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October 2009

Why the Stimulus Plan Will Fail ...and a Better Alternative
by Jake Towne Based on my January 19, 2009 article LINK

“An invasion of armies can be resisted, but not an idea whose time has come.” - Victor Hugo

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Dishonest Money: The Fall of the Dollar

The purchasing power of the dollar has lost >94% since FDR took America off the classical gold standard in 1933 through monetary inflation. The monetary inflation was caused by the FED. They debased the dollar by creating more and more irredeemable paper dollars. TowneForCongress.com

'Full Production' not 'Full Employment' Economies are far too complex for any central planning group The problem of excessive spending will not be cured by more spending

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Xishuangbanna, China

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Henry Hazlitt

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October 2009: Current Stimulus Status in the Lehigh Valley per Recovery.gov

$2.05 Billion approved for PA, 495 jobs “created/saved” Our district has $3.2 Million allotted, $0 reported spent, 0 jobs reported “created/saved”
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Unemployment Rates 1930-1941

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The Unemployment Rate is 21%

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I, Pencil by Leonard Read

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The National Debt

White House Budget FY 2009

below

Source: http://www.nolanchart.com/article6512.html TowneForCongress.com

FIAT = by decree
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Hope for the Future
"...if anything will be done, common Americans themselves must do it, they can count on no one else." -Dr. Edwin Vieira "If there must be trouble, let it be in my day, that my child may have peace.” – Thomas Paine, “The American Crisis,” 1776
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Replace the Socialistic Keynesian Government Status Quo with the Austrian Free Market
Keynesian Economics
The “Money Power” is held by the Government & Bankers Government 'Commands' the Economy Renown for Deficit Spending and Stealing via Currency Debasement Redistributes Wealth to the MilitaryIndustrial Complex, Banking Cartels, Special Interest Groups & Corporations Allows and Rationalizes Government Takeovers of Private Businesses May promote “capitalism” and the “free market” in word, but in deed functions as “Crony Capitalism,” “Vulture Capitalism,” the “Corporatocracy” or “Disaster Capitalism”

“In the long run, we are all dead.” - Lord John Maynard Keynes British Economist and Central Planner

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Replace the Socialistic Keynesian Government Status Quo with the Austrian Free Market
Austrian Economics
The People own the “Money Power” Government Plays No Role in Economic Planning Promotes Honest Money & Balanced Budgets Highly Rewards those who Create Wealth and Shares it with All Government Does Not Takeover Private Businesses Promotes Free Market Capitalism and laissez faire, or “let them be!” economics

“All those intent upon sabotaging the evolution towards welfare, peace, freedom and democracy, loathe gold.” - Ludwig von Mises Founder of the modern Austrian School

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Abolish the Federal Income Tax: It's Immoral!
“1. Abolition of property in land and application of all rents of land to public purposes. 2. A heavy progressive or graduated income tax.” The First 2 Planks from Karl Marx's Communist Manifesto

The Income Tax is a Marxist idea implemented in 1913 as retribution against the "evil capitalists" who had caused the Panic of 1907. The end result of this practice has been to heavily tax everyone. The government has no right to the first claim on your labor. Only you should. Plundering those who have acquired property in a just manner only serves to deter them from acquiring more.
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Abolish the Federal Income Tax: It's Unnecessary!
2008 Federal Inlays in Billions of USD
Source: http://www.whitehouse.gov/omb/budget/fy2009/pdf/hist.pdf

2008 Federal Outlays %
“Just” $67 Billion needed to run judicial, executive, and legislative branches.

$410 B or 14% Deficit Spending

$68 B or 2% Excise Tax

$1,220 B or 41% Federal Income Tax

$910 B or 31% Social Insurance Tax

$345 B or 12% Corporate Income Tax Total 2008 Federal Budget was over $2,900 Billion

Large cuts in the overseas military empire, projected at $1 Trillion annually combined with the printing of fiat U.S. Notes would eliminate the need for a federal income tax. TowneForCongress.com

The Real Interest Rate

Source: http://towneforcongress.com/economy/unlocking-the-money-matrix-the-real-interest-rate-part-1215

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Graphics Acknowledgements
Unless listed below, all photos are either mine or public domain. The “Towne 2010 – As Good As Gold” logo was created by Derek Wyatt

Document Copyright
Copyright © Jake Towne, 2009. Any portion of this presentation that could be copyrighted is owned by myself and I hereby released it to the public domain. I grant full permission to use any of the ideas or material within. You may republish this work. Attribution to myself is appreciated but not required.

