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Can The U.S. Go Bankrupt?

By bob LivingstonBankrupycy
When an individual goes bankrupt, he has spent more than his income. His debts and the interest on those debts exceed all the income he has to such a degree that they are beyond his ability to repay.
Most people believe that national governments go bankrupt because they spend too much or spend more than their income. This is what colleges and universities teach and propaganda media parrot. Furthermore, when governments “overspend,” they call it “deficit spending.” But there is no such thing as national bankruptcy as the word “bankruptcy” implies or as it applies to the individual.
There are certain key words and phrases cleverly put into use to conceal the source of government finance: Federal budget, government spending, government deficit and Federal income tax. Believe it or not, none of these terms relates to government finance. But they do cover government fraud on an unbelievable scale.
The terms Federal budget, government spending and government deficit are meaningless when the Federal government and the central bank (Federal Reserve) create money in the form of paper and numbers called credit, in unlimited amounts. The government does not want public knowledge of its monetary trickery. This is why universities teach “accounting” and “finance.”
A simple axiom: To go broke or bankrupt in the national government sense implies that there is a finite or limited supply of money available to national governments. But money does not exist, and no one has ever proven that it does. People think that paper “dollars” are money. In truth, no one has ever seen a dollar. A dollar is not a thing. It is a unit of measurement the same as the terms quart or ton.
Don’t believe me? Will you believe the Federal Reserve’s own publications from the 1970s?
“Today, most coin and currency is ‘fiat’ money — money by virtue of government declaration and public acceptance. Fiat money isn’t valuable in itself and doesn’t represent a claim on gold or silver. Fiat money is acceptable because people know money’s true value is its purchasing power — its ability to buy goods and services.” — The Story Of Money, p. 19, Federal Reserve Bank of New York.
“Coin and currency are ‘Legal Tender,’ money the Government says has to be accepted if offered to settle a debt. But that approval doesn’t make cash any more ‘real’ than checkbook balances.” — I Bet You Thought… p. 7, Federal Reserve Bank of New York
“Neither paper currency nor deposits have value as commodities. Intrinsically, a dollar bill is just a piece of paper. Deposits are merely book entries. Coins do have some intrinsic value as metal, but far less than their face amount… What, then, makes these instruments — checks, paper money, and coins — acceptable at face value in payment of all debts and for other monetary uses? Mainly, it is the confidence people have that they will be able to exchange such money for real goods and services whenever they choose to do so.” — Modern Money Mechanics, p. 3, Federal Reserve Bank of Chicago
“Currency backing isn’t relevant in today’s economy. Currency cannot be ‘redeemed,’ or exchanged, for Treasury gold or any other asset used as backing. The question of just what assets ‘back’ Federal Reserve notes has little but bookkeeping significance.” – I Bet You Thought…, p. 11, Federal Reserve Bank of New York
“Commercial banks are important financial institutions because they can create money — checkbook money. When we borrow $200 at a local bank to buy a washing machine, we sign an I.O.U. and the banker writes a slip for a $200 addition to our checking account. No one has any less money on deposit, but we have more. The banker has bought our I.O.U. with new demand deposits -­ checkbook money -­ which were created. Bank credit and checkbook money have both increased $200.” — Money and Economic Balance, p. 177, Federal Reserve of New York
The method of money creation is witchcraft. It has been witchcraft for thousands of years. Modern economists and sophisticated eggheads only imagine that they understand money.
Yet nothing that affects our lives could be so all-important. Money is not a dull subject, because the study of money is a study of tyranny. It makes a mockery out of human freedom, property ownership and the accumulation of wealth.
Once we understand money, we then know that any imagined personal freedom that we have is a license or privilege given by the government which can be taken away by the government. The purpose of money is to transfer wealth from the producers to the nonproducer money creators.
John Maynard Keynes revealed a lot in his book, Consequences of the Peace, published in 1919. He stated, “If governments should refrain from regulation (taxation), the worthlessness of the money becomes apparent and the fraud upon the people can be concealed no longer.”
Keynes said in this statement that the system of income tax covers the fraud of the government printing press. What does this mean? It means that the government and its partner the Federal Reserve is printing money (creating credit) out of nothing and paying it into circulation for whatever the government wants, whether it be a fleet of ships or an army or to keep the people fat and happy. To cover the fraud of massive confiscation of wealth with printing press money, we have an income tax system.
The income tax system has a very serious purpose, but contrary to what Americans think the income tax has absolutely nothing to do with funding the government. The income tax is a consumption tax. The income tax regulates consumption. Note Keynes’ word “regulation” above. The income tax system penalizes those who are successful. It is a social and economic leveling system.
The income tax also is used to take as much “money” out of circulation as possible. The more “money” taken out through the income tax, the more the money creators can create. The less “money” there is, the better it keeps its imagined value.
“Too much money results in excess spending. When consumers, businesses and governments spend excessively, they compete for the available supply of goods and services and force prices up. When prices rise, the purchasing power of money falls. To keep purchasing power strong, then, the supply of money must not increase too rapidly.” — I Bet You Thought…, p. 111, Federal Reserve Bank of New York
The Federal government funds itself with “printing press money.” The income tax does not fund the Federal government. Almost nobody knows this, but it is extremely important to understand. The power to create money is the source of government force and bureaucratic tyranny in our lives.
What does all this mean to us? It means that we live under an authoritarian system and we are at its mercy. The Federal government has monopoly power to create money (credit or debt) backed by force. And it disguises this system from the people with the income tax system explained above. Simply stated, corporate government is transferring unbelievable and unimaginable wealth to itself with “money” that it creates and which costs nothing. Does this not make “organized crime” look like Sunday school?
This is how and why world wars are financed that cost millions of young lives. This is how social and economic policy is forged into so-called public policy, a euphemism for government social engineering and government force.
“Public policy” is government force in our lives based on monopoly power to create “money.”
So can governments experience economic collapse? Yes, but no one is aware of how it comes about. That’s because it is not a bankruptcy as is generally understood.
Here’s how it happens: The process of government “money” creation is a concealed scheme of consuming (stealing) the national wealth. In effect, the government creates its own wealth — not from taxes, but by creating “money” and using it to fund the government and to transfer wealth from the people to itself. The simple equation is that when governments consume all the national wealth of the people, then the government collapses.
Governments produce nothing, so governments must live off of the producers. It is the nature of governments to grow bigger and bigger and consume more and more of the national wealth. Do you see this happening?
At some point, government overconsumes the national wealth and collapses. Government finally consumes more than the people can produce.
So then, modern bankruptcy of national governments is not overspending. It is overconsumption of the national wealth.

