Hat tip to Wymarshian…
The Bankruptcy of the United States is Now Certain
by Porter Stansberry
It's one of those numbers that's so unbelievable you have to actually think about it for a while… Within the next 12 months, the U.S. Treasury will have to refinance $2 trillion in short-term debt. And that's not counting any additional deficit spending, which is estimated to be around $1.5 trillion. Put the two numbers together. Then ask yourself, how in the world can the Treasury borrow $3.5 trillion in only one year? That's an amount equal to nearly 30% of our entire GDP. And we're the world's biggest economy. Where will the money come from?
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According to the U.S. Treasury, $2 trillion worth of debt will mature in the next 12 months. So looking only at short-term debt, we know the Treasury will have to finance at least $2 trillion worth of maturing debt in the next 12 months. That might not cause a crisis if we were still funding our national debt internally. But since 1985, we've been a net debtor to the world. Today, foreigners own 44% of all our debts, which means we owe foreign creditors at least $880 billion in the next 12 months – an amount far larger than our reserves.
Keep in mind, this only covers our existing debts. The Office of Management and Budget is predicting a $1.5 trillion budget deficit over the next year. That puts our total funding requirements on the order of $3.5 trillion over the next 12 months.
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© Copyright Porter Stansberry, S&A Digest, 2009
The world’s most important gathering of monetary reformers takes place each year in Chicago at the American Monetary Institute’s annual conference. This year’s event takes place September 24-27 at Roosevelt University . Chairing the conference is Stephen Zarlenga, AMI director and author of the landmark book “The Lost Science of Money.” For information and the list of speakers, including monetary economist Michael Hudson, see the AMI website at http://www.monetary.org/2009schedule.html. While personal matters will prevent me from appearing on-site, I have sent the following remarks. Segments of my six-part DVD, “Credit as a Public Utility,” will also be shown.
It is not difficult to come up with methods to solve today’s economic crisis through monetary reform. Many of us are doing it. The key, as I have been writing for the past several years, is to treat credit as a public utility, not the private property of the world’s financial elite.
If we truly adhered to this concept, we would be able to see that a debt-based monetary system, where money only comes into existence through bank lending, can succeed only in isolated circumstances when a growth bubble outpaces the ability of the public to pay interest charges for the privilege of having money to spend and thereby to survive.
Whenever the growth bubble fails, as we have seen over the last three years, the system crashes, the financiers pick up assets for pennies on the dollar, and the cycle starts again. It seems haphazard and unpredictable, but we all know that the system was designed this way and that only the wealthy profit in the long run.
The rich use governments, through which they control politicians, bureaucrats, and covert operatives, to protect and enhance their power. Democracy is subverted. Once the rich have their host country firmly under control, they branch out to the rest of the world. The key then becomes the use of financial power to control the world’s resources through trade and currency manipulation and the management of legal codes and institutional rulemaking.
If social classes within the host country or foreign nations victimized by financial hegemony should happen to rebel, police and military forces are deployed to crush the rebellion. Educational systems and the mass media are employed to brainwash civilian populations by keeping them docile and compliant. A host of methods are employed, including false-flag terrorist events, to instill fear in the population and keep them beholden to the authorities for protection. Because the financial elite are parasites who kill their hosts, they must constantly ensnare new victims.
The foregoing is a complete picture of the present world situation. The last two hundred years have been marked by the march toward world conquest by the money-masters through the Anglo-American military-financial-intelligence colossus, combined with their bought-and-sold allies from the privileged classes of subservient nations.
The outcome was in some doubt during the 1970s in the aftermath of the Vietnam War. But beginning with the Reagan Doctrine in the 1980s, where a decision was made to gobble up the world one small country at a time, the march forward resumed. The 1990-91 Persian Gulf War, the carving up of Yugoslavia later in the 1990s, and the conquest of Iraq and Afghanistan most recently have brought the Western alliance to the borders of Russia . The attack now continues through the Caucasus region, even as Iran and Pakistan are being isolated.
It may be controversial to say that Russia is the target. Why might this be so? It’s because the financial takeover by the West in the 1990s didn’t work. An independent Russia has made a comeback. They have a lot of nuclear weapons and know how to use them. The collapse of the Soviet Union, leaving the U.S. “the world’s only superpower,” created a far more perilous imbalance than most people are aware of. It’s an imbalance that has caused Western military planners—for instance with NATO—to dangerously overreach.
The big question geopolitically is whether China can be induced to stand with the West. This was the objective of the effort beginning around 1971 under President Richard Nixon’s “Opening to China ” to incorporate China into the Western financial system. But today China increasingly seems to be standing alone, with the makings of a self-sufficient banking and industrial complex—and a stable currency—that is defying Western attempts at control.
Will there be an “oriental surprise?” Will China reach a point where it makes an irreversible decision to side with Russia or stand against the West? No one knows. Henry Kissinger wrote in the Washington Post on August 19, 2009, that keeping China as a friend to the West is essential for the “New World Order.” And yes, he used those words—this is not a big secret. The winds of change are also blowing in Japan , where the pro-American ruling party has just been voted out.
Personally, I find this struggle for world domination repugnant—the complete triumph of the rule of materialism and violence. As Rodney King said, “People, I just want to say, you know, can we all get along?” Indeed, why can’t we see that life on earth, as Pope Benedict XVI recently pointed out in his encyclical Caritas In Veritate, is a gift from God to man, a gift that bestows on all of us the duty to treat each other fairly and with compassion?
So, in the face of the current world horror, what chance do monetary reformers have to be heard?
