The Social Cost Of Capitalism
Paul Craig Roberts
When I was a graduate student in economics, the social cost of capitalism was a big issue in economic theory. Since those decades ago, the social costs of capitalism have exploded, but the issue seems no longer to trouble the economics profession.
Social costs are costs of production that are not born by the producer or included in the price of the product. There are many classic examples: the pollution of air, water, and land from mining, fracking, oil drilling and pipeline spills, chemical fertilizer farming, GMOs, pesticides, radioactivity released from nuclear accidents, and the the pollution of food by antibiotics and artificial hormones.
Some economists believe that these traditional social costs can be dealt with by well defined property rights. Others think that benevolent government will control social costs in the interests of society.
Today there are new social costs brought by globalism. For developed countries, these are unemployment, lost consumer income, tax base, and GDP growth, and rising trade and current account deficits from the offshoring of manufacturing and tradable professional service jobs. The trade and current account deficits can result in a falling exchange value of the currency and rising inflation from import prices. For underdeveloped countries, the costs are the loss of self-sufficiency and the transformation of agriculture into monocultures to feed the needs of international corporations.
Economists are oblivious to this new epidemic of social costs, because they mistakenly think that globalism is free trade and that free trade is always beneficial.
Economists are also unaware of the social costs of deregulation. The ongoing financial crisis which requires massive public subsidies to "banks too big to fail" is a social cost resulting from government accommodating Wall Street pressure to deregulate the financial system by repealing the Glass-Steagall Act, by removing the position limits on speculators, by preventing the CFTC from regulating derivatives, and by turning the Anti-Trust Act into dead-letter law and permitting massive economic concentrations. The social costs of successful corporate lobbying is enormous. But economists who believe that markets are self-regulating imagine that an enormous gain in efficiency has occurred, not massive social costs.
In order to keep the deregulated financial system afloat, the Federal Reserve has monetized trillions of dollars of debt over the last several years. Real interest rates have been driven into negative territory. Retirees are unable to earn any interest income on their savings and have to draw down their capital in order to cover their living expenses.
The liquidity injected into financial markets by the Federal Reserve’s policy of quantitative easing has produced huge bond and stock market bubbles. When they pop, more American wealth will be wiped out and more jobs will be lost.
Consider just one example of the social costs of jobs offshoring. When US corporations produce abroad the goods and services that they market to Americans, the goods and services that flow into the US arrive as imports. Thus, the trade deficit rises dollar for dollar.
The trade deficit means that the US has imported more than it has earned in foreign currencies by exporting. For most countries this would be a problem, but not for the US. The US dollar is the world reserve currency, which means that it is the means of international payment and that foreign central banks hold US dollars as reserves to secure the values of their own currencies.
With the passage of time, this advantage becomes a disadvantage, because foreigners use the dollars gained from their trade surpluses to buy up American income-producing assets. They buy US Treasury bonds and US corporate bonds, and the interest income leaves the country. They purchase US companies, and the profits, dividends and capital gains leave the country. They lease Chicago’s parking meters and American toll roads, and the revenues flow abroad.
The enormous outflow of income streams creates a large current account deficit for the US, which means that foreigners have even more surplus dollars with which to buy up more US assets. In other words, a chronic trade deficit is a way to redirect a country’s revenues and profits into overseas hands.
The ownership of a country changes from its own citizens to foreigners. According to Reuters, in 1971 foreign companies owned 1.3% of all corporate US assets. http://www.reuters.com/article/2008/08/ … 3020080827
By 2008 foreigners owned 14.2 percent of all US industries, including 21.5% of mining, 25% of manufacturing, 30.2% of wholesale trade, 12% of information industries, 12% of real estate, 15% of finance and insurance, 25% of professional, scientific, and technical services, 11% of entertainment and recreation and 11% of accommodation and food services, according to a report from Economy In Crisis. http://americawakeup.net/ownership
Numerous famous American brand names now are companies owned by foreigners.
