Scared by a Little Old Lady

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I was a subway commuter from my suburban home to downtown Baltimore for over 5 years. During that span I was assaulted twice by groups of teenagers. I got the better of them on the first time and they got the better of me on the second.  Both times I was a little rattled, quite angry, but not really scared.  I never considered driving because of the price of parking.


After leaving that position I moved to a small town in a rural part of Western Maryland.  I joined a book club at the local library where group members would read the same book and then get together in a small meeting room at the library to discuss it.  This, of all places, is where I got really scared by a little 70’ish year old lady in sneakers.


There, 20 or so of us gathered in ceramic chairs formed into a circle facing a drawing board where the group leader could capture important points and recurring themes.  I realized, as the room filled, that I, at 57 years, would be the youngest in the group.  The chair to my left was claimed by the old lady I mentioned before.  We smiled, said hello, and waited for the group to start.  Everyone in the room appeared pleasant and gentle.  There was a palpable sense of stability and good will.


The book we were discussing was Mathew Desmond’s Evicted: Poverty and Profit in the American City.  Desmond, a Harvard Sociologist, actually moved to the poverty-stricken north side of Milwaukee for his research.  Instead of arguing for a particular point, Desmond simply reveals the real life struggles of individuals and families focusing on tenant/landlord issues, especially as they relate to eviction.  Many of those followed were struggling to pay $500 to $600 rent out of their $650 to $750 monthly incomes.


He did a good job of articulating how bad choices led to bad results but also revealed the incredible burden many suffer as they are always a step or two away from eviction.  In the midst of this suffering he revealed the wealth of many landlords who routinely forgo essential maintenance as a trade off against those who may be slightly behind in payments.


During the discussion there was a general consensus the poor were certainly in a pickle and that something should be done.  I mostly kept quiet but gently introduced the idea that some of this was simply a result of making bad choices – like using crack instead of starting a savings account. Towards the end of the discussion the woman next to me spoke.  She basically said that this was all quite simple; Federal housing assistance simply must be dramatically raised.  I responded that our nation is beyond broke, that we are $22 trillion in debt not counting $60-80 trillion of unfunded liabilities.  I said that we are currently at the point that if borrowing rates rise too much we will be unable to service even the interest on our debt.


Her response was what scared me.  She said “well, I’m sure that they won’t let THAT happen”.  She had an honest, child-like belief that our overseers in D.C. were fully trustworthy to prevent anything really bad from ever happening.  It dawned in horror on me that she was unaware of so many financial truths, of financial history and the dire seriousness of our country’s debt addiction.  It was truly a “well if they have no bread, let them eat cake” moment.  All I could do was to look at her in disbelief but how could I convey to her that we simply don’t have any extra spending capacity?  I applauded her compassion; how could I not.  As I drove home I realized that she had really scared me though.  The fear came from 3 factors.  First, she honestly completely believed in the benevolence, foresight and protective nature of the folks inside the beltway.  Second she probably represents nearly half of the nation.  Third she was packing a voter registration card and knew how to use it.


Autumn Cote Added Jun 29, 2018 - 5:09am
Please note, this article would be a lot easier to read if you added some white space between paragraphs.  Also note, the best way to draw more attention to your work is to comment on the work of others.  As always, many thanks for your participation with Writer Beat!
James E. Unekis Added Jun 29, 2018 - 10:09am
Thanks Autumn.
I originally tried spacing between paragraphs and it inserted strange characters throughout.  Any thoughts?
Katharine Otto Added Jun 29, 2018 - 11:44am
It's a dilemma, isn't it?  The naive and gullible generation that was born in the FDR era has blind faith in the nanny state, and they don't want to know the truth.  The younger folks are more realistic (and cynical), and many believe Social Security won't be there for them.  I tell them they are under no obligation to make good on government debt.  Payroll taxes should be optional. 
I no longer believe in saving, because no one can guarantee the dollar will hold its value.  Same with the stock market.  I support tangible assets that hold their value.  Cash flow, but not too much, because it makes you a target for the predators, including the tax collectors.
opher goodwin Added Jun 29, 2018 - 11:56am
I can't help thinking that the wealthiest country on the planet can easily afford it. Perhaps they should consider not giving such an enormous slice of the cake to so few and use that money to provide adequately for the poor?
To my mind it is not about borrowing at all. There is plenty of money. It is about caring and producing a more equitable society. It is the top end that is taking all the wealth and creating the problems.
James E. Unekis Added Jun 29, 2018 - 12:34pm
Katharine, thanks for he response.  Social Security should have several trillion dollars in reserve but any real money was replaced with IOUs (read stolen) a long time ago.
I agree that payroll taxes should be optional; especially since Louis Lerner used tax money to deny tax exempt status from political organizations with who she disagreed!
I believe in holding a certain amount of physical gold and silver.  But what is one to do since the government will certainly seize that if its value increases too quickly.
James E. Unekis Added Jun 29, 2018 - 12:43pm
Thanks for your response.
We certainly can afford it - we just need to stop funding something else to pay for it.  Anything you mention is a sacred cow for someone else.
Try googling debt clock.  The United States currently borrows 40 cents of every dollar we spend.  It is the same as a family who has no savings, no money in the checking account and is rapidly maxing out its MasterCard to pay the minimum on its VISA.