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Document Copyright
Copyright © Jake Towne, 2009. Any portion of this presentation that could be copyrighted is owned by myself and I hereby released it to the public domain. I grant full permission to use any of the ideas or material within. You may republish this work. Attribution to myself is appreciated but not required.

Closing Remarks
* I am running as a citizen, not with either major party - What I offer to the citizens of the 15th district, and many do belong to the two main parties, is a truly independent voice and ear. * I am not a career politician. If elected, I would plan to run again in 2012, but following this I would most likely not run again. My aim is to serve as a temporary statesman and representative and then leave government. I am more mindful than most of the sad truth behind "Power corrupts and absolute power corrupts absolutely." As collateral for this assurance, if elected, I will not enlist in the Congressional pension plan, which guarantees members up to 80% of their salary in annual pension. I believe this is fiscally irresponsible and too lucrative. The current salary for a seat in the U.S. Congress is $174,000. I view this as too lucrative given the current purchasing power of the dollar, so obviously I would act to reduce Congress's salary and mine - how can the people believe Congress will tighten the purse-strings on government if Congress fails to start with itself? I support tying the salaries of our Congress in some manner to household median incomes. TowneForCongress.com

Source List
Place the cursor over the title to access the link. This lecture was based on the first link below.

Towne, Jake. January 2009. “Why Obama's Stimulus Plan Will Fail... and a Better Alternative.” Bastiat, Frederic. 1848. The Law. Hazlitt, Henry. 1946. Economics in One Lesson. Lewis, Michael and David Einhorn. Jan 2009. "The End of the Financial System As We Know It" and " How to Repair A Broken Financial World." NY Times articles with solid advice on how to correct the financial system. Obama, Barack. 10 January 2009 Speech. Quinn, James. 2009. "Unintended Consequences - 2009 & Beyond" Read, Leonard E. 1958. I, Pencil. Famous short essay on economic intricacies. Romer, Christina and Jared Bernstein. 2009. The Job Impact of the American Recovery and Reinvestment Plan. Rothbard, Murray. 1990. What Has the Government Done with Our Money? Towne, Jake. 2009. “America's Military Empire.” Towne, Jake. 2008. “Bernanke's Great Lie – The “Gold Standard”and the Great Depression.” Towne, Jake. 2009. “Federal Reserve Plank.” Towne, Jake. 2009. “Income Tax Plank.” Towne, Jake. 2008. “The Money Matrix – What the Heck Are Derivatives?” Towne, Jake. 2009. “The Money Matrix – Bring Light to Dark Derivatives” White House Budget FY2009. (FY2010 here.) TowneForCongress.com

Source List (3/3)
Place the cursor over the title to access the link. Here is a LINK to a summary of my writings and my semi-bibliography.
Reagan, Ronald. 1984. Remarks when accepting the presidential nomination. Rothbard, Murray. 1990. What Has the Government Done with Our Money? Towne, Jake. 2009. “America's Military Empire.” Towne, Jake. 2008. “Bernanke's Great Lie – The “Gold Standard”and the Great Depression.” Towne, Jake. 2009. “Income Tax Plank.” Towne, Jake. 2008. “The Money Matrix – How the FED Works.” Towne, Jake. 2008. “The Money Matrix – What the Heck Are Derivatives?” Towne, Jake. 2009. “The Money Matrix – Bring Light to Dark Derivatives” Towne, Jake. 2009. “Why Obama's Stimulus Plan Will Fail... and a Better Alternative.” Washington, George. 1796. Farewell Speech to the People of the United States. White House Budget FY2009. (FY2010 here.)

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Appendix
Biography Fractional Reserve Banking in Pictures Mission Statement and Principles Our Open Office

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My Biography
Born and raised in Nazareth 30 years old, never married, no children Attended Nazareth Area High School Graduated 3rd in my class of about 230 Awarded the area's Citizenship Award from then-U.S. Congressman Paul McHale Active on football, track & field (captain), township baseball (catcher), and cross country teams Attended Lehigh University from 1998-2002 Graduated with honors with a major in Chemical Engineering and minored in the Classics. Cumulative GPA of 3.7 Attended Dortmund University (Germany) as an exchange student in 2001 As a Martindale Scholar, I traveled to Hong Kong in 2001 and then wrote a paper on their political system
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My Biography
Following Lehigh, I moved to California where I worked for Ablestik Laboratories, a supplier for the semiconductor industry, as a process engineer. In my job, I scaled up new products from R&D to production, troubleshot product problems for customers, and implemented cost-saving changes to benefit both my company and the customer. For nearly the last 4 years, I have been living and working in Shanghai, China as a process engineering supervisor starting up two brand-new manufacturing cells. I led the commissioning of the equipment and products, then helped the factory qualify customers and ramp production. I can speak Mandarin Chinese. More details on my professional career are in my resume
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My Biography
Besides traveling within China and our country, I have been fortunate enough to travel for either business or vacation to: Japan New Zealand Australia Cambodia Thailand Singapore Malaysia Belgium Germany France Italy Switzerland Nepal South Korea