Budweiser belongs to a Dutch company. Alka Seltzer belongs to a German company.
Firestone belongs to a Japanese company. The magazines Car and Driver and Woman’s Day are owned by a French company. Gerber baby food and Purina dog food belong to Swiss companies. Hellman’s Mayonnaise and Ben & Jerry’s ice cream belong to UK companies. Many thousands of former US companies have moved into foreign control as a result of the US trade deficit, which is swollen by the offshored production of US corporations.
The policy of chasing lowest labor cost abroad, that is, of pursuing absolute advantage, the antithesis of comparative advantage which is the basis of free trade, is the redirection of US profits, capital gains, rents, interest, parking meter and toll road fees into foreign hands.
Thus, there is a high social cost from corporate executives pursuing short-term profits in order to maximize their performance bonuses. The profits from offshored production are not indications of economic efficiency and social welfare. Most likely, the social costs to the US of offshored production are larger than the profits gained, making jobs offshoring a net loss to the US economy. There is little doubt that the social costs of GMOs exceed the profits of Monsanto.
But don’t expect mainstream economists to pay any attention. They are still waxing eloquently about the advantages of Globalism’s gift of the New Economy of high unemployment and low wages, financial crisis and dollar erosion. http://rt.com/usa/dollar-danger-as-world-currency-977/
Statistics: Posted by yoda — Sat Jun 01, 2013 2:32 am
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The Case Against Cronies: Libertarians Must Stand Up to Corporate Greed (And to embrace free market social responsibility)
Another excellent article from Tim Carney in The Atlantic. He sends out the same call we have been sending out (with an increasingly loud voice thanks to our readers) for quite a while. Those of us who believe in free markets, who believe that freedom and liberty are vital to human beings achieving their highest potential in business and beyond, must be prepared to call businesses out which collude with the government for unfair advantage. We should exert pressure in the marketplace and beyond.
If businesses see that engaging in crony capitalism is more costly to them than the advantages gained by schmoozing with the politicians they’ll stop.
(From The Atlantic)
Perhaps the only way to persuade big companies to reject cronyism is for spirited free-marketeers to somehow make up the majority of their shareholders — or their customers. If the latter sounds impossibly quixotic, consider the case of Allison and BB&T.
In 2005, the U.S. Supreme Court ruled, in Kelo v. New London, that local governments could use the power of eminent domain to take land from owners and transfer it to private companies. The ruling infuriated believers in property rights and critics of cronyism. Amid the public outcry, Allison announced that his bank, BB&T, would not finance commercial real estate deals that involved eminent domain takings.
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P.S.: Today is my last day leading social media and digital outreach efforts at Cato. Congratulations to my successor, Kat Murti, who will be taking Cato into the future and helping grow Cato’s social media following to new heights.
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The attached article is, well, strident. But it is full of excellent information about the current state of the United States. Average citizens have given up quite a lot in this country over the past 20 years. Our crony capitalist system expands and the state pushes into nearly every corner of our lives. Many people have made the transition from citizen to subject without even knowing it. With every year the dignity of the individual is eroded. Many do not even care.
Thankfully many others still do.
(From The Market Oracle)
Total government spending (Federal, State, Local) in 1996 totaled $2.7 trillion, or 35% of GDP. Today total government spending is $6.3 trillion, or 40% of GDP. In 1979, before the belief in government became a religion, total government spending was only 31.5% of GDP (27% in 1965). Are you receiving twice the service from government than you received in 1996? Are you safer from terrorists due to the massive expansion of the police state? Are your kids getting a much better education than they did in 1996? Have the undeclared wars benefitted you in any way, other than tripling the price of gas? Are the higher wage taxes, real estate taxes, school taxes, sewer fees, utility fees, phone fees, gasoline taxes, permit fees, and myriad of other government charges worth it? Is it normal for government to account for almost half of our economy?
