July 27th 2011

THE TGB Report

Debt Ceiling On the news every night I see the talking heads that we must raise the debt ceiling or the markets will plunge and the banks will look badly on the US government. Why should we the American people in particular the middle class give a rats behind about what the folks in the banking industry and Wall Street have to say about the decisions made concerning the debt ceiling. The talk of late is of a Super Congress making decisions and then forcing it through the rest of Congress without the ability to amend the agreement and only cast an up or down vote. If you dont know what the Super Congress is the Huffington Post explains it best This "Super Congress," composed of members of both chambers and both parties, isn't mentioned anywhere in the Constitution, but would be granted extraordinary new powers. Under a plan put forth by Senate Minority Leader Mitch McConnell (R-Ky.) and his counterpart Majority Leader Harry Reid (D-Nev.), legislation to lift the debt ceiling would be accompanied by the creation of a 12member panel made up of 12 lawmakers -- six from each chamber and six from each party. Legislation approved by the Super Congress -- which some on Capitol Hill are calling the "super committee" -- would then be fast-tracked through both chambers, where it couldn't be amended by simple, regular lawmakers, who'd have the ability only to cast an up or down vote. So the folks in the Senate and the President cannot get new members of Congress to vote yes to a debt increase. So what do they do create a new committee to write up the bill and then try and force it through. I say find let them write this up and then bring it to the house and senate for a straight up/down vote. Anyone who wants to retain their seats especially the members who ran on a fiscally responsible platform can vote no. This will allow them to stick with their promises as well as defeat this bill. An deal that allows the debt ceiling to raise is a deal with the devil. You are only temporarily holding back a flood waters that get worst and worst each time you raise the debt ceiling. Think about the people who run up credit card debt. They can either continue to take out new debt and mortgages to continue their life style. If they continue this way they can go on maybe five, ten, or twenty years. But they will eventually default on their loans, lose their home, car, and be broke. Or they can take on the pain of selling their home and moving into a smaller apartment, sell their new cars and drive a used one and not eat out every night. Things will be tough during this period but eventually they will have all their bills and be living debt free. Sadly the government due to the fractional reserve system and the Federal Reserve they can continue to print out money with the Congress rubber stamping the check every time they want more money to buy votes. With this debt ceiling we can take the first step in turning our country around if we push Congress to vote no on any deal that raises the debt ceiling.

Life after Default An article by Peter Kline posted on Lew Rockwell points out what to this point no one in the media or political arena but hey life goes on after a default. Also, shockingly enough get better more often than not. Financial markets have been restructuring debt for many centuries, and
www.thetgbreport.blogspot.com Thomas.g.brown@hotmail.com

July 27th 2011

THE TGB Report

they've gotten pretty good at it. From the discussion regarding T-bills, you'd think no one had ever heard of default-risk premiums before. (Interestingly, this seems to be a case of American exceptionalism: people aren't particularly happy about Greek, Irish, and Portuguese defaults, but no one thinks the world will end because of them.) I find this line of reasoning unpersuasive. A T-bill is a bond just like any other bond. Corporations, municipalities, and other issuers default on bonds all the time, and the results are hardly catastrophic. Hey you see not raising the debt ceiling will not kill us in fact it may make us focus on real priorities which is individual greatness and sovereignty of all men as individuals.

Real Money Now we would not even be in this mess if the Creature from Jekyll Island (CJK) was not born in 1913 a.k.a. the Federal Reserve. For those of you who dont know the story I recommend the book (CJK) written by G. Edward Griffin which discusses in great detail how the Fed came about. Many of you may not know that the Federal Reserve is not a government entity but rather a private bank which creates money out of thin air and then turns around and lends it to the United States government. The way this is done is that the Treasury department creates 90 Tbills and the Federal Reserve prints money to purchase these debt instruments and money is then deposited in a large commercial bank (Bank of America) and that is how they create money from nothing. Now if we had dollars that where backed fully by physical gold or silver and could be redeemed for the gold/silver values of the dollar without restriction this would prevent the Treasury from creating more money than they have in physical bullion. The best plan would be to have competing private currencies which would keep dealers honest as they would have a real problem getting folks to use their banks and currencies.

www.thetgbreport.blogspot.com

Thomas.g.brown@hotmail.com