle, and flail

1890 – 40-50 labor-hours required to produce 100 bushels (5 acres) of wheat with gang plow, seeder, harrow, binder, thresher, wagons, and horses

1930 – 15-20 labor-hours required to produce 100 bushels (5 acres) of wheat with 3-bottom gang plow, tractor, 10-foot tandem disk, harrow, 12-foot combine, and trucks

1965 – 5 labor-hours required to produce 100 bushels (3 1/3 acres) of wheat with tractor, 12-foot plow, 14-foot drill, 14-foot self-propelled combine, and trucks

1975 – 3-3/4 labor-hours required to produce 100 bushels (3 acres) of wheat with tractor, 30-foot sweep disk, 27-foot drill, 22-foot self-propelled combine, and trucks

1987 – 3 labor-hours required to produce 100 bushels (3 acres) of wheat with tractor, 35-foot sweep disk, 30-foot drill, 25-foot self-propelled combine, and trucks

In one hundred and fifty seven(157) years it went from 300 hours to 3 hours to produce a bushel of wheat.

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How invention increased corn production

1850 – About 75-90 labor-hours required to produce 100 bushels of corn (2-1/2 acres) with walking plow, harrow, and hand planting

1890 – 35-40 labor-hours required to produce 100 bushels (2-1/2 acres) of corn with 2-bottom gang plow, disk and peg-tooth harrow, and 2-row planter

1930 – 15-20 labor-hours required to produce 100 bushels (2-1/2 acres) of corn with 2-bottom gang plow, 7-foot tandem disk, 4-section harrow, and 2-row planters, cultivators, and pickers

1945 – 10-14 labor-hours required to produce 100 bushels (2 acres) of corn with tractor, 3-bottom plow, 10-foot tandem disk, 4-section harrow, 4-row planters and cultivators, and 2-row picker

1975 – 3-1/3 labor-hours required to produce 100 bushels (1-1/8 acres) of corn with tractor, 5-bottom plow, 20-foot tandem disk, planter, 20-foot herbicide applicator, 12-foot self-propelled combine, and trucks

In one hundred and twenty five(125) years it
went from 90 hours to 3-1/2 hours to produce a
bushel of corn.

…

…

How invention reduced labor.

1930 – One farmer supplied 9.8 persons in the United States and abroad

1940 – One farmer supplied 10.7 persons in the United States and abroad

1950 – One farmer supplied 15.5 persons in the United States and abroad

1960 – One farmer supplied 25.8 persons in the United States and abroad

1970 – One farmer supplied 75.8 persons in the United States and abroad

In 40 years a farmer went from supplying 9.8 persons to supplying 75.8 persons in the United States and abroad.

.

Invention has contributed to the rise of
civilization from Sumer to Egypt to Babylon to
Persia to Greece to Rome and beyond. They contributed to the rise and disappeared with the fall of Power passed from generation to generation and was corrupted from within or destroyed by circumstance without
.

Some knowledge survived to help those who followed but not enough to preserve a continuum of growth. With the rise of both world commerce and the birth of rudimentary democracy we have entered a period a rapidly expanding mechanization, energy generation and now automation. 

 We are now making advances in science & technology and culture changing advances in twenty years that once took a hundred. The question is if we can advance the cooperative nature of humans fast enough to prevent the competitive nature from shaking society apart at its very foundations.

In a short period of time the means to produce the basic necessities of goods and service for us all will be produced by a small part of the population. I have tried to illustrate this process by showing the shrinking role of agriculture in society over the last 100 years. 

All parts of essential need will be supplied by an equally small part of the community. The problem is how do we value the lives of those who are not really needed to make the essentials of survival and how do we distribute the basic needs of life to all. 

 Does each living human have intrinsic value or will we discard those that we don’t value. If interdependent cooperative values are ascendant, then we will preserve all life that we can. If independent competitive values prevail then democracy will crumple and selfishness will determine the value of life. The world you choose to create stands in the balance.