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Daniel J. Mitchell
As part of my “Question of the Week” series, I said that Australia probably would be the best option if the United States suffered some sort of Greek-style fiscal meltdown that led to a societal collapse.*
One reason I’m so bullish on Australia is that the nation has a privatized Social Security system called “Superannuation,” with workers setting aside 9 percent of their income in personal retirement accounts (rising to 12 percent by 2020).
Established almost 30 years ago, and made virtually universal about 20 years ago, this system is far superior to the actuarially bankrupt Social Security system in the United States.
Probably the most sobering comparison is to look at a chart of how much private wealth has been created in Superannuation accounts and then look at a chart of the debt that we face for Social Security.
To be blunt, the Aussies are kicking our butts. Their system gets stronger every day and our system generates more red ink every day.
And their system is earning praise from unexpected places. The Center for Retirement Research at Boston College, led by a former Clinton Administration official, is not a bastion of laissez-faire thinking. So it’s noteworthy when it publishes a study praising Superannuation.
Australia’s retirement income system is regarded by some as among the best in the world. It has achieved high individual saving rates and broad coverage at reasonably low cost to the government.
Since I wrote my dissertation on Australia’s system, I can say with confidence that the author is not exaggerating. It’s a very good role model, for reasons I’ve previously discussed.
Here’s more from the Boston College study.
The program requires employers to contribute 9 percent of earnings, rising to 12 percent by 2020, to a tax-advantaged retirement plan for each employee age 18 to 70 who earns more than a specified minimum amount. …Over 90 percent of employed Australians have savings in a Superannuation account, and the total assets in these accounts now exceed Australia’s Gross Domestic Product. …Australia has been extremely effective in achieving key goals of any retirement income system. …Its Superannuation Guarantee program has generated high and rising levels of saving by essentially the entire active workforce.
The study does include some criticisms, some of which are warranted. The system can be gamed by those who want to take advantage of the safety net retirement system maintained by the government.
Australia’s means-tested Age Pension creates incentives to reduce one’s “means” in order to collect a higher means-tested benefit. This can be done by spending down one’s savings and/or investing these savings in assets excluded from the Age Pension means test. What makes this situation especially problematic is that workers can currently access their Superannuation savings at age 55, ten years before becoming eligible for Age Pension benefits at 65. This ability creates an incentive to retire early, live on these savings until eligible for an Age Pension, and collect a higher benefit, sometimes referred to as “double dipping.”
Though I admit dealing with this issue may require a bit of paternalism. Should individuals be forced to turn their retirement accounts into an income stream (called annuitization) once they reach retirement age?
I’m torn on this issue. Paternalists sometimes do have good ideas, but shouldn’t people have the freedom to make their own decisions, even if they make mistakes? But does the answer to that question change when mistakes mean that those people will be taking money from taxpayers?
Fortunately, I don’t need to be wishy-washy on the other criticism in the study.
Australia’s system does have shortcomings. It is heavily dependent on defined contribution plans and is vulnerable to weaknesses in such programs.
I strongly disagree. A “defined contribution” account is something to applaud, not a shortcoming.
The author presumably is worried that a “DC” account leaves a worker vulnerable to the ups and downs of the market, whereas a “defined benefit” account promises a specific payment and removes that uncertainty. Sounds great, but the problem with “DB” accounts is that they almost inevitably seem to promise more than they can deliver. And that seems to be the case whether they’re supposedly based on real savings (like company retirement plans or pension funds for state and local bureaucrats) or based on pay-as-you-go taxation (like Social Security).
*Since I’m somewhat optimistic that America can be saved, I’m not recommending you head Down Under just yet.
P.S. I’m also a huge fan of Chile’s system of private accounts. At the risk of oversimplifying, Chile’s system is sort of like universal IRAs and Australia’s system is sort of like universal 401(k)s.
