The Charade of the Debt Debate

The average American can’t be blamed for thinking that the debt ceiling debate that is monopolizing the news cycle is a crisis in the making. One can hardly turn on the TV or the computer and see anything else at the top of the news columns. It doesn’t matter what source you look at, left, right whatever, they are all playing to the hilt. After all hysteria and fear mongering makes for ratings and advertising dollars.

Growing right along with the media hype is a sense by the American people that government has just grown too big, too incompetent and just plain corrupt, a sense that politicians aren’t just lying to them but they are hiding the truth for their own political ends and desires to get re-elected. This opinion is beginning to cross all political lines and it has the politicians worried. How can they convince voters to re-elect them if ever increasing numbers of voters see them all, Republicans, and Democrats, as self-serving and disinterested it the problems of the average citizen? Politicians, being creatures of habit, of course resort to the partisan gamesmanship that has served them so well for all these years.

Problem is that every time they convince themselves and/or enough public opinion that the latest proposal is the “solution to the problem,” it fails before it even gets started. Hence the source of the paradigm shift in the public’s attitude, and as is to be expected the politicians are the last to recognize it.

Underlying all this are questions that the politicians don’t want to answer, hell they don’t even want them asked! If these questions are acknowledged to exist, the answers and the questions those answers would then generate will expose them for the frauds and wholly owned subsidiaries of Wall Street that they are.

While politicians and pundits on both sides of the aisle bemoan the $14.3 Trillion debt they all ignore the fact that the onetime audit of the FED revealed that it had loaned $16.1 Trillion in funds at near 0% interest to the Too Big To Fail banks and then turned around and hired these same banks to manage the loan portfolios and PAID them another $600 Million for the service! Yet no questions are asked about conflict of interest or hiring foxes to guard the hen house!

So just where did the FED get this $16.1 Trillion? They simply created it up out of thin air; they made a few magical entries on the computer and the assets of the banks in question (the very banks that own the FED) suddenly grew to the point of no longer being insolvent. Why are no questions being asked? Why were the members of the FED board given waiver on conflict of interest because they were personally invested in the very banks they were loaning money to?

So what we have is an unaccountable private monopoly that creates our money, sets interest rates, regulates the banking system in general and makes secret loans with the nation’s currency to whoever they want.

It has more power over the direction of the economy than any other institution. It has no oversight, is responsible to no one but itself and no one, no government body, no court can overrule or overturn its decisions.

How can any citizen, any elected official regard this as just or in any context "American"? Who could be surprised that while by any measure, anemic GDP growth, persistent unemployment numbers, growing debt and deficit, creeping inflation the economy flounders, the banks continue to not just prosper but report increasing profits and pay monumental bonuses to their top executives?

Unless and until structural changes are made to not just the government budget process but more importantly the FED there will be no viable solution to the fiscal and monetary crisis. Until the FED’s power to inflate the currency and steal the wealth of the public to pad the balance sheets of its constitute banks the fleecing will continue.

Any “shared sacrifice” must include the bottom line of the banks. Unless Glass-Stegal is re-instituted their power cannot and will not be broken. The largest holder of US debt paper is not China or any other sovereign power, it is the FED. Its balance sheet has swollen by nearly 200% solely of the accumulation of Treasury Bonds. Through the POMO process the banks have made billions on the growing indebtedness of the Federal Government and no politician or pundit utter a peep of protest. None will even dare question that this has been the very reason for the FED’s existence for all these years. Looking at this chart how could there be any other conclusion?

You want a solution? Audit the FED, declare the US Treasuries on its books as null and void. Declare the Treasuries held by its constituent banks as of a reduced value. Use a re-enacted Glass-Stegal to break up the “Too Big To Fail” banks just as Teddy Roosevelt broke up the oil and steel trusts. Reconstitute the FED along the lines of Alexander Hamilton’s “Bank of the United States” where under it would remain a private bank but with a board containing members appointed by both the Congress and the President and independent of any previous association with the banks. Any such new FED must be subject to periodic public audits and any failure to comply with law subject to not just civil prosecution of the bank but criminal prosecution of it board members.


Well don’t hold your breath, it won’t happen, not as long as the bankers dump their pocket change into the campaign funds of the politicians that would have to enact any such change in law.