US Budget Funds $4.2 Billion Yearly for Illegal Aliens but Strips $600 Million from Military Retirees

defense-large

While the government found the money to spend $4.2 Billion annually for an IRS credit granted to illegal aliens, and $ 59 Billion on foreign aid, they somehow couldn’t afford to properly maintain the retirement pensions of our military, to the tune of only $ 600 million per year…..pathetic

Foxnews

A final effort by Senate Republicans to halt cuts to pensions of military retirees failed late Tuesday, after Democrats blocked an amendment to the controversial budget bill.

The two-year budget agreement, which cleared a key test vote earlier in the day, was expected to get a final vote no later than Wednesday.

The administration proposed spending $59 billion in the fiscal year that began on Saturday, including $8.7 billion in a newly created contingency account for operations in Iraq, Afghanistan and Pakistan.

Ahead of the final vote, Sen. Jeff Sessions, R-Ala., tried unsuccessfully to use a parliamentary tactic to force a vote on the amendment, which he wrote to undo the cuts for military retirees.

A provision in the already House-passed bill would cut retirement benefits for military retirees by $6 billion over 10 years.

Sessions wanted to instead eliminate an estimated $4.2 billion in annual spending by reining in an IRS credit that illegal immigrants have claimed.

He and fellow senators argued the bill unfairly sticks veterans and other military retirees with the cost of new spending.

“It’s not correct, and it should not happen,” Sessions said on the floor.

“By blocking my amendment, they voted to cut pensions for wounded warriors,” he said afterwards. “Senators in this chamber have many valid ideas for replacing these pension cuts, including my proposal to close the tax welfare loophole for illegal filers, and all deserved a fair and open hearing. But they were denied.”

Sessions’ office claimed the vote Tuesday to block the amendment was a vote to “cut military pensions instead of cutting welfare for illegal immigrants.”

Senate Budget Committee Chairman Patty Murray, D-Wash.,who brokered the budget deal with House counterpart Rep. Paul Ryan, R-Wis., argued the GOP effort was really an attempt to kill the entire bill.

The Republican-led House passed the bill last week in an effort to avoid another stalemate leading to a potential government shutdown, like the one in October that polls showed was largely unpopular with voters.

The two-year budget deal would ease for two years some of the harshest cuts to agency budgets required under automatic spending curbs commonly known as sequestration. It would replace $45 billion in scheduled cuts for the 2014 budget year already underway, easing about half of the scheduled cuts.

