Debt Limit Not
Benjamin Franklin is credited with this: “Certainty? In this world nothing is certain but death and taxes.” If he were to say that today would he have said it this why; Certainty? In this world nothing is certain but Congressional spending, death and taxes.
So the time is upon us, the Congress will begin the process to vote on increasing the federal borrowing limit. With Federal revenue just over $2 trillion and spending around $3.75 trillion, what the Congress needs to do is pass a bill that will state that debt service payment shall be paid first. After which they will pay the military, Social Security, Medicare, Medicaid, national security and let the administration choose what to pay next.
Washington has proved it cannot and should not be trusted. Now is the time that their hands should be tied. Quantum Easing has devalued the dollar, causing commodities to jump in price, and has not done anything for employment.
What the Federal Reserve has done is force excess cash into the banks and if they release it we would have hyperinflation. See recent charts from the . When the Feds only job was to maintain the value of the US dollar, things where not so bad.
What most people fail to realize is that most commodities are traded in US dollars. As the dollar is weakened, more dollars are required. That in turn means that our price goes up; see ‘Open Letter of Thanks.’
The easiest way to explain this is this way. Think of the Dollar as a share of stock and the United States as a company. If there are 1 billion shares of the company and the company is worth $10 billion that means that share is worth $10. Now say that the company wants to raise some extra cash, they sell another 1 billion shares. That means there are now 2 billion shares of stock on the market. Your 1 share of stock that was worth $10 is now worth $5.
If, you had been trading one share of stock for 10 hamburgers now you will have to trade at least 2 shares for the same hamburger. This was the same trick that was used in the Weimar Republic, and we all know how that ended. To stop the central bank we need to stop the debt increase. We must live within our means.
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