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"As Alan Greenspan prints more greenback dollars originating in debt to pay off debt in order to support our costly colonial invasions, our money is being devalued. That translates to inflation: more quantities of money to buy the same thing. What happens when other nations decide to no longer fund US since our paper money, the value of which is created out of thin air via debt, is losing value?" 



MAD Tax Beyond Squander Dome

Posted November 25, 2004 thepeoplesvoice.org

By: Ted Lang

Want to see Americans run away in sheer terror? Want to know what really scares them senseless in the land of decree and the home of depraved? Try going at them with numbers! Americans are absolutely terrified of numbers, and anything that relates to them! Want proof?

Just approach any American, look them right in the eye, and say the number, "1040!" Americans are terrified of the IRS and their unlimited power to seize, kill and destroy. Bill of Rights protections? Senator Upchuck Schumer had it right: "The Second Amendment [and therefore the entire Bill of Rights] is a myth!" The Second Amendment allows citizen force to stand up to government force thereby ensuring our protections under the Bill of Rights. Now you show me where and when any government anywhere was gracious enough to allow its citizens arms, excepting of course the major sovereignties of Switzerland and Iraq.

Americans are either terrified or oblivious of banking, credit cards, income tax forms and arithmetic. Is it any wonder why they are totally convinced that anything involving the combination of government and numbers represents a terrifying unknown? Ask any American this basic question: Can you define and explain the deficit and the national debt? Some will know, and some others will figure it out on the spot only because they were presented with a consideration of the two differing concepts within the same sentence. But the majority of Americans are clueless as regards basic accounting and economic terminology.

Accounting, basically double-entry bookkeeping, was invented by a Catholic monk in 1494, two years after Columbus purportedly discovered the New World. Its double-entry concept was tedious and laborious, but very necessary to root out mistakes and mispostings. Computers and "off-the-shelf" accounting programs today have all but eliminated the tedium and horrendous amount of time formerly required to keep a set of books and balance debits versus credits on a trial balance.

Another dual concept in accounting and bookkeeping is that which mirrors life: the static and the ongoing. The purpose of accounting, touted as being more professionally and universally adaptable than the narrower constraints of merely maintaining a set of books, is to allow for accuracy and meaning by recording financial transactions in terms of dollars and cents. And the purpose of accounting is to produce two types of financial statements: one representing static numbers of an organization and the other representing the on-going operations of the organization.

The static numbers of an organization, such as the original cost of a building, or machinery, or the amount of either a bank account or a loan, are termed the organization's financial position, and the financial statement representing those here-defined static numbers is known as the "balance sheet." It presents the costs of assets owned, the amount of loans or liabilities owed, and the difference between the two. Clearly, the value of assets should exceed the dollar amount of the liabilities owed, and the difference, or net worth, or equity, should be positive.

On the other hand, the organization's "operations," the very reason for which the organization exists, and comparing income versus expenses, shows results from operations in a one-year period. It is often addressed by the term "the bottom line," and is called either the "profit and loss statement," or simply the "income statement."

One must understand the difference between financial position versus the results from the one-year period of operations conducted by the organization; hence, the difference between the long-term balance sheet and the one-year income statement.

Where am I going with all this? As stated earlier, Americans are generally terrified of financial matters, especially when they relate to government. And that's just fine with our tax and squander welfare-warfare party in the District of Criminals. The criminal activities of looting, plundering and that of launching deadly and unnecessary wars against the rest of the world, originates under the Capitol dome.

President of vice, Dick Cheney, has been quoted as saying "Deficits don't matter." Of course they don't! At least insofar as he's concerned - the tax bill for deficits is merely deferred to future administrations and generations who must pay off the increasing loans payable liability on the government's balance sheet. Consider your own balance sheet in this regard: the cost of your house, furniture and car. What if what you owe exceeds the value of what you own? That's bankruptcy! Can you simply print more money to pay off your debt? The government can!

Annual operational deficits, expenses [spending] exceeding income, get added to and accumulate as the national debt on the balance sheet, which increases the risk of bankruptcy. Paying off debt in terms of the principal amounts of the increasing liabilities incurred must be considered also in terms of the cost of having borrowed; namely, the interest charged for borrowing. Interest expense reduces the benefits of operational income revenue by reducing the bottom line. In the case of our government, the bottom line is ever increasing, but as a loss!

Congress has just again raised the national debt ceiling. Congress and our MAD president, the shirker and smirker, the Honorable Alfred E. Newman, continue to spend in a reckless and unrestrained manner, and at a rate higher than can be offset in taxes collected by the IRS. Budget excesses and expenditures over governmental operational income in the form of tax revenue create a "bottom line" on the government income or profit and loss statement that's always "in the red." But because government spending is legitimized via a legislatively approved budget, the loss is termed a "deficit."