We are now over 100% debt to GDP which most economists see as the point of no return.  Historically the only way out is through inflation.  Have you noticed the recent interest rate rises and hear the drum beat for more?
opher goodwin Added Jun 29, 2018 - 12:59pm
James - I agree that debt is a burden. But why go into debt? There is plenty. It is surely the uneven distribution that is causing the debt! When Trump reduced taxes (mainly for the wealthy) he either increased the debt or reduced the services people (the poor) enjoy.
An unequal society is a sick one in my opinion.
There is plenty of money to provide excellent services, infrastructure and rich lifestyles. There is no need for debt. That wealth is being funnelled into the pockets of a few.
Autumn Cote Added Jun 29, 2018 - 1:15pm
My suggestion is when you edit your article to click the enter button between each paragraph.  Other than that, it looks fine.  
James E. Unekis Added Jun 29, 2018 - 1:22pm
we are already in debt.  Even if all wage earners were taxed at 100% for a year, it would not eliminate our debt.
I agree that there is something fundamentally wrong with the greedier aspects of capitalism but pure wealth redistribution has never worked.
Still I share your frustrations.  The largest single lump of debt our nation incurred was the bailout of banks during the sub-prime mortgage crisis.  All in all it added around $25,000 in debt to every man, woman and child in the United States to bail out theses banks.  How is that for capitalism?  When the banks made a profit they pocketed it but when they had losses they took it from us.  So profits are privatized but losses are socialized.  That is the type of behavior that precludes us from implementing policies to help the homeless and constantly evicted.
As far as there being plenty just remember that we are now in a position that we have to borrow more money each year just to make the interest payments on our existing debt.
Stone-Eater Added Jun 29, 2018 - 3:37pm
Just reduce the US attack budget. Oh, sorry, I meant defense budget.....
James E. Unekis Added Jun 29, 2018 - 5:00pm
Stone eater,
Thanks for your response.  You may find common ground there between Republican, Democrat, and Socialists as well.  The wars in the mid-east are un-ending, unproductive, and unclear on intent.  There is also a growing resentment from conservatives that the U.S. is still paying the Lion's share for defense of many nations  Further there is an awakening in certain conservative circles that a great deal of the war-mongering is only benefitting the top 1%.  In addition, true fiscal conservatives have to admit that our near trillion dollar a year military expenditure is way out of line with our nation's military threats.  Even vets have to see that we can spend billions on a new weapon system while VA hospital services are pathetic.
The Republican's vulnerable under-belly is not fair-market capitalism.  It is instead the numerous times when capitalism is used to justify the rich stealing from, abusing, manipulating and lying to the poor and middle class under Federal laws which enable them to do so.
Dino Manalis Added Jun 30, 2018 - 2:32pm
 That little old lady was a liberal lioness!
Katharine Otto Added Jun 30, 2018 - 2:43pm
The US is financed by debt.  The Federal Reserve Act put Congress in the debt creation business, in order to guarantee perpetual interest to the Fed.  It is the greatest Ponzi scheme ever devised, with the income tax the corollary revenue producer to make sure the perpetual interest gets paid.  The US is not rich, unless you consider that it has more debt (which equals money in modern-speak) than any other country.
I so agree with Stone that the Department of Offense needs to be drastically cut, but the biggest problem is the Fed, which was created (according to some) to provide US backing for bankers to help finance World War I.  In researching the history of income taxes, I'm learning that they have more often than not been instituted to finance wars.  
James E. Unekis Added Jun 30, 2018 - 4:24pm
That a good line.  But really it wasn't a liberal vs conservative thing that scared me as I somewhat agree that those renters need help.
It as her simplistic faith the Washington would never let anything truly bad happen to our economy.
James E. Unekis Added Jun 30, 2018 - 4:32pm
Thanks for the clarification.  One only need look back 10 years to see the greatest financial scam in world's history - perpetrated by the Federal Reserve, and the big banks against every American alive at the time and for decades to come.
If you dissect the Sub-prime lending crisis followed by quantitative easing it is all too apparent that the Federal Reserve stole 7-8 trillion dollars from American citizens, in the form of future debt and transferred it to the big banks.
I'll elaborate if you want but if you think through it critically I'm sure you'll agree.
opher goodwin Added Jun 30, 2018 - 6:43pm
James - I share your pique at what the capitalist system does and the way the banks cream off our money. It is grotesque.
But I do not believe that debt is too bad a thing. I've been in debt with a mortgage many times my annual income. I paid it off over time.
Governments can do that if they like.
The US is rich because it has an economy that is pulling in a huge amount. It chooses to divvy that up unfairly so that a tiny elite get a huge slice. I think that is wrong and is also the source of the debt. If it took more taxes off that elite (and they didn't squirrel their wealth offshore without paying their fair share) there would be no need for debt.
A society with that degree of inequality is a sick society.
In my opinion what is needed is better distribution of wealth, better public services and a fairer society.
opher goodwin Added Jun 30, 2018 - 6:46pm
Katharine - The USA is rich because it's economy is pulling in lots of money. I would agree that all too often that money is misused for war. In my opinion it should be more fairly distributed to avoid gross inequality and used for better education, health, social care and policing.
James E. Unekis Added Jun 30, 2018 - 8:07pm
Thanks for commenting.  I don't feel as though your house analogy is fair because you continued to pay down the debt.  If you kept building another addition every year and borrowed for those additions without paying the original debt down then you would be doing what our government is currently doing.
I would also like to see us lower our military spending.  This could be covered by no longer footing the bill  for so much of our allies defense.  I believe Trump has alluded to this and his recent behavior in the G7 tells me he's likely to move along those lines.