With farm bill defeat, Americans on hook for $147M a year to Brazilian cotton farmers

By Barnini Chakrabortybrazil_cotton

American taxpayers remain on the hook for millions of dollars to pay off Brazilian cotton farmers — one of the more bizarre, and costly, consequences of the House of Representatives’ failure to pass a massive farm bill on Thursday.
In a surprise defeat, the House on Thursday rejected the dense, 600-plus page bill. The bulk of the bill would have funded food stamps as well as a bundle of farm aid programs. But lawmakers were also hoping to use the legislation to resolve a long-running dispute between the United States and Brazil that is draining U.S. taxpayer dollars every year.
Specifically, the U.S. is paying the South American country $147 million annually. America has shelled out more than $4 billion to date to Brazil.
“I think the average taxpayer would be astounded if they knew how much we’re paying Brazil in bribe money,” said Rep. Ron Kind, D-Wis., who is trying to end what he describes as the “blackmail payments.”
The money being sent to Brazil is part of the international fallout stemming from U.S. government subsidies for domestic cotton farmers. The U.S. is one of the world’s largest cotton exporters and hands out $3 billion a year in subsidies.
About a decade ago, Brazil sued the U.S. before the World Trade Organization. In its complaint, Brazil claimed the U.S. government had subsidized American cotton farmers so much it would make it impossible for other countries to compete. The WTO sided with Brazil in 2004 and said the country had a right to impose punishing trade measures against America.
Under an interim settlement, the Brazilian government agreed to withhold additional retaliatory tariffs on non-agriculture products, in exchange for the payments, until a new farm bill that contains measures to modify the country’s current cotton program is passed and enacted.
That’s where Kind’s amendment came into play. While the farm bill would have changed the U.S. cotton program, Kind’s amendment would in turn end the payments to Brazil. But the amendment was not included, and the bill did not pass.
“We have to keep it up because of our inability to reform our own cotton subsidy program,” Kind told FoxNews.com.
While dropping the interim settlement is an option, many say that the retaliation could be worse. Brazil won the right to impose more than $800 million in retaliatory import taxes against U.S. industries including financial services and automobiles.
On Thursday, House lawmakers’ rejection of the farm bill in turn delayed efforts to see the cotton dispute come to a close.
For Kind — who has publicly criticized the WTO settlement — continuing to pay Brazil isn’t a viable option.
“This is crazy, this is nuts,” he said during a committee hearing in June, while promoting his push to “change our domestic cotton program so we do come into compliance with WTO so we can end $150 million of basically blackmail payments to Brazil so they don’t level sanctions against us because of that WTO case.”
Even if the House resurrects the farm bill, and the provision addressing the Brazil case, the entire Congress would have to pass a unified bill and have it signed into law.
The Senate side has had more success. Last week, lawmakers passed its version of the bill which would spend $955 billion over the next decade. The price tag in the House version was lower due mostly to variations in food-stamp spending.
Tamara Hinton, the communications director for the House Agriculture Committee, said that the House bill is intended to eliminate the agreement between Brazil and the U.S., and end the payments.
“Our bill was written to resolve the issue with Brazil,” she told FoxNews.com.
When the House might return to the bill is anyone’s guess. The last time the House approved a farm bill was back in 2008. They failed to come to an agreement on its reauthorization last year, too.
For now, lawmakers will have to either start over on the farm bill or go to conference without a bill and try to negotiate with the Senate. If Congress fails to pass any type of farm bill by the end of the year, the country would go back to when the last permanent farm bill was enacted – in 1949.
Christine Harbin, a federal policy analyst at Americans for Prosperity, faulted Congress for taking so long to address the issue. She told FoxNews.com that instead of fixing the problem, “the U.S. decided to pay off Brazil.”
“Little programs like this fly completely under the radar,” she said. “We’ve subsidized the cotton industry so much that we are become anti-competitive.”

Read more: http://www.foxnews.com/politics/2013/06/21/americans-forced-to-pay-brazil-147-million-year-after-house-farm-bill-failure/?intcmp=trending#ixzz2X9mNiTDH

The Hidden Evils of Obama’s Budget Proposal

obama-and-budgetOn Wednesday, President Barack Obama released his long awaited and dreaded budget proposal. He claims that it will help lead to a deficit reduction of over $1 trillion over the next 10 years, which breaks down to only a reduction of $200 billion a year. He also claims that his proposal will help lead efforts towards a balanced budget in the near future. Lastly, he also claims that his math is sound.

