The Weiner Component V.2 #43 – Patterns of History: Part 3: Post World War II

Umezu signing the instrument of surrender to t...

Umezu signing the instrument of surrender to the United States (Photo credit: Wikipedia)

One of a number of posters created by the Econ...

One of a number of posters created by the Economic Cooperation Administration to promote the Marshall Plan in Europe (Photo credit: Wikipedia)

Map of Cold-War era Europe and the Near East s...

Map of Cold-War era Europe and the Near East showing countries that received Marshall Plan aid. The red columns show the relative amount of total aid per nation. (Photo credit: Wikipedia)

George C. Marshall, General of the Army.

George C. Marshall, General of the Army. (Photo credit: Wikipedia)

On September 2, 1945, Japan formally surrendered unconditionally and World War 2 was over.  Germany had surrendered unconditionally earlier, on May 8, 1945.  Italy had given up two years before on September 8, 1943.  The Axis Powers no longer existed after Japan surrendered.  The war was over.

 

Allowing for the massive bombing destruction and the millions killed during the war, many cities, both belonging to the Allies and the Axis had been bombed to almost complete rubble.  The world was then at peace but recovery from the destruction still had to come about.

 

Keep in mind that if economic conditions had been better in the period between the two wars World War II would never have occurred; the people who gained control of Italy, Japan, and Germany would never have been successful in taking over these countries without the dire economic conditions brought about by the depression.  The ultimate cause of the war was the Great Depression.

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The war, both in the United States and otherwise, had been a time of deprivation.  In order to win the war people had done without much of the goods and services needed for proper living.  Virtually all production for the duration of the conflict had been aimed at winning the war.  Countries could now begin recovery in Europe and Asia, while in the United States it was a time for a return to civilian goods.  There had been no actual fighting in America.

 

Before World War II most people in the United States were still coming out of the Great Depression; they were surviving more or less.  Conditions improved under President Roosevelt but the economic level that had existed before 1929 was never reached.  Then, for about five years, the country had been involved in fighting a major World War.  Production in most industries had been involved in fighting World War II.  Most of the goods and services produced went into the war effort.  Civilians did without.

 

Production in most industries had geared up to its maximum point.  The President was continually calling for higher production goals.  If an individual wasn’t in the military he or she was involved in some form of industry or they were farmers producing as much food as they could and receiving top dollar for their products.  People invested their new excess funds in war bonds or they had banked this money.  During the war there wasn’t much upon which to spend their earnings.  Most production, as we’ve seen, was for the war effort.

 

Now in 1945, with the war over, people wanted the luxuries they had never really had.  Industry in the United States turned from war production to civilian production.  Automobile plants retooled and began producing civilian cars.  It would take several years to just meet the demand for new automobiles.

 

A new industry that began at this time was television.  While the technology had been developed in the 1930s it was not practically applied until the mid-forties.  People bought large cabinets containing seven inch screens that initially broadcast in black and white for a few hours each evening.

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Basically what happened in the United States was a nation flush with money and flush with new or reconstituted older industries was raring to make up for what they had missed over the last five years.  The remnants and probably even the memory of the prewar depression were gone.

 

In addition the nation through Congress wanted the soldiers brought back home as quickly as possible now that the war was over.  The country felt extremely grateful to the G.I’s for what they had done and Congress, in addition to bringing the troops back home, came out with the G.I Bill.  Veterans, who had left school to join the military were offered an opportunity to go back to school and finish their education.  The Federal Government would fund them, living expenses, tuition, and books.

 

Some veterans returned to high school and finished up the last year or two there in a few months and then went on to college.  Even if they were married and had children the government would fund them.  For many, who had never thought of higher education, it was easier to go to school than immediately get a job.  This included those with families.

 

Consequently many came back to high school, finished in a short period of time and went on to college.  It didn’t matter what their responsibilities were the government funded them.  A whole generation of individuals who had originally never intended to go to college got higher education degrees and subsequently became members of the middle class with higher incomes than they had ever conceived. .

 

In addition for those who didn’t want to go to college the Federal Government funded them opening up their own business.  Many became, among other things, television technicians and store owners.

 

In essence the Federal Government through funding and education created and encouraged the existence of a large middle class.  It transformed the United States into something it had never been before, mainly a middle class nation.  This meant much higher expectations for the majority of Americans throughout the nation and a much higher standard of living for virtually everyone within the country.

 

The process of doing this, the spending of all this money by the Federal Government massively increased the National Cash Flow within the country, which, in turn, also worked toward raising everyone’s standard of living.

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Europe emerged from the war as a basket case.  A good part of the war had been largely fought there.  Its major cities were largely destroyed.  Many had to be rebuilt almost from scratch.  They had the labor but not the funding.

 

Secretary of State and former General George C. Marshall in a speech given in 1947 recommended foreign assistance by the U.S. to help rebuild Europe.  This became, what President Harry S. Truman called, The Marshall Plan or European Recovery Program.  It was passed in both Houses of Congress on a bipartisan basis in 1948 and signed by the President that year.  The United States spent over 13 billion dollars in 1948 dollars; that would equal 135.4 billion dollars in September 2017 dollars.  This was money given to the European nations.

 

The program lasted four years.  Eighteen European countries participated in it.  The Soviet Union and the Eastern Bloc Countries, which the Soviets controlled, refused any of this aid.  This actually made it easier for the bill to sail through a Republican dominated Congress.

 

The United States provided similar aid in Asia but they were not part of the Marshall Plan.

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The question that now arises is: Was the United States totally altruistic, helping both its allies and enemies in World War II?  Interestingly the answer to that question is both Yes and No.

 

We did help those eighteen countries and shortly thereafter the Asian nations also recover from the ravages of World War II.  In fact, their new infrastructures were far more modern than that of the United States.  But what we supplied was the money to buy the goods that allowed both the recovery and modernization.  The actual goods needed were purchased mostly from the United States.  The production of these goods also added to the overall prosperity of the country supplying them.  Simply stated, we gave these countries a checking account to be used essentially in the United States.

 

The question then arises: Where did all this money come from?  Taxes were certainly not raised in the United States to pay for all this productivity used by these nations for economic recovery.

 

To understand this we have to think back to what President Roosevelt did in the United States in 1933; he doubled the U.S. money supply by taking the country off the gold standard.  Money was no longer gold, instead paper currency became a means of exchange not really backed by anything of value.  It was created by having the government of the nation simply printing and issuing it.  As long as the supply of money in circulation did not exceed the amount of goods and services that the country could produce there was no real inflation and it retained its value as a means of exchange.

 

The major currency in the world in 1945 was the American dollar.  It was in demand throughout the globe.  There was no way inflation could occur then.  It stabilized all the other currencies, which were measured against it.  The United States printed the money as needed and spent it within the country and throughout the world.  From these dollars both in and out of the country massive human productivity occurred and recovery from the war came about historically in a relatively short period of time.  The results were prosperity for both the recipients of the funds and also for the suppliers of the money.

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It is vital to remember that money is now an object of exchange.  It itself has no real value except that which is arbitrarily assigned to it by the nation that prints it.  By making it the object of exchange the money then served to enhance the productivity needed to restore the different nations to a new level of economic productivity.  The different nations, after World War II, reached a new level of prosperity that was greater than what had existed before the Great Depression.

 

Keep in mind that that was just a starting point for each individual nation.  The economies were higher and more sophisticated than they had been earlier but they were still in flux.  The national economies could still go up or down bringing about continued grown, recession, or depression.  But by 1952 were at a higher economic point than they had ever been prior to that time.

 

Also the true key to the real wealth of a nation today is determined by the extent of its productivity.  This overall productivity is controlled by the distribution of the money throughout the society.  If everyone get a reasonable amount to spend over each period of a year then the nation’s potential can be reached.  But if the distribution is totally unequal then the productive potential becomes limited and the Gross Domestic product (All the goods produced in a twelve month period.) is limited.  This can occur by making money itself the object of wealth rather than just the means of exchange.

 

 

 

The Weiner Component V.2 #42 – Patterns of History: Part 2: Post World War II

English: United States President Franklin D. R...

English: United States President Franklin D. Roosevelt signing the declaration of war against Japan, in the wake of the attack on Pearl Harbor. (Photo credit: Wikipedia)

"YOUR MONEY IN WAR BONDS HELPS TO..."...

“YOUR MONEY IN WAR BONDS HELPS TO…” – NARA – 516270 (Photo credit: Wikipedia)

English: The "Big Three": From left ...

English: The “Big Three”: From left to right: Joseph Stalin, Franklin D. Roosevelt, and Winston Churchill on the portico of the Russian Embassy during the Tehran Conference to discuss the European Theatre in 1943. Churchill is shown in the uniform of a Royal Air Force air commodore. (Photo credit: Wikipedia)

Forgetting the horror caused by World War II, the Second World War economically changed the United States and the rest of the world positively.  The U.S. and other countries, including Germany and Japan, entered the war with the bulk of their populations being lower class, having a minimal standard of living.  Relatively shortly or at least within the first two decades after the end of the war the bulk of their populations had risen to a middle class status, having a comfortable standard of living for the majority of their populations.  What happened?

 

The Great Depression broke out early in 1929.  It brought about economic isolation with each nation attempting to survive by itself.  Germany, Japan, and Italy attempted to recover by imperialistic advances.  Italy expanded into North Africa, Japan into China and the rest of Asia.  Germany intended to expand both East and West in Europe.

 

In the United States, separated by thousands of miles from Europe and Asia, there was no immediate threat of war.  The country, under Republican President Herbert Hoover, just continued on essentially waiting for the capitalistic system to reassert itself.  It didn’t.

 

The majority of the population was lower class, just barely surviving on their limited incomes.  But at this point there was massive unemployment and no real jobs available.  Men deserted their families they could no longer support, rode the rail lines as hobos, following rumors of work in one or another part of the country.  The entire capitalistic system had broken down.  And no one understood why or how to fix it.

 

In 1933 Franklin Delano Roosevelt became the 32 President of the United States.  In his maiden speech on the new device, radio, he spoke of people having nothing to fear but fear itself.  Roosevelt used radio to talk the nation through its irrational apprehensions of the Great Depression.

 

Roosevelt changed the function of government.  Before he became President it provided a safe environment in which its population could function.  With the Roosevelt Administration it took on responsibility for those people within the country who could not properly provide for themselves.  What had been a matter handled by Church charities earlier would from then on be taken care of by the Federal Government.  The problem had grown too large for the religious institutions to take care of.

 

Roosevelt called his program the 3 R’s: Relief, Recovery, and Reform.  Under Relief, Roosevelt offered the New Deal, where the Federal Government would create jobs for the unemployed.  There was everything from manual labor to theater projects for writers and actors.  The New Deal even produced some films.  There were projects like Hoover Dam, electrification of sections of the United States, and community theaters, plus innumerable other projects.

 

With all this conditions improved in the United States but the depressed state continued.  There was still a high rate of unemployment.  While conditions improved total Recovery never came about for the United States until shortly after World War II in Europe broke out with an endless need for food and war materials.

 

Reform was legislation that was to keep causes of the depression from occurring again.  There were bank and other types of regulation.

 

On December 7, 1941 the United States entered War II after being attacked at Pearl Harbor, Hawaii.  The War would not end until the unconditional surrender of Japan in 1945, after the dropping of two atomic bombs.

 

It was from this point that recovery began, first within the United States and then with Europe and Asia.

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Once America entered the war the United States became the “Arsenal of Democracy,” involved in what was practically considered a holy war against the Axis Powers, the forces of evil.  The U.S. supplied Allied Nations with the materials to fight the war.  Initially the Allied nations stored their gold supplies in the United States for reasons of safety.  In order to fight the war they spent that gold buying food and war supplies.  After that when the gold was spent the United States developed a policy of “lend lease” which was actually a policy of giving to the Allies what they needed to continue their efforts against their enemies.

 

Where did all this money come from?  The United States Government printed it and used it to pay for the goods and services produced.  This money then was added to that already circulating in the National Cash Flow.  Because money added to the Cash Flow is spent several times this added several times the amount initially added to the Cash Flow.

 

The U.S. also sent armies overseas to fight in North Africa, Europe, and Asia.  Interestingly even with the casualties caused by the war its overall population still increased.

