CLARENCE POLITICAL OVERSIGHT

Providing Town of Clarence residents an update on the performance of Americas Political System P.O. Box 66, Clarence Center, NY 14032-0066

Issue #1: Review of the American Economy from 1975 present

February 17, 2011 (1) Since 1975 America has allowed imports to exceed our exports. Our Political System has been creating jobs to compensate for the jobs being lost to foreign competition. (2) Americans prefer a Political System that creates jobs without increasing taxes. For example, Americans will not support increasing the taxes on American gasoline made from imported oil (Germany has a pump price of $6.40 /gallon). (3) In 1977 Politicians responded to the will of the people by using deficit spending to create USTB (United States Treasury Bond) jobs. Politicians funded USTB jobs by directing our Federal Government to sell USTB to Americans and other nations. Politicians also authorized our Federal Reserve to print money to buy USTB (Federal Reserve Act of 1977). (4) USTB jobs not subject to foreign competition include manufacturing weapons of war, non-military service jobs (education, media, religion, health care, Government, finance, legal), and military jobs (preparing for war, waging war, caring for injured and retired veterans). This has created an Illusion of Prosperity that has made America less competitive. Americas extravagant Health Care system provides per capita Health Care spending twice as high as other developed nations. Americas extravagant military spending represents nearly 40% of the world total. (5) Fortunately, investors throughout the world have been willing to buy low-interest rate USTB because until recently the dollar has been considered the worlds safest investment due to its low rate of inflation. (6) Politicians also created FIHI (Fiscally Irresponsible Housing Industry) jobs by allowing Americas commercial banks to invest in Toxic mortgages (mortgagee may not be able to afford the payments). Additional FIHI jobs were created by allowing Wall Street Banks to bundle Toxic mortgages with Healthy mortgages to create a CDO (Collaterized Debt Obligation) bond. Politicians also allowed Wall Street Bond Rating agencies to rate Toxic CDO bonds as Healthy bonds and sell them to foreign nations. Politicians also allowed Wall Street Banks to use Credit Default Swaps to insure Toxic CDOs. (7) In 2006 mortgagees began to default on their payments and the FIHI jobs began to decline. Our Federal Reserve has been printing money to create new USTB jobs and buy Toxic mortgages to prevent a banking crisis. Not one Politician has taken responsibility for the FIHI jobs. Not one Wall Street banker has been convicted for selling toxic CDO bonds. (8) We have to expect that at some point USTB investors (includes Americans, China, Japan, and other nations) will become concerned about Americas extravagance, Political Dysfunction, and dollar inflation and demand a much higher interest rate for new USTB. This is happening to Treasury Bonds being sold by countries such as Ireland and Greece. (9) The annual per capita interest payment on the outstanding USTB (our per capita Federal Debt) is the same for every American, rich or poor, adult or child. This provides an obvious advantage to wealthy individuals and nations who can buy USTB and will further exaggerate the income inequality that has occurred since 1980. American Voters have been placing themselves, our children, and our grandchildren into debt instead of creating NTR (New Tax Revenue) jobs and STNW jobs. (10) This year Federal Government Politicians will need to sell 1.2 trillion dollars in USTB (our Federal Government deficit) to fund the 30-40 million American jobs dependent on these sales (since 1980 our population has increased by 85 million). If necessary our Federal reserve will print money to buy USTB while hoping inflation does not become excessive. (11) Politicians seek the dependency that wins votes but let the dependents beware. American voters have allowed our Political System to become criminally dysfunctional. We allow American Political Parties to win elections using SHOD (Smear, Hypocrisy, Outlandish claims, and Deception). We allow American Political Parties to endorse Politicians who condone SHOD and are incompetent and/or fiscally irresponsible. (12) The goal of a Political Party is the power to direct our Government. American Voters need to recognize that our oversight is required to prevent Politicians from degrading our Government. Politicians can create economic and social chaos because they control our banking system, justice system, and Americas nuclear arsenal. (13) America needs a Political System that will create NTR jobs. (14) Even more important, America needs a Political System that will replace 30-40 million USTB jobs with STNW (Share The Necessary Work) jobs. Americans can create STNW jobs if they are willing to reduce their annual income and work fewer hours at their current wage or longer hours at a lesser wage. This action will prevent economic and social chaos and make America competitive with other nations. Note: Future Newsletters will address specific topics regarding our economy and Political System