But even cutting military spending in half would not address the continued rise in debt; although it would enable us to help more poor if we continued to amass debt at our current rate.
The really scary thing is our unfunded liabilities ($60-80 trillion).  It would take every nickel that every single American earned in any matter for 5 years to fund that even ignoring the interest we accumulate in keeping the programs operating currently.  I don't know of anyone personally that could afford to work for free for the next 5 months much less the next 5 years.  This would require EVERY SINGLE DIME earned by every man woman and child in ay way, and would take 8 years if we paid for outstanding debt and serviced the interest on existing debt.
I know that our country seems rich but the only thing keeping us from hyper-inflation is that America has the world's reserve currency.  But watch out  - Russia and China have started an agreement that allows them to pay each other for oil in their own currencies.  Our reserve currency status is built upon the petro-dollar.
Taxing the wealthy more simply causes them to re-locate to other countries.  It makes me mad and I, too, resent the growing wage gap but this is the reality in which we live. 
I personally strongly believe that we are heading for massive inflation.  It is, historically, the only way out for countries that had delved too long into liberal spending patterns.
The Treaty of Versailles is a classic example of the inevitable inflation following massive debt.
Can we help the homeless and constantly evicted?  Yes but it might require for you and I and millions of others to invite another family into our homes and forgo our newer cars, electronics and vacations.
Americans are always willing to vote that someone else should pay for social problems.  If they are truly important issues to us we would put our money where our mouths are and render aid at our own expense.
Leroy Added Jun 30, 2018 - 8:28pm
And, it seems we are raising another generation just like her.
It isn't that capitalism has failed us; we have failed capitalism.  The bank bailout, as you mentioned, is a prime example. 
James E. Unekis Added Jun 30, 2018 - 8:35pm
"we have failed capitalism."
I like that, thanks.
Kurt Bresler Added Jul 1, 2018 - 4:21am
Well good for you luring us into that dark alley.   It sounded so interesting we were hooked and had to keep reading.
But alas, You are right.  Most of the people in this country actually do not realize our dilemma(s).
What scares me is that when someone comes on the TV set and says America has been taken over ...say by the Chinese, or the Arabs, or the Russians  ..insert a good threat.
Someone, Most everyone is not going to believe it for exactly the same reason.  "They are not going to let that happen?"
Shamefully it may be the last words of regret for many of us.
James E. Unekis Added Jul 1, 2018 - 4:52am
Thanks for the comment.
I remember a younger version of myself asking my older brother, who worked in the Federal Government, where the foresight was; certainly THEY (the federal government) wouldn't let our country get into that situation.
He looked at me and asked "foresight!?  What do you want, the Jedi Council?"
Certainly our great leaders were more interested in our future than in their next bribe or next election.
But alas......
Leroy Added Jul 1, 2018 - 8:07am
"I personally strongly believe that we are heading for massive inflation.  It is, historically, the only way out for countries that had delved too long into liberal spending patterns."
Logically, you are right.  But, if the past is any indicator, we will go the path of Japan.  As Japan drove interest rates to zero, deflation set in.  It was devastating.  All efforts to create inflation with QE have failed.  There are differences; Japan's debt is more internal, for example.
With regards to underfunded pensions, I agree.  It is the biggest, immediate threat, IMHO.  If we look at where the pressures are, high-interest rates goes a long way to solve the problem.  Interest rates have been too low for too long.  I believe they will go too high for too long.  I remember financing my first vehicle decades ago.  It had an 18% interest rate.  We marveled at the 8.5% mortgage rate that our friend's parents had on their home.  I think these rates will return.   The increases will be moderated by an economic downturn.  Inflation increases the pressure as most of these pensions have cost of living adjustments built in.   As wages usually lag, inflation will be highly unpopular with those without such a pension.
opher goodwin Added Jul 1, 2018 - 9:05am
James - I would agree that continually borrowing would create a problem but only if you got to the point where it became impossible to pay back or too much of a cost. I do not believe the USA is anywhere near that. I do however believe that it would be a good idea to pay off the debt and I see no signs of that.
The USA is rich enough to give every American a very substantial standard of living but chooses not to do so. It gives an inordinate amount to a small number and next to nothing to a great number. Those in the middle are overworked and chasing a dream that they too could be one of the top ones. I find this system iniquitous and immoral.
What is needed is a fairer system without exorbitant wages and bonuses, with a fair progressive tax system, proper public services and a more equal society. IMO that can be achieved without further borrowing and still provide the means to start paying off the debt.
The wealthy can go screw as far as I'm concerned. If they make their money in a country then they pay fair taxes. If they don't like it they can leave and try to exploit people elsewhere.
That is one reason why I would like a more global approach to taxation where the wealthy cannot exploit every loophole and avoid contributing!! They are getting away with murder!!
James E. Unekis Added Jul 1, 2018 - 2:19pm
Thanks for your comment.
Japan remains a historical enigma.  They are at or near 300% debt to GDP - way off the charts and yet experience deflation.  I haven't studied the Japanese economic phenomena but I would venture to guess that their debt has been restructured by some greater entity.
It would seem that if they can no longer service (make payments on) their debt then logically their borrowing costs would soar.  I mean what level of interest would you want to loan money  when there is a history and future probability of non-payment?
The un-funded liabilities I mentioned were primarily regarding Social Security and Medicare.  I'm sure that Federal pensions only add to the problem though - good catch.