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The entire nation was involved in fighting the war.  People put in window boxes in their apartments or turned their lawns into “Victory Gardens,” growing vegetables.  Housewives saved the excess fat from their cooking and turned it in to their butchers who, in turn, turned it over to manufacturers who used the grease in their production of war materials.  Children collected old newspapers and tin cans that were reprocessed and reused.  Virtually the entire families were involved in the war effort.

 

The government sold War Bonds.  For $18.75 one could buy a War Bond that would return $25.00 in ten years.  Larger denominations were also sold.  Children in public schools bought and collected War Stamps which when the amounts were large enough were exchanged for War Bonds.  Adults also contributed their excess money buying these.  Largely everyone was putting money into the war effort.

 

In addition rationing was instituted shortly after the United States joined the war effort.  Items of food like meat and many vegetables were rationed in the country with the bulk being sent overseas for the war effort.  Gasoline and many other items were also rationed.  Families were issued rationing books with all kinds of stamps in them, the amount depended upon the number of the family.  Women went shopping with limits set by the rationing books.

 

All vehicles built during the latter part of 1942 until the end of the war in 1945 were military vehicles.  There were none built for civilians.  Virtually all the U.S. factories were converted to the war effort.

 

From 1940 on there were more jobs available than there were people to hold them.  Once America had entered the war in December of 1941 people could work double shifts at the factories.  In addition in 1942 many high school students worked after their school day.  Women were brought into the factories.  In 1943 for the first time in the general society Blacks in the Northern states also got jobs working alongside whites in the factories.  All this to meet the production needs of the war effort which President Roosevelt kept increasing.

 

The major problem that evolved was that the working public was now earning more money than it could spend.  Selling War Bonds was a device to take some of this money off the market.  For people who wanted more than rationing allowed there was the Black Market, illegally selling items of food and other products without the use of rationing stamps.  But even with this there was a tremendous buildup of money among the general public.  And at the end of the war all this money would be looking for products to purchase.

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It is worth considering briefly the question of where the money that the Federal Government spent came from.  The statement was made that the Government printed it as it was needed.  Keep in mind that under President Roosevelt the basis of money changed.  At the beginning of 1933 money was gold in the form of coins.  By the end of that year and thereafter the gold had been collected, melted down in blocks and stored in depositories.  New paper money had been issued in its place.  The new source of currency had no real value.  It was a means of exchange: the production of goods and services for the potential to eventually purchase new goods and services.  The wealth produced was the goods and services used during the latter part of the Great Depression and during World War II.  The potential that the United States had, with everybody working, for production was the real wealth produced.  And this principle remains true today.

English: US GDP from U.S. Department of Commer...

English: US GDP from U.S. Department of Commerce: Bureau of Economic Analysis (Photo credit: Wikipedia)

The Weiner Component V.2 #41 – Patterns of History: Part 1: Welfare for the Rich

English: Woodrow Wilson.

English: Woodrow Wilson. (Photo credit: Wikipedia)

The Presidency of Donald J. Trump seems to be taking the country historically backwards.  We, as a nation, are moving toward the past, going from being a middle class nation to a lower class one.  And the current major agent bringing this about is the President of the country, Donald J. Trump with the aid of the Republican dominated Congress.

 

In the post-Civil-War Period the United States underwent a rapid phase of industrialization.  The Industrial Revolution arrived.  We changed from a rural civilization to an urban one.  This was the period of the robber barons and monopolies.  Taxation was limited.  The XVI Amendment to the Constitution legalizing the income tax would not be passed until 1913.  Prior to that date a large group of industrialists made multimillions of dollars in their prospective industries, establishing, in many cases, family dynasties, like the Rockefellers or the Fords.

 

At that time there were no rules of regulations.  Cities rose rapidly.  The country was crisscrossed with railroads.  Unions were considered organizations in restraint of trade.  Child and women labor was ramped.  Most industries worked their way up to become monopolies controlled by one man or a small group of men.  Monopolies bribed their way into Congress.  By the late 19th Century monopolies and oligopolies con`trolled most production.

 

All this corrupt growth was partly halted by the development of the Progressive Movement which rose around the turn of the 20th Century.  The struggle to end the monopolies and oligopolies would continue to and end with World War I.  It would not resume again until the Great Depression.

 

There was a great influx of labor during this early industrial period.  People came from Eastern Europe and Asia.  They built the railroads, filled the factories, and lived in overcrowded slums in the rapidly developing urban centers.

 

The overall population of the United States at this time was lower class, people: men, women, children, working for wages, usually low and were barely living upon what they earned.  With the Progressive Movement laws were passed improving conditions in the cities and the factories.  The labor movement developed and wages gradually improved.  Working conditions got better as new labor laws were passed.  It was a slow process.

 

With the coming of World War I there were shortages of everything in Europe.  Food and war materials were imported from the United States.  There was actually a labor shortage there.

 

During 1917 the United States was drawn into the war on the side of the Allied Nations.  The U.S. President, Woodrow Wilson’s slogan was: This was the war to end all wars.  Unfortunately after the war ended Allied Nations wanted revenge.  Wilson was forced to settle for a League of Nations which later the United States refused to officially join.

 

Germany as the only nation left of the Central Powers at the end of the War had to pay reparations for the cost of the war.  The Allies used the German reparations to pay the United States the money they had borrowed from her to fight the War.  With the coming of the Great Depression all payments ended.  Each nation worked unsuccessfully to get itself out of the Great Depression.  For the United States the Great Depression ended with the coming of World War II in 1939.

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In 1933, when he became President of the United States, Franklin Delano Roosevelt doubled the money supply in the nation by collecting all the gold coins, legally doubling their value from $18 an ounce to $36 an ounce, and reissuing the money in paper currency.  Presumably everyone had their currency exchanged from gold to paper.  Gold non-circulated certificates were deposited with the Federal Reserve which were supposed to stand behind the paper currency.  The gold was melted into blocks which were then put into depositories like Fort Knox.

 

By this move Roosevelt not only doubled the money supply he also gave the Federal Government possession or control of 50% of the money supply without raising one dollar in taxes.  This money would be used to pay for the “New Deal” that would be given to all the people in need in the United States.  Apparently Roosevelt also liked poker, that where the name of his program came from.

 

The entire concept of money would change at this point, not only in the United States but throughout all the nations since they all would follow this pattern.  Money would no longer be an exchange of a good or service for a valuable metal worth that good or service.  Paper money henceforth would have no intrinsic value.  It would only be a means of exchange.  A good or service would be exchanged for a different good or service.  Money would be the instrument of exchange.  It would state the value of the good or service for the other good or service for which it was exchanged.

 

Money now also became a means of scoring what a job or item was worth.  It had no real value outside of the country.  It could not be used in other countries.

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As we’ve seen in the United States prior to 1933 money was actual gold and silver; paper money was a promissory note that could be redeemed at any time for gold or silver.  It extended the amount of money in circulation.

 

Promissory notes began at one dollar and went up to thousands of dollars.  Ones and fives were silver certificates.  Anything above that was a gold promissory note that could be exchanged for gold $20 pieces of gold.

 

The year 1933 was the low point of the Great Depression.  In that year the Democrat, Franklin Delano Roosevelt, became the 32d President of the United States.  Among his actions that year he had all the gold coins, with the exception of a small number held back as souvenirs, collected and melted down into gold blocks.  They were stored in depositories.  Roosevelt had the value of the gold changed from $18 an ounce to $36 an ounce.  In essence he doubled the money supply.  This enabled him to pay for the New Deal.

 

What Roosevelt did, knowingly or not knowingly, was to change the function of money.  Before 1933 gold coins were accepted anywhere on the planet.  Money, an object of value was exchanged for equally valued goods and/or services.  After 1933 money became an object of exchange.  It had no intrinsic value.  It became within each country strictly an object of exchange; exchanging a good or service for a good or service.  Thereafter it became a sort of scorecard, denoting the value of an object, service, or occupation but other than that having no value itself.

 

In 1933 as the gold coins were collected gold certificates were issued and retained by the Federal Reserve for the gold collected and these served as the basis for the paper money issued.  Did the gold certificates equal the amount of paper money issued by the Federal Government?  I don’t believe anyone ever checked.

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Alexander Hamilton, the first Secretary of the Treasury, began this country based upon debt.  During the Revolutionary War the Continental Congress freely issued paper Continentals with which to pay its debts.  After the War Hamilton, as Secretary of the Treasury, Hamilton collected this money and put out a new issue paying off the Continentals at full face value.  He believed that a certain amount of Federal Debt ensured the allegiance of the property owning class.

 

With a few short exceptions, like the early part of Jefferson’s tenure as President, there has been a National Debt.  The question that now arises is: Should there be a limit to this Debt?  After all when the Federal Government borrows money it has to pay interest on the Debt.  Currently, toward the end of 2017 the Debt has reached 20 trillion dollars.  The interest upon that amount is in the hundreds of millions of dollars.

 

During periods of Democratic Presidents, when the Republicans had a majority in one House of Congress they have been deficit hawks, being upset over each additional dollar of debt.  With Republican Presidents they have been willing to massively expand the debt.  Under President Reagan the National Debt rose, for the first time, over one trillion dollars.  It more than doubled under the first Bush President and it quadrupled under the second Bush President.  Currently, under President Donald J. Trump, in order to bring about what the Republicans call “Tax Reform,” but what is actually a massive tax decrease for the wealthy, the Republicans are willing to increase the National Debt by over 1 ½ trillion dollars a year.

 

Originally they were going to gut Affordable Health Care (Obamacare) and use that money for the tax cut.  But when that plan failed their tax bill plans changed to take money from the middle class and from deficit spending.  Will that bill pass in both Houses of Congress?  I doubt it.  As long as the Republicans have a majority of two in the Senate they are having trouble passing anything.  To date, one year into their current administration they have passed no significant legislation.

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There is another important consideration to keep in mind.  With the current massive National Debt and the propensity of Republican Presidents to spend money unnecessarily or foolishly.  President George W. Bush’s Iraqi War and President Donald J. Trump’s ridiculous twelve hundred mile Wall there is a distinct possibility that the National Debt could continue to rise rapidly.  The effect of this is a redistribution of money in the hands of the wealthy.  After all who can afford to buy the continuous flow of government bonds?  Tax dollars will be paid by the rapidly declining middle and lower classes which will, in turn, be distributed as interest to the wealthy upper class.  This process will continually push many of the remaining members of the middle class downward economically into the lower class while enhancing the upper few percentile of the upper class.  It will help to take America back to where it was before the turn of the 20th Century.  In point of fact this plan can generate welfare for the very rich.

Franklin Delano Roosevelt, 1933. Lietuvių: Fra...

Franklin Delano Roosevelt, 1933. Lietuvių: Franklinas Delanas Ruzveltas (Photo credit: Wikipedia)

The Weiner Component V.2 #40 – Money & the Presidents: Part 6: Donald J. Trump

The Presidential Election of 2016 was between Hillary Clinton and Donald J. Trump.  Clinton was the Democratic candidate and Trump was the Republican choice.

English: Hillary Clinton Speaks to College Dem...

English: Hillary Clinton Speaks to College Democrats (Photo credit: Wikipedia)

Hillary R. Clinton had been demonized by the Republicans since she was first lady of

speaking at CPAC in Washington D.C. on Februar...

speaking at CPAC in Washington D.C. on February 10, 2011. (Photo credit: Wikipedia)

Arkansas and her husband had been Governor of that state from January 11, 1983 on.  At that time she was called the Lady Macbeth of Arkansas by the Republicans because of her work for the poor and children.  As First Lady of the United States she chaired a committee on providing medical insurance for all American citizens which the Republicans strongly opposed.  It failed.  She has been heavily resented by Republicans over the years for being an advocate for those who need representation in the state legislature and in Congress and for being a Senator and Secretary of State.  The Republicans wanted her to be a stay-at-home First Lady rather than an advocate for causes they did not support.

 

Donald J. Trump has an odious reputation as a male chauvinist, a sexual predator, a dishonest businessman, a TV reality star, and as a prefabricator or liar.  He is a thin skinned narcissist and probable sociopath who sees everything in terms of himself.  In addition he is lazy, making-up what he doesn’t know or understand.  He verbally attacks anyone who in any way opposes him, calling those individuals derogatory names.  Today, as President, he is running a country whose functioning he doesn’t quite totally understand.