P.P.S. There’s much to admire about Australia, but its government is plenty capable of boneheaded policy. Heck, the government even provides workers’ compensation payments to people who get injured while having sex after work hours, simply because they were on a business-related trip. Talk about double dipping!
P.P.P.S. Here’s my video explaining why we should implement personal retirement accounts in the United States.
P.P.P.S. The death tax has been abolished in Australia, so there’s more to admire than just personal retirement accounts.
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Among politically active social conservatives, there’s a remarkably durable myth that Republicans can make inroads with black voters if only they hold fast to hard-line positions on issues like same-sex marriage. That notion cropped up again this week as part of a widely publicized letter to Republican National Committee chair Reince Priebus in which thirteen officials with social-conservative groups threatened that their followers will leave the GOP or stay home in future elections unless the party pledges to continue its staunch line against gay marriage, a stance now widely unpopular in public opinion polls and among many Republican demographics such as those under 50.
The letter, which you can read here, portrays the issue as vital in GOP minority outreach, which they said should “focus on issues where there is mutual agreement like traditional marriage.” (It does not mention that black opinion, once lopsidedly opposed to same-sex marriage, has swung closer in polls to an even split on the issue). To support this claim, it cites real-world examples from three states: Illinois, Ohio, and my own state of Maryland.
On Ohio, the letter repeats longstanding claims that President George W. Bush’s campaign stance on marriage made the difference in his narrow Buckeye State win in 2004. My colleague David Boaz has already examined those claims in this space, and found the evidence surprisingly thin. The Illinois example, for its part, is self-evidently beside the point: the letter correctly notes that some minority elected officials in that state oppose same-sex marriage, but that does nothing to show that any Illinois blacks are ready to stop voting Democratic because of their concern for the issue.
That leaves Maryland. And in the course of analyzing last November’s Maryland vote in some detail, and writing a series of articles on the results of my research, I feel some confidence in saying that no one has been able to offer evidence that the ballot fight over same-sex marriage did the Maryland Republican Party any overall good with black voters in the state.
As I noted in this December article in The Blaze, Prince George’s County in suburban Washington, which has a substantial black majority among registered voters and has won national attention as a microcosm of black political trends, was hard fought territory in Maryland’s Question 6 fight. In the end, the county split about evenly, Question 6 trailing by just 1 point; the measure was carried to a 5-point statewide win by a strong showing elsewhere in the Baltimore-DC corridor, notably including many Republican suburbs.
Because P.G. is so large and has so many overwhelmingly black precincts, it afforded an opportunity to investigate whether black voters with socially conservative views are any more likely to vote Republican than those with more socially liberal inclinations. Toward that end, I identified those black-dominated precincts with the strongest social-conservative leanings, as measured by the size of the margins by which they disapproved Question 6. If the “GOP minority inroads” thesis was correctly identifying a genuine trend, you would expect to see signs of a healthy black crossover vote for GOP candidates in those precincts. Instead, the black precincts that most strongly opposed Question 6 were also among those where the GOP got buried most completely, with Mitt Romney getting only (in typical showings) 3, 5, or 6 percent of the overall vote. The down-ticket Maryland GOP candidates, who all happened to be strong social conservatives, were getting beaten just as decisively, including in Senate and House races where all the relevant candidates were white. The GOP’s social-conservative senate hopeful, for example – who ran well enough to carry 13 of 23 counties statewide against lackluster white liberal Sen. Ben Cardin – did even worse in P.G. than Romney, winning only 6 1/2 percent of the vote county-wide and a good bit less than that – as little as 2 percent in one precinct – in the most socially conservative black P.G. neighborhoods.
Republicans who imagine that catering to the most vehement social conservatives within the party will result in a harvest of new black votes are deluding themselves.
View full post on Cato @ Liberty
Ed Clark is a lawyer and politician who ran for Governor of California in 1978 and, as the Libertarian Party candidate, for President of the United States in 1980.