Well I would expect that with the retirement of baby bloomers already underway and the Fed raising interest rates we will witness a great deal of angst amongst those on fixed income.  Neither private, nor public pensions are keeping up with even the current meager inflation we have; I highly doubt that they will do so when inflation grows.
James E. Unekis Added Jul 1, 2018 - 2:28pm
Thanks for the comment.  I understand and agree with your frustrations with inequities between the haves and have-nots in our country.  They greed levels are soaring and fiscal responsibility is for those of limited means.  When the big banks began to fail in 2008 we all paid to bail them out.  Funny, I don't remember seeing a apyback from them as they returned to profitability.
"I do not believe the USA is anywhere near that".  I guess we will have to agree to disagree on that point.  Just remember that we borrow around 40% of ur annual budget every year and nothing at all is being repaid.  If you were making $60,000 a year but borrowed so that you could spend $100,000 a year, year after year, never paying a dime on what you owe, how long do you think you could keep this up.  This is what we, as a nation, are currently doing. 
opher goodwin Added Jul 1, 2018 - 5:06pm
James - I do not think that is quite the proportion of borrowing is it? But I do agree that you cannot go on borrowing year after year. You have to start paying back. To do that it will be necessary to get taxation right and curb the excesses of that top 1%. I think they are scamming everybody.
James E. Unekis Added Jul 1, 2018 - 5:23pm
the proportion varies from year to year but it is generally in that range.
We are so far in debt that even taxing the 1% at 100% of their income would not fix it although I do agree that capitalism combined with unchecked greed is just as bad as communism.
I would propose that we reign in the big corporations and banks.  The banks alone contributed between 7 to 8 trillion of our 22 trillion during the sub prime mortgage crisis and the following rounds of quantitative easing (0% interest).   This amounted to the largest financial scam in the history of mankind.
Opher, try googling the debt clock.  Get the interactive version on your browser.  It boggles the mind.
opher goodwin Added Jul 1, 2018 - 5:40pm
James - that clock is fun. I wouldn't put too much trust in its accuracy though. I'm not sure who is behind it or where those figures are generated from. There is no way they can possibly be real time.
I know that taxation of the sharks will not solve the problem overnight. But by reining in their outrageous earning and having a reasonable progressive tax it would enable that debt to be eaten away over time. 
Even A Broken Clock Added Jul 1, 2018 - 8:43pm
James - interesting post. I like how you interspersed the physical threat with the philosophical threat. 
Different question though - where in Western Maryland did you locate? My son is working for IBM out in the Cumberland area, so he may be near you.
James E. Unekis Added Jul 1, 2018 - 9:13pm
I'm glad you enjoyed the clock.  You are correct, it is NOT real time.  The gross figures are, however, realistic. lists total debt of $21,128,999,819,421.29....the debt clock shows $21,183,455,872,509.00.  Somewhere north of 21 Trillion dollars is the generally accepted figue.
If, we as a nation, could reign in spending and cut out loopholes for multi-millionaires and billionaires we may indeed start making progress.  The problem only seems to get worse under both Democrats and Republicans.  Politicians can't get elected by arguing for cuts; only increases.
I do think that more thorough oversight of big banks and huge corporations is sorely needed.  Wells Fargo bank, for example has had three major scandals in the past few years.  One of the scandals involved over 2 million felonies alone.  Nobody served a day in jail.
Somehow I don't  think this problem is going to be addressed until there is a crisis that affects the average voter, or I should say, is perceived as a problem by the average voter.
As for the poor, I'm afraid that they will be the last to experience relief.  Now if Christians behaved with love towards their neighbors as taught by Jesus, and took these people into their homes, the eviction problem, at least, could be eradicated.  Unfortunately too many Christians today believe in Capitalism over love.
Ala, it is a complex problem though.  I took in a homeless man with the stipulation that he not drink because my elderly mother was living in one of my rooms.  When he couldn't quit drinking I got him into treatment.  I spent 4 days vacation and nearly $1,000 trying to help him.  He stayed sober for 3 weeks but then went directly back to the bottle.
They say a person can't address a problem if they don't admit that a problem exists.  I think this is true of our nation as well.  We need to admit that we are addicted to debt as the first step towards any solution.
opher goodwin Added Jul 2, 2018 - 5:49am
James - I find myself agreeing with you. I think that the relationship between Big Business and politicians has been far too cosy for too long. Politicians are scared of tackling the problem because Big Business might damage the economy. It's a blackmail situation with garnish of corruption. Too many politicians are willing to feather their own nests and not deal with the problems.
It needs sorting out. For me that is the root of the problem.
That was exceedingly generous of you to go to that length to help a man who was down and out. I'm impressed. Not many people would go that far.
James E. Unekis Added Jul 2, 2018 - 11:03am
I'm glad we could find a common belief.    If you find yourself agreeing with me look into the corruption of big Pharma.  I worked, for a while, gathering data for a State's Attorney General's lawsuits against big Pharma.  I saw such things as life or death pills going from 15 cents to $765.00 per pill because they bought out the only other manufacturer becoming, in effect, a monopoly.  I'm sure that people died over this price increase.  But greed driven practises like this example are abundant; the government response is slow and tedious.
I'm glad we had this discussion.  I learn a little from you and you learn a little from me and pretty soon people are agreeing.
Good luck Opher! 
