Don’t Fear the Truth

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Basically, stories about rice being rationed at Cosco are a joke, after you read that people in Haiti are eating MUD PIES. This is not a joke, they use a type of clay, add fat to it, and then eat it.

Here is where I get mad.

The US Defense budget is about $500 Billion a year. 2008 is estimated at over $600 Billion. These numbers are just planned budgets, not actual spending. We spend more than this.

The second highest defense budge in the world is China, at about $60 billion per year. Meanwhile “The United Nations estimates that the cost to end world hunger completely, along with diseases related to hunger and poverty, is about $195 billion a year.”

$195 billion a year would end world hunger completely?

So the US could cut its military spending by enough to wipe out world hunger, and still spend 6-7 times more than the number two military country in the world.

Actually, I am not a fan of just sending countries aid. Welfare only keeps people poor, and I don’t think the citizens of these countries just want hand outs - they want the tools and education to make it on their own. Contrary to popular belief not everyone in Africa welcomes the food we send them. To quote the article:

We can continue the endless cycle of need and dependency, or you can create jobs, develop indigenous capacity, and build a sustainable future.

Aid not only crowds out local entrepreneurship, it makes governments lazy and deprives countries of the incentive to build effective institutions. Public revenue derived from taxes makes governments directly responsible to their citizens. Free money builds white elephants and bloated bureaucracies, it being far easier to create new government jobs than implement policies to fight unemployment, especially when someone else is footing the bill.

Some Africans have even asked that the UN stop sending food to Africa.

Lets recap:

• Sending free food to poor nations only encourages corruption and laziness, and ensures the cycle of poverty and hunger continue.
• The US and other industrialized nations continue to send food to poor nations. These nations are still hungry though, people are still dying every day.
• The US alone could cut its military budget by 33% - think about this, just a 33% decrease - apply that money to distributing free food to poor nations, and end world hunger. Yet they do not, they send some food and aid, but continue to spend three times the money on its military than it would take to end world hunger. The US would still, after this decrease, be spending 6-7 times what China, the number two militarized nation in the world, spends on its military.
• “The World Bank wants developing countries to introduce market reforms, including the abolition of protective tariffs, a move that often causes massive damage to local agriculture.”

It would appear then, that if people in power really believed that free food would solve world hunger, that the US on its own could do so pretty easily. Yet we do not.

If the people in power know that sending $195 billion in free food per year would not really fix the problem, why do we continue to send smaller amounts of free food?

A case could be made that the industrialized world does not want too many of the poor countries to industrialize. Especially Africa. As noted above, the World Bank pushes reforms that cause huge problems for poor nations. This article in the NYTimes even shows how Malawi, a country in Africa started feeding its own people and even selling surplus food to other countries - they ignored the advice given to them by the World Bank, and US Economics ‘experts’. This article really proves that the US is purposely trying keep these nations poor, and starving. How? It states:

Over the past 20 years, the World Bank and some rich nations Malawi depends on for aid have periodically pressed this small, landlocked country to adhere to free market policies and cut back or eliminate fertilizer subsidies, even as the United States and Europe extensively subsidized their own farmers.

The US is planning on spending $288 billion on farm subsidies - yet we tell African nations not to subsidize their own farming. Malawi decides to go on its own and subsidize farming… and now they have so much food, they are exporting it.

Possibly this is not all planned. I would like to think so, actually. But the evidence is pretty strong. Sending free food is not helping, rich nations are counseling poor nations to use economic policies that they themselves do not use. The US could easily wipe out hunger if it truly felt that sending free food would help these countries.

In a time when oil is getting harder to find, maybe people in power understand that natural resources are limited, and the more countries become industrialized, the more we will have to share with the rest of the world. The US could not sustain its lifestyle if we did not import natural resources, and by keeping poor nations from industrializing, we can buy their natural resources and even claim that it helps their country - which it would, if many of the nations in Africa were not controlled by dictators, and overrun with corruption… which is coincidentally, promoted by the policy of sending them free food…

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The Fed can ‘create’ money, and it does. Do they print money at will? No. The key to inflating a currency is to keep is slow. The inflation we are seeing seems to be the result of multiple factors that I am still researching and won’t get into here.