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What is Hillary Clinton’s great sin as far as the Republicans are concerned?  She is a liberal Democrat with a propensity to aid the poor and needy.  She sees the function of government as providing for those who can’t properly provide for themselves and having this paid for by those who can afford to pay higher taxes.  While Trump and the Republicans see less being spent upon the poor and needy and believe the rich, as the producers of the goods and services needed by the society, should be paying less of their incomes in taxes than the rest of the population.

 

In actuality Clinton specific crime was using a public email service rather than just a government email service.  On the basis of this numerous speakers at Trump rallies have yelled out, “Lock her up!!”  However prior Republican government officials like George W. Bush’s Secretary of State have done so in the past and Trump’s son-in-law, Jared Kushner, and Trump’s oldest daughter, Erika, have done so in the present; as have other Trump officials.  Somehow the Trump people can do anything but everyone else should be legally limited as to what they can do in government.  This is pure arrogance or cynicism.

 

From the evidence that seems to be emerging now it would seem that both the Trump people and the Russia conspired together and separately to flood the media with fake news and rumor and with stolen Clinton Emails aimed at making Hillary Clinton unacceptable to a percentage of the American public.  If Trump was personally involved in this the probability is that he will be impeached before his current term is up.

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The Republican Party, which lost its political majority in Congress in 2008, is very loud and complaining about anything the Democrats do or try to do.  During Barack Obama’s eight years as President the Republicans liked nothing that the Democrats did or attempted to do and they continually let the country and the world know it.  The Democrats, whose current minority leader is a lady, Nancy Pelosi, are a very quiet and polite.  Their philosophy is to let the general public make their own discoveries and vote for candidates accordingly.

 

A large group of people have become disgusted with both political parties and have become Independents.  They have left both political parties and vote as they see fit.  In addition many people vote against their own interests.  An example being those who voted for Trump who have had their medical insurance partly cut off.

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Donald Trump won the 2016 Presidential Election but Hillary Clinton had over three million more popular votes than he did.  This is the second time in the last 16 years that this has happened.  The first error, which put George W. Bush in the presidency in 2001, cost over 3,000 American military lives in an unnecessary war in Iraq.  This does not include all the Iraqis that were killed.  The current error placed Donald Trump, a man totally unfit to be President, in that office.  What harm he may do as President is anybody’s guess.

 

The President is elected not by the public directly but rather by the Electoral College which consists of State electors from 50 states being chosen in the exact same proportion in which they are represented in Congress.  Four hundred and thirty-five members of the House of Representatives, the number being determined by the population of each state and one hundred members of the Senate, two from each states regardless of the population of that state.

 

The Constitution was originally written during the summer of 1787 and completed on September 17 of that year.  It began operation on March 4, 1789.  This was about a decade before the Industrial Revolution began in England in the cotton industry; the United States at that time was mostly rural with some small cities.  At the end of the Revolutionary War the new United States was set up under the Articles of Confederation as 13 Independent States that had a largely powerless Congress.  The Constitution created a Union of the States, giving the new bicameral Congress the power to make laws for the nation.  Most people then still thought of themselves as belonging to the particular state in which they lived.

 

Communication tended to be very poor or slow.  The founding fathers who wrote the Constitution had to come up with a means of choosing an executive or president who would represent all 13 states.  Everyone knew at that time that the first President would be George Washington.  But after his term in office a new President would have to be chosen.  These founding fathers had no concept of political parties.  They wanted all the voters to choose the “wisest” man in their area and these electors would choose the best or “wisest” man in the country to be the new President.

 

Political Parties came into existence even before the new United States.  Alexander Hamilton created the Federalist Party.  The second national party came into existence in 1800 with the election of Thomas Jefferson, who created the Democratic-Republican Party, which is still with us as the Democratic Party.

 

Today eight states, within the United States, have 3 only electoral votes.  Twenty-seven of the fifty states, having from 3 to 8 electoral votes have a total of 132 electoral votes while the top four states in population: California, Texas, New York, and Florida, have a total of 151 electoral votes.  The remaining twenty states are between the two.  It takes 270 electoral votes to win the Presidential Election.  Trump received 304 Electoral votes.

 

As the population is not equal within each of the 50 states the Electoral votes in the larger states count less than those in the smaller populated states.  They are most heavily weighted in the eight states that have only one member in the House of Representatives.  In California the most populated state in the Union the Electoral vote counts the least.

 

What happens is that many smaller states have three Congressional votes: two in the Senate and one in the House of Representatives.  Eight states have 3 electoral votes.  Actually 33 of the 50 states have eight or less electoral votes.  Another 12 states go from nine electoral votes to eighteen electoral votes.  That means that 45 smaller states essentially control the election.

 

In terms of the popular vote in 2016 Trump received 46.2% or 62,984,825 popular votes; Clinton received 48.3% or 65,844,959 popular votes.  She should have won the election.  It is past time to have an amendment to the Constitution doing away with the Electoral College.  There is now almost instant communication throughout the United States.  Every single vote should count equally.  They do not under the Electoral College.  A true Democracy is supposed to express the will of the majority of the people.  This does not always happen with the Electoral College.  It is past time to get rid of it.

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Donald J. Trump, to quote one of his favorite words, is a “disaster” as a human being and as President of the United States.  For one thing he is incapable of showing empathy to Gold Star parents or wives whose son or husband died fighting for this country.  Everything with Trump is about himself.  All subjects seem to start and end with him.  He is the only President in the history of the United States who has held Election Rallies after he was elected to office.

 

The man is a total narcissist and he probably is also a sociopath.  He seems to believe that at the age of 71 he knows everything worth knowing.  He doesn’t like to read; consequently he gets all his news from watching TV; mostly, I suspect, Fox News.  Trump seems to see most people as either on his side or as enemies.  He never apologizes for anything he does or says, no matter how inept or stupid.  He also never accepts responsibility for anything he does that turns out negatively.  Everything bad is someone else’s fault.

 

Trump is also lazy.  He desperately wants legislative wins; but he doesn’t want to be responsible for defeats.  Consequently his Administration does not work directly with Congress.  What he gives to them is a very general outline of how he feels about the law at that moment.  He could easily change his mind by the next day.  When he was campaigning for office he promised to improve Affordable Health Care (Obamacare) his first day as President.  By the time he took office the concept had changed.  Trump’s major goal seems to be reducing taxes for himself and his fellow rich, as well as large corporations.  In order to bring this about initially the plan was to gut Obamacare, taking billions out of the program to pay for a massive tax cut for the rich and large corporations.

 

This was the “Repeal and Replace” plan.  The Federal Government would give fixed block grants to all the individual states.  The states would then run the medical care plan in each state, presumably making up the gradual increasing costs out of their own budgets.  This plan would have thrown millions of citizens gradually out of Affordable Health Care leaving it only for those few who could afford the premiums.

 

All the attempts the Republican dominated Congress made over a nine month period to pass this bill failed.  The only major bill that Congress passed over this period had to do with increasing sanctions on Russia for interfering in the 2016 Presidential Election and for limiting Trump’s power to individually deal with Russia.  It had over 90% bipartisan support in both Houses of Congress.  Since a veto would not have killed the bill Trump signed it.

 

Currently Congress, with Trump’s total support, is working on what it and the President call “a tax reform bill.”  This is a tax reduction bill for the rich and large corporations.  It actually increases taxes for the middle class particularly in the large Democratic states like California and New York and further separates incomes between the very rich and everyone else, further shrinking the middle class.  In point of fact those earning between $10,000 and $75,000 will have their tax bill increased while those in the millions will have their tax bills decreased considerably.

 

Since the Republicans were not able to take the funds needed out of Affordable Health Care they will largely pay for the tax reduction by deficit spending.  It seems that the Republicans are Deficit Hawks when the President is a Democrat but do not have a problem increasing the National Debt by an extra trillion and a half dollars or more when he is a Republican.  Massive principles apparently can change overnight!

 

The probability is that the Republican dominated Congress will have no better luck with this bill than they had with “Repeal and Replace.”  While the House of Representatives has a fairly large majority of Republicans there is only a majority of two Republican senators in the Senate.  There are 46 Democrats and 2 Independents who vote with the Democrats.  If the vote in the Senate is 50 for and 50 against then the Republican Vice President can break the tie with his vote.  But if three Republican Senators refuse to go along with their political party then the bill is defeated.  Every attempt at “Repeal and Replace” has been defeated by three votes.  Trump’s Tax Reform Bill could easily lose enough votes in both Houses of Congress to easily be defeated.  There is a Midterm Election coming up on the first Tuesday in November of 2018.  One third of the Senate and the entire House of Representatives will be coming up for reelection.

 

It seems that the majority of tax paying Americans are against this bill.  If it were to somehow pass the majority of Republicans could be swept out of Congress in 2018.  Even if it failed this could happen in 2018.  Trump would really be frustrated if he had to deal with a Democratic majority in the Senate or in both Houses of Congress.

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Apparently Trump wants a legislative victory regardless of its effects on the country.  He is perfectly willing to destroy the middle class or do whatever it takes to achieve this.  He may well not be successful in getting any new major laws passed for the rest of 2017 or even for 2018.  After the November 2018 Midterm Election there may be a Democratic majority elected to the Senate or even to the House.

 

From what I gather the European nations are waiting for Trump to go away in 2020.  The people in the United States may have to do the same thing if he is not impeached and hope he doesn’t do too much damage before that time comes.

A graph labeled "Figure 109," and fo...

A graph labeled “Figure 109,” and found on page 126. It shows the percentage of Democrats and Republicans who belong to labor unions. (Photo credit: Wikipedia)

The Weiner Component V.2 #39 – Money & the President: Part 5: Barack Obama

Official photographic portrait of US President...

With his family by his side, Barack Obama is s...

With his family by his side, Barack Obama is sworn in as the 44th president of the United States by Chief Justice of the United States John G. Roberts, Jr. in Washington, D.C., Jan. 20, 2009. More than 5,000 men and women in uniform are providing military ceremonial support to the presidential inauguration, a tradition dating back to George Washington’s 1789 inauguration. VIRIN: 090120-F-3961R-919 (Photo credit: Wikipedia)

President Barack H. Obama was elected in November of 2008.  He assumed the Presidency on January 20, 2009, inheriting a country on the verge of a massive depression whose economic downfall could also have brought down the rest of the Industrial nations of the world.

 

Most of the banking houses within the United States were close to if not at the point of bankruptcy.  They had been involved for the last 30 to 40 years in a process of increasing the amount of available currency in the overall economy by financing and continually refinancing a large percentage of American homes, and in doing this raising property values virtually to the clouds.  Their philosophy at that time was for homeowners to use their properties as bank accounts by continually refinancing them.  During the year 2008 this Real Estate Bubble burst with property values crashing in some cases 60 to 80 percent.  Initially in 2008 former President George W. Bush had partially bailed out some of the banks before he left office; but the bulk of this problem was left to the new incoming President, Barack Obama.

 

Among other things the country faced, with the sudden fall of values and the fact that the banks suddenly stopped refinancing homes, was a sudden massive level of unemployment.  On the one hand many people owed more on their homes than they were worth and on the other hand, because of the sudden massive unemployment, many people were no longer able to afford to make their monthly mortgage payments, even if the value of their homes was above their mortgage debt.

 

It should be noted that if a large percentage of the banks were allowed to fail then the movement of money within and across the country would slow to a trickle destroying the economy for a number of years until a new banking system could be set up, however long that took.  In 1929 with the Great Depression the disintegration lasted until the 1940s, the outbreak of World War II.  This one with its added complications could last 20 to 30 years, if not longer.

 

Another immediate problem was the fact that the numerous Hedge Funds that had bought the original mortgages, each of which had been divided up into a hundred or more pieces and sold piece by piece to different Hedge Funds, had very sloppy records of these transactions.  The banks sold the mortgages and/or set up their own Hedge Funds. Then they continued to administer them but no longer owned the mortgages.  At this point mortgage money was no longer coming in.  The banks stopped receiving their fees and the Hedge Funds no longer received their incomes.  What emerged was an impossible situation.

 

The problem here was that no one owned enough of a mortgage to foreclose legally on a property for nonpayment of the mortgage.  Ownership, however, did not bother the banks, many began foreclosing on properties they did not own but did service.  Initially the courts felt that the banks would do nothing illegal.  When it was proven that the banks were acting illegally the practice was stopped by the courts and those banks were heavily fined.  People who had been foreclosed illegally in some cases received some financial compensation from the banks.  Other than that no one from the banks was charged with criminal activity.