MEFOBILLS Added Jul 2, 2018 - 11:52am
It is important not to get cause and effect reversed:
The Federal Reserve Act put Congress in the debt creation business, in order to guarantee perpetual interest to the Fed.  It is the greatest Ponzi scheme ever devised, with the income tax the corollary revenue producer to make sure the perpetual interest gets paid. 
The Federal Reserve is not Federal.  Their employees are not government workers, and do not get a government pension.  The Federal Reserve is a stock owned quasi corporation that was maneuvered into place by a money trust, to USURP constitutional power vested in Congress.
After Texas congressman Wright Pattman sniffed out Fed's usury scheme, he FORCED THE FED into rebating interest back to Treasury.  So any interest on sovereign TBill debt at FED level is rebated.  
People always want to look for the head of pyramid.  The head of pyramid was a collection of private banks that formed the FED to be their agent.  The FED is really the tail on the dog, not the dog.
Today these head banks are represented by TBTF, or "primary dealers"  The New York FED located near wall street is actually near the tip of the pyramid, as its role is to sweep reserves into securities so insider profits can be made.
The FED connected private banks into one network, allowing their private "bank credit" to network, then the network spread worldwide.  Finance of this type of money (bank credit) then networked with international markets.  The impulse of bank credit is to spread and network .. hence internationalism and globalism hypnosis funded from this sector.
Money's true nature is law, and law cannot be extended past your borders.  Bank credit is not a lawful money, unless private corporations are given this law power ... which they instead TOOK.  
Article 1 section 8 clearly puts the money power into the hands of congress, to in effect be in the hands of the people, not a money trust.
MEFOBILLS Added Jul 2, 2018 - 11:59am
Japan has a 200 percent debt to gdp and they are not going bankrupt.  It is important to look at the type of debt and the claims. 
The debt claims matter, the time period matters, and how the "interest" channels matters.   In the case of the U.S. the debt is denominated in dollars (not a foreign unit), and hence the U.S. is not in as a tenuous position as is made out.  Private debts are what really matters the most... private debts kill economies.  
Japan can handle their public debt because they are paying it to themselves.  Japan's postal bank holds much of it, and this is a state run institution, which could erase legally if they wanted to - yet they don't.  
James E. Unekis Added Jul 2, 2018 - 1:41pm
Thanks for the elaboration on the Federal Reserve  I haven't really looked into Japan but what I have read does not paint a rosy picture of their future, especially as their population ages.
I see debt as debt - private or public.  The only difference is that private citizens can not start up the printing presses -  or in more modern terms - quantitative easing.
Public debt is still owed and the only real revenue source is we the people.  Of course we won't have bill collectors calling us concerning repayment of QE.  But I would argue that we are in the beginning stages of inflation.  The Fed is talking about 3 to 4 more increases this year alone.  It is a tricky balance.  Go too slow and soon we won't be able to service even the interest on our debt.  Too fast and savings are eroded as every dollar has increasingly less purchasing power.
I once bought an 1800 year old Roman coin for less then $20.  I asked the dealer how it could possibly be so cheap.  His answer was that they were really not that rare.  People tend to hold onto money, he elaborated.
In the same fashion people want repayment of debt; it is not going to go away despite the twisting, contorting and machination of various economists.  No amount of sticking our heads in the sand is going to change the fact that the United States has a debt addiction.  We have more debt than any country in the history of the world.
We've tried ZIPR and the fed seems disinclined to more to negative rates.  The only realistic way of getting out from $21 trillion of debt is inflation and I suspect that this round will really hurt.
opher goodwin Added Jul 2, 2018 - 1:45pm
Me too James. Thanks for the conversation.
What you describe of the way the pharmaceutical companies work is typical of big business. They exploit ruthlessly. It disgusts me. Talking intelligently is always worthwhile.
MEFOBILLS Added Jul 2, 2018 - 2:39pm
This is your genetic and evolutionary programming speaking for you:
I see debt as debt - private or public.  The only difference is that private citizens can not start up the printing presses -  or in more modern terms - quantitative easing.
Let's unpack this shall we?  You and I and all of us are programmed to pay back debts.  If you up my experiment here at WB about how debt is outside of the monetary realm you will get a better idea of what I'm saying.
In a debt money system, people's savings are in direct proportion to public debt.  In other words, without public debt's there is no savings.  A government is profoundly different than a household budget.  See Wynne Godleys sector balance equations if you doubt this.  Public debts if they are owed to yourself (the country), and if the interest is rebated are basically numbers on dusty ledger, and are not making claims on the productive economy.  
Private debts are a very different animal.  Private debts are a direct tax on the energy of the population to labor, produce, and live. 
The Great Depression was due to the build up of private debts.  The great recession in 2008 was the build up of private debts though the housing bubble.  Japans stagflation starting in the 80's was similar through a housing bubble.   
Japan has since swept these private debts onto the public ledger by converting them, otherwise Japan would not be functioning.
Japan's low birth rates, as well as all of the first world, cannot be seen outside of high access price to life, which in turn is due to private debt formation.   
Private banks have a business model of debt creation, and without people willingly going to the bank to hypothecate themselves, then banker livelihood falls apart.  
Please reject your evolutionary "feelings" in this instance.  Fraud schemes, even when sophisticated, do not require repayment.   
MEFOBILLS Added Jul 2, 2018 - 2:44pm
In terms of balance sheet operations:
QE is a SWAP.   
Swaps are another magick operation where a thumb is put on the balance scale.  Unlike kinds are swapped.