The moment his budget proposal was released, hundreds of people and organizations immediately began analyzing it to see if it lived up to Obama’s claims. Among those is the Heritage Foundation, whose first analysis indicate that Obama’s budget proposal is not what he says it is, which is pretty much his track record on every other major proposal of his, including Obamacare and the Stimulus packages.

Here are some of the things that the Heritage Foundation discovered in Obama’s proposal:

1. $1.1 trillion tax hike that would hurt every income class of Americans and businesses. He is calling for caps on deductions, including how much one can donate to a charitable organization, and place more caps on exemptions. Taxes would be raised on the wealthy even more than what was increased on January 1, 2013, which would further hurt wage and job growth. After signing the new death tax increase three months ago, Obama proposes to increase it even more and lower the exemption from $5 million estate to $3.5 million. He is also proposing a cap on the tax-deferred retirement accounts at $3 million. Any amount over that will not be tax deferred. Another tax that will hit many middle and lower income Americans is an increase in the federal cigarette tax.

2. Insufficient defense funding that would result in a weaker and smaller military defense. His budget proposal does not provide for any modern weaponry or equipment, reduces the amount of training and maintenance, which may not matter anyway, since he calls for further reduction in personnel and general military structure.

3. Obamacare swings into action starting January 1, 2014 and Obama’s new budget is fattening up the coffers for Obamacare. The budget calls for a one year postponement of the Medicaid Disproportionate Share Hospital (DSH), a program that helps fund hospitals who care for greater numbers of low income and uninsured patients. He also proposes to increase funding for the exchange programs with the states concerning Medicaid and Medicare. Perhaps the most damaging aspect of the proposed budget with concerns of Obamacare is a mandatory drug rebate for low-income seniors using Medicare Part D. The drug rebate would be paid by the drug manufactures which amounts to a tax that they will certainly pass on to seniors in the form of increased Part D premiums. There is also an increased surcharge for Plan B seniors and increased premiums for Part B and D upper income participants. There are a number of other healthcare provisions in Obama’s budget proposal that will cost all of us even more for healthcare in the form of premium increases as well as increased costs on drugs, doctors and hospitals.

4. Although Obama claims that his budget proposal will lead to a balanced budget, it won’t. According to Heritage’s Patrick Louis Knudsen:

“Because the budget never balances—it doesn’t even try—debt remains at dangerously elevated levels.”
5. Obama’s proposed budget is a moot point at this time. Because Obama failed to provide a budget over two months ago when he was supposed to, both the House and Senate proposed and passed their own budgets. The trick now is to get the House and Senate to amicably mesh their two proposals together into one workable and acceptable package. Obama’s proposal not only won’t work, but it’s completely irrelevant at this point in time. The only purpose it could possible serve is to cloud and muddy up the political waters, making it even more unlikely that a single agreed upon budget will emerge out of Washington.

The bottom line is that Obama’s budget proposal contains a number of hidden evils in the form of more taxes and increased costs for every income level in the nation. People, especially seniors living on fixed incomes will see their cost of living increase, placing many of them in financial jeopardy. His budget also feeds the already gluttonous Obamacare, making it fatter and more costly. Hitting the wealthy with even higher taxes after they just took a substantial hit in January, will only leave them with less money to invest in their businesses, which ultimately results in fewer jobs and fewer pay increases. His budget also further weakens our military defense which causes me to question his loyalty to America and ask if he is purposely setting us up to be taken over by a stronger military force.

Like everything else Obama touches, his budget is pure poison to the American people and future of our nation. Every one of you needs to tell your Representatives and Senators to block Obama’s budget proposal for everyone’s sake.

Obama budget to take aim at wealthy IRAs – They are determined to destroy the wealth in our nation

Budget 12
Bernie Becker
President Obama’s budget, to be released next week, will limit how much wealthy individuals – like Mitt Romney – can keep in IRAs and other retirement accounts.
The proposal would save around $9 billion over a decade, a senior administration official said, while also bringing more fairness to the tax code.
The senior administration official said that wealthy taxpayers can currently “accumulate many millions of dollars in these accounts, substantially more than is needed to fund reasonable levels of retirement saving.”
Under the plan, a taxpayer’s tax-preferred retirement account, like an IRA, could not finance more than $205,000 per year of retirement – or right around $3 million this year.
Romney, Obama’s 2012 opponent, had an IRA several to many times that amount, leading to questions about how the former Massachusetts governor was able to squirrel away so much money in that sort of retirement account.
The president’s budget, expected Wednesday, has several revenue-raising proposals that come as Democrats and Republicans continue to spar over whether more tax increases are needed to reduce deficits.
Obama’s framework also includes higher taxes on cigarettes, as a way to pay for expanded access to pre-kindergarten. Congressional tax writers in both parties and both chambers are currently examining the code in hopes of a broad tax-reform package.

