Keynes is constantly being proven wrong, I wonder why the left adheres to his economic theories so tightly.
Actually Keynes is constantly being proven right!!
By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.
John Maynard Keynes
If, however, a government refrains from regulations and allows matters to take their course, essential commodities soon attain a level of price out of the reach of all but the rich, the worthlessness of the money becomes apparent, and the fraud upon the public can be concealed no longer.
John Maynard Keynes
Congressman Wright Patman in A Primer On Money, reported that the money supply decreased by eight billion dollars from 1929 to 1933, causing 11,630 banks of the total of 26,401 in the United States to go bankrupt. This allowed central bankers to buy up rival banks and whole corporations at a deep discount.
On June 10, 1932, Congressman Louis McFadden, a long-time adversary to the Federal Reserve, made a 25-minute speech before the House of Representatives, in which he accused the Federal Reserve of deliberately causing the Great Depression.
In 1933, McFadden introduced House Resolution No. 158, Articles of Impeachment for the Secretary of the Treasury, the Comptroller of the Currency, and the Board of Governors of the Federal Reserve, for numerous criminal acts, including but not limited to, conspiracy, fraud, unlawful conversion, and treason.
I submit our new chief of economic advisers is a useful idiot but I did get a laugh out of her interview, her hands were constantly moving, really you could mute the sound and it looked like she was trying to teach some kindergartners how to do 'patty cake."
Under the pretense of helping to end the Great Depression came the 1933 Gold Seizure whereby the Roosevelt Administration outlawed private ownership of gold. Under the threat of imprisonment for 10 years, a US$10,000 fine or both, everyone in America was required to turn in all gold bullion to the U.S. Treasury.
A fairly short history of banking and monetary policy of the USA.
To enlarge on the Vietnam war section, Ho Chi Mihn asked Woodrow Wilson to help Vietnam throw off the yoke of French colonialism at the end of WWI. Wilson spurned Ho's advances but then Wilson had been very supportive of Trotsky and helped enable the Bolshevik's overthrow of the Russian government. At that time Ho greatly admired the US Constitution and desired to be an ally of America.
Boom bust cycles;
It is important to be aware of the fact that these booms, and subsequent busts, are not the result of free-market capitalism as commonly held. They are the direct result of monetary manipulation by central banks no different in principle than Soviet-era market intervention.
In Summary
The current Federal Reserve banking system is modeled after the European central banking system Americans revolted against during their War of Independence.
Every dollar created under the present monetary system does not represent a tangible asset. It represents an I.O.U. from the government, and therefore the people, to the central bank. After three failed attempts, central bankers finally gained control the monopoly on the issuance of American money with the creation of the Federal Reserve in 1913.
There are two unavoidable results of the Federal Reserve System:
(1) devaluation of the dollar and
(2) accumulation of debt.
Rising prices is not intrinsic to free-market capitalism. It is a monetary phenomenon caused by increasing money supply. Money, like anything else, is subject to the laws of supply and demand. The more abundant the money, the lower its value.
If the amount of money were to remain constant relative to population, we would see a general decrease in the prices of goods as technologies and transportation efficiencies improved. This would be a boon to consumers.
Conventional economic thought believes that decreasing prices are bad for the economy because it encourages saving. It is widely held that consumer spending, not saving, is what drives the economy.
This is a falsehood, perpetrated by those would stand much to gain by further and further indebtedness of the public. Savings leads to capital investment which is the real driver behind capitalism.
For the 2007 fiscal year ending Sept 30, 2007, the total interest charges to the Total Outstanding Public Debt of the United States was US$430.0 billion making it the forth largest expense after Human and Health Services, Social Security Administration and National Defense.
The equivalent of a little over 37 cents of every dollar the U.S. government collects under the Sixteenth Amendment goes towards paying the interest on the national public debt. This amount doesn't include any repayment on the principal, nor does it include any State or Local public debt.
Not a bad rate of return for the Federal Reserve which literally creates the money that indebts the nation out of nothing but the want thereof!
How do We Get Out of this Mess?
The current monetary system uses questionable practices on both moral and legal grounds. Monetary inflation erodes the wealth of citizens. Fractional reserve banking enable banks to fraudulently lend out more than they have. Debt is incurred every time new money is created. This debt must is inherited by future generations.
The above link goes on to detail how we actually can get out of the mess we are in, of course it's just the opposite of what our chief economic adviser will be advising.