Murray Rothbard was a prolific author and Austrian economist who promoted a form of free market anarchism he called “anarcho-capitalism.”
Bruce Daniel is a dentist from Loomis, California, and directed the Libertarian Party’s plan to reform the Social Security system and replace it with the “Freedom Individual Retirement Account.”
In this audio-only recording Clark, Rothbard, and Daniel each describe the inherent problems the current Social Security system faces and propose reforms that would fix the system.
View full post on Libertarianism.org
This Week in “Gun Disgust”: Social Services Visits New Jersey Man’s House Because of a Facebook Picture of His Son Holding a Gun
A picture of Shawn Moore’s 11-year-old clad in camouflage and holding a scary-looking gun prompted New Jersey’s Department of Children and Families to visit his house for an “inspection,” according to Moore. As reported by the Associated Press:
The elder Moore was at a friend’s house when his wife called, saying state child welfare investigators, along with four local police officers, were at the house, asking to inspect the family’s guns.
Moore said he called his lawyer Evan Nappen, who specializes in Second Amendment cases, and had him on speaker phone as he arrived at his house in Carneys Point, just across the Delaware River from Wilmington, Del.
“They said they wanted to see into my safe and see if my guns were registered,” Moore said. “I said no; in New Jersey, your guns don’t have to be registered with the state; it’s voluntary. I knew once I opened that safe, there was no going back.”
The Department of Children and Families has not confirmed that the Facebook picture was the reason for the surprise “inspection,” but a spokeswoman did comment that it is “important to note the way an investigation begins is through the child abuse hotline. Someone has to call to let us know there is a concern.”
Yesterday, I argued on FoxNews.com that the gun debate is really a culture debate. Two cultures are emerging in America. One culture respects guns as important tools in the hands of responsible citizens. The other culture is disgusted by guns. It is becoming increasingly difficult to bridge the gap between those cultures in order to devise reasonable and effective gun laws that respect citizens’ Second Amendment rights.
Clearly, Mr. Moore is in the former camp and has taught his son how to responsibly use firearms. Appearing on “Fox and Friends” this morning, Moore’s son Josh said he’d been shooting guns since he was five, that he likes to hunt, and is a “pretty good shooter.”
Yet many who are animated by “gun disgust” believe keeping firearms in the home is tantamount to child abuse. But the actual number of accidental firearm deaths of children are usually grossly overstated. In 2010, the CDC reported 62 deaths by accidental firearm discharge for children between 0-14 years old. (You can check the numbers yourself here.)
While each and every one of these deaths is undeniably tragic, the number is far less than deaths due to accidental drownings (726) or bicycles (approximately 100 in 2006). Yet I’m sure social services would not have visited Mr. Moore’s house if he had put up a picture of Josh on a new ten-speed. In fact, for an instrument with such potential for lethality, the number of accidental gun deaths for children is remarkably low. Even seemingly innocuous things, such as adult beds, can kill dozens of children per year. Between 1999-2001, 41 children under five died after being caught between a mattress and a wall or headboard. Nevertheless, during the Clinton administration the Department of Justice ran a series of ads designed to frighten parents about the dangers of unlocked guns, claiming that “an unlocked gun could be the death of your family.”
Those numbers are unlikely to change the minds of the gun-disgusted. As in many areas of public policy, facts often matter less than we’d like to believe.
View full post on Cato @ Liberty
Peter Ferrara is Director of the International Center for Law and Economics and President of the Virginia Club for Growth. He is a graduate of Harvard College and Harvard Law School, and has practiced law with firms on Wall Street and in Washington, DC.
In this video, Ferrara lectures at a Libertarian Party of New York conference on his first book, Social Security: The Inherent Contradiction (1980). He describes in detail the problems built into the way the U.S. Social Security system was designed and offers a method of transitioning to a fully privatized retirement-savings model.