 

President Barack Obama made hugh government loans to the banks.  He also bailed out the American auto industry.  These were all interest bearing loans.  Former President George W. Bush had signed the 2009 Budget the prior year into law.  President Obama needed an additional amount over 300 billion dollars to fund all the loans.  A Democratic Congress authorized the amount needed and the Federal Government  was eventually mostly paid back with interest.  The companies that did not pay their loans back went bankrupt.

 

President Obama made a point that the near-bankrupt banks could no longer compensate their executive with million dollar salaries.  Their leaders had, after all, brought these financial institutions practically into bankruptcy.  The CEO of the Bank of America complained vigorously that his company would pay back their loans as soon as possible so they could get back to paying their executives proper compensations.

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Immediately upon assuming the presidency the Obama Administration faced two massive problems: one was a high rise in unemployment; and the other was the fact that most of those homes whose value had collapsed had mortgages that each had hundreds of owners.  Actually no one held enough of a mortgage to do anything with it.  In reality this meant that no one really owned the houses.  Functionally if nothing was done to alter the situation then it would take at the very least one or two decades for the problem to be resolved.

 

No one owned enough of a mortgage to do anything with it.  The people in these homes could go one living there without making payments, which in many cases was happening because of the unemployment, and no one could foreclose on them.  Of course no one knew which homes came under this and which did not.  But in time many homeowners figured it out.  They had made no mortgage payments and no one bothered them.  Many of these people were employed or became eventually employed and still made no mortgage payments.  Instead they ended up with more money than they ordinarily had when they were employed and so they spent this money in restaurants or other places essentially enjoying themselves and also helping economic growth.

**************************************

What the Obama Administration had been able to do was to turn a potential depression that would have been larger than the Great Depression of 1929 into what has been called the Great Recession.  By the use of money they made a potentially massive depression into a recession from which the country recovered while Obama was still President of the United States.

 

The mortgage dilemma which ordinarily should have taken a decade or more to resolve was solved by President Obama and the Chairman of the Federal Reserve, Ben Bernanke.  For a term of a little over two years, during President Obama’s second term in office, the Federal Reserve bought $50 billion worth of mortgage paper a month and then destroyed or discarded the mortgage pieces.  Fifty billion a month for a period of two years is one trillion, 200 million dollars’ worth of mortgage pieces.  In addition the government also added this same amount of money to the National Cash Flow.

 

In essence the Obama Administration bought the country out of a potential depression and recession.  Adding all this money to the economy did not cause any real inflation.  Instead it reduced unemployment to under 4% toward the end of President Obama second term in office and essentially brought about a return to a positive and healthy functional economy.  Interestingly neither Obama nor Bernanke flaunted this fact and not only did they get no credit for it, most people didn’t even know it happened.

 

In 1933 Franklin D. Roosevelt doubled the money supply in the U.S. but the Great Depression did not really end until World War II.  In 2015 Barack Obama more than quadrupled the money supply and ended the Great Recession.  The country learned a lot economically over the years.  Money was accepted by the Federal Government as a tool to end National economic disasters.  It was no longer an object of value.

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Shortly after Barack Obama assumed the Presidency the Republicans from both Houses of Congress met in caucus and concluded that they would make Obama a one term President.  Was this because he was Black or because he was a Democrat?  For whichever reason they would support nothing for which he could gain credit.

 

At this time, 2009, the Republicans were in a minority position in both Houses of Congress.  After the midterm election of 2010 the Republicans would gain the majority in the House of Representatives and keep it for the rest of President Obama’s term of office.  In 2014, for his last two years in office, the Republicans would also gain the majority in the Senate.  As a consequence after his first two years as President it would be impossible for President Obama to achieve any new legislation.  He would essentially run the country by executive orders.

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As a footnote included in the text of this essay we should consider what might have happened if the Republican candidate, John McCain had won the 2008 Election.  How would he have run the United States as President?  The probability is that he would have had the same problems that President Herbert Hoover had from 1929 to 1933.  The country would have fallen into and continued with a Grand Depression.  There is no way that McCain would have had the imagination to do what President Barack Obama did.

 

During his first two years in office President Barack Obama not only modified what might had been a massive depression he also got through Congress a great deal of positive legislation.  Obama signed the Patient Protection and Affordable Care Act, which was later known as the Affordable Care Act or Obamacare.  In order to avoid a repeat of the 2008 Property Bubble Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act that the President signed.  There was the American Recovery and Reinvestment Act of 2009.  In addition he signed Tax Relief, Unemployment Insurance Reauthorization, and the Job Creation Act of 2010.  For the military there was the Don’t Ask, Don’t Tell Repeal Act of 2010.  Sexual orientation was no longer to be considered in the military.

 

By 2011 the Republicans or GOP gained control of the House of Representatives.  After a lengthy debate the President signed the Budget Control and American Taxpayer Relief Act.  As the President and the House of Representatives could not come to any agreement of funding the government this bill was signed as a compromise.  The House wanted to cut entitlement programs and increase military spending while the Administration refused to support cutting entitlement programs.  What occurred was sequestration.  If the President and Congress could not work out any way to reduce government spending then beginning in 2013 the Sequester would come into being.  This would automatically reduce an equal percentage of all aspects of Federal spending.  It officially began on March 1, 2013.  Exceptions could be made but each required a separate bill from Congress signed by the President.  Sequestration is still with the Federal Government.

 

During his second term in office the President In addition to Sequestration increased U.S. troop levels in Afghanistan, reduced nuclear weapons with the United States-Russia New START Treaty, largely ended military involvement in the Iraq War and ordered military operations that brought about the death of Osama bin Laden.

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In 2012 President Barack Obama ran for a second term against the Republican, Mitt Romney.  What was fascinating in the election was the shortness of the Republican memory.  One of the things Romney promised was to do away with all the legislation that was passed to do away with the abuses that had caused the 2008 Real Estate Bubble.  All of that would wait another four years for when Donald Trump became President.

 

In this four year period President Obama promoted the LGBT Americans with his Administration filing briefs that urged the Supreme Court to strike down same-sex marriage bans as unconstitutional.  Obama also urged gun control after shootings.  He strongly supported climate change and immigration.  Militarily he ordered intervention in Iraq and continued operations in Afghanistan.  He supported the Paris Agreement on global climate change and initiated sanctions against Russia after the invasion in Ukraine and interference in the 2016 Presidential Election.  He also, after over one half a century, normalized U.S. relations with Cuba.  President Obama left office in January with a 60% approval rating.

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When President Barack Obama assumed the office of President of the United States the population of the country, according to the Census Bureau was 306.77 million people.  At the end of his eight year term it had grown to 325.34 million people.  An increase of 18.57 million persons.  People or whose antecedents’ had come from all over the planet changing the population so that Caucasians were no longer the majority of the population.  They continued as a large minority within the population.

 

It should also be noted that in 2009, at the end of the George W. Bush Administration, the National Debt was 10.6 trillion dollars, doubled from the end of the Clinton Era.  By January of 2017 it was 18 trillion dollars.  It had been extremely expensive keeping a Grand Depression from happening.  The alternative for the American people would have been total disaster.

 

The Weiner Component V.2 #38 – Money & the Presidents: Part 4

English: Official photograph portrait of forme...

English: Official photograph portrait of former U.S. President George W. Bush. Português: Foto oficial de George W. Bush, presidente dos Estados Unidos da América. (Photo credit: Wikipedia)

U.S. President George W. Bush and Afghan Presi...

U.S. President George W. Bush and Afghan President Hamid Karzai appear together Wednesday, March 1, 2006, at a joint news conference at the Presidential Palace in Kabul, Afganistan. (Photo credit: Wikipedia)

Clinton raised taxes for the very wealthy and lowered them for everyone else.  There was prosperity with deficit reduction for his last three years in office.  George W. Bush lowered taxes for the rich and gave everyone else a token discount on their income taxes.  He also got the U.S. involved in two wars, one of which was unnecessary and the National Debt zoomed to the point of almost doubling.  Over his eight years in office the National Debt went from 5 trillion 792 billion dollars to 11 trillion 898 billion dollars.

 

In November of 2,000 George W. Bush won the Presidential Election in an extremely controversial election.  His Democratic opponent, Al Gore, had a greater popular vote.  And in Florida they used a punch out ballot in the election.  The problem here was that the punch outs required an additional effort to be totally detached from the ballot.  Numerous ballots contained partially punched out votes.  These were not immediately counted and later had to be considered one by one.  The Chief Justice of the Supreme Court, William Rehnquist, made a negative point over counting individual ballots and the practice was discontinued, giving the presidential victory to George W. Bush.  It was victory by default!

 

From January 20,Th when he assumed office, until the early afternoon of September 1, 2001 nothing much happened in the country.  On the morning of that day President George W. Bush was reading to a Primary school class from one of their textbooks when news arrived of what had happened at the New York City World Trade Center.

 

Four large passenger American airplanes, after takeoff from Eastern airports, had been hijacked by groups of Al-Qaeda terrorists.  Two had crashed into each of the two main towers of the 110 story World Trade Center, destroying the towers.  One plane had crashed in the countryside on its way to Washington, D.C. and the fourth plane had crashed into the Pentagon, destroying a section of it.  2,996 people had been killed and over 6,000 people were injured.  There was over 10 billion dollars in property damage.

 

The leader and founder of Al-Qaeda, Osama bin Laden, had set up the terrorist mission.  He would be killed several years later by navy seals working under the orders of then President Barack Obama.

 

President Bush’s reaction was to declare War on Terrorism and go after Al-Qaeda and the Taliban, which was then housed in and which also controlled the government of Afghanistan.  The United States, initially supported by Canada and the United Kingdom, and later by a coalition of over 40 countries, all belonging to the United Nations, would attack Afghanistan, the home country of Al-Qaeda and the Taliban.  Their object was to deny the terrorists a safe haven in Afghanistan by removing it from their control.

 

On October 7, 2001, President Bush launched Operation “Enduring Freedom” with Great Britain.  They were later joined by the Afghanistan Northern Alliance which had been fighting the Taliban in a Civil War since 1996.  In December 2001 the United Nations Security Council established the International Security Assistance Force.  NATO became involved in August 2003.  The U.S. provided the commanding general.  This force included troops from 43 nations.

 

Osama bin Laden and his forces had been driven out of the country but the Civil War continues today, over 16 years after.  The Afghanistan government, democratically set up by the U.S. and U.N., has never been able to control the country.  This has been done by the United States and its United Nations allies.

 

In May 2012, NATO leaders ordered an exit strategy.  In 2014 the U.S. announced its major military operations were over and that it would leave a residual force in the country.  In 2014 the British handed over their bases to the Afghan government and on December 2014 NATO formally ended military operations.  In September of 2017 the Trump Administration deployed an additional 3,000 troops to Afghanistan bringing the U.S. presence there up to 14,000 soldiers.  There doesn’t seem to be any end in sight.

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Early in the Afghan War President Bush, his Vice President, Dick Chaney, and his Secretary of Defense, Donald Rumsfeld, met in Texas to discuss with the Commanding General Tommy Franks “Desert Storm II,” the invasion of Iraq which Bush considered part of the “axis of evil.”  Presumably, under Saddam Hussein, Iraq contained “weapons of mass destruction” and was a threat to the United States.

 

Iraq, at that time was allowing U.N. experts to examine their military facilities searching for illegal weapons.  The United Nation inspectors complained that Bush’s invasion cut their investigation short.  In fact the CIA had mixed feelings about Iraq having these weapons.  They mostly felt that there were “no weapons of mass destruction.”  It turned out they were right.

 

Why did Bush and his coterie insist upon invading Iraq?  There was no evidence that they had in any way participated in the destruction of the Twin Towers.  Bush was creating another war that was not really necessary.  Two reasons emerge here.  One was that they believed they could remake Iraq into a small version of the United States.  All they had to do was get rid of its dictator, Saddam Hussein.  Then they could hold a Democratic Election and the new Iraq would live happily ever after.  They did not understand anything about the Middle East.  They were either totally naïve or completely ignorant.

 

The other reason was the fact that Saddam Hussein had attempted to have George W. Bush’s father, former President George H.W. Bush assassinated and the son wanted to punish him.  It could have been a combination of the two reasons.  They saw it as a win, win situation.  In any event the cost of this decision was over 3,000 American soldier’s lives and about ½ million Iraqi lives.  In addition it destabilized the Middle East and forced us to continue to keep troops in Iraq as the government there was never able to maintain control of the country.