The FED creates new dollars on its keyboard, and they are seen as a liability.  These dollars then find TBills in bank reserve loops.  The TBills then are swapped for the dollars.  
In terms of the bank there is NO net asset change.  In terms of the FED their balance sheet expanded simultaneously with both a new liability and a new asset.  The TBill is a new asset and the dollars are their liability. 
The bank now receives interest on money caught in reserve loops due to law change.
Money's true nature is law.
Any leakage from the reserve loops to the real economy is from fraud.
MEFOBILLS Added Jul 2, 2018 - 2:55pm
The only realistic way of getting out from $21 trillion of debt is inflation and I suspect that this round will really hurt.
Maybe... because people are profoundly ignorant on how the money system works, especially politicians.
The best way would be to convene a court of law, then inspect the debt instruments.  If they have already been paid 1.5X or 2.0 times they can be canceled.  
If the owner of the debt instrument is not happy with having already earned 200 percent, then maybe they can spend some time in jail for being a greedy shit.
Again, all debts are NOT THE SAME.  They can be classified and adjudicated. 
In the U.S. ALL OF ITS DEBTS are denominated in its own currency, and therefore it can be dealt with legally.
Money's true nature is law.
MEFOBILLS Added Jul 2, 2018 - 3:01pm
James, I just noticed it was you who made the original comment I replied to.... but my replies are for anybody who is interested.  
James E. Unekis Added Jul 2, 2018 - 3:13pm
I'm in the country-side about 10 miles from Oakland - around 45 minutes from Cumberland
Even A Broken Clock Added Jul 2, 2018 - 4:41pm
Ah, good ole Garrett County, where you can see snow from September through May. I've driven on I68 many times, recently to see my son, and often before when I would drive up to Wilmington DE for work at corporate headquarters. Garrett County is very iffy during the wintertime. Cumberland, being down at Potomac level, is a world different than up in your part of the state.
James E. Unekis Added Jul 2, 2018 - 6:13pm
Thanks for commenting.  Yes, Garrett county.  The Baltimore area, except for 20 years in the midwest, has primarily been my home.  I moved here 11 months ago from Westminster.  What a lovely little place.  No traffic, slower lifestyle and, did I mention, no traffic?
I must admit being a little apprehensive of the first winter but snow-wise, at least, it was pleasantly mild.  I have heard tales of 280 inches in a year though.  I've got a nice garden growing and am looking forward to writing away next winter with inspiration from my view of Deep Creek.
I venture into Cumberland every 2 weeks or so and am routinely surprised by the sudden change in temperature.  One day it was  5 degree near Wisp and 28 degrees in Cumberland.
I've taken
to Cumberland over Morgantown simply because it is 15 minutes closer.  Any thoughts between the two?
James E. Unekis Added Jul 2, 2018 - 6:36pm
Thanks for commenting.  I sillegard debt as debt simply because he lending entity has the upper hand and will ultimately require repayment.
Private debts are only a direct tax because the lender will take you to court.  Public debts "float" for longer periods as economists rename, re-package and obfuscate.  The re-grouping of sub prime mortgages into Grade AAA investment vehicles was a prime example.  Even a used car salesman knows that everyone can't afford a Mercedes; especially those with a history of not paying their bills.  Sure, the top wealthy corporations got away with fraud upon the principal borrowers and further complicated the matter through a bundling of bad debt into highly rated investment "vehicles", thereby swindling unsophisticated investors.
What the hell do you mean that "Fraud schemes, even when sophisticated, do not require repayment.?!!!!"   If you mean that those on top of the fraud did not pay sir then you are very right, however, many people were put on the street and others' relatively small investment were basically stolen.  So in your world little people don't matter.   As long as they don't impinge upon the fraudsters themselves everything is fine.  True that the average American didn't recognize this pillage.  Shame on you for your apologetics on their behalf !
James E. Unekis Added Jul 2, 2018 - 6:45pm
What great debts did those of the depression period involve themselves with?  Capitalism which called armed Pinkerton guards to slaughter union /pretestors in the street or those believing that they might invest in Capitalism, against hope that the system wasn't rigged?!!!!    My very own grandfather was a slave to a "Capitalist coal mining company which required that he rent from the company, buy from the company store, buy dynamite from the company store and slowly went into debt despite 72+ hour work weeks with no vacation.  But since it didn't impact the wealthy you think that public debt is not private debt.  Of course you are blind as public debt affects EVERYONE and can be translated by PHD economists as " no real problem".
James E. Unekis Added Jul 2, 2018 - 6:52pm
I lie the word you used  - sweeping the debt.  More obfuscation; more confusion.  Is that all you have to offer.  It depends on what the definition of "is, is sir".  Why lie, why obfuscate, why argue defenseless positions?   Are you scared that the average person understand  economics?  You borrow, you owe.  Economists only muddy the water for their own gain.
MEFOBILLS Added Jul 2, 2018 - 6:52pm
What the hell do you mean that "Fraud schemes, even when sophisticated, do not require repayment.?!!!!"
It is a longstanding principle in law that Fraud (when proven) is not to be rewarded.
New York in the Colonial period was the first area in America to adopt this doctrine.  
You misunderstand me.  By denying pay to fraudsters, you are punishing them from further ill-gotten gains.  You are also released from your debts to them, a double gain for the productive economy.
Example:  A house mortgage (death) can end up costing the debtor 3 or 4X by end of 30 year note.  This is pretty good payment for simple keyboard creation of credit.