I was skeptical of the idea that our income taxes ALL went directly to make a few guys rich when I first heard it, so I started digging. Eventually I found the source, I think, of all of these rumors. It is called the Grace Commission Report. The link goes to a pdf that shows you the original report.

The report does have some pretty amazing information about our income taxes. On page 14 it says that:

Resistance to additional income taxes would be even more widespread if people were aware that:

• One-third of all their taxes is consumed by waste and inefficiency in the Federal Government…
  
• Another one-third of all their taxes escapes collection from others as the underground economy blossoms in direct proportion to tax increases and places even more pressure on law abiding tax-payers, promoting still more underground economy — a vicious circle that must be broken.
  
• With two-thirds of everyone’s personal income taxes wasted or not collected, 100 percent of what is collected is absorbed solely by the interest on the Federal Debt and by Federal Government contributions to transfer payments. In other words, all individual income tax revenues are gone before one nickel is spent on the services which taxpayers expect from their Government.

This does not say that the money goes into the pockets of international bankers. It does not say that we pay interest on every dollar created - another rumor.

I actually have some doubts about the whole Grace Commission report too. Maybe the report itself was to push some agenda. A quick search finds one of the Grace Commission authors, Phillip N. Truluck. He is the COO of The Heritage Foundation, a conservative think tank. He worked for Strom Thurmond, a racist. Hey if they can blame Obama for what his pastor says, then we can blame this guy for working for a racist. A think tank is an organization of private individuals who try to influence, and sometimes even write up, political policies of all types. Private individuals, all rich, who are influencing government. Why is this legal again, to let unelected individuals influence our government? Anyway, just look at their home page. “What would Reagan do.” Reagan broke labor unions, repealed labor laws, funded dictatorships, and was generally a shitty, shitty president. All conservatives, for some reason, love Reagan. Probably because he reduced inflation - by removing housing from the CPI index, which means that housing is not calculated into inflation. I would think this explains how we claim our inflation has been low for 10 years, while our housing prices skyrocketed… I am no expert on the CPI though, feel free to correct me on this.

Back to the report. This Grace Commission report was written for Reagan. Notice also on page 14 where it says:

Importantly, any meaningful increases in taxes from personal income would have to come from lower and middle income families, as 90 percent of all personal taxable income is generated below the taxable income level of $35,000. Further, there isn’t much more that can be extracted from high income brackets.

It goes on to propose that if the government took 100% of all income from the upper class bracket, it would only run the government for 7 days. This is… a horrible argument. They are claiming that the rich should not be taxed further by showing that all of the income for the top bracket *IF it were the only source of revenue for the government* would only run it for 7 days? Does this show that increasing taxes for that bracket would not help at all? No.

To me, this sounds like Republican Propaganda. “Lower taxes! You can’t tax the rich any more, it won’t help!”

I also have an issue with the logic of the explanation of where the taxes go. They claim 1/3 goes to waste and inefficiency. How? Inefficient does not mean the money does nothing, it implies it is not being used effectively. Yet they claim that this means the money does *nothing* to help the tax payers. Then they claim that another 1/3 is never collected. So 1/3 of our income taxes is not collected? If it is not collected due to the reasons they present, then it is never recorded, and the government does not even know it is lost! The idea is that businesses ‘hide’ revenue, and so they do not pay tax on it, or people avoid paying the taxes in other ways. No business tells the government they owe $X dollars in taxes, and just does not pay. They are lying about how much they charged in taxes. This is a lost opportunity for revenue, but it is not *paid* income taxes that are then lost or misused, or wasted. It is money the government never had. Again, I am no expert here, someone correct me if I am wrong.

If you watch the documentary ‘The Power of Nightmares’, you can see how neocons like Rummsfeld and Wolfowitz were involved in making Reagan believe the Russian threat was greater than it was. Perhaps this report was to fool Reagan into believing that there were justified reasons to reduce taxes for the rich, and to tax the poor more? This is pretty much what this report states, using horrible, horrible arguments.

