America has gone over the fiscal cliff so often; the concussions have definitely created economic brain damage and lunacy.
First: “Fiscal Cliff” is nothing more than an economic political term for economic idiocy leaders engage in more often than they do with Dominican hookers and interns.
Second: America goes over the fiscal cliff every time the Federal Reserve lowers interest rates to give the federal government an excuse to over lend, spend, and borrow what can never be repaid.
If you are panicking right now, you forgot America has been cliff-diving for over 200 years and generations of economic brain damage hasn’t taught America one, single thing about printing paper currency and borrowing: Loans cannot be repaid with paper or excessive taxes.
If we paid attention to history, the Federal Reserve wouldn’t stand at attention every time it hears the ca-ching of cash registers ringing the national hymn of Weimar.
Most leaders are more interested in gambling for power than America’s preservation, which is why Obama and Democrats are hyping the fiscal cliff: Make Americans believe the wealthy caused the $16 trillion debt and they must be over-taxed! Only taxation can stop America from collapsing and going over the cliff!
The “Fiscal Cliff” is purposely used as a weapon to destroy the economy and push America to the brink of bankruptcy in order to destroy individual American wealth.
Obama and Democrats are using the “Fiscal Cliff” weapon well. They’ve scared the daylights out of Americans who prefer suffering blind eye concussions rather than understanding that history is repeating itself on a level like never before because of our leaders, not the people.
Example: The American Revolution cost a fortune, and when we ran out of money, the Continental Congress created a new currency: Paper notes known as “Continentals.”
As always, the government over prints paper and people assume the notes are equal to gold coins and paper will back up their means.
“Continental” currency worked as well then as now: The Central Bank over-printed to keep up with“Continental” demands. But paper is not a redeemable, tangible asset. As the war accelerated, Congress reneged on its promise to issue more notes, inflation skyrocketed, and Americans were left in desperate need.
Alexander Hamilton, whose ideas were more in line with British government, created another central bank with one currency. The colonies had few banks: Britain controlled banking and prevented rival banks from developing. America needed a way to smooth the progress of government financing to investors and lending to businesses to develop a prosperous American economy. The idea was great, but failed: Hamilton’s Second Bank sent all United States gold [currency backing] to foreign countries during the 1790s.
In Hamilton’s Writings, his December 13, 1790 “Report on a National Bank” to the House of Representatives he stated: “The bank did not have the ability to circulate great sums of money beyond actual gold and silver coins held within the bank’s vaults,” so another rout was taken that pushed America over a fiscal cliff:
The stamping of paper is an operation so much easier than the laying of taxes, that a government in the practice of paper emissions, would rarely fail in any such emergency to indulge itself too far, in the employment of that resource, to avoid as much as possible one less auspicious to present popularity.
Hamilton’s Bank continued printing nonredeemable notes as inflation escalated. By 1812 America dove over the fiscal cliff.
I’ll never understand why we outlawed dueling!
The War of 1812 was financed mainly through the use of borrowed funds. Total public debt increased from $45.2 million on January 1, 1812, to $119.2 million as of September 30, 1815.
America’s banking system was so mismanaged; we dove again: The Panic of 1819.
In his book Andrew Jackson and the Bank War, historian Robert V. Remini wrote that by 1822 America’s economy collapsed: American banks fell and the people lost everything. Anger was so wide-spread, Americans elected President Andrew Jackson, who tore down the Second Bank, placed money back into individual state’s hands, pushed for gold and silver to remain in America, and sold federal land to pay off the national debt.
Jackson’s policies never prevented future government borrowing and lending idiocy or the creation of Federal Reserve.
Cheap paper seems to cause convenient amnesia.
By 1846, the United States war with Mexico over annexation of Texas and California cost $64 million, so “Congress authorized the issuing of additional debt to meet these obligations. It is this concept that would later become the basis for the Savings Bond program. By the end of 1849, public debt totaled $63.1 million.”
A final official estimate in 1879 totaled $6,190,000,000. The Confederacy spent perhaps $2,099,808,707. By 1906 another $3.3 billion already had been spent by the U.S. government on Northerners’ pensions and other veterans’ benefits for former Federal soldiers. Southern states and private philanthropy provided benefits to the Confederate veterans. The amount spent on benefits eventually well exceeded the war’s original cost.
By the end of the fiscal year of 1899, America paid much of its debt, leaving the country with $1.9 billion in gross debt.
But America elected Woodrow Wilson, who enacted the Federal Reserve, IRS, and borrowed $11.577 billion ($206.186 billion in 2002 dollars), we are still repaying today, to finance WWI, while borrowing further from Americans. This doesn’t include the enactment of the Debt Commission for borrowing funds.
I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated governments in the civilized world – no longer a government by free opinion, no longer a government by conviction and the vote of the majority, but a government by the opinion and duress of a small group of dominant men.
Notice the “unhappy” president never repealed his ruination.*
Next, the “dominant” FDR “civilized” us with government programs and ended the gold standard in 1933, declaring private ownership of gold illegal, except gold jewelry. I assume marriage had something to do with that decision.
Though foreign governments could sell gold to America, President Nixon destroyed the gold standard completely, leaving America on a fiat standard not backed by commodities.
But hey, we have communist China backing worthless paper while manufacturing worthless American products!
Forget the damn cliff, we threw a rope over the highest limb on the tallest tree long-ago and hanged ourselves with our own economic stupidity!
* [Editor's note: This story may be apocryphal.]