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During Bush’s last year in office, 2008, the Real Estate Bubble, which the banks had been creating since the 1980s, burst.  People had been encouraged to use their homes as bank accounts.  They could always refinance their home whose value kept increasing  largely because of the continual refinancing.  In essence the banks had gradually created money in the trillions of dollars throughout the country by continually refinancing homes at ever increasing value.  By 2007 the problem became obvious but the majority of bankers were in denial.  In fact some of them began refinancing homes at 125 percent of their appraised value.  The entire system collapsed in 2008, Bush’s last year in office.  Many homeowners suddenly owed more on their houses than they were worth.  Bush and his Secretary of the Treasury bailed out the banks with multi-million dollar loans.  This was the state of the union that George W. Bush handed over to his Democratic successor, Barack H. Obama.

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In essence George W. Bush, who had initially won the Presidential Election over a quirk, the Florida punch ballots, had brought about an unnecessary war, in all probability, to punish a dictator for attempting to have his father killed.  In this process innumerable people, both American soldiers and Iraqis had lost their lives.  The financial cost of this action would double the National Debt and put an unnecessary financial burden thereafter upon the United States.

 

He would also pass on to his successor a country on the verge of a depression great than that of 1929.

.The Weiner Component V.2 #37 – Money & the Presidents: Part 3

(George H.W. Bush riding in a Humvee with Gene...

(George H.W. Bush riding in a Humvee with General Schwarzkopf in Saudi Arabia, November 22, 1990) (Photo credit: Wikipedia)

When Ronald Reagan became President in 1981 the National Debt was $997 billion 885 million.  In 1989, when he left office eight years later, it was $2 trillion 857 billion 431 million.  If

Jimmy Carter had won the 1981 election it would still have gone up but, certainly, not as much.

 

President Ronald Reagan was followed into office by his Vice President, George H. W. Bush in 1989.  His initial goal was to lower the Nation Debt; but he had a Democratic majority in both Houses of Congress.  They also wanted to lower the debt but their approach was totally different from that of the Republican President, George H. W. Bush and the Republicans.

 

Bush and his fellow Republicans in Congress wanted to lower the cost of funding entitlement programs for the poor and middle class.  This was unacceptable to the Democrats who wanted to raise taxes, particularly income taxes for the upper echelon and reduce loopholes for the well to do.  During his presidential campaign Bush had stated once in exasperation: “Read my lips.  No new Taxes.”  In order to raise additional funds he had to go back on his word and raise taxes.  This alienated a large number of Republican voters.

 

The Berlin Wall fell in 1989 and Germany was unified within a year after that.  By 1991 the Soviet Union dissolved.  For the United States President George H.W. Bush negotiated the North American Free Trade Agreement with Canada and Mexico which ended tariffs between the three countries.

 

The Gulf War broke out in August 2, 1990.  Saddam Hussein, the ruler of Iraq, invaded this oil rich neighbor, Kuwait.  With the United Nation’s approval President Bush announced operation Desert Storm.  A coalition of nations under U.S. leadership would liberate Kuwait.

 

On January 17, 1991 Allied forces launched the first air attack.  There would be 4,000 bombing raids by coalition aircraft for four weeks.  Then essentially American forces landed at Kuwait on February 24, 1991.  The offensive stopped at the border of Iraq after 100 hours.

 

The war was expensive.  When Bush left office on January 20, 1993 the National Debt was $4 trillion 411 billion 489 million.  President George H.W. Bush had just about doubled the Reagan National Debt.

 

In addition in 1991 there was a mild six month recession.  Unemployment edged upward.  President Bush signed a bill providing additional benefits for the unemployed.  Welfare increased at that time as more people lost their incomes.  Unemployment reached 7.8%.  Because of the negative economic conditions many corporations reorganized, laying off numerous employees.  Many of them were Republicans who had voted for Bush and had expected their jobs to continue indefinitely.  These people found themselves suddenly unemployed.  The Census Bureau reported that 14.2% of Americans lived in poverty.

 

Could the Gulf War have been avoided?  The answer is: Yes.  President Bush sent a plenipotentiary, who did not have much authority, to Iraq to meet with Saddam Hussein.  He chose a female to emphasis women’s rights, which meant to Saddam that Bush did not consider the matter important.  From what I understand the two verbally fenced for a while.  When she left Saddam assumed that Bush did not consider the invasion important and would ignore it.

 

When the invasion occurred Bush’s response was the opposite.  Saddam would attempt to get even later by unsuccessfully attempting to assassinate Bush.  And, of course his son, President George W. Bush would several years later get even by invading Iraq and spending another few trillion dollars on that.

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In 1992 Bush ran as the Republican Candidate for another term.  This election ended up having three candidates, in addition to George H.W. Bush, the Democrats ran William Jefferson (Bill) Clinton, the former governor of Arkansas, as their candidate, and Ross Perot, the Texas billionaire businessman, ran as an Independent.  He financed his own campaign.

 

Ross Perot received 18.91% of the popular vote, 18,943,321 votes, and zero electoral votes.  President George H.W. Bush got 37.45% of the popular vote, 39,104,550 votes, and 160 electoral votes.  Bill Clinton achieved 43.01% of the vote, 44,369,806 popular votes, and 370 electoral votes.  He became the 42nd President of the United States, serving from January 20, 1993 to January 20th 2001.

 

Clinton was the first Democratic President since Jimmy Carter.  He was the 42 when he became President; the second youngest man to assume the presidency, Theodore Roosevelt had been the youngest.  Clinton would preside over the longest period of peacetime expansion in American history.

 

The National Debt was 4 trillion 400 billion 489 million when he assumed office.  During his last three years in office he was able to reduce the debt.  In 1998 there was a $69 billion surplus at the end of the fiscal year.  In 1999 it was $126 billion and in 2000 it had grown to $236 billion.  All of this reduced the debt slightly for the first time.

 

Somehow he thought that the military was large enough and that he didn’t need to increase it or maneuver it into a major war activities.  While he utilized the military in United Nation activities in the Near East to try to lessen genocide and violence he did not involve the U.S. in any actual wars.

 

President Bill Clinton signed the North American Trade Agreement with Canada and Mexico which President Bush had initiated.  He attempted early, during his first term. Unsuccessfully to pass a national health care bill.  Interestingly the Democrats had a majority in both House of Congress at this time but lobbying prevailed against it.  The slogan that defeated it was: “There has to be a better way.”  He did later get a State Children’s Health Program passed.

 

During his first term (1993 – 1997), within two months of becoming President, Clinton signed the Family and Medical Leave bill that allowed unpaid leave for pregnancy or serious medical conditions.  The Bill had bipartisan support.

 

He revised restrictions on domestic and international family planning, allowing programs that Reagan and Bush had restricted or gotten rid of.  He allowed abortions which declined during his administration by 18.4 percent.

 

He also signed the Omnibus budget Reconciliation Act of 1993.  This bill cut taxes for the 15 million lowest income people.  It made tax cuts available to 90% of small businesses in the country and he raised taxes on the wealthiest 1.2% of taxpayers.  The Bill passed without getting one Republican vote.

 

Following Nixon’s initiation of relations with Communist China, Clinton signed the U.S.-China Relations Act of 2000; this law granted permanent normal trade relations and trade status to the People’s Republic of China.

 

In the Midterm Election of 1994 the Republicans gained control of the House of Representatives which they kept thereafter through the rest of Clinton’s presidency.  After that it was very difficult getting any legislation he supported passed.

 

Newt Gingrich, as Speaker of the House of Representatives initially led the campaign to impeach President Bill Clinton.  He was tried shortly after the seating of the 106th Congress on February 1999.  But the charges against him were brought by the 105th Congress in late 1998.  By the time the vote was taken Newt Gingrich, for legitimate reasons had resigned from the House of Representatives.

 

The process of impeachment is that the House of Representatives votes a Bill of Impeachment against the President and a 2/3d vote is required by the Senate after functioning as a jury to impeach him, that is 67 votes.  Bill Clinton was charged with perjury and obstruction of justice.  On the perjury charge, 45 Republicans voted guilty and 55, practically all Democrats, voted not guilty.  On the obstruction of justice charge the vote was 50 for and 50 against.  It missed finding him guilty by one vote.

 

Clinton served out the rest of his term in office.  He was a very popular President before, during, and after his trial.  There was a lot of animus against him by the Republicans, particularly those in Congress. To a large extent they were able to vent their spleen though the attempted impeachment.

 

The National Debt, when Clinton left office, was $5 trillion, 678 billion, and 178 million.  It had been $4 trillion, 411 billion, and 490 million when he became President in 1993 and for his last three years as President, Clinton had lowered the debt almost a half-trillion dollars.  Actually the Clinton years were good years for the American public.

The Weiner Component V.2 #36 – Money & the President: Part 2

Official Portrait of President Ronald Reagan

English: US President Ronald Reagan and Soviet...

English: US President Ronald Reagan and Soviet General Secretary Mikhail Gorbachov at the first Summit in Geneva, Switzerland. Česky: Americký prezident Ronald Reagan a sovětský generální tajemník Michail Gorbačov na prvním summitu v Ženevě. (Photo credit: Wikipedia)

Up until the Reagan Administration the National Debt had been below one trillion dollars.  During Reagan’s time it reached and went beyond the above figure and with succeeding presidents, particularly Republican ones, has gone far beyond that figure.  Today, in late 2017, it exceeds 19 trillion dollars and if the plans of the current President, Donald J. Trump, are carried out it will take a sudden jump of at least 3 additional trillion dollars.

 

The National Debt has been the means by which the amount of currency in circulation has been controlled.  The Federal Reserve uses the Debt to control the amount of cash in circulation.  It continually sells and cashes out long and short term bonds.  By selling less new bonds than it cashes out the FED increases the amount of money in circulation.  By selling more bonds than it cashes out it reduces the amount of money in circulation.  The amount it sells is controlled by the interest it pays on the bonds.

 

The problem, of course in controlling currency in circulation is that there are other necessary expenditures which can throw off the above process.  Today it would seem that the National Debt is completely out of control and currently getting ready to zoom even further in that direction.  Basically what this means is a redistributing of the Gross Domestic Product or National Wealth upward to those who can afford to buy the Government Bonds.  They get additional benefits upon money they invest.  This spending phenomena began on a large scale with Ronald Reagan’s Presidency.

 

Up until this time the Federal Reserve was generally able to control the amount of money in circulation but during the Reagan years the National Debt went to one trillion dollars and then passed beyond that.  The adjustment power did not work with that much debt.  Other presidents, mostly Republican, took the debt far beyond that point so that it is today over 19 trillion dollars and growing.  The current President, if he gets his way with a Republican Congress, could increase it another 3 trillion dollars with his so-called tax reform.

 

Can the country ever get out of this cycle?  That’s an interesting question.  The National Debt consists of two groupings: the public debt and the private debt.  Over the years the Treasury has taken any funds left over by any Department of the Government at the end of the fiscal year and put that money into the General Fund.  They have then credited the particular Department with those excess funds.  Technically each Department still has access to those funds which the Government has spent.  Over the years this has reached a point of at least 50% of the National Debt.  It could even be as high as 70%.  On a quarterly or by-yearly basis the Federal Reserve turns over to the Treasury Department the interest on that part of the National Debt it owes itself.

 

Interestingly Social Security holds the largest amount of the National Debt.  It is well over one trillion dollars and could be well over two trillion dollars.  During the Reagan Administration the Federal Government was facing the possibility of reaching a break-even or worse level with Social Security payouts.  The Reagan People adjusted the amounts collected so that there was a fairly large surplus from that point on.  We are now looking forward to running short of the amount needed in another 20 or 30 years.  In fact, rumor has it that many of the people today paying into Social Security will not have it in existence when they retire.  Is this true?  I doubt it.

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Ronald Reagan was born in 1911.  He became President in 1981, which put him at 70 years of age when this event occurred.  Up to that time he was the oldest man to assume the presidency.

 

Reagan apparently went to college in the late 1920s and early 1930s, the time of the Great Depression.  When he was questioned at the end of his presidency over the illegal Iran-Contra Deal, beyond stating that he had done something illegal, Reagan stated that he had majored in economics in college.  Economics, during this period was still a relatively new science.  Much was not understood.  When a similar condition occurred in 2008 and 2009 the Obama Administration was able to tone down a potentially greater depression than the one in 1929, making it into a recession.

 

President Reagan did not have the sophistication to understand what had happened in 1929.  He believed in simple answers to most problems.  To him economics functioned best under a totally Free Market system.  He did away with the laws that had been passed during the Roosevelt Administration to keep the country from the banking abuse that had brought about the Great Depression.

 

Reagan kept stating that the problem of government was the government, which we had to get out of the way for real economic growth to occur.  He did this while increasing the size of the Federal Government.  It was this action that brought about the Real Estate Bubble in 2008, and caused the government to bail out the banks which had caused the situation, and to pass laws to avoid a greater depression than that of 1929.

 

It is interesting to note that under the Republican President, Donald J. Trump, the country is again hearing the same arguments that brought about the Real Estate Crash of 2008 and the Great Depression of 1929.  It will be fascinating to find out what eventually happens.  Apparently the Republicans have no memory of the past!

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When Ronald Reagan assumed the presidency he firmly believed that the Soviet Union, which he later called the Evil Empire, was far ahead of the United States in military weaponry and men.  His military goal was to catch up and get ahead of them.

 

In point of fact the United States was far ahead militarily of the Soviet Union.  Their keeping up with us would eventually bankrupt them.

 

Reagan had been a movie actor earlier.  He seemed to believe that the weaponry used in science fiction movies could be developed by American scientists as they were needed.  His program, which was named after a Sci-Fi movie was called “Star Wars.”  Trying to do this in real life can be inordinately expensive, even if the chances of success are low to zero.  Luckily none of these hypothetical weapons were required during his presidency.

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During the Reagan years a very small number of economists came out with the theory of supply-side economics.  It began with the concept that Supply determines Demand; that is, if a good or item is manufactured people will want to buy it.  The basic economic theory has been and still is among most economists that Demand determines Supply.  The theory here is that if people want something it will be supplied.  This has been espoused by most economists in the 20th and 21st centuries.

 

The Reagan Administration coming out of the stagflation of the 70s, the combination of unemployment and large increases in the prices of all goods, came out with this theory.  It was called Supply-Side Economics or Reaganomics.  According to this macroeconomic theory economic growth can be most effectively created by lowering taxes and decreasing regulation.  This, in turn, will increase income for the general public and give the wealthy more money to invest in new production.  Everyone would benefit from a greater supply of goods and services that would cost less to produce and, at the same time, increase employment.

 

One of the so-called proofs of this was what happened during the Kennedy Presidency.  In response to a recession income taxes were lowered and people spent more with the government collecting increased taxes.  Unfortunately Reaganomics did not work during Reagan’s eight years as President.  The Nation Debt would rise to over a trillion dollars.

 

This Trickle-down Economics resulted in the wealthy taking their new additional funds and investing them in old productivity like the stock market.

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On August 5, 1981 President Ronald W. Reagan fired all striking air traffic controllers in the United States, 11,345 of them.  In doing this he would undermine the labor movement and help bring about the wage and salary inequities between labor and management.

 

Two days earlier nearly 13,000 airport air controllers walked out after talks collapsed with the Federal Aviation Administration.  7,000 flights were cancelled across the nation.

 

Technically the strike was illegal. But there had been 39 prior illegal work stoppages against the Federal Government from 1962 to 1981.  President Reagan called the strike illegal and threatened to fire any controllers who did not return to work within the next 48 hours.  Federal judges fined the union one million dollars a day.  11,345 controllers stayed out and were fired.

 

Some 3,000 supervisors joined 2,000 controllers who returned to work, with an additional 900 military controllers in manning the airport towers across the nation.

 

Reagan broke the union at considerable risk.  An air disaster might have resulted from the replacing of the striking workers.  It didn’t happen.  It would take several years and a cost of billions of dollars to return the system to a pre-strike level.  More would be spent doing this than the workers had demanded.

 

Presumably Reagan showed how tough he could be to both workers and foreign leaders.  In all probability the Soviet leader, Gorbachev, was impressed by his action or, at least, the recklessness of his action.  At the time I was daily waiting for an air accident to occur.

 

Reagan arranged that none of the striking air controllers ever be rehired.  In 1993 when Bill Clinton became President he countermanded that order.  About 800 of the former air controllers were rehired.  They joined a different union since Reagan had broken their former union.  Also American labor has not done that well since that time.

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Initially Reagan was going to be a one term president but in 1983 he was so popular that the Republican Party decided to have him run for a second term.  President Reagan easily won against the Democratic former Vice President, Walter Mondale.  Mondale received 40.1 percent of the popular vote but, since the electoral vote was on a winner take all basis, practically all of the electoral votes went to Ronald Reagan, 525 out of 538.

 

Ronald Reagan would begin his second term as President at the age of 74.  It came out at that time that occasionally he would fall asleep at times during staff meetings.

 

During this term Reagan concentrated more on foreign relations.  Because he had believed that the Soviet military was better equipped than that of the U.S. he continued to upgrade the American military.  The truth was that the U.S, was far ahead of Russia.  This move forced the Russians to engage in a military buildup, actually an arms race with the U.S.  This started during his first term.  Russia could not afford the race.  In America it would bump the National Debt to over one trillion dollars.  In Russia it bankrupted the U.S.S.R. and caused it to collapse.  It also created a situation where parts of the Soviet Union broke off into separate nations.

 

Reagan saw other nations as good or evil; the Libyan leader, Gaddafi, was the evil leader supporting terrorism.  Using that premise he had the American Air Force bomb the Libyan capital.  There had been earlier incidents between the Libya and the U.S. military but war had not been declared.  The immediate justification for the air raid, on April 14, 1986, was a Berlin terrorist bombing at a nightclub frequented by American military personal.  Reagan in his speech to the American people held Gaddafi personally responsible for the bombing.

 

While Reagan did not approve of the government of Nicaragua he did support the revolutionary Contras against the government.  Congress passed a law barring the use of funds for the purpose of overthrowing the government of Nicaragua.  In January 1984 the CIA mined the harbor in the capital of Nicaragua.  Suggestions from people in the Administration got countries like Saudi Arabia to contribute money to the Contras.  Obliquely, going against the will of the majority of Congress, the Contras or “Freedom Fighters” as President Reagan called them got some funding.

 

Toward the end of his second term in office President Reagan authorized what has historically been called the Iran-Contra Affair.  With the approval of the President arms were illegally sold to Iran and the money obtained bought arms and other military materials illegally for the Contras to use in overthrowing the government of Nicaragua.  While Nicaragua may not have been that friendly to the United States at that time they had a democratically elected government.

 

From what I remember the Contras were terrorists attempting to gain power.  Reagan unsuccessfully attempted to get Congress to appropriate funds for them.  Reagan was sure he was right and the Congress was wrong.  He needed the funds for a group “Freedom Fighters” so they could fight for freedom.  A group of people illegally sold arms to Iran.  The money from that transaction was used to fund the Nicaragua revolution unsuccessfully.  The Reagan people disregarded the arms embargo the U.S. had placed on Iran and used the money gotten illegally.

 

The person handling the operation was an army officer, Colonel Oliver North, whose political leanings were to the far right.  I got the impression that he saw himself in the middle of a James Bond adventure.

 

When the news of this broke, toward the end of the Reagan presidency Reagan gave a speech in which he stated that he couldn’t believe that he had done something illegal.  Reagan has been called the Teflon president, nothing unpleasant stuck to him.  Apparently the American public also couldn’t believe he was capable of doing something illegal.

 

No impeachment charges were brought against him.  After his term as President he was never charged with an illegal act.  This fact also saved most of his staff who had also been involved in the crime.  Colonel North had testified before Congress.  Nothing in his testimony could be used against him.  This made it impossible to develop a case against him.  He ended in talk-radio, ran for the Senate, lost, and returned to talk-radio.

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President Ronald Reagan changed not only the politics of the world by inadvertently ending the Cold War, he also changed the economic functionality of the United States.  The Federal Reserve would lose much of its ability to control the amount of currency in circulation from his presidency on.  Thereafter much of the money added to the National Cash Flow would be done because of the size of the debt.  It would obliquely help bring about conditions that would help the banks bring about the Real Estate Crash of 2008.  Labor and management relations would change to the detriment of labor.  The levels of wealth between the rich and those below them would change, with labor economically crawling upward while the rich became far richer.  America would begin to change with a very gradually decreasing middle class.  The distance of separation between the rich and everyone else would widen.  While Reagan cannot get credit for all of this he is still responsible for the country moving in this direction.

The Weiner Component V.2 #35 – Money & the Presidents: Part 1

English: Plaza of the Presidents, commemoratin...

English: Plaza of the Presidents, commemorating all the US presidents who served during World War II; outdoor display on the grounds of the National Museum of the Pacific War, Fredericksburg, Texas, USA. Each monument honors a US president who served during World War II (FD Roosevelt, Truman, Eisenhower, Kennedy, LB Johnson, Nixon, Ford, Carter, Reagan, and GHW Bush) (Photo credit: Wikipedia)

English: Four Presidents: President Ronald Rea...

English: Four Presidents: President Ronald Reagan with his three predecessors. (Photo credit: Wikipedia)

The Wealth of a nation is its level of productivity which is determined in terms of monetary value.  The monetary value is in terms of the currency of the nation.  The currency itself is merely the agent of exchange; it allows the goods and services of each individual to be exchanged for those produced by all other individuals.  All of this is finite in that there is a limit as to what a particular nation can produce.  This limit is set by the national level of manpower and by the available resources.  While wealth is determined by the currency value an individual controls, the currency itself is an instrument of exchange, not of value.  Money is basically the tool that allows for the creation or production of the actual wealth: the products or services produced.  The actual wealth is the productivity of the nation, all the goods and services it produces, its GDP.

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President Harry S. Truman continued the policies of President Franklin D. Roosevelt.  He presided over the end of World War II and he created the Fair Deal as his economic policy.  Truman also presided over the beginnings of the Cold War with the Soviet Union and the Korean War or police action.

 

The next president was former General Dwight David Eisenhower.  He was the 34th President, entering the political race in 1952 as a Republican.  He was President from 1953 to 1961, the first Republican elected since 1928.  Eisenhower was a moderate conservative who continued the New Deal agencies and expanded Social Security.  Economically he built the first interstate highway system in 1956.  Presumably this was done because of the Cold War: an interstate highway system would be beneficial if needed for military operations within the country and it would also be beneficial in helping to provide continued economic growth.

 

In the 1961 Race Republican Richard M. Nixon, Eisenhower’s former Vice President, ran against Democratic John F. Kennedy.  Kennedy won the election by 6/10s of 1% of the popular vote.  In the electoral vote he did better.

 

When Kennedy took office on January 20, 1961 the country was facing a mild recession.  His policy was to lower rates on the income taxes.  As a result of this the Federal Government collected more taxes than it had previously done.  People had more money and spent more and the recession ended.  Interestingly since that time many Republican Presidents like Ronald Reagan have claimed that lowering taxes would actually increase government revenue.  It hasn’t happened.

 

Despite negative incidents during his tenure like the Bay of Pigs invasion of Cuba and the Cuban Missile Crisis Kennedy was one of the most popular presidents that this country had.  His approval rating was 77%.  Unfortunately he was assassinated on November 22, 1963.  His Vice President Lyndon B. Johnson replaced him as President and then was elected in his own right for another four years.  President Johnson was able to get Kennedy’s Civil Rights Act of 1964 through Congress.  In fact Johnson was able to get through some of the bills Kennedy had strongly supported.  In his own right Johnson declared War on Poverty and had a measure of success on that until he extended the war in Viet Nam, bringing American troops directly into combat.  President Kennedy had used U.S. troops as advisors only; President Johnson attempted to defeat the Viet Cong.  He apparently felt that the United States was that powerful.  He was wrong.

 

President Johnson’s domestic policy was called The Great Society.  He attempted to do too much.  Attempting to fight his War on Poverty and at the same time conduct a full scale war against North Vietnam without the American Public being affected was more than the country could handle.  The cost of all this began a spiral of inflation which was not ended until the second year of the Reagan Administration in the early 1980s.  Johnson began the excess spending during the first half of the 1960s, Reagan ended the growing inflationary spiral during his second year in office during the early 1980s; growing inflation existed for about a 20 year period.  The termination of the inflation was a very economically painful process upon small business.  The inflationary spiral was broken by raising interest rates to about 20%, making money too expensive to borrow.

 

The number of American military personnel in Viet Nam was increased dramatically during the Johnson years, going from 1600 advisors to 525,000 combat troops in 1967.  American casualties soared.  In addition the sorted battles were shown nightly by the news on television throughout the United States.  There was an angry antiwar movement especially on college compasses.  Summer riots broke out in most major cities after 1965 and crime rates soared in the U.S.  With all of the above and not being able to win the Viet Nam War or police action, since it was not officially a war, broke Johnson’s spirit.  He refused to run for the presidency in 1968.

 

In that year, after a tumultuous Democratic Convention in Chicago, Hubert Humphrey, ran against and lost the election to the Republican candidate, Richard M. Nixon.  Nixon, the country’s 37th President, if he hadn’t been involved in the Watergate Break-ins, would have probably emerged as one of the outstanding Presidents of the United States.  In 1970, he created the Environment Protection Agency.  He did after a long period of time end the Viet Nam War in 1973, bringing home all the American prisoners of war.  His visit to China in 1972, the first such for an American President, led to diplomatic relations with that country.  These relations caused the Soviet Union to sign an Anti-Ballistic Missile Treaty with the United States later that same year.  He initiated détente.

 

When he first took office he imposed wage and price controls in 1969 in an attempt to stop the inflation spiral that had reached 4.7%.  It didn’t work because of all the exceptions that had to be applied.  Fighting the Viet Nam War and attempting to maintain peacetime conditions in the nation which would continue well past his time in office brought on the continued rise in inflation.  Not Nixon nor anyone else as President would have been able to stop it.  It would take extreme action by the Federal Reserve to do so.

 

For his second term in 1972 Nixon wanted a massive victory.  This required assorted actions, some of which were illegal.  Nixon and the Republican leaders secretly supported the far left Democratic candidate that would be unacceptable to the majority of the American people.  They chose South Dakota Senator George McGovern, who had unsuccessfully attempted to replace Robert Kennedy after his assassination in 1968.  McGovern was generally considered a far-left liberal.  He was the hero of the radical college groups.  The Nixon campaign contributed heavily to the McGovern candidate.  That action may have been immoral but it was not illegal.

 

In addition to this Nixon had a group in Washington called the “plumbers.”  They broke into Democratic headquarters at the Watergate Hotel a number of times and were finally caught and arrested.  From that point on a cover-up ensued until it finally came apart two years into Nixon’s second term.

 

Nixon was informed by Senator Barry Goldwater, probably the leading Republican in the U.S. at the time, that he had to resign or proceedings to impeach him would be begun the next day.  On August 9, 1974, Richard M. Nixon became the first President to resign from the presidency.

 

Ironically he was replaced by the Vice President he had himself appointed, Gerald Ford.  The original Vice President, Spiro Agnew, had earlier resigned from office rather than face a lengthy corruption trial which would have found him guilty.  Ford, shortly after assuming the Presidency, pardoned Nixon for any crimes he had or might have committed.  Nixon accepted the pardon, thus admitting his guilt by accepting the pardon.

 

Gerald R. Ford had been appointed to the Vice Presidency by then President Richard M. Nixon.  He was also earlier appointed to the Senate by the governor of Michigan.  At that time he was Minority Leader at the House of Representatives.  He had served there for 25 years in the House of Representatives.  As President he appointed Nelson Rockefeller as his Vice President.

 

President Ford signed the Helsinki Accords, which officially marked an end to the Cold War and brought about détente.  He presided over the end of the Viet Nam War nine months into his presidency.  Domestically, he served as President over the worst economy since the Great Depression, dealing with growing inflation and a recession.  His foreign policy was characterized by the increased role Congress began to play.  He served as Chief Executive of the United States for 895 days, the shortest term for a president who did not die in office.  In 1976 Gerald Ford lost the presidency to the Democratic candidate, former Georgia governor James Earl (Jimmy) Carter.

 

Jimmy Carter had been elected Governor of Georgia from January 12, 1971 through January 14, 1975.  Despite the fact that he was little known outside of Georgia Democratic candidate Jimmy Carter defeated Republican President Gerald Ford in 1976.  He assumed office on January 20, 1977 as the 39th President of the United States.

 

On his second day as President, Carter pardoned all Viet Nam draft evaders of the Viet Nam War.  He was able to get the first signed agreement between the Palestinians and Israel, the Camp David Accords.  He signed the Panama Canal Treaties that gave Panama control of the Canal and the second round of Arms limitation Talks (SALT II).

 

Economically the country was going through stagflation during his tenure, both high inflation and high unemployment.  Carter had his Federal Reserve chairman, Paul Volcker, attempt to break the inflation spiral which had reached about 15%.  Volcker did this by raising the interest rate to about 20%, making money too expensive to borrow.  This, in turn, would drive many small businesses into bankruptcy as they could not afford those rates during their economic dry seasons.  Many complained to the President and he had Volcker end the policy.  The next President would enforce it and end the inflation spiral while driving numerous small businesses into bankruptcy.

 

Gasoline and fuel prices rose in 1980 to about $2.16 a gallon for gasoline and went considerably higher for heating fuel also.  President Carter recommended that people keep their thermostats set at 65 degrees and wear sweaters.  He did this at the White House.

In 1979 to 1981 there was the Iranian hostage crisis which ended shortly after the next President took office.  Because the Soviet Union invaded Afghanistan Carter ended détente and resumed the Cold War.

 

In the 1980 Presidential Election the Republicans chose Ronald Reagan to run against President Jimmy Carter.  Reagan won an overwhelming victory.

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Up to this point in our history the National Debt, which had almost always been with us was under one trillion dollars.  The Federal Government had spent money but it had always been on a limited basis.  Roosevelt, perhaps the greatest of the spending presidents, while he doubled the money supply that had been available in the country, did so without raising the National Debt significantly.  Even with World War II, the immediate post war spending, and the Cold War the country’s spending did not reach this point.  All of this would change after 1981 with the election of Ronald Reagan to the Presidency.

 

The Weiner Component V.2 #35 – Money & the Presidents: Part 1

 

The Wealth of a nation is its level of productivity which is determined in terms of monetary value.  The monetary value is in terms of the currency of the nation.  The currency itself is merely the agent of exchange; it allows the goods and services of each individual to be exchanged for those produced by all other individuals.  All of this is finite in that there is a limit as to what a particular nation can produce.  This limit is set by the national level of manpower and by the available resources.  While wealth is determined by the currency value an individual controls, the currency itself is an instrument of exchange, not of value.  Money is basically the tool that allows for the creation or production of the actual wealth: the products or services produced.  The actual wealth is the productivity of the nation, all the goods and services it produces, its GDP.

********************************

President Harry S. Truman continued the policies of President Franklin D. Roosevelt.  He presided over the end of World War II and he created the Fair Deal as his economic policy.  Truman also presided over the beginnings of the Cold War with the Soviet Union and the Korean War or police action.

 

The next president was former General Dwight David Eisenhower.  He was the 34th President, entering the political race in 1952 as a Republican.  He was President from 1953 to 1961, the first Republican elected since 1928.  Eisenhower was a moderate conservative who continued the New Deal agencies and expanded Social Security.  Economically he built the first interstate highway system in 1956.  Presumably this was done because of the Cold War: an interstate highway system would be beneficial if needed for military operations within the country and it would also be beneficial in helping to provide continued economic growth.

 

In the 1961 Race Republican Richard M. Nixon, Eisenhower’s former Vice President, ran against Democratic John F. Kennedy.  Kennedy won the election by 6/10s of 1% of the popular vote.  In the electoral vote he did better.

 

When Kennedy took office on January 20, 1961 the country was facing a mild recession.  His policy was to lower rates on the income taxes.  As a result of this the Federal Government collected more taxes than it had previously done.  People had more money and spent more and the recession ended.  Interestingly since that time many Republican Presidents like Ronald Reagan have claimed that lowering taxes would actually increase government revenue.  It hasn’t happened.

 

Despite negative incidents during his tenure like the Bay of Pigs invasion of Cuba and the Cuban Missile Crisis Kennedy was one of the most popular presidents that this country had.  His approval rating was 77%.  Unfortunately he was assassinated on November 22, 1963.  His Vice President Lyndon B. Johnson replaced him as President and then was elected in his own right for another four years.  President Johnson was able to get Kennedy’s Civil Rights Act of 1964 through Congress.  In fact Johnson was able to get through some of the bills Kennedy had strongly supported.  In his own right Johnson declared War on Poverty and had a measure of success on that until he extended the war in Viet Nam, bringing American troops directly into combat.  President Kennedy had used U.S. troops as advisors only; President Johnson attempted to defeat the Viet Cong.  He apparently felt that the United States was that powerful.  He was wrong.

 

President Johnson’s domestic policy was called The Great Society.  He attempted to do too much.  Attempting to fight his War on Poverty and at the same time conduct a full scale war against North Vietnam without the American Public being affected was more than the country could handle.  The cost of all this began a spiral of inflation which was not ended until the second year of the Reagan Administration in the early 1980s.  Johnson began the excess spending during the first half of the 1960s, Reagan ended the growing inflationary spiral during his second year in office during the early 1980s; growing inflation existed for about a 20 year period.  The termination of the inflation was a very economically painful process upon small business.  The inflationary spiral was broken by raising interest rates to about 20%, making money too expensive to borrow.

 

The number of American military personnel in Viet Nam was increased dramatically during the Johnson years, going from 1600 advisors to 525,000 combat troops in 1967.  American casualties soared.  In addition the sorted battles were shown nightly by the news on television throughout the United States.  There was an angry antiwar movement especially on college compasses.  Summer riots broke out in most major cities after 1965 and crime rates soared in the U.S.  With all of the above and not being able to win the Viet Nam War or police action, since it was not officially a war, broke Johnson’s spirit.  He refused to run for the presidency in 1968.

 

In that year, after a tumultuous Democratic Convention in Chicago, Hubert Humphrey, ran against and lost the election to the Republican candidate, Richard M. Nixon.  Nixon, the country’s 37th President, if he hadn’t been involved in the Watergate Break-ins, would have probably emerged as one of the outstanding Presidents of the United States.  In 1970, he created the Environment Protection Agency.  He did after a long period of time end the Viet Nam War in 1973, bringing home all the American prisoners of war.  His visit to China in 1972, the first such for an American President, led to diplomatic relations with that country.  These relations caused the Soviet Union to sign an Anti-Ballistic Missile Treaty with the United States later that same year.  He initiated détente.

 

When he first took office he imposed wage and price controls in 1969 in an attempt to stop the inflation spiral that had reached 4.7%.  It didn’t work because of all the exceptions that had to be applied.  Fighting the Viet Nam War and attempting to maintain peacetime conditions in the nation which would continue well past his time in office brought on the continued rise in inflation.  Not Nixon nor anyone else as President would have been able to stop it.  It would take extreme action by the Federal Reserve to do so.

 

For his second term in 1972 Nixon wanted a massive victory.  This required assorted actions, some of which were illegal.  Nixon and the Republican leaders secretly supported the far left Democratic candidate that would be unacceptable to the majority of the American people.  They chose South Dakota Senator George McGovern, who had unsuccessfully attempted to replace Robert Kennedy after his assassination in 1968.  McGovern was generally considered a far-left liberal.  He was the hero of the radical college groups.  The Nixon campaign contributed heavily to the McGovern candidate.  That action may have been immoral but it was not illegal.

 

In addition to this Nixon had a group in Washington called the “plumbers.”  They broke into Democratic headquarters at the Watergate Hotel a number of times and were finally caught and arrested.  From that point on a cover-up ensued until it finally came apart two years into Nixon’s second term.

 

Nixon was informed by Senator Barry Goldwater, probably the leading Republican in the U.S. at the time, that he had to resign or proceedings to impeach him would be begun the next day.  On August 9, 1974, Richard M. Nixon became the first President to resign from the presidency.

 

Ironically he was replaced by the Vice President he had himself appointed, Gerald Ford.  The original Vice President, Spiro Agnew, had earlier resigned from office rather than face a lengthy corruption trial which would have found him guilty.  Ford, shortly after assuming the Presidency, pardoned Nixon for any crimes he had or might have committed.  Nixon accepted the pardon, thus admitting his guilt by accepting the pardon.

 

Gerald R. Ford had been appointed to the Vice Presidency by then President Richard M. Nixon.  He was also earlier appointed to the Senate by the governor of Michigan.  At that time he was Minority Leader at the House of Representatives.  He had served there for 25 years in the House of Representatives.  As President he appointed Nelson Rockefeller as his Vice President.

 

President Ford signed the Helsinki Accords, which officially marked an end to the Cold War and brought about détente.  He presided over the end of the Viet Nam War nine months into his presidency.  Domestically, he served as President over the worst economy since the Great Depression, dealing with growing inflation and a recession.  His foreign policy was characterized by the increased role Congress began to play.  He served as Chief Executive of the United States for 895 days, the shortest term for a president who did not die in office.  In 1976 Gerald Ford lost the presidency to the Democratic candidate, former Georgia governor James Earl (Jimmy) Carter.

 

Jimmy Carter had been elected Governor of Georgia from January 12, 1971 through January 14, 1975.  Despite the fact that he was little known outside of Georgia Democratic candidate Jimmy Carter defeated Republican President Gerald Ford in 1976.  He assumed office on January 20, 1977 as the 39th President of the United States.

 

On his second day as President, Carter pardoned all Viet Nam draft evaders of the Viet Nam War.  He was able to get the first signed agreement between the Palestinians and Israel, the Camp David Accords.  He signed the Panama Canal Treaties that gave Panama control of the Canal and the second round of Arms limitation Talks (SALT II).

 

Economically the country was going through stagflation during his tenure, both high inflation and high unemployment.  Carter had his Federal Reserve chairman, Paul Volcker, attempt to break the inflation spiral which had reached about 15%.  Volcker did this by raising the interest rate to about 20%, making money too expensive to borrow.  This, in turn, would drive many small businesses into bankruptcy as they could not afford those rates during their economic dry seasons.  Many complained to the President and he had Volcker end the policy.  The next President would enforce it and end the inflation spiral while driving numerous small businesses into bankruptcy.

 

Gasoline and fuel prices rose in 1980 to about $2.16 a gallon for gasoline and went considerably higher for heating fuel also.  President Carter recommended that people keep their thermostats set at 65 degrees and wear sweaters.  He did this at the White House.

In 1979 to 1981 there was the Iranian hostage crisis which ended shortly after the next President took office.  Because the Soviet Union invaded Afghanistan Carter ended détente and resumed the Cold War.

 

In the 1980 Presidential Election the Republicans chose Ronald Reagan to run against President Jimmy Carter.  Reagan won an overwhelming victory.

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Up to this point in our history the National Debt, which had almost always been with us was under one trillion dollars.  The Federal Government had spent money but it had always been on a limited basis.  Roosevelt, perhaps the greatest of the spending presidents, while he doubled the money supply that had been available in the country, did so without raising the National Debt significantly.  Even with World War II, the immediate post war spending, and the Cold War the country’s spending did not reach this point.  All of this would change after 1981 with the election of Ronald Reagan to the Presidency.

The Weiner Component V,2 #34 – The Concept of Money: Part 2

One of a number of posters created by the Econ...

One of a number of posters created by the Economic Cooperation Administration to promote the Marshall Plan in Europe (Photo credit: Wikipedia)

Logo used on aid delivered to European countri...

Logo used on aid delivered to European countries during the Marshall Plan. (Photo credit: Wikipedia)

Marshall Plan

Marshall Plan (Photo credit: Wikipedia)

If one draws a horizontal line in United States history both before and after World War II one gets an interesting perspective.  Before the war the U.S. was a poor country still working its way out of the Great Depression with a large lower class, a small middle class, and a smaller upper class.  After the war the country still had a lower class but it was much smaller than it had been before the war, a large ever-growing middle class, and a smaller upper class.  What happened was an infusion of paper money during the Great Depression, World War II and afterwards which reconstituted the nation as it had never been before and turned it into a middle class country.

 

After the war there was also intensive government spending in the form of free education for veterans, the GI Bill.  Veterans were also funded who didn’t go to school, so they could start their own businesses and buy homes.  There was continued intensive government spending.  Also from 1948 this was added to, with the Marshall Plan or European Recovery Plan, for the next four years.  The European countries rebuilt their infrastructures with goods from the United States.

 

Where did all this money come from?  It came from the Federal Government printing presses.  What it did was unleash the productive capacities of the population.  Specifically it was the tool that allowed massive production of goods and services which freed the labor potential of the people within the country and helped create the new growing middle class.  The spending greatly increased the National Cash Flow throughout the nation and also brought in an immense increase, on all levels, of taxes.  We were by this process a much richer nation.

 

There had been rationing during the war.  Not much had been made available to the general public, most of the goods produced went overseas to the armies fighting the war.  Excess money had been put into war bonds; many of these were now cashed in.  There were new industries, like television; radio had existed before the war; now there were two major home entertainment entities.  Only military vehicles had been manufactured during the war.  As the automobile industry was converted to civilian use people bought new cars for the first time in years.  There were jobs or new businesses for the returning veterans.  It was a new era.

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To move to an earlier period: during the Civil War money had been gold and silver coins.  The Federal Government bought and minted all the gold that was mined in the United States.  Consequently the legal tender that existed in society at that time was both the gold and silver that could be mined and minted.  Since wars are expensive and their cost generally exceeds the amounts of money that exists or could be collected in taxes or minted, the government had an immediate need for more cash.  This problem was solved by issuing paper currency called greenbacks.  The reason they were called greenbacks was because one side was green and they were legally made into currency.  There was nothing behind these bills except the word of the U.S. Government.  From 1861 through part of 1862 they were Demand notes.  From 1862 through 1865 they were United States notes.  After the war the greenbacks were gradually retired, replaced by gold and silver coins.

 

Since more money had been needed to fight the Civil War the Federal Government had arbitrarily created it and spent it fighting the war.  Once the war was over the Government gradually withdrew and replaced that money with gold and silver coins.  It was actually a form of no interest borrowing.  But this process began the growth of the Industrial Revolution in the United States.  After the war we were a much richer country than we had been before it started.

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Toward the end of World War II from July 1 through July 22, 1944, the Bretton Woods Conference or the United Nations Monetary and Financial Conference met at Bretton Woods, New Hampshire.  It consisted of 730 delegates from 44 Allied nations.

 

The basic currency in the world then and during the post war period was the American dollar.  All the Allied currencies were pegged against the dollar, generally taking their value as a percentage of the dollar.   Bretton Woods established the rules for international trade that would continue from the end of World War II on.  After the Marshall Plan all these nations functioned on a higher plain than they had before the war.

 

It should be noted that none of these nations, with the exception of the United States initially had any gold.  All the currencies of all these nations were based upon the productive ability of each of the nations.  Their currencies values nationally and internationally were based upon their credit.

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In addition another thing to keep in mind has been and is population growth.  According to the U.S. Census Bureau on July 1, 1929, the year the Great Depression began the United States population consisted of 121.77 million people.  By 1933, when Franklin D. Roosevelt became President it had grown to 125.58 individuals.  By 1945, the end of World War II, it had reached 139.93.  By July 1, 1970, it was 205.05 million people.  By 1980, the year Ronald Reagan was elected President, the population was 227.22 million people.  By the year 2,000, when George W. Bush was elected to the presidency it was 282.16 million people.  By 2010 the population was 309.35 million people.  By July 1, 2017 the Census Bureau estimates the population in the United States to be 325.34 million people.  Also keep in mind that in every official census introduction there is an apology for the people who were somehow missed, that is, not counted.  The estimate in 2010, admitted by the Census Bureau, was that they had missed millions of homeless people throughout the country and the estimate was much closed to 350 million people.

 

While we are not considering the fact here the world population has also phenomenally increased.  It is estimated today to be somewhere above 7 ½ billion people.  It is also continuing to grow.

 

The overall count in the United States has tended to increase each year by about 2 ½ million.  This includes deaths, births, and immigration.  According to the Census Bureau there is one birth every 7 seconds; one death every 12 seconds; one international migrant every 32 seconds.  The net gain is one additional person every 12 seconds.  And this includes periods of peace and war.

 

In order for the country to function properly as the population grows there has to also be an increase in the amount of money available in the National Cash Flow otherwise the country would be facing a gradual growing deflation, seeing the amount of money available per person decreasing in amount and increasing in value.

 

The Federal Reserve controls the money supply.  It can increase or decrease the amount of money available in the general society by its open market operation and otherwise.  From 1987 to 2006 Alan Greenspan was Chairman of the Federal Reserve.  He had stated that it was not his job to deal with the money supply.

 

To be fair the powers of the Federal Reserve have evolved from its founding in 1915 to the present.  Certain powers have been granted to it by Congress over the years, other powers it has taken on.  Under Alan Greenspan it choose not to deal with the need for more money within the society.

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The banks, which operate for a profit, have the power to expand or contract the amount of currency available to the general public.  Probably beginning slowly sometime in the 1970s the banking houses gradually created a new type of hedge fund based upon the value of homes owned by people throughout the United States; they began using mortgages as investment securities.  In the 1980s, with the Reagan Administration supporting Free Markets or theories of pure capitalism, these hedge funds took off and the country underwent a binge of refinancing that would not explode until the Housing Crash of 2008.  Homeowners were encouraged to use their homes as bank accounts that they could freely spend. By doing this they caused the homes to shoot up in value while massively expanding the economy and the value of their homes.  In the process a housing bubble was created which gigantically inflated the values of the houses allowing many people to constantly refinance their homes during this period.  When the crash finally came in 2008 a large number of people were underwater on their homes; that is, they owed more on the mortgages than the properties were worth.

 

Many, if not most, of the banking houses began foreclosing on these properties until it was discovered that the banks didn’t own the mortgages on these houses, they merely serviced them.  They belonged to the hundreds of people who had shares in these Hedge Funds.  Actually they didn’t belong to anyone because numerous Hedge Funds, each consisting of hundreds of owners, actually owned the houses and there was virtually no way of discovering who held 50+ percent of an individual property.  Virtually all the banks paid hundreds of millions of dollars in fines for their illegal seizures and sales of these properties.  It should be noted that the banks solved their illegal behavior totally with fines; no one went to jail for these illegal acts by the banks.

 

It was an unbelievable mess that defied straightening out.  For a period of a little over two years the Federal Reserve, under Chairman Ben Bernanke, with the support of President Barack Obama, bought up 50 billion dollars’ worth of mortgages a month and also added 50 billion dollars a month directly to the National Cash Flow.  At the end of this period the new Chairperson, Janet Yellen ended the practice gradually over a period of months by systematically decreasing the amount of the monthly purchase until it reached zero.

 

If we ask what happened to all the mortgage pieces that the Federal Government purchased at this time?  Logistically the cost of matching up all the multitudinous pieces of mortgage paper would have been impossible.  And the government did not want to put any additional hardships upon these people.  The mortgage paper was destroyed.  Nobody whose paper the government held was foreclosed upon.  If a house was deserted because it was under water it would eventually be sold for back taxes.  If the people stayed in the house no one foreclosed upon them as long as they paid their property taxes.

 

The problem was that the Federal Government made no announcement about what it had done or was doing.  People found that they could live in their former home without making any further payments.  Many tended to generally spend the money they would have used toward their mortgages.  There was an increase in overall spending due to the generosity of the Federal Government.  People couldn’t sell their homes because they no longer owned them but they could continue to live in them as long as they paid their property taxes.  If they were elderly and eventually passed on the homes would eventually be sold for back taxes.  Some people who had cash and figured this out made a lot of money.

 

Were these funds the Federal Government spent added to the National Debt?  The probability is negative.  These funds were just added to the Cash Flow.  They supplied needed money to the economy and helped the country get out of what was called The Great Recession.  They also helped avoid a greater depression than that of 1929.

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The level of the National Debt today is over 19 trillion dollars and continuing to grow.  The Federal Government has added additional billions of dollars to the National Cash Flow which were not counted as part of the National Debt.  This was from the period of the Great Depression on, through World War II, the post war period, and particularly through the Obama Administration.  By and large the country has moved forward positively during all this going from being a lower class nation to a middle class one.

 

The basic problem that seems to exist is that the understanding of the general public, and seemingly most members of Congress and even a good percentage of the ruling administrations, still have an early Twentieth Century concept of money being an object of wealth rather than a tool that allows the society to operate.  Money defines an individual’s level of wealth but it is not viable until it is used.  This has and can cause confusion in national development.  A true understanding of money and of the true wealth of the nation throughout the country would make a significant positive difference.