by Frank Li
A big sequester is just around the corner (A Sequester No One Wants). Worried? Do not be! It's just yet another fabricated crisis! Besides, it's only $85B, or 2.4% of the $3.6T federal budget! If we can't cut that miniscule when the budget deficit is more than $1T, how are we ever going to pay back our monumental national debt of almost $17T?
We have much bigger problems to worry about!
What are they? How about capitalism, democracy, and money theories? In this article, I will link them together with three stern messages as follows:
Capitalism is the best thing that's ever happened to mankind. It fed starving people and created unprecedented prosperity in the West over the past several hundred years. It is creating unprecedented prosperity in China now.
Democracy not only was a proven failure in Rome and Greece more than 2,000 years ago, but also has been destroying the West over the past two decades, at least, with no end in sight.
America will not save itself or democracy by printing more money!
I author a weekly column at Global Economic Intersection, which has many publications on economics. I read these publications to further my knowledge of economics. However, I have just reached a simple conclusion: most of the research as reflected in many publications is simply valueless, not unlike modern democracy, which has been faltering in the West over the past two decades, at least.
As always, I will focus on America, instead of the West.
2. America is a great country!
A simple but true statement! For more, read: What is America, Anyway?
3. Americans are innovative!
Over the past 150 years, at least, Americans invented many things that have fundamentally changed human lives for the better, from Thomas Edison's light bulb, to Henry Ford's assembly lines for cars, to Steve Jobs' i-everything.
4. Three big things not invented by Americans!
Americans did not invent these three big things:
Capitalism: It was invented by the Europeans. For example, Industrial Revolution started before the U.S. was founded as a country in 1776.
Democracy: It was practiced in Rome and Greece more than 2,000 years ago. Both failed for the same reason: debts!
Money theories: Many, if not most, theories of money seem to be based on one notion: Fiat money. What, then, is fiat money?
According to Wikipedia,
Fiat money is money that derives its value from government regulation or law. The term fiat currency is used when the fiat money is used as the main currency of the country. The term derives from the Latin fiat ("let it be done", "it shall be").
Fiat money originated in 11th century China, and its use became widespread during the Yuan and Ming dynasties. During the 13th century, Marco Polo described the fiat money of the Yuan Dynasty in his book The Travels of Marco Polo. The Nixon Shock of 1971 ended the direct convertibility of the United States dollar to gold. Since then all reserve currencies have been fiat currencies, including the U.S. dollar and the Euro.
5. Money theories
There are many theories of money in existence (e.g. Quantity Theory of Money, Theories of Money, and Marx's Theory of Money). They make economics a seemingly interesting discipline. However, half of these theories can be easily eliminated by simply understanding that Quantitative Easing (or QE), a favorite policy practiced by the Federal Reserve, is just "printing money"!
[hat tip on above graphic to Prepardness Daily]
Why, then, does not the Fed call QE1, QE2, etc. "printing money"? It did, for many years, until inflation it caused gave "printing money" a bad reputation! The Fed then called it "monetizing the debt" until inflation gave it an equally bad name. The latest euphemism is QE until people suffer from the resultant inflation and hate it, as well. Any guesses for the next name for the same bad game that further erodes the US dollar and causes more misery?
It's all a myth just like democracy! Artificial complexity makes manipulating large groups of people easier by keeping them uninformed, or misinformed (read: Brainwashing in Communism and in Democracy), the secret sauce of democracy, as we know it today!
Fool me once, shame on me! Fool me twice, shame on you! Fool me three times, shame on the political system! For more, read: Solution II for America: Term-Limits and More!
6. The sequester
The sequester is a very minor, contrived problem, but it certainly highlights our true, dire situation: Our top politicians are arguing endlessly about $85B when our annual deficit is more than $1T! What's wrong with these politicians?
Here is a recent news story: Nikki Haley slams Washington after meeting with Obama. Here are two excerpts with my comments:
When she asked Obama if he would consider a last-minute plan to shave about 2 percent from the annual federal budget without increasing taxes, the answer was "no." "My kids could go and find $83 billion out of a $4 trillion budget," Haley said. "This is not rocket science."
Yes, you are right, Governor! Anybody with reasonable intelligence could do it, except for President Obama, who does not know how to govern! Remember, Barack Obama never managed a budget or payroll before becoming the President!
"There is something very wrong in this town."
Yes, you are right again, Governor! Virtually everything is wrong in Washington! Why and how? Read: It's the political system, stupid!
America is deeply in trouble.
I believe I have the most accurate diagnosis for America, as well as the best solution. Any doubt? Read my book (Saving America, Chinese Style) and then write your own review, 1-star or 5-star, at Amazon.com!