You do know that the bank credit is created from nothing?  It is not like the banker loaned you his lawnmower and wants it back.  The banker did not loan you his or any other depositors cash.  It came from nothing, and returns to nothing when you pay back principle.
See?  This form of debt is NOT THE SAME as your evolutionary instincts say it is.  You have been punked to think all debts are the same and must be treated fairly.  Your evolution "honor" is being used to abuse you with fraud.  
With regard to public debts... I'm not for that either.  But, as long as we are mired in a debt based money system, then it is absolutely critical that everybody with two IQ digits to rub together understands that public debts are private savings.  Do you want to go without savings?
Government balance sheets and household balance sheet are not equivalent and any imaginary ideas people have on this subject needs to be disabused.
A sovereign style money system is not what we have, we have a debt based money system designed to put YOU into private debt.  70% of the bank credit money supply is related to finance and real-estate, NOT INDUSTRY.  
Most people work in industry to receive their wages.
James E. Unekis Added Jul 2, 2018 - 7:04pm
Like little old ladies "The FED creates new dollars on its keyboard, and they are seen as a liability.  These dollars then find TBills in bank reserve loops.  The TBills then are swapped for the dollars.  In terms of the bank there is NO net asset change.  In terms of the FED their balance sheet expanded simultaneously with both a new liability and a new asset.  The TBill is a new asset and the dollars are their liability. ".
Actually you have it wrong.  From the Fed's standpoint the TBILL is their liability and the dollars are their asset.  How could you get that simple thing wrong?  The dollars are spent upon a great deal of things, few of which create value.  The (asset) dollars are annually but the liability (TREASURY INTEREST NOTES AND INTEREST REMAIN!!!)
Thus the money is gone but the repayment for interest and the original capital remain.  HOW IS THAT not debt???
James E. Unekis Added Jul 2, 2018 - 7:10pm
Finally, all fraud requires repayment.  Maybe not through normal means but ask even the least sophisticated here discussing..."i somne owed you a million dollarrs would you force him to pay?
Maybe you've been around them for a long time MEFORZBILLS but debt is debt and despite the bank's recent success in greed, you will all eventually pay
MEFOBILLS Added Jul 2, 2018 - 7:43pm
There are plenty of times in history where debt has been released.
Even in bankruptcy, that is a releasing of debts - the shielding from creditors who want to be paid.
Jesus mission started on the Jubilee year when he announced "the good news."  Jubilees in the ancient near east were legal proceeding to remove unproductive debts from the economies.  This was normal behavior also including Hammurabi in Babylon.  (Not same people of Babylon who inculcated Cabala.)
In those times they understood the nature of debts.. they were more monetarily advanced than modern people, who think of themselves as sophisticated.  
MEFOBILLS Added Jul 2, 2018 - 7:49pm
Actually you have it wrong.  From the Fed's standpoint the TBILL is their liability and the dollars are their asset.  How could you get that simple thing wrong?
I don't have it wrong.  On the FEDs balance sheet, the new dollars created are the FED's liability.  They are not allowed to create assets.
When they "Buy" swap, the new TBill from private banks, it then moves to the FED's balance sheet.  The TBill is considered an Asset to the FED.
The FED then has an offsetting liability and asset, so the double entry balance sheet "expands."  
Simultaneously on the private banks balance sheet, they lost their TBill and gain dollars.  There was a swap of unlike kinds on the "asset" side of their ledger.  
Think of it this way, it is something like your savings account being decremented, but you checking account being increased.  The private banks are also not effected balance sheet wise, only the composition of "assets."
It is hard for normal people to wrap their head around this stuff, because they equate their home economics with government and banking and they are not the same.  
Debts are not the same either.  There are different kinds of debts making different kinds of demands, and they have different effects.
James E. Unekis Added Jul 2, 2018 - 8:00pm
I'm sorry if I am misrepresenting what you are saying; however "Example:  A house mortgage (death) can end up costing the debtor 3 or 4X by end of 30 year note.  This is pretty good payment for simple keyboard creation of credit."
In reality , however, the loan to a poor person was sold of to investors AS GRADE -"AAA" trustworthy.   The homeowner was evicted and the bank was bailed out by the Fed as "too big to fail".   They got their money back from the fed but still owned the foreclosed property from the original borrowers).  They were then able to sell the foreclosed home. (Additional profit) when the homeowner was evicted and put on the street.  If these two rounds of profiteering weren't enough, the big banks borrowed from, on the basis of being TBTF banks, and used the ZIPR loans to buy back their own stocks to send valuations soaring.
If you don't read exploitation in the above you are a greedy capitalist without any compassion.   Millions of homeowners were put on the street and millions of investors were defrauded; however since the rich got richer you simply applaud.
You will be amongst the first witht their backs against the wall when the revolution occurs.
James E. Unekis Added Jul 3, 2018 - 3:31am
I was re-reading my response and didn't like the fact that I made it personal.  There was no call for that.  I apologize.  Your comments are insightful and you never resorted to personal rhetoric.  Please feel free continue and I will reign in my tongue (keyboard).
Even A Broken Clock Added Jul 3, 2018 - 10:41am
James - re: Cumberland vs. Morgantown. When I was helping my son to move to the Cumberland area, I noted that the town had not had much new construction since the post-war boom - and the war involved was WWI. Cumberland is a moribund location but does have some good Italian restaurants.  Morgantown is a growing and much more vibrant area, although the direct metro area is smaller than Cumberland. There's a broader selection of retail there, even better than down in Charleston where I live. Plus you have the university there with cultural events. So that's my thoughts on this.