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My Biography
Educated at Mises University, Class of 2009 Towne For Congress is endorsed by RetakeCongress.com, 912Candidates.org, and is a proud member of the “Liberty Candidates” coalition Economics articles published at SeekingAlpha.com, Goldseek.com, DollarCollapse.com among others Eco-Political articles published at NolanChart.com, LibertyMaven.com, CampaignForLiberty.com among others

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Fractional Reserve Banking in Pictures
By Jake Towne, 2009

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Dishonest Money How to Create $900 from $100
The banking system creates dishonest “money” each time you deposit money. Here's how it is done, using the current approximate fractional reserve ratio of 10%.
Step 1) A depositor deposits $100 at a bank. Total Reserves: $100 Total Loans: $0 Total Money Supply: $100 "Give me control of a nation's money and I care not who makes its laws." - Mayer Amschel Rothschild, 1744 -1812, Leader of the Rothschild Banking Cartel of Europe
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0 Total Deposits Total Loans Total Money Supply

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Dishonest Money How to Create $900 from $100
Step 2) The bank holds $10 for its reserves and loans out the other $90 to others. Total Reserves: $10 Total Loans: $90 Total Money Supply: $100
"It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning." - Henry Ford
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0 Total Loans Total Deposits Total Money Supply

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Dishonest Money How to Create $900 from $100
Step 3) This $90 is deposited elsewhere. Next, this second bank takes the $90 in deposits, holds $9 for its reserves, and loans out the other $81. Total Reserves: $19 Total Loans: $171 Total Money Supply: $190
"When an assembly undertakes to issue paper as money, the whole system of safety and certainty is overturned, and property set afloat. Paper notes given and taken between individuals as a promise of payment is one thing, but paper issued by an assembly as money is another thing. It is like putting an apparition in the place of a man; it vanishes with looking at it, and nothing remains but the air." - Thomas Paine, “Dissertations on Gov't”

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Dishonest Money How to Create $900 from $100
Step 4) Step 3 repeats. The third bank takes the $81 as a deposit, holds $8.10 for its reserves, and then loans out $72.90. Total Reserves: $27.10 Total Loans: $243.90 Total Money Supply: $271
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“The few who understand the system, will either be so interested in its profits, or so dependent on its favors, that there will be no opposition from that class. The great body of people, mentally incapable of comprehending the tremendous advantages, will bear its burden without complaint." - Lord Rothschild

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Dishonest Money How to Create $900 from $100
Step 5) The process keeps repeating. The bulk of the money creation is done after 15 repeats, but what is eventually left after 40 or 50 repeats is pretty much: Total Reserves: $100 Total Loans: $900 Total Money Supply: $1000 So within a short period of time, banks transferring to other banks within the system can CREATE $900 from the initial $100 deposit. For those hearing the above for the first time, this process is such NONSENSE that it is a little hard to grasp.
 Source: Federal Reserve Bank of Chicago, “Modern Money Mechanics” (1994)
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Dishonest Money FED Open Market Operations
The FED itself also creates or destroys dollars, but they do not even require deposits. The Federal Reserve conducts open market operations by purchasing or selling any type of asset. In the past the FED mostly bought Treasuries. In the past several years, the FED has mostly bought company assets or bad debt, such as AIG's.
"Bankers own the earth. Take it away from them, but leave them the power to create money and control credit, and with a flick of a pen they will create enough to buy it back." - Josiah Stamp, former President of the Bank of England

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Dishonest Money FED Open Market Operations
Here’s what happens when the FED buys Treasuries or other assets 1) The FED’s Open Market Committee (FOMC) decides to expand the nation’s money supply. They purchase, for example, $100 billion in Treasury bonds. 2) The FED writes a check on itself for $100 billion. [Where did it get the money? The answer is -- FROM NOWHERE!] Monetary Supply Expansion: $100 billion 3) This $100 billion FED check then goes to one of the select government bond dealers (such as JP Morgan Chase or Goldman Sachs) in exchange for the $100 billion in Treasuries. Monetary Supply Expansion: $100 billion 4) Then the dealer deposits its $100 billion FED check at a commercial bank. Monetary Supply Expansion: $100 billion 5) Enter the fractional reserve loop. This deposit is very quickly loaned out repeatedly and grows to $100 billion in deposits and $900 billion in loans. Monetary Supply Expansion: $1 Trillion TowneForCongress.com

Mission Statement
(1) Spread my message of prosperity by defending freedom and peace. (2) Educate as well as learn from the public. (3) Win the 15th District U.S. Congressional seat in 2010. (4) Truly represent the citizens of the district by voting on their behalf. (5) Create and drive new legislation in agreement with the platform, my principles and citizen input.