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Money Is A Form Of Social Control And Most Americans Are Debt Slaves
By Michael, on February 19th, 2013
Is America really "the land of the free"? Most people think of money as simply a medium of exchange that makes economic transactions more convenient, but the truth is that it is much more than that. Money is also a form of social control. Just think about it. What did you do this morning? Well, if you are like most Americans, you either got up and went to work (to make money) or to school (to learn the skills that you will need to make money). We spend a great deal of our lives pursuing the almighty dollar, and there are literally millions of laws, rules and regulations about how we earn our money, about how we spend our money and about how much of our money the government gets to take from us. Not that money is a bad thing in itself. Without money, it would be really hard to have a modern society. Unfortunately, our money is based on debt, and debt levels in the United States have exploded to absolutely unprecedented levels in recent years. The borrower is the servant of the lender, and if you are like most Americans, nearly every major purchase that you make in your life is going to involve debt. Do you want to get a college education so that you can get a "good job"? You are told to get a student loan. Do you want a car? You are encouraged to get an auto loan and to stretch out the payments for as long as possible. Do you want a home? You are probably going to end up with a big fat mortgage. And of course I could go on and on and on. The cold, hard truth of the matter is that most Americans are debt slaves. Most of us spend our entire lives trapped in an endless cycle of debt that we never escape until we die, and meanwhile our years of hard labor are greatly enriching those that own our debts.
Have you ever found yourself wondering why you can never seem to get ahead financially no matter how hard you work?
Well, it is probably because you have gotten yourself enslaved to debt.
Just consider the following example about credit card debt from a former Goldman Sachs banker…
On the debt side of things, how much does your credit card company earn if you carry just an average of a $5,000 credit card balance, paying, say, 22% annual interest rate (compounding monthly) for the next 10 years?
In your mind you owe a balance of only $5,000, which is not a huge amount, especially for someone gainfully employed. After all, $5,000 is just a quick Disney trip, or a moderately priced ski-trip, or that week in Hawaii. You think to yourself, “how bad could it be?”
The answer, including the cost of monthly compounding, is $44,235, or about 9 times what it appears to cost you at face value.
But a large percentage of Americans never pay off their credit cards at all. They make small payments each month, but then they just keep on adding to their balances.
In the end, that is financial suicide.
If you carry an "average balance" on your credit cards each month, and those credit cards have an "average" interest rate, you could end up paying millions of dollars to the credit card companies by the end of your life…
Let’s say you are an average American household, and you carry an average balance of $15,956 in credit card debt.
Also, as an average American household, let’s assume you pay an average current rate of 12.83%.
Finally, let’s assume you carry this average balance for 40 years, between ages 25 and 65. How much did your credit card company make off of you and your extreme averageness?
Sadly, approximately 46% of all Americans carry a credit card balance from month to month.
How stupid can we be as a nation?
When you become enslaved to the credit card companies, your toil and sweat makes them much wealthier. It is a form of slavery that does not require anyone pointing a gun at you.
But we never seem to learn. Incredibly, 43 percent of all American families spend more than they earn each year.
As the chart below demonstrates, consumer credit actually declined for a short while during the last recession, but now it has turned around and the growth of consumer credit is on the same trajectory as it was before the last economic crisis…
Today, the total amount of consumer credit in the United States is 15 times larger than it was 40 years ago.
And every major "milestone" in our lives typically involves even more debt.
-The total amount of student loan debt in the United States recently passed a trillion dollars, and approximately two-thirds of all college students graduate with student loan debt at this point.
-Total home mortgage debt in the United States is now about 5 times larger than it was just 20 years ago, and mortgage debt as a percentage of GDP has more than tripled since 1955.
-Car loans just keep getting longer and longer, and approximately 70 percent of all car purchases in the United States now involve an auto loan.
-Want to get married? That average cost of a wedding is now $26,989 which is probably going to mean even more debt unless you have wealthy parents.