The income tax was put in place in 1913, pushed by ‘progressives’ the same group pushed for the Federal Reserve Act. In 1914, Woodrow Wilson started attacking other nations. He attacked Mexico alone SEVEN times in his presidency. The income tax gave the federal government a huge income. As you can read here, the real reason for Prohibition was that the income tax was generating so much revenue, that the government did not need the alcohol tax anymore. Prohibition had been pushed for decades before 1920. They repealed Prohibition because the Great Depression caused income tax revenue to drop dramatically. Surprise! Alcohol is made legal, for tax money.

As far as I can tell, the US started attacking neighboring nations in 1914. It would seem logical that if you want to wage war, you need money. Possibly the income tax was just put in place to fund the American Empire.

No matter what the purpose though, the money is most definitely not going into some banker’s pocket.

If someone can prove me wrong there, well just leave a comment here and I will start changing my banner.

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When Hussein started selling oil in Euros, it attacked the dollar’s dominance as the world currency. And of course, two other countries tried, or are trying, to follow suit. Venezuela tried in 2001, and within a year Chavez was almost removed in a military coup - in the Ron Paul speech I linked to above, he states it is widely rumored that our CIA was involved in that coup.

And now Iran is starting its own oil bourse (exchange).

Notice a trend here?

Luckily for Bush, 9/11 happened not long after Hussein started selling oil in Euros, otherwise we would not be in Iraq. Interestingly, all Iraqi reserves were quickly converted back to US dollars once we took over, and oil was once again sold in US dollars. Boy were we lucky we had an excuse to get our military into the Middle East. Whew.

To add some fuel to the fire, you have Peak Oil. The link goes to a US Department of Energy Report, called the Hirsch Report, that talks about the peaking of world oil supplies, and future ‘energy shortages.’ Oh, and US and UK oil companies are also going to reap profits from the sale of Iraqi oil. Like icing on the cake.

Luckily we are in Iraq, making permanent bases to ’spread Democracy’. It is also very fortunate that Global Warming became widely known about a year and a half after the Hirsch Report stated:

“Waiting until world oil production peaks before taking crash program action leaves the world with a significant liquid fuel deficit for more than two decades.

Most sources feel we either hit ‘peak’ in 2005, or will hit it by 2012. So fortunately Global Warming became an issue. How would the US Government explain to people why they had to save energy and drive more fuel efficient cars? What would happen if the morning news started with “we are headed for 20 years of energy shortages, the worlds oil is in decline!”.

Panic. People would at least go into Survival Mode™, not spending any more money than necessary… which would send our economy into a horrible spiral.

So here we are. Our military is smack dab in the middle of the remaining oil left in the world, people are working to ‘become energy independent’ and never think to ask why we didn’t need to be independent back when Saddam was killing the Kurds… and they don’t panic because luckily, we have another reason to use to explain to people why they need to cut back on energy usage and of course, why other countries should too. We are ensuring that the worlds oil is sold in dollars… except for those pesky Iranians, trying to set up their oil bourse. I wonder what will happen when Iran gets that set up?

Iran completes oil bourse, February 17th, 2008.

Oh yes, the next time you see tiny speedboats ‘menacing’ US warships, remember that The Gulf of Tonkin never happened. 50K Americans, and millions of Vietnamese died and years later it turns out there were not even any Vietnamese boats there at all on the second day… and on the first day, OUR soldiers shot at the Vietnamese - and they still did not fire back at us.

So ask yourself: do you think Bush would care about 3000 dead Americans, now that you see there are solid, very real motives for attacking Iraq?

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People ask themselves, how are we paying for Iraq? When you go to the store and pay $.50 more for a loaf of bread, you have your answer. Inflation. You and I pay for Iraq, meanwhile the war profiteers are getting rich, while we suffer. I wonder if before Iraq happened, what people would have said if they were told that everything would get expensive because of the war? Do you think most people would care about Hussein, if they knew their standard of living would drop as a result of the war?

I need to do more research, but the above quote makes me wonder…

Discourages all prudence and thrift. I would think this is saying that if the government could not ‘print money’ they would be a little more careful with their budgets.