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Principles

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Government, or the rule of law, solely exists to protect the liberty of the individual.

“What is law? It is the collective organization of the individual right to lawful defense.” - Frederic Bastiat, 1848, The Law TowneForCongress.com

Photo courtesy BigMacSC99

Government exists to protect liberty, not to redistribute wealth, nor to grant special privileges, nor to interfere with the lives of individuals and their actions. The government of a free country, properly speaking, rests not in its elected officials but in its laws. The Constitution is the supreme law of the land. Therefore, transfer of American sovereignty to supranational organizations, even if “benign,” is not permissible without a constitutional amendment. The United States Constitution was written under the principle of "positive grant." This means the federal government is authorized to exercise only the powers which are specifically given to it by the Constitution, and nothing more.

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Each individual is fundamentally equal under the law with all other individuals. The rule of law's framework of liberty ensures the greatest opportunity for individuals to explore their strengths and surmount obstacles. A limited and decentralized government with inherent checks and balances results in more selfrule by local communities, and hence providing local diversity and overall greater satisfaction for individuals. Individuals can always vote with their feet, and move to areas not affected by laws they strongly disagree with.
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Individuals have the right to live their own lives how they choose, so long as they do not forcibly interfere with the equal rights of others.

Ultimate disregard for human life – Remains of Nazi Germany's victims taken by the US Army in 1945

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The only legitimate use of force is in defense of individual rights — life, liberty, and justly acquired property — against aggression.

The Japanese attack at Pearl Harbor resulted in a declaration of war against Nazi Germany and Imperial Japan. Shown here is the beachhead assault on DDay in 1944.

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Geronimo's Apache tribe fought to maintain their independence from both the United States and Mexico. The philosophy of liberty holds that everyone has certain natural rights.

Rights belong to individuals, not groups. Rights are not privileges, they are derived from the natural state of being human. The Constitution merely acts to forbid the infringement of the federal government upon these rights.
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The monetary unit must be incorruptible, not based on fraud.

"Of all the contrivances for cheating the laboring classes of mankind, none has been more effective than that which deludes them with paper money." - Daniel Webster, 19th century American statesman TowneForCongress.com

The government's monetary role is to mint money and maintain the integrity of the monetary unit, not to commit fraud by debasement or to substitute counterfeits of paper for the constitutionallyspecified forms of lawful money, coins of gold and silver. However, individuals should be free to trade and exchange as money any mutually agreeable commodity or item as they wish.

A German burns banknotes for warmth since their value has been reduced to just paper due to the Weimar hyperinflation that followed WWI.

American Silver Eagle bullion coin made by the U.S. Mint

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Property should be owned by people, not government.

Photo courtesy Neozuki

“No person shall be... deprived of life, liberty, or property without due process of law.” - The Constitution of the United States of America “Life, liberty, and property do not exist because men have made laws. On the contrary, it was the fact that life, liberty, and property existed beforehand that caused men to make laws in the first place.” - Frederic Bastiat, 1848, The Law

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The free market is feared by many who do not understand it. Those who do realize the free market is the most just, most humane economic system, and remains the greatest engine of prosperity and liberty the world has ever known.

A stacked microchip package used in mobile phones and computers – products of the free market TowneForCongress.com

Freedom is an indivisible whole and includes both economic and personal liberty.

Ben Franklin's 1754 political cartoon signified the need for the colonies to unite to preserve the liberty of all. Likewise, economic and personal liberty together is a powerful force and freedom is lost when either is compromised.

The complementary elements of economic and personal liberty are inseparable from their greater whole, freedom.