The answer, I believe, is that we are being heard. My mind goes back to 2003, only six years ago, when Stephen Zarlenga came to my office at the U.S. Treasury Department in Washington , D.C. , where I had booked him to give a presentation based on his book, The Lost Science of Money. Later I worked with Steve on his first draft of the American Monetary Act. The time came when Steve began to meet with Congressman Dennis Kucinich, briefing him and others in Washington on monetary ideas.
So much has happened since then. So many more people have become aware of the evils of the debt-based monetary system. We have seen Congressman Ron Paul ignite a national storm of revulsion against the Federal Reserve System. There is now even hope that the American Monetary Act might be introduced on the floor of Congress.
But it is also perfectly obvious that this is only a start. The start, however, has been made, though there’s a long way to go.
We’ve had promising starts before. Back in the latter part of the 19th century, the American public were far more attuned to ideas of monetary reform than at any time since. There was then a Greenback Party that elected members of Congress and ran candidates for president. The Populist Party understood monetary issues and the importance of a flexible and expansive currency. Henry George became the leading author of the day with his reformist ideas based on the principle that the earth was a commons from which all have a right to benefit.
But then, when the international bankers finally succeeded in taking over the country through the passage of the Federal Reserve Act of 1913, the curtain fell. It wasn’t an iron curtain; it was a red velvet curtain, such as graced the windows of the rich financiers of the age who benefited. These financiers started two world wars to consolidate their dominion. They may yet start a third. The Reagan Doctrine may have made it inevitable.
But I do not believe the warmongers will have the last say. Even if they bring down upon us another world catastrophe, those who believe in the better side of humanity will eventually win, because our cause is just and our ideas are based upon truth. Without monetary reform there can never be economic democracy. But with it perhaps the chief cause of war can be eliminated: the unjust distribution of wealth among people and nations, where some get far too much and many get nothing.
I strongly support the American Monetary Act, the movement for a basic income guarantee, and proposals supporting citizens’ dividends such as those of the Social Credit movement or the ones already in place through programs like the Alaska Permanent Fund. Even if such measures are not immediately implemented, the effort to promote them serves the purpose of educating millions of people.
Our present responsibility is getting the word out that there is indeed a far better way to do things and that real change is possible. That money and credit can empower people, not just enslave them. That debt is unnecessary when credit is viewed as a public utility. That technology when properly distributed can free people for higher intellectual and spiritual pursuits, not just eliminate jobs and force millions of people into bankruptcy and starvation. That, as Henry George and his successors have made clear, resources are for everyone, not just a few.
I have come up with my own proposal for immediate relief that I call “The Cook Plan.” One of the worst myths of our time is that for government to spend money it can only collect that money ahead of time through taxes or by borrowing. “The Cook Plan,” instead, would have the government print and distribute vouchers in the amount of $1,000 a month to any adult resident who applied.
The vouchers could be spent on necessities of life such as food, housing, clothing, transportation, or communication. They would then be deposited in a series of community savings banks and used to capitalize low-interest lending to individuals, students, small businesses, and family farms. The backing for the vouchers would be the new economic production they would engender at the grassroots level of every community.
This measure alone would take a giant step toward bringing about a healthy U.S. and world economy at the level of “We the People,” rather than the fruitless and hypocritical attempt to create “recovery” through bank lending and government deficit spending. “The Cook Plan” has met a positive response from around the world during the several months since I proposed it.
My views, while economically sound, have a spiritual basis. I believe in God, and I believe that man was created in the image of God. I believe that a world where we love our neighbor as ourselves and implement this love through social and economic policy is not just a dream, that it is the only practical way to live.
I believe in the family of man and the responsibility of man to be a good steward of the earth and the environment. I believe financial tyranny has done its best to destroy these values. But I see an upsurge of desire and commitment among people for a new day, a truly democratic society, and a life on earth that is organized and conducted sanely, compassionately, and wisely.
Those who attend such events as the American Monetary Institute’s 2009 conference understand all this. Together we will continue to work toward our ideals, no matter what disasters may intervene. It will take time and hard work, but we and those who come after us shall prevail.
Richard C. Cook is a former federal analyst who worked for 21 years for the U.S. Treasury Department. His book “We Hold These Truths: The Hope of Monetary Reform” is now available. He is also author of a book on the space shuttle Challenger disaster. His website is www.richardccook.com.
Richard C. Cook is a frequent contributor to Global Research. Global Research Articles by Richard C. Cook
"The Old Order is an aristocratic, social, and political system that prevailed in Europe between the 14th and 19th centuries. In it, power is held by the monarchy, the clergy, and the aristocracy, and society is divided into three Estates—the nobility, the clergy, and the rest of the people who are powerless. The Ancien Régime retains the privileges of both the nobility and aristocracy that existed in feudal times, and the people, whose lives have the value of mere livestock, exist only for the benefit of the state. The Ancien Régime is also militaristic, aggressive, and imperialistic. Wars are common, and between the reigns of Louis XIV and Louis XVI, France fought in at least 27 of them. But wars, then and now, are expensive, and France financed them with debt. When Louis XVI ascended the throne, the nation neared bankruptcy, and the people were impoverished. These circumstances provoked the French Revolution. Its aim was not merely to change the government’s form, it was to change the nature of society. Its battle cry was Liberté, Egalité, and Fraternité. The revolution was no mere political uprising; it was a social uprising whose aim was to entirely destroy the Old Order’s social structure, to abolish the privileges of the clergy, aristocracy, and nobility, and to uplift the value of and empower common people. The French didn’t entirely succeed, but they did create the conditions for the eventual emergence of social democracies in Europe.
From "Conservatives Leading the World Headlong into the 18th Century", by Prof. John Kozy.