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Copyright © William Hodge 2010

Thursday, July 08, 2010

Error of Libertarianism

For a Libertarian the greatest value is his own life. The value

of self is instinctive, even before the born knows he has been

born. Even before there is awareness that there is self

awareness among others, he who is born is demanding

service from his community. The newly born commits

his first act of selfishness before he is self aware.

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When he reaches the age of perception, he must

learn to evaluate his role among others. If he owns

his life will he rule or serve or share. The choices

he makes will depend on how he values those with

whom he competes and cooperates for achievement.

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When the Libertarian has come to the perception

that he is one among many, he must decide if he

wishes to live by separating his life value from

others. Is he independent, working to achieve

personal liberty measured by acquisition of

property and levels of achievement in comparison

to fellow human beings. In other words is he

better than others. Or is he interdependent

where his success is measured by his contribution

to the success of all members of the community.

Or is he a combination of both ideals.

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The First Principle of Libertarianism is self ownership.

That is self evident. The property of self is based on

the subjective concept of “I am” The only existence

of self is internal. In the subjective world another

“self” is perceived by empathy and not by perception

0f the senses.

….

The second Principle is Liberty. That too is an internal

concept. It is the notion that you have the right to

take objective action and not be interfered with by

others. It is a desirable ideal as it relates to the

freedom of action by the subjective self. But in fact

it does not exist in the real (perceived) world. Others

can by their own choice interfere with your desires

or actions. Your liberty(freedom of action) depends

on the successful use of superior force or cooperative

agreement. Their is no independence of action in

objective reality. All things are interrelated and

interdependent.

. . . .

The third principle is the concept that property is

the the fruit of your labor. It is the product of time,

energy and talent. That also is a mental concept

and has no objective reality. Property is most

commonly considered real estate but it can be

produced goods or currency. Real estate is an

artificial construct that has no equivalence in

the natural(objective) reality. It is created and

granted and protected as a privilege by the state.

Even other Goods are not usually the product of

the time , energy, and talent of an individual.

They are instead produced by the combined and

interdependent skill and effort of the whole community.

No single individual ever gathers the fiber,

spins the thread, weaves the cloth, and cuts the

pattern to sew his own clothes. Nor does he build

the tools that are used to accomplish these task.

Ownership of Real property is a privilege created

and granted by the state. All other products are

created by the interdependent cooperative efforts

of a functioning community.

….

Libertarianism is not possible in the real world.

It rejects the notion of power to compel individual

behavior by a state or powerful group. It is predicated on the notion

that all things can be done by contractual agreement

between the members of a group that has assembled

to accomplish a particular task or function. It is

dependent on the agreement between the contracting

members on how to share the fruits of their labor

according to the degree or complexity of each

participants contribution. It then must decided how

to adjudicate disagreements between the participants.

This model has to be repeated a thousand  times over to

accomplish the huge variety of tasks necessary in a

modern complex society. 

 Then each task group must

enter contractual agreements with other groups for

trading their respective goods and services.

There must also be groups set up and funded to

prevent strife between competing groups. All of this

must be accomplish with out any kind of state that

would have power to force compliance of acceptable

behavior between all of these contractual groups

spread all over the world.

….

Libertarianism is a very nice philosophical ideal using

words that we value because they they have been

used to describe the creation of our current Democratic

Republic. They are high sounding principals of historic

idealism. 

 The problem is that they are just words that

lack substance and meaning. They would melt away

like snow in in a heat wave if there was the slightest

chance of creating them in the first place.

We must deal with the world as we perceive its reality

and not as we dream it should be. It is built one stone

at a time and torn down and built again as condition

change. One thing that both history and science has

taught us is that the only thing does not change is the

fact that everything does change. 

We must put aside the notion that each of us are independent  

We must deal with the truth that every life is dependent on both the

competitive nature and the cooperative nature of the

human community.

. . . .

Copyright © William Hodge 2010

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1. Neil B Says:July 4th, 2010 at 7:56 pm
   William, check out the non-libertarian FAQ if you haven’t:http://world.std.com/~mhuben/faq.html