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Government Accountability & Transparency

“As your Representative, I will work inside of an Open Office that is clear as glass.” - Jake Towne, 2010 Candidate for Pennsylvania's 15th District TowneForCongress.com

Our Open Office
Besides our existing website and system, I will offer:

1) Online Public Feedback & Debate Forum 2) Monthly Reports 3) Online Bill Submission Service 4) On-Demand Town Hall Discussions
“If citizens demand it, I would even install a Webcam in my office. But they should know I will never support the government watching them. I want to get the government off our backs, and full Accountability and Transparency is the path.” - Jake Towne, 2010 Candidate for Pennsylvania's 15th District TowneForCongress.com

Our Open Office: Online Public Feedback & Debate Forum (1/4)
Login moniker account for all residents Registered voters to have a priority flag symbol next to their comments and votes
Faneuil Hall, Boston, MA Photo courtesyDaderot

“This revolutionary idea is based on the Town Halls and Roman Forums of old. Together, let's remodel and restore our Republic for the 21st Century using NEW ideas and tools.” - Jake Towne, 2010 Candidate for Pennsylvania's 15th District TowneForCongress.com

Our Open Office: Online Public Feedback & Debate Forum (2/4)
Submit votes and comments on the house bills coming up on the House calendar Users can create forum topics & foster citizen debates Phone calls and separate emails/letters will be tallied onto the forum pages by my office The Forum will email news and personalized notifications to receive based on your personal preferences and interests
“I'm trying to free our minds. Here is one of the doors, but I can only show it to you. You have to decide whether to walk through it.” - Jake Towne, 2010 Candidate for Pennsylvania's 15th District TowneForCongress.com

Our Open Office: Online Public Feedback & Debate Forum (3/4)
Those who do not have computer access may: Use the terminals at our district office Dictate comments in manually by phone Request their mailed letters to be publicized, and our office will scan and post into the Forum
“Freedom of speech must be protected at all costs. Dissent must not only be tolerated but welcomed in a free and open society.” - Jake Towne, 2010 Candidate for Pennsylvania's 15th District “If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter.” - George Washington, President of the United States, 1789-1797 TowneForCongress.com

Our Open Office: Online Public Feedback & Debate Forum (4/4)
Forum Romanum Photo courtesy Stefan Bauer

“With your help and votes, we will together redefine the 'res publica', our Republic, or our 'public affairs.' We will revolutionize politics, and move it from its current darker age into a new era of real hope, real change, and openness.” - Jake Towne, 2010 Candidate for Pennsylvania's 15th District TowneForCongress.com

Our Open Office: Monthly Reports
This written monthly report will offer:

Summary of how and why I voted for each and every House floor vote My co-sponsoring activity and why New bills introduced and why Refer to Forum consensus and feedback in my reports Office budget updates will be transparent
“My monthly reports are aimed at delivering maximum transparency and maximum accountability. What if my votes, actions and views do not agree with the public's? I expect they won't at all times, but if I fail to provide adequate explanations and do not obey the wishes of the people, then I will not be in office very long, now will I?” - Jake Towne, 2010 Candidate for Pennsylvania's 15th District TowneForCongress.com

Our Open Office: Online Bill Submission Service (1/2)
Any resident can submit draft proposals for new legislation Each publicly-published proposal must either: ➢ Cite the power granted to Congress for its validity ➢ Or, if revoking a current act or law, provide detailed justification or cite the Constitution if it is unconstitutional A public reply must be given to each draft by myself, and I hope to contact and discuss with Drafters themselves
“Look, there are around 650,000 citizens in our district. I am no more intelligent than anyone else, but I do know that many of us are experts in certain fields or have special interests of one kind or the other. This idea will bring the best ideas out of our community, and give citizens a real voice in which to be heard.” - Jake Towne, 2010 Candidate for Pennsylvania's 15th District TowneForCongress.com

Our Open Office: Online Bill Submission Service (2/2)
If the draft idea is accepted, I will work with the Drafter to refine it, and submit it to the Forum for review by the community before submitting it on the House floor Especially if this idea is popular, Drafters should be aware that they will be partly responsible for helping promote their bill.
“No matter how hard I work with my staff and Congress, I am only one person. I estimate this idea could allow us to multiply my output as your Representative in Congress by at least five-fold. We may even need to organize ourselves to sell our ideas to citizens in other districts and organizations to get these bills passed, instead of relying on often corrupt back-door DC deals.” - Jake Towne, 2010 Candidate for Pennsylvania's 15th District TowneForCongress.com

Our Open Office: On-Demand Town Hall Discussions
Offer ability to sign up for Town Halls at the Forum Town Halls are teleconferences at a preset day and time that you receive at your phone number Bi-Weekly Town Halls in 2 Formats ➢ Pure Q&A ➢ Topic Discussion followed by Q&A Residents at the Forum can summon me to an “OnDemand” topic discussion after voting reaches a target for hot topics that I am not addressing fast enough
“When citizens speak, their Representative must listen completely. Across our land, the so-called “Representatives” have not troubled to listen to We the People, and this is a key reason our country is in such dire straits today.” - Jake Towne, 2010 Candidate for Pennsylvania's 15th District TowneForCongress.com

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