Encourages squandering, gambling, rechless waste of all kinds. Again, do politicians care about a new law that will cost the government billions, if they understood the system, and we could not inflate the currency?

It often makes it more profitable to speculate than to produce. Three words. Hedge Fund Manager.

Its inexcusable injustices drive men toward desperate remedies.Many times I have heard guys joke that they should just go sell drugs to make ends meet… not realizing that the reason their $10 an hour paid the bills 2 years ago, but now does not, is because of our inflationary system. The poor cannot work their way out of a hole, because the hole is always getting deeper and deeper, and they don’t know it.

It plants the seeds of fascism and communism. It leads men to demand totalitarian controls. There are articles all over the Internet about how the US is leaning towards Fascism. Did you know Central Banking, which is what our system uses, is one of the 10 steps to Communism in the Communist Manifesto? Strange, isn’t it? This system only started in 1913… And of course the system promotes totalitarian controls. As people get poorer and poorer, they ask the government to step in, now knowing it is the core of our system that is working against them. Minimum wages! Fix the problem! We need the government to step in! And so the government makes more and more laws, and coincidentally gets more and more control…

In case anyone reading this does not understand inflation, it basically means printing more money, increasing the amount of money in circulation. Originally, people used gold. You couldn’t just make gold (although you could mine for it, which did cause inflation if there was a huge find actually) but once people started using paper money as a convenience, whoever was in control of the money for a nation would soon realize that there were only two reasons not to just print money for themselves, and not tell anyone.

1: if all citizens tried to turn in their monetary notes to get their gold, there would be more notes than their was gold, and people would realize that the king or banks had actually stolen their money.

2: it would cause prices to rise. This is because as each citizen gets more money, he buys more, which increases demand, and so raises the price.

If a King though wanted to go buy cannons to arm his ships for war, where could he get the money? Raise taxes? This irritated the citizens, which was not too bad for a King, but as time went on, elected Politicians were often not reelected if they raised taxes. So what to do? Just print more money, and go buy cannons. As long as you did not print too much, the inflation would not rise too fast, and people would not notice. And so you basically taxed the people, but without their knowledge. Sneaky, isn’t it? And when prices go up you can just tell people that it is all due to some country in Asia getting industrialized of course, even though the country has been industrializing for 20 years, and only in the past few years has inflation been a problem.

And then if you are really sneaky, you would export all of your factories so that while you inflated the currency, the prices of most goods would not increase too much, since you could abuse the poorer, Communist workers and pay them $.10 a day.

Unfortunately, things that were not produced outside of the country would show the effects of inflation like say…housing? Healthcare? University tuition? Hey wait a minute…

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What is happening is that our system is built on crap, lots and lots of crap, all designed to help specific groups, and not the general populace. Amazing really. I used to argue on a forum with a recently graduated (Dartmouth) Economist, and he would state things as fact, but according to this book, Ron Paul, the Ludwig Von Mises institute, and many other *truely* Free Market Economists, he is wrong.

This kid tried to tell me, for months and months, that inflation was good. By design, it pushes people to invest their money. What amazed me most, (I have written about this before) is that the government wants inflation, and our system is designed this way. It is truly amazing. Ok wait, lets start GeekMode™ for a second here:

We are, no joke, living in The Matrix. You there, reading this article. You are living in a dreamworld, a prison for your mind. You are a slave. Like everyone else you were born into bondage. Into a prison that you cannot taste or see or touch. A prison for your mind.

Ok lets end GeekMode™.

It is true, all dorkiness aside. You were born into a prison. You don’t realize it, but you were. We all were.

The first thing to learn is that the idea that prices always go up - that is not natural. Prices can go up for natural reasons, but the idea that they always go up, every year, is part of our economic system. It is designed that way. They want prices to go up. Why?

As the book says ‘Inflation is designed to deceive labor (the average worker) by reducing REAL wages (that is, wages in relation to purchasing power) by increasing prices.’

Key word: deceive.

There are a few key concepts here. Money is just a number, not real wealth. If the government printed a godzillian dollars, and gave everyone say, a million dollars for nothing, what would happen?