Losses from the income statement get transferred to the balance sheet at the end of the year when "the books are closed for the fiscal period." So the balance sheet is reduced in value by a larger liability, and then again when the loss is transferred to equity as a reduction of net worth.

Financial professionals use the term "deficit" as it occurs only in the planning stage of an annual financial plan, or its more detailed version by department, account, and time period, termed a "budget." When revenue is planned, and planned spending/expenditures exceed planned revenue, the projected loss, which is yet to happen, is termed a "deficit."

What this means is that Congress knowingly votes to spend over and above what the United States Treasury is able to collect in tax revenues beforehand. It is an annually planned-and-approved deliberate incremental movement towards bankruptcy. If the economy takes an unexpected downturn anytime during the operational year, termed a "fiscal year," which describes a twelve month period other than one starting on January 1 and ending on December 31, and actual realized revenues are smaller than planned, or expenditures must be increased by some "unforeseen" contingency, such as Bush's illegal war in Iraq, then deficits will continue and the national debt will loom increasingly out of control.

Our corrupt tax-and-squander government legitimizes irresponsible fiscal operations that create deficits and increase our liability to repay the national debt created by these looting, plundering, war-mongering crooks, by "officially" raising the debt limit. The entire so-called Federal Reserve System was always based upon debt, a debt guaranteed by the income tax receipts American citizens were saddled with when the Congress of Criminals and Wilson signed both into law in 1913. And raising the debt ceiling is every bit part and parcel of this continuing Congressional fraud.

Now the debt has been raised again by the CoC to $8.18 trillion! Who underwrites the CoC's promises to pay this debt? We do! Money is merely a substitute for value transfers in the free market. The value being transferred is the money from foreign nations, primarily China, who provide current money of value in exchange for the promise to repay back the principal sometime in the future. Also underwriting US fiscal fraud are individual bondholders. In the meantime, the bondholders here and the greater majority abroad are repaid interest for the loans in real value-depreciating money, expenditures which are in the form of interest expenses deducted from the government's revenue on its profit and loss statement. The more we borrow and increase the national debt, the higher will be our interest expense.

In other words, the bottom line red number showing a loss gets larger and larger, and we will in effect need to take out more loans just to pay the interest on the debt. But this is only the financial and accounting dimension of the problem; there's another.

The concept of money as a token of value must be considered. In dealing with other nations, foreign trade must be considered on a value added/subtracted basis. Foreign trade is also affected by a dual dimension: the flow of goods and services and the value of each nation's money. Clearly, if a nation's money system loses value, more and more of it is required to purchase foreign goods and services. In order to buy large quantities of the astounding amount of goods and services required in the conduct of war, more money must be printed because of the skyrocketing war production requiring immediate payment of wages, salaries, cost of materials and manufacturing operations. This doesn't even take into consideration transportation and shipping costs.

As an example of the astonishing cost of war, consider that one standard tank or artillery round can cost anywhere from $30 to 50 thousand! Consider this cost and its magnified waste when used to destroy the infrastructure of another nation that never gave US a reason to attack it in the first place!

It is obvious that our president is indeed the personification of madness: Alfred E. Newman. Forging ahead with costly war after war, he is indeed putting the nation into deeper debt to those countries presently financing and underwriting US with their loans. As Alan Greenspan prints more greenback dollars originating in debt to pay off debt in order to support our costly colonial invasions, our money is being devalued. That translates to inflation: more quantities of money to buy the same thing. What happens when other nations decide to no longer fund US since our paper money, the value of which is created out of thin air via debt, is losing value? Since 1913, it was based on the credit of the United States and our ability to repay debts.

Interest rates must be raised in order to continue to attract foreign investment. China is a principal investor - compare its manufacturing capabilities and goods and services offerings to ours. We were once a manufacturing giant, capable of making everything by ourselves. We are increasingly becoming dependent on foreign goods and services, and those goods and services are about to become a lot more expensive because of the irresponsible squandering by our Congress of Criminals and our leader Big Al in his un-American journey to the Newman World Order.

How are any of these fiscal concerns, characterized by accounting trickery and economic self-destruction, going to advance the cause of world freedom? How is increased dependency upon foreign production and industry going to add value to our money? How is the hostility we are showing towards other nations and their people going to promote world harmony and increase free trade? And how have our recent presidential campaigns and elections addressed any of these issues? Is there any doubt at all that the poop will soon hit the prop?


THEODORE E. LANG 11/23/04 All rights reserved. Ted Lang is a political analyst and a freelance writer.



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