MEFOBILLS Added Jul 3, 2018 - 5:28pm
NP.  People often take me as cold hearted.  Yes, I'm more than familiar with how the bank bubble scheme works as I'm an expert in this subject.
It enrages me as well.  Since I am fact based that makes me hard edged and "emotional" people can get offended.  Nothing wrong with having feelings and being emotional - it is what makes you human.
Katharine Otto Added Jul 4, 2018 - 11:57am
Thanks for your explanations.  I know quite well how the Fed works, that it is composed of a banking cartel that tricked Congress into passing the Federal Reserve Act in 1913, as part of Wilson's "banking reform."  I'm also aware that this was linked with the income tax, and believe this was the revenue-producing arm that made creation of the Fed profitable for bankers.  (Just as the whiskey tax provided for perpetual interest payments to the first central bank on public debt in 1791.)
You say that interest on T-bills "at the Fed level" is rebated to the Treasury, but I don't understand what you mean.  Who or what pays the interest?  In Creature from Jekyll Island, Griffin makes a big deal about the difference between "honest" money and "dishonest" money, like the fiat currency we have now.  My interpretation, which may be wrong, is that income tax proceeds are "honest money" that is being provided the Fed and federal government in part to pay interest on the "dishonest money" generated out of the Appropriations/T-bill scam.
MEFOBILLS Added Jul 4, 2018 - 12:22pm
Wright Pattman found the FED making interest on TBills it held.  He argued that the FED could not do this, and made them rebate.  In other words, the Tbills (a debt instrument) were demanding the payer (the taxpaying public) pay the payee (the FED) interest.  
The FED would then turn around and guarantee the big banks within its system an income above inflation rate.  Usually it was a guarantee of 6%.  Of course this was all criminal.
It doesn't work exactly this way, but the effect is the same:  Taxpayers pay on TBills, FED collects, Fed then sends the money to Treasury.  Treasury then respends back into money supply (or lowers tax rate to make the effect null).
In other words, public debt on TBills we hold to ourselves have FAR MUCH LESS meaning than private debts.
The FED couldn't get away with the canard of being both public and private after Pattman.  
However, the FED does still take its profits before it rebates, and is why they do not want an audit.  
With regards to Griffin, remember he ripped off Mullins.  Gold is not real money.  Money's true nature is law.   I don't know if Griffin is an agent or a dupe or ignorant on this subject.
MEFOBILLS Added Jul 4, 2018 - 12:25pm
Public debt like Tbills are not active due to the rebate.  They are not serviced.  The Bills are not making demands.  A debt that makes no demands is not draining the money supply.  
OK... it is making a partial demand as FED takes some cut.
Most of the people whining about public debts don't know what the hell they are talking about.  They don't understand the debt based money system.  This is most people in the world, including politicians.  
Katharine Otto Added Jul 5, 2018 - 10:43am
I looked up Mullins and his claims against Griffin.  Since I haven't read Mullins' book(s), I can't say whether Griffin plagiarized, but Griffin does acknowledge Mullins in his bibliography, along with many others, including Matthew Josephson's Robber Barons, which I have also read.  As you point out, the system is very complicated, apparently intentionally so, so it's understandable that most people would be clueless.  "Most people" don't understand the debt-backed dollar, which I happen to believe is reprehensible.  Are you suggesting it's good that public debt and private debt are opposites, that the federal government starts at the bottom line and goes down from there?  
You frequently say that money is law, and that gold is not money.  While that may be true, it brings up the question of the law's validity.  The US history of aggression and empire building, financed by public debt, makes me wonder if federal bankruptcy may be the only way to stop the wars.
Finally, you also mention that the taxpayers are paying for the Fed and its banking friends in the system.  How?  Through taxes and inflation, and the rigged roller coaster that is the stock market, I imagine, although I'm willing to be educated on this.
Eric Reports Added Jul 17, 2018 - 11:23pm
Trump quote:  We are living in a big, ugly bubble and one day that bubble is gonna burst."
James E. Unekis Added Jul 18, 2018 - 3:01pm
Thanks for commenting.
My parents bought a home in Baltimore for $18,000 and sold it for $200,000.  Their mortgage payment was around $100 a month.   Some inflation is good in that way.  But when we've borrowed so much that we can't service the interest on our debt, watch out.  Wild inflation has gotten so bad that when people get their paychecks, they leave work to spend every cent they have.  Prices would quadruple if they waited until after work to shop.
We as a country have painted ourselves into a corner financially.  The only way out now is inflation.  The longer we wait the worse it will be.
Our normalcy bias is soon to be violently changed.  We are in a bubble that is getting bigger daily with no plans to address it.  Trump is right.  This big bubble is, by the way, the biggest in the history of the world.  It's going to be painful when this one pops !
MEFOBILLS Added Jul 18, 2018 - 4:37pm
While that may be true, it brings up the question of the law's validity.  The US history of aggression and empire building, financed by public debt, makes me wonder if federal bankruptcy may be the only way to stop the wars.
An excellent book on how America turned to war and empire is Pettigrew's "Triumphant Plutocracy."  Pettigrew was the first Senator from South Dakota and had a ring-side seat.  Read it to get an insiders account from a highly moral person.
Note that it is the usual cast of characters that foment wars.  The answer to your question is another question.  How to keep these types of people out of government? Most of them are feathering their own nests, or are working for monopoly interests, typically the finance sector.

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