2011 April 30 Saturday
Debt Ceiling Hold-Outs As Monetary Terrorists

Mark Steyn picks up on a recent comment by former US Treasury Secretary Paul O'Neill on jihadists against a larger national debt.

Anyway, Secretary O’Neill popped up the other day on Bloomberg Television to compare debt-ceiling holdouts to jihadists. “The people who are threatening not to pass the debt ceiling,” he said, “are our version of al-Qaeda terrorists. Really.”



“They’re really putting our whole society at risk by threatening to round up 50 percent of the members of the Congress, who are loony, who would put our credit at risk.”

Mark makes some mostly obvious observations like pointing that running a huge (and unsustainable) budget deficit (now about 10% of GDP) already puts American national credit at risk. He also points out at the whole purpose of a credit limit in the first place is to increase credibility with creditors. Well, that credibility only exists as long as there's a real ultimate ceiling for how big the debt can be allowed to grow. So trying to act like there's a real debt ceiling adds up to terrorism how exactly?

I expect Congress will eventually do debt ceiling increase that their spendthrift ways (fully supported by most of the electorate) made necessary. That some Congresscritters at least use the occasion of a vote on the debt ceiling to draw attention to our national folly strikes me as helpful though not sufficient and certainly not terrorism.

This reminds me of something else I just read about monetary terrorism. When Bernard von NotHaus was recently convicted in a US District Court in Statesville North Caroline for making a Liberty Dollar from silver as an inflation-safe alternative to the real dollars (and did anyone buying the Liberty Dollar think they were buying real US currency?) US Attorney Anne Tompkins accused him of domestic terrorism for undermining the US dollar.

“Attempts to undermine the legitimate currency of this country are simply a unique form of domestic terrorism,” U.S. Attorney Anne Tompkins said. “While these forms of anti-government activities do not involve violence, they are every bit as insidious and represent a clear and present danger to the economic stability of this country.”

When counterfeiters just print money they are expanding the money supply the expense of everyone else. The Federal Reserve, in its Quantitative Easing programs, has basically generated cash out of thin air. First the Fed bought up dubious credit from banks. Now it has graduated to buying up US Treasury debt, again with money the Fed generates out of thin air. Like counterfeiters. Really, The Fed is doing something qualitatively different how exactly? The monopolist says "but on me it looks good".

Share |      By Randall Parker at 2011 April 30 06:31 PM  Economics Government Debt

no i don't said at May 1, 2011 9:13 AM:

“While these forms of anti-government activities do not involve violence, they are every bit as insidious and represent a clear and present danger to the economic stability of this country.”

Did anybody tell this idiot Tompkins that the government emanates from the people? Hey, when the majority of a country is considered as "terrorist" of "possible terrorist" then there's something wrong with the system. As the old man in the Zeitgeist "Moving Forward" video would say: "This shit's got to go"

So many fucken laws in a country gradually make it impossible for anybody to live without breaking the law.

Poor Pete said at May 1, 2011 1:35 PM:

The word terrorist has lost all its meaning. If it means going against corrupt governments let's hope to have more terrorists in the future. Perhaps millions of people will want to be called terrorist.

REN said at May 2, 2011 8:14 AM:

The term deficit terrorist is used regularly by some economists. Places like Portugal and Greece that have to put their resources in hock to attract capital are a case in point. Since Portugal, Greece, or even American States, cannot issue their own Sovereign currency - deficit terrorists want them to go into debt bondage. The plutocrats who have the savings (or the ability to create new money with a ledger entry) will swoop in and buy up the now depressed land and real assets at the depressed prices. Eventually populations (like Mexico) have concentrated wealth so much that the top few percent end up owning everything.

Please American’s pay attention to the money system, it is probably the most important thing any intelligent individual can do.
The government base money can be two things: 1) It can be spent freely into the economy to provide for infrastructure or jobs. When spent in this way, it also will become savings needed in the private economy. 2) Government can spend money into the economy to buy and consume things from the private sector.
When the Government gets very large and issues new money in order to consume, then that crowds our private activity. Item number 2 is what pisses most American’s off. Item number 1 is what economists think, because they know that the private sector has to have some injection of base money from the government. Why?

Why? Why? Because dear reader, usury interest is at the root of our credit money system; credit money is money that comes into being at your local friendly bank. When you pay off your car or your house, the debt money on the banker’s double entry ledger drops down to zero; in this way, debt money supposedly pops into being you take out a loan, and then disappears when the loan is paid off. But, that is not entirely true –which most crack head economists cannot fathom. The interest on that credit money loan needs to enter the supply from somewhere, and it normally comes from government deficit spending. Without government deficit spending the money supply will contract, leading to recessions or depression.

We really need a fourth branch of government to watch over the money power. They need to be insulated from the populist house and senate. While we are at it, let’s kill the 17’th amendment and make the Senate non-populist like the founders intended.

We are in a balance sheet recession. That means that as long as we keep credit money as our unit of exchange, then we have to deficit spend till the balance sheet is fixed. Sorry, I didn’t invent the system. Don’t shoot the messenger. If it were up to me, I’d flush private banking fractional reserve credit money, and replace it with 100% reserve. That way all money is real money and not credit.

check it out said at May 2, 2011 2:38 PM:

I think we'd better put a limit on the light-year-long definition of "terrorist"

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