-Do you have a serious medical problem? According to a report published in The American Journal of Medicine, medical bills are a major factor in more than 60 percent of the personal bankruptcies in the United States.
Are you starting to understand why approximately half of all Americans die broke?
And I have not even begun to talk about our collective debts yet.
Government debt is a collective form of debt. You may not have voted for any of the politicians that have been racking up debt in your name, but part of it still belongs to you.
Since the year 2000, state and local government debt has more than doubled. These are collective debts for which we are all responsible…
And of course the biggest collective debt of all is the U.S. national debt.
In a previous article, I discussed how the national debt has exploded out of control in recent years. If you can believe it, the U.S. debt to GDP ratio has increased from 66.6 percent to 103 percent since 2007, and the U.S. government accumulated more new debt during Barack Obama’s first term than it did under the first 42 U.S. presidents combined.
When you break things down by household, the numbers look even more frightening.
During Barack Obama’s first four years in the White House, the amount of new debt accumulated by the federal government breaks down to approximately $50,521 for every single household in the United States.
And as I have mentioned previously, if you started paying off just the new debt that the federal government has accumulated during the Obama administration at the rate of one dollar per second, it would take more than 184,000 years to pay it off.
Well, you might argue, none of that debt will ever be paid off in our lifetimes.
And you would be right.
But what we are doing is consigning our children, our grandchildren and all future generations of Americans to a lifetime of debt slavery.
How nice of us, eh?
Over the past 10 years, the U.S. national debt has grown by an average of 9.3 percent per year, but the overall U.S. economy has only grown by an average of just 1.8 percent per year.
How do we expect to continue doing this?
Fortunately, more Americans are starting to wake up to how foolish all of this is.
For example, the following is what Home Depot Founder Kenneth Langone told CNBC on Tuesday…
"The fundamentals haven’t changed … And we don’t know when the storm is going to hit," he predicted. "It has to happen.If you look at our debt to GDP, eventually you reach a point where there’s no turning back."
He used an analogy to make his point. "If you had one meal left, and you had your grandchild with you, would you eat if or give it to your grandchild?"
He said all people would say "give it to my grandchild."
But pursuing the president’s vision, he argued, "[Is] eating the grandchildren’s breakfast, lunch and dinner right now. And the [grandchildren] haven’t been born yet."
What we are doing to our children and our grandchildren is beyond criminal. We are selling away their futures in order to make our lives more pleasant.
Right now, we are stealing more than 100 million dollars from our children and our grandchildren every single hour of every single day.
So where is the outrage over this theft?
Sadly, most Americans don’t even realize that all of this is by design. When the Federal Reserve system was created back in 1913, it was designed to get the U.S. government trapped in an endless spiral of debt.
And it worked. Today, the U.S. national debt is now more than 5000 times larger than it was when the Federal Reserve was first created.
Our society has become addicted to debt, and that means that we have become addicted to slavery.
We are not the "land of the free". The truth is that we are now the "land of the servants".
Over the past 40 years, the total amount of debt owed in the United States (government, business, consumer, etc.) has grown from less than 2 trillion dollars to more than 55 trillion dollars…
So who benefits from all of this?
I talked about this in a previous article. The ultra-wealthy and the international bankers make enormous profits by lending money to all the rest of us.
According to a stunning report that was released last summer, the global elite have up to 32 trillion dollars stashed away in offshore tax havens around the globe.
How did they get so much money?
The borrower is the servant of the lender. They have gotten rich at our expense.
But most people live their entire lives without ever understanding how the game is being played.
Today, most Americans see that the Dow is back above 14,000 and they hear the mainstream media telling them that happy days are here again and so they just believe that things are going to turn out okay somehow.
And it certainly does not help that most people seem to let others do their thinking for them. In fact, about 23% of all Americans can’t even read at this point.
Statistics: Posted by yoda — Wed Feb 20, 2013 12:00 am
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