Read more: http://thehill.com/blogs/on-the-money/domestic-taxes/292071-obama-budget-to-target-wealthy-iras#ixzz2QBR3l5PB
Follow us: @thehill on Twitter | TheHill on Facebook

Tax Hikes for the Rich, Tax Hikes for the Poor, Defense Cuts for Everyone

budget1President Obama belatedly sent his 2014 budget proposal up to Capitol Hill today, containing $3.77 trillion in spending for next year and tax hikes that will affect both rich and poor alike. All told, deficits would still total over $700 billion next year under President Obama’s budget proposal.

In his press conference, President Obama claimed that his spending increases will be “targeted investments in areas that will create jobs right now.” The President rejected the choice between jobs investment and falling deficits, saying that “our deficits are already falling” and that “my budget will reduce deficits by another $2 trillion… in a balanced and responsible way.”

Before Obama is proclaimed a deficit-cutter, it’s important to remember that standard Keynesian economics – that the President subscribes to – would prescribe falling deficits as an economy comes out of a recession. Keynesians like President Obama would be expected to advocate shrinking deficits in an economic recovery. What’s important is to examine how President Obama treats the federal ledger in out years.

It doesn’t look good, either. President Obama’s budget would see deficits shrink from 2014-2018 before starting to grow again. But of course, the next decade is going to be pivotal for deficit reduction. Entitlement reform that focuses on shrinking mandatory spending in the out years is of paramount importance, and President Obama’s response to that is basically to fiddle around the edges, then wait and see how Obamacare works. What’s more, the Office of Management and Budget – the office that calculates some of the projections – is historically kinder to the President than the more highly-regarded Congressional Budget Office. THe CBO will have their own score out on the President’s budget in the next few weeks.

Beyond that, here are a few of the highlights from President Obama’s budget:

Tax hikes for the rich: President Obama wants to use two different measures to increase taxes paid by upper income-earners. The first would be to instate the “Buffett Rule,” which would force taxpayers in upper brackets to pay a mandatory minimum perecentage of their income, no matter what deductions they might have. The second would be to cap total deductions at 28 percent of income. Both these would be ways of raising the effective federal tax rate paid by high income-earners.

Tax hikes for the poor: President Obama also has two ways to hike taxes on the poor. He’s proposing a cigarette tax that would fund more federal spending “investments” on what he calls universal pre-K. Cigarette taxes are obviously paid by everyone, but they constitute a much larger percentage of income for the poor – and, by the numbers, the poor tend to be heavier smokers. President Obama is also proposing to move federal inflation measurements to “chained CPI,” which would be a more accurate measure of inflation and constitute a fair amount of deficit reduction – but is also an across-the-board tax hike that would affect the poor as well as the rich.

Overall spending increase: Next year, the Obama budget will spend $3.77 trillion. This is even more than the left-wing dream that is the Senate Democratic budget – which spends $3.71 trillion. Over the next ten years, President Obama will spend less than the Senate Democrats’ proposal, but in the short-term, he’s asking for more money than Patty Murray.

Corporate tax reform: Here we’ll offer tentative praise. President Obama wants to close loopholes and lower the top overall corporate tax rate. He wants to make it revenue-neutral, which shouldn’t be the goal, but even a revenue-neutral reform would be a mild improvement over the status quo.

Decreased funding for defense: Nearly every federal executive agency is receiving increased funding, but notable exceptions are the Department of Defense and the Department of Homeland Security. Combined, those departments will receive over $4 billion less than they did in 2012. That’s in addition to cost-cutting at the State Department, which is receiving less funding mainly due to the wind-downs of wars in Afghanistan and Iraq. The Departments of Commerce, Education, Energy, Health and Human Services, Housing and Urban Development and Labor are all receiving substantial increases.

Surprising spending cuts: The Obama Administration proposes to cut almost $300 million dollars from the Environmental Protection Agency’s budget and cuts $200 million from the Treasury Department.

Those are the top takeaways from the President’s budget. On the whole, it’s less radical than the Senate’s budget and at least head-fakes towards deficit reduction in the next few years. This, however, is a status quo budget at exactly the time that fighting for the status quo is the wrong thing to do.

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