Gigs Shrugged

I found this today:

I wish it were possible to obtain a single amendment to our Constitution. I would be willing to depend on that alone for the reduction of the administration of our government to the genuine principles of its Constitution; I mean an additional article taking from the federal government the power of borrowing. I now deny their power of making paper money or anything else a legal tender. I know that to pay all proper expenses within the year would in case of war be hard on us. But not so hard as ten wars instead of one. For wars would be reduced in that proportion besides that the State governments would be free to lend their credit in borrowing quotas.

The Writings of Thomas Jefferson Being His Autobiography, Correspondence, Reports, Messages, Addresses, and Other Writings, Official and Private By Thomas Jefferson

Every dollar in existence is backed by exactly 1 dollar of debt. It is impossible to increase the money supply without increasing aggregate debt. It’s also impossible to decrease debt without decreasing the money supply by the exact same amount.

That’s one reason the Fed is pumping out money like crazy, and congress is spending it. As the debt markets unravel, people are paying off debts, and other debts are being declared total losses and being written off and new debt isn’t being offered as much… all of this causes money supply contraction.

So why are they spending and creating so much money?

The optimistic answer is that they are doing it to prevent deflation. The cynical answer is that they are spending money because they can, giving it to political friends in massive pork spending contracts, and the Fed giving directly to politically friendly bankers, in the most massive wealth redistribution scheme this country has ever seen. Except it’s not the socialist kind of wealth redistribution, it’s the kind where a corrupt government transfers money from everyone to its political friends. The worst sort of crony corrupt capitalism. And yes, Obama is a party to it.

Whoever controls the volume of money in our country is absolute master of all industry and commerce…when you realize that the entire system is very easily controlled, one way or another, by a few powerful men at the top, you will not have to be told how periods of inflation and depression originate.

-James Garfield, 20th President

This entry was posted on Friday, March 20th, 2009 at 9:35 pm and is filed under Economics, Politics. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.