At first, people would go nuts, they would buy things at normal prices. But quickly, shops would run out of goods. Any business, seeing products flying out the door, will raise prices, to hopefully still sell all of their goods, but at the highest price possible. So prices start to go up. Eventually, the prices would go up to a point that people who were living at the same standard they were before they received the million dollars. Now a loaf of bread is $20, a car is $100,000. People think they are rich, but they are not. Their real wealth has not changed, they just have more paper notes in their pocket.

Inflating the system does not make people more wealthy, it just changes the numbers. This is another key concept. Until the money has been in circulation awhile, prices are normal, so the people who first receive the money will actually end up with more stuff. By the time the government gives the last million to the last citizen, the prices have increased, and the citizen gets nothing extra, actually, that person will actually be able to buy less than they did before, while the people who got their million first, end up with more stuff at the end.

People like me, the blue collar workers of America, we are the last ones to get the million.

Some people will say ‘but inflation hurts everyone, the prices go up for the rich people too’. This is true, sort of. The final trick is that people who can afford to invest their money, and make interest off of their investment, will keep pace with, or even out pace, inflation. Those who can invest the highest proportion of their salary into something will do the best. So Bill Gates will be hurt less than some guy making $200,000 a year, even though they both invest their money. Someone making $20,000 a year, who cannot invest at all, gets hurt the most.

The system is designed so that there is always more and more money being added to the pool, and by the nature of how it works, that money will not flow to the poorest, it will always flow upwards, to the rich. The repercussions of adding money to the system is most felt by those who receive none of the new money.

Yet, those people do not usually notice, until inflation gets bad, which is it right now. Why would there be a lot of money being added to the pool right now? What does the government need lots of money for?

War. Wartime seems to create economic growth, but in reality, it creates inflation. At first it helps, because jobs are added to companies that have military contracts. Those new employees go out and buy groceries, houses, cars. Local businesses see an increase in demand, business is booming they say… but then the prices start to go up, and anyone not getting a raise or rich enough to invest, will now make less money. You, me, and everyone else is paying for Iraq, every time we pay more for gas, food, everything. Inflation is a big part of the higher gas prices, make no mistake.

And thanks to the death of many Unions, people do not get a ‘cost of living raise’ anymore. As Henry Hazlitt states in ‘Economics In One Lesson’:

What they (the people inflating the system) forget is that labor has itself become sophisticated: that the big unions employ labor economists who know about index numbers, and that labor is not deceived.

But labor is deceived, remember this book was written in the 40s. As unions declined, it became every man for himself, and since none of us are taught monetary policy in high school (you did notice we all go to government run schools, right?) we never see the trick.

You there, the person who slogged through this long winded article! We are just slaves. Why is it almost impossible for the average American to survive on one paycheck? Did the government really do anything at all by raising minimum wage? That raise you received this year, that made you feel good, are you really richer than you were last year?

Ultimately there are ways that the government disguises inflation. Inflation is hard to measure, and of course, Reagan took housing out of the calculations in the 80s. The money that inflated housing prices had to come from somewhere, right? Yet how can the inflation numbers still say 3% or 4% per year? There are other ways, but there is enough to digest here already.

Hazlitt says, even the most hardened Economists find it impossible to factor inflation into everything. When we hear on TV that the economy grew 4% last year, do we remember that inflation was 4%, so that we really did not grow at all? When the stock market goes up and up and up, do we remember that without our inflationary system is artificially boosting those numbers, and that much of the money pushing the stock market to ever higher numbers is slowly, quietly, being sucked from the Average American? When we get a 4% raise, do we remember that we really are only treading water, and not really getting ahead? When the politicians and economists say they do not understand why the rich poor gap is widening so fast, will they think of inflation? No, no one does. Even professional economists will forget, and that is why the system works.

This system only came about in 1913. Ever heard the phrase ‘the Roaring 20s’? I would think it is not coincidental that this system was put in place in 1913, and within 20 years, the US had a huge boom in its economy, and then a HUGE bust. Booms and busts, sound familiar?

You were born into a prison. One that you cannot taste or see or touch. A prison. For your mind.

GeekMode™ is so much fun.

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