Guy S. out in Iowa has been pointing out that the so-called “Sequestration” cuts are being offset by the cash that Federal Reserve Chairman Ben Bernanke is pumping into the economy. The effect, of course, is to divert money from government programs to holders of government debt whose bonds are being purchased.
This not only cancels out the spending cuts, it accelerates the concentration of capital ownership. Worse, at a time when the stock market is increasingly volatile (shades of early 1929), debt holders necessarily replace their former holdings of government debt with existing equity issues on the secondary market. This puts upward pressure on stock prices, which counters the downward pressure from the lack of real economic growth, and creates the illusion that growth is taking place simply because people are making a profit by gambling on the increasingly wide swings in stock prices.
We don’t agree with the idea that government should take care of everyone’s needs — but given a choice between pouring cash into the coffers of the rich so they can gamble, and giving people some cash to live on by increasing or maintaining current levels of government spending, common sense says to continue government spending . . . assuming that there is no other way for people to gain income.
Fortunately, there is a much better way for people to gain income, the Just Third Way, which is what we’ve been trying to talk to, e.g., Virginia Delegate Bob Marshall about (below). Of course, we’ve been doing other things, as well:
• Don’t forget to clear your calendar for Friday, April 26, 2013 and the annual rally at the Federal Reserve. We don’t have all the details yet, but it looks as if there is going to be some entertainment and a number of interesting speakers.
• We were able to suggest a sound program to Virginia Delegate Bob Marshall, who to date has not responded.
• Efforts continue to encourage Delegate Bob Marshall to talk to Norman Kurland about spearheading a similar program for the Commonwealth of Virginia. You can send Bob an e-mail suggesting that he talk to Norm at delegatebobmarshall [at] Hotmail [dot] com.
• An interesting bit of news out of Spain is that, as the government there successfully implements its “austerity plan,” panic is ensuing about the possibility of not having a money supply! (“Spain Pays a Price for Smaller Deficit,” Wall Street Journal, 02/28/13, A11.) It doesn’t seem to occur to anyone that you can back the money supply with private sector hard assets instead of government debt.
• MeShorn Daniels interviewed Norman Kurland on the FocusShow Wednesday of this week. The theme was “Changing the Victim Mentality to a Justice Reality.” While it’s two hours, the show is well worth listening to.
• As of this morning, we have had visitors from 52 different countries and 48 states and provinces in the United States and Canada to this blog over the past two months. Most visitors are from the United States, the United Kingdom, Canada, India, and Nigeria. People in Nepal, Columbia, Morocco, Estonia, and Argentina spent the most average time on the blog. The most popular postings this past week were “Thomas Hobbes on Private Property,” “Aristotle on Private Property,” “A ‘Virginia-Only’ Currency,” “Avoiding Monetary Meltdown, I: Andrew Jackson’s War on the Economy,” and “The Death of Reason, XIII: Understanding Money.”
Those are the happenings for this week, at least that we know about. If you have an accomplishment that you think should be listed, send us a note about it at mgreaney [at] cesj [dot] org, and we’ll see that it gets into the next “issue.” If you have a short (250-400 word) comment on a specific posting, please enter your comments in the blog — do not send them to us to post for you. All comments are moderated anyway, so we’ll see it before it goes up.