Archive for the ‘Campaign for Liberty’ Category

The hypocrites anti-states pledge for non believers in the right of states to chose their own laws

November 11, 2012

The hypocrites anti-states pledge for non believers in the right of states to chose their own laws

By Dark Politricks

The other day Cenk Uygur from the Young Turks asked hypocritical states rights enthusiasts who don’t believe in the recent state ballots in Colorado and Washington to legalise marijuana to take the Anti States Pledge.

The pledge states:

“I have never actually believed in state’s rights. Every time I mentioned it I was lying. I promise to never, ever mention it again as long as I shall live.”

You can watch Cenk Uygur make his case in the following video.

You can read my latest article on the Anti States Right’s Pledge and the failed war on drugs on my main website in an article I have just written called “The Anti State Right’s Pledge – and why President Obama is not a true liberal”.

Advertisements

Calling all Virginians

February 3, 2010

By Matt Hawes

On the heels of VA C4L’s great legislative victory for health freedom in the Virginia Senate on Monday, we have a chance to win another crucial victory with HB 69.

HB 69, the Virginia Firearms Freedoms Act (which, like legislation in Montana and other states, says that federal regulations or other laws do not apply to firearms, firearm accessories, or ammunition manufactured commercially or privately in Virginia and remaining within the borders of Virginia), will be heard by the House Militia, Police, and Public Safety Subcommittee #1 on Thursday, February 4 at 5 pm.

Please click here to urge subcommittee members to support HB 69.

VA Co-State Coordinator Donna Holt has been paying for a lot of the fight on her own dime, so if you live in Virginia and are able (or are out of state and sympathetic to this cause), click here to contribute to VA C4L.  Your contribution of any amount will go a long way toward making fliers and mailings in support of HB 69 and helping to continue organized efforts to win its passage.

View the original article at Campaign for Liberty

Ron Paul in the National Journal

February 3, 2010

By Matt Hawes

Last week, National Journal caught up to Dr. Paul for a brief interview.

NJ: What stirred the activists’ fervor now?

Paul: I think it’s the failure of government. People are recognizing that government…. made promises, and yet now people are recognizing that they can’t fulfill their promises. They know about the debt, they know about the entitlements that can’t be paid. They know about the problems that we have around the world, they know about the corruption dealing with Goldman Sachs and others….

Read the rest of the questions and answers here.

View the original article at Campaign for Liberty

The Fed as Giant Counterfeiter

February 3, 2010

Robert Murphy
Campaign For Liberty
Wednesday, February 3rd, 2010

San Jose State economics professor Jeffrey Rogers Hummel tells all his students that the easiest way to understand the Federal Reserve is to think of it as a giant, legalized counterfeiter. I had always known that the Fed and other central banks were like counterfeiters, but I still thought that the actual mechanics of open-market operations and so forth actually provided some important distinctions.

In large part because of my frequent email exchanges with Hummel, I now realize that I was being naïve. Once you understand the details of modern central banking, you are able to step back and see that it truly is a way for the government to use the printing press to pay its bills. All of the complicated process of targeting interest rates through buying Treasuries simply hides this essential point — and perhaps deliberately so.

An Old-Fashioned Monarch With a Printing Press

Before we examine Fed operations, let’s start with something simpler. Suppose there is a powerful monarch reigning over a large, industrