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Friday, August 9, 2013

During The Best Period Of Economic Growth In U.S. History There Was No Income Tax And No Federal Reserve

The American Free Market System At Work
How would America ever survive without the central planners in the Obama administration and at the Federal Reserve?  What in the world would we do if there was no income tax and no IRS?  Could the U.S. economy possibly keep from collapsing under such circumstances?  The mainstream media would have us believe that unless we have someone "to pull the levers" our economy would descend into utter chaos, but the truth is that the best period of economic growth in U.S. history occurred during a time when there was no income tax and no Federal Reserve.  Between the Civil War and 1913, the U.S. economy experienced absolutely explosive growth.  The free market system thrived and the rest of the world looked at us with envy.  The federal government was very limited in size, there was no income tax for most of that time and there was no central bank.  To many Americans, it would be absolutely unthinkable to have such a society today, but it actually worked very, very well.  Without the inventions and innovations that came out of that period, the world would be a far different place today.

It is amazing what can happen when the government just gets out of the way.  Check out all of the wonderful things that Wikipedia says happened for the U.S. economy during those years...
The rapid economic development following the Civil War laid the groundwork for the modern U.S. industrial economy. By 1890, the USA leaped ahead of Britain for first place in manufacturing output.
An explosion of new discoveries and inventions took place, a process called the "Second Industrial Revolution." Railroads greatly expanded the mileage and built stronger tracks and bridges that handled heavier cars and locomotives, carrying far more goods and people at lower rates. Refrigeration railroad cars came into use. The telephone, phonograph, typewriter and electric light were invented. By the dawn of the 20th century, cars had begun to replace horse-drawn carriages.
Parallel to these achievements was the development of the nation's industrial infrastructure. Coal was found in abundance in the Appalachian Mountains from Pennsylvania south to Kentucky. Oil was discovered in western Pennsylvania; it was mainly used for lubricants and for kerosene for lamps. Large iron ore mines opened in the Lake Superior region of the upper Midwest. Steel mills thrived in places where these coal and iron ore could be brought together to produce steel. Large copper and silver mines opened, followed by lead mines and cement factories.
In 1913 Henry Ford introduced the assembly line, a step in the process that became known as mass-production.
When hard working, industrious people are given freedom to pursue their dreams, great things tend to happen.  The truth is that we were all designed to create, to invent, to build, and to trade with one another.  We all have something that we can contribute to society, and when families are strong and the invisible hand of the free market is allowed to work, societies tend to prosper.
It is not a coincidence that the greatest period of economic growth in U.S. history was between the Civil War and 1913.  The following information comes from Wikipedia...
The Gilded Age saw the greatest period of economic growth in American history. After the short-lived panic of 1873, the economy recovered with the advent of hard money policies and industrialization. From 1869 to 1879, the US economy grew at a rate of 6.8% for real GDP and 4.5% for real GDP per capita, despite the panic of 1873.  The economy repeated this period of growth in the 1880s, in which the wealth of the nation grew at an annual rate of 3.8%, while the GDP was also doubled.
Wouldn't you like U.S. GDP to double over the course of a decade now?
So why don't we go back to a system like that?
In 1913, the Federal Reserve and a permanent national income tax were introduced.  Today, the unelected central planners at the Federal Reserve totally run our financial system and the U.S. tax code is about13 miles long.  The value of our currency has declined by more than 96 percent since 1913, and the size of our national debt has gotten more than 5000 times larger.
Meanwhile, control freak bureaucrats seemingly run everything.  Almost every business decision is heavily influenced either by taxes or by the millions of laws, rules and regulations that are sucking the life out of our economic system.
My favorite example of how suffocating red tape in America has become is the magician out in Missouri that was forced by the Obama administration to submit a 32 page "disaster plan" for the rabbit that he uses during his magic shows for kids.
It is no wonder why we don't have any economic growth.  The central planners in the federal government are killing our economy.
And the central planners over at the Federal Reserve are killing our financial system.  In school we are taught that the Fed was created to bring stability to our financial system, but the truth is that they have been responsible for financial bubble after financial bubble, and now Federal Reserve Chairman Ben Bernanke has created the largest bond bubble in the history of the world.  When that thing bursts, and it will, we are going to see financial carnage on an unprecedented scale.
Unfortunately, the truth is that the Federal Reserve never has been looking out for the interests of the American people.  It was created by the big banks and it has always worked very hard to benefit the big banks.  During the Fed era, the big banks have become the most powerful economic entities on the entire planet.  Our entire economy is now based on debt, and the big banks are at the very center of this debt spiral.  The following is an excerpt from a recent article by Paul B. Farrell...
Today’s world includes four Wall Street banks each with assets over $1 trillion, each more than Goldman. Plus eight other big global banks each have over $2 trillion total assets, including, among the 100 largest, Barclays, HSBC, Deutsche, ICB-China and Japan’s Mitsubishi.
Yes, this new world is changing fast. Back in 2008 the world’s financial banks were in ruins. Wall Street sunk into virtually bankruptcy. Goldman and its Wall Street too-big-to-fail co-conspirators had trashed the global economy, triggered a virtual depression, and Wall Street’s casinos lost over $10 trillion of Main Street retirement funds.
And as we saw back in 2008, the Federal Reserve is going to do whatever is necessary to prop up Wall Street.  Most Americans never even heard about this, but during the last financial crisis the Fedsecretly loaned 16 trillion dollars to the big banks.  Those loans were nearly interest-free and those banks knew that they could get basically as much nearly interest-free money as they wanted from the Fed.
So how much nearly interest-free money did the Fed loan to normal Americans?
Not a single penny.
That would be bad enough, but it is also important to remember that since 2008 the Fed has actually been paying banks NOT to lend money to the rest of us.
What is it going to take for the American people to start demanding that the Fed be abolished?  They are absolutely destroying our financial system.
Meanwhile, the central planners in the Obama administration have been doing their part as well.  During the second quarter of this year, the number of Americans working between 30 and 34 hours per week fell by146,500.  During that same time period, the number of Americans working between 25 and 29 hours rose by 119,000.
Why is this happening?
Well, the Obamacare employer mandate will apply to workers that work at least 30 hours each week, so employers are starting to cut back on the hours their employees are getting in order to comply with the law.
But this is just one example out of thousands, and most Americans already know that the U.S. economy has been crumbling for many years.
In fact, things have gotten so bad that even 53 percent of all Democrats believe that the American Dream is dead even though Barack Obama is residing in the White House.
But this is just the beginning.  Things are going to get much, much worse.  We are going down the same path that Greece has gone, and the unemployment rate in Greece has just hit a new all-time record high of 27.6 percent.
That is where the U.S. is headed eventually.  Decades of very foolish decisions are catching up with us.
The primary reason why all of this is happening is debt.  As a society, we simply have way, way, way too much debt.
The biggest offender, of course, is the federal government.  Since 1970, federal spending has grown nearly 12 times as rapidly as median household income has, and since the year 2000 the size of the U.S. national debt has grown by more than 11 trillion dollars.
When government debt gets too large, it has a profoundly negative effect on an economy.  The following is an excerpt from an outstanding article by Lacy H. Hunt, a Ph.D. economist...
Here are the studies, starting with the one with the broadest implications:
  1. "Government Size and Growth: A Survey and Interpretation of the Evidence," from Journal of Economic Surveys. Published in April 2011, Swedish economists Andreas Bergh and Magnus Henrekson (both of the Research Institute of Industrial Economics at Lund University) found a "significant negative correlation" between size of government and economic growth. Specifically, "an increase in government size by 10 percentage points is associated with a 0.5% to 1% lower annual growth rate."
  2. "The Impact of High and Growing Government Debt on Economic Growth: An Empirical Investigation for the Euro Area," inEuropean Central Bank working paper, Number 1237, August 2010Cristina Checherita and Philipp Rother found that a government-debt-to-GDP ratio above the threshold of 90-100% has a "deleterious" impact on long-term growth. Additionally, the impact of debt on growth is nonlinear – as the government debt rises to higher and higher levels, the adverse growth consequences accelerate.
  3. The Real Effects of Debt, published by the Bank for International Settlements (BIS) in Basel, Switzerland in August 2011. Stephen G. Cecchetti, M. S.Mohanty, and Fabrizio Zampolli determined that "beyond a certain level, debt is bad for growth. For government debt, the number is about 85% of GDP."
  4. "Public Debt Overhangs: Advanced-Economy Episodes Since 1800,"by Carmen M. Reinhart, Vincent R. Reinhart, Kenneth S. Rogoff, Journal of Economic Perspectives, Volume 26, Number 3, Summer 2012, pages 69-86. The authors identified 26 cases of "debt overhangs," which they define as public-debt-to-GDP levels exceeding 90% for at least five years. In spite of the many idiosyncratic differences in these situations, economic growth fell in all but three of the 26 cases. All of the instances, which lasted an average of 23 years, are included in the paper. They found that average annual growth is 1.2% lower for countries with a debt overhang than for countries without. The long duration of such episodes means that cumulative shortfall from the debt excess—i.e., several years in a row of subpar economic growth—is potentially massive.
But it isn't just federal government debt that is the problem.  The rest of us have way too much debt as well.
If you can believe it, the ratio of private debt to GDP was 273.3% for the twelve months ending in the first quarter of 2013.
That is an astounding figure.
And as Hunt explained, having too much private debt is also very bad for an economy...
In Too Much Finance, published by the United Nations Conference on Trade and Development (UNCTAD) in March 2011, Jean Louis Arcand, Enrico Berkes, and Ugo Panizza found a negative effect on output growth when credit to the private sector reaches 104-110% of GDP. The strongest adverse effects are for credit over 160% of GDP.
The second is the 2011 BIS study authored by Cecchetti, Mohanty, and Zampolli. They found that private debt levels become "cancerous" (in BIS economic advisor Cecchetti's own words) at 175% (90% for corporations and 85% for households)—just slightly more than the UNCTAD study.
When you add our private debt to GDP ratio of 273 percent to our federal debt to GDP ratio of 101 percent, you get a grand total of 384 percent.
This is how we have funded the false prosperity of the past couple of decades.  Essentially, we have been putting our good times on a credit card.
And as anyone that has ever tried to live on credit knows, the good times eventually run out.
But this is what the Federal Reserve was designed to do.  It was designed to get the U.S. government trapped in a debt spiral from which there would never be any escape.
It is not an accident that our national debt has gotten more than 5000 times larger than it was when the Fed was originally created.  This is what the bankers wanted the system to do.
They wanted a system that would extract wealth from all of us through taxes, transfer it to the government, and then transfer it to them through interest payments.
We never needed a central bank, we never needed the IRS and we never needed an income tax.  America would be doing just fine without any of them.
But instead, America chose to go down the path of collectivization and central planning, and now we are heading toward the biggest economic disaster in the history of mankind.
Economic Collapse

The False Prophets and Teachers of the Right

How can any conservative American be optimistic today when we look back on the last three and a half years? Americans - in general - in this land OUT RIGHT reject moral absolutes and sound social conservatism. This immoral attitude has made its in roads into the present conservative movement of today. It is only on this bedrock (the Laws of Nature and of Nature's God - conservative moral absolutes) that a healthy society can exist in this fallen world(Psalm 11:3, Prov. 14:34, Rom 1:18-32). Our Founding Fathers knew all too well what the horrific consequences would be when moral absolutes were despised and rejected by the American people. These men of sound wisdom and keen perception knew and warned that tyrannical despotism, oppression and lawlessness would abound and the "great experiment" would come to a tragic end. When America's restraining power on the tyrants, despots and lawlessness of the world is gone, what then? (SEE CHART) (Rev. 6-19)

Our Founding Fathers knew all too well what the horrific consequences would be when moral absolutes were despised and rejected by the American people.

My Friends, beware of the Rush Limbaugh types who seek to motivate and encourage true Americans by preaching a subtle godless optimistic vision of America’s future, while America is on the very brink of absolute fiscal and moral collapse. He told us that he would, "let us know when to panic" but sadly Rush and others are oblivious that the Day of the Lord is at hand! Thank God for these men and for their efforts for seeking to preserve America, but put NOT your trust in their vain words of false optimism about our future. What is tragic is that they themselves reject the reality at hand and believe that all things will continue to go on forever and work out for good(Psalm 118:8, 146:3-4, Isa. 2:22, Jer. 17:5). These false -unregenerated - prophets of optimism are nothing more than Lucifer's "angels of light" (1 Cor. 11:13-15) and are misleading thousands - if not millions - of Americans. They themselves see the Bible and God's saving grace only in a relative and pluralistic light. If these voices of conservatism truly believed the saving message of the Gospel of Jesus Christ (1 Cor. 15:2-4) they would turn their "golden microphones" and "airways" into pulpits of righteousness, proclaiming the reality of Day of the Lord and man's desperate need for the Savior(John 3:16-17 1 Cor. 2:2, 9:16, Gal. 6:14).
They themselves are oblivious that the Day of the Lord is at hand! Thank God for these men, but put NOT your trust in their vain words.
As "we as a nation" passes into oblivion and into global tribulation, may Almighty God and His Word be your total source for consolation and optimistic reality for today's crisis. Have FAITH in Almighty God America! He alone is able to deliver one from the poisons and corruption that dominate and infest this fallen world (Gal 1:4). My beloved, invest in ETERNITY, not in the few futile seconds of this vain life (Eccl 1:1-3). ETERNITY is where our sights should be set. ETERNITY is our future home (Isa. 65:17, 1 Cor. 2:9, Rev. 21,22:1-5). It is crucial today to be able to distinguish between these two perceptions.

If you personally know the Lord Jesus as your Lord and Savior, may you be redeeming these days; for they are indeed evil (Eph. 5:16).May we all - that know the Lord in spirit and truth - dedicate our lives whole heartedly to Him for His glory and honor (1 Cor. 10:31, Col 3:17, 1 Peter 4:11)May pointing people to a saving knowledge of the Saviorbe priority one! My beloved, keep focused and looking for the Savior's soon return… for the Kingdom of Heaven is truly at hand!

The Ignoran Fishermen Blog

Israel can spark US-Russia thermonuclear war: LaRouche

American political activist Lyndon LaRouche has warned that the continuation of Israeli behavior towards Syria, including the recent air strikes against the Arab country, could end in a US-Russia thermonuclear war.

His comments appeared in an article by Jeffrey Steinberg, which has been published in the latest issue of Executive Intelligence Review, a weekly news magazine founded by LaRouche himself.

“Lyndon LaRouche warned on Aug. 3 that ongoing Israeli actions, including the July 5 Israeli Air Force (IAF) bombing of a depot near Latakia, Syria which held Russian-made anti-ship cruise missiles, could trigger a wider war, drawing the United States into thermonuclear conflict with Russia,” the article starts.

Following the attack, American officials said the air strike had failed to destroy all the missiles. Steinberg said the leak proved that the US wanted to distance itself from any military measure against Russian targets in Syria to avoid further escalation of any future conflict with Moscow.

“According to U.S. intelligence sources contacted by EIR, the leaks are intended to make clear that the United States is not supporting the Israeli strikes against Russian targets against Syria. Such strikes could lead to an escalation that directly draws the United States into a head-on confrontation with Russia,” the piece read.

LaRouche, an eight times presidential candidate, said in 2004 that “ the ongoing drive to induce President George W. Bush to launch a war against Iraq, is a 1996 Israeli government policy that is being foisted on the President by a nest of Israeli agents inside the U.S. government.”

Press Tv

Russian Warning: Get All Your Money Out Of Western Banking And Financial Institutions “Immediately”!

President Putin has sent a memo to ALL embassy’s world wide today advising both Russian citizens and companies to remove deposits out of ALL Westearn banks immediatly or risk losing your wealth.

NICOSIA – A web site on Friday claims to have seen an urgent bulletin from the Russian Foreign Ministry sent to its embassies all over the world advising both Russian citizens and companies to begin divesting their assets from Western banking and financial institutions “immediately”.
The site said the Kremlin feared grow that both the European Union and United States were preparing for the largest theft of private wealth in modern history.

Read more at http://investmentwatchblog.com/russian-warning-get-all-your-money-out-of-western-banking-and-financial-institutions-immediately/#iFdMBtSPti9OMTTi.99

Investment Wach

The Frightening Reality About How Easily Hackers Could Shut Down The US

Hacking into and shutting down industrial systems on which the U.S. relies is staggeringly easy, according to recent presentations from the Black Hat hacker conference.

Picture this: A few pump station operators along New York City's water tunnels fire up their computers to check the status of various water pressure readings.

But their networks have been hacked, and the readings they see on their computers are not the real readings. The adjustments they make cause the water pressure to skyrocket, blowing several mains, and cutting water to various part of the city, if not the entire city. Sure these systems have redundancies, but those redundancies are vulnerable too.

Attacks require "significantly fewer resources and skill" than previously thought.Simultaneously, in other parts of the Northeast U.S., hacked high voltage transformers spin out of control and explode. The blackout could cut as wide as the Tri-State area, and last for months, compounding any attempts to fix the water lines.

No water. No electricity. Pure mayhem.

Tim Simonite of MIT Tech Review recently talked to hackers at Black Hat about a vulnerability in a protocol called “Dbus” which leaves more than 90,000 industrial controls vulnerable.

Another vulnerability, this one in sensors “used to monitor oil, water, nuclear, and natural gas infrastructure” can be hacked into with “a relatively cheap 40-mile-range radio transmitter.” Those sensors could be “spoofed” to show false readings, hackers tell Simonite.

The Obama administration says it takes the threat seriously and has taken several steps — including an executive order — to try and improve network security. As Simonite points out, however, even though the information sharing program alerts companies to vulnerabilities, that doesn't mean the companies follow through with patches.

BlackHat attendees showed proof that the companies weren't doing all they could to protect their customers.

From Tech Review:

All the attacks to be mentioned today require significantly fewer resources and skill than what was required to employ the best-known attack on an industrial system, the U.S.-Israeli-backed Stuxnet operation against the Iranian nuclear program.

Previously, the Defense Science Board released a report that said viruses and exploits with Stuxnet-like results are incredibly complicated and likely require the backing of state-sponsored hacking units to perform. The Black Hat findings paint a completely different picture — it seems the idea of a few people in a basement causing cataclysmic damage is not really that far-fetched.

Read more: http://www.businessinsider.com/hackers-could-shut-down-the-us-2013-8#ixzz2bRIJZelc

CIA official says Syria crisis a top threat to US security

The war in Syria has become a top threat to US security, a top CIA official warned this week, adding that should the country — with its chemical and other advanced weapons — collapse, it could become another safe haven for al-Qaeda, like Pakistan.

“Syria’s volatile mix of al-Qaeda extremism and civil war now poses the greatest threat to US national security,” Michael Morell, the Central Intelligence Agency’s second in command told the Wall Street Journal on Wednesday. Morell is preparing to retire from his post Friday after 33 years of service.

He assessed that there were now more foreign fighters joining al-Qaeda-affiliated extremists in Syria than there were in Iraq at the height of the war there.

The government’s weapons “are going to be up for grabs and up for sale,” just as in Libya, he said.

“It’s probably the most important issue in the world today, because of where it is currently heading,” and the potential for a massive spillover into Lebanon, Jordan and Iraq, Morell added.

On al-Qaeda, the top official said that the US has “significantly degraded” the terror group’s capabilities in countries like Afghanistan and Pakistan.

The assessment came just a few days after the US extended the closure of some of its diplomatic missions across the Middle East and Africa, following warnings of an al-Qaeda attack.

Intercepted communications between group members triggered the mass closures,a travel warning to US citizens, as well as the order to evacuate all US citizens from Yemen.

Morell acknowledged that the terror group has scored some victories, such as the spread of its ideology and global reach.

“Even while the core al-Qaeda group may be in decline, al-Qaeda-ism, the movement’s ideology, continues to resonate and attract new adherents,” Bruce Hoffman, director of the Security Studies Program at Georgetown University, wrote in a research paper this year, quoted by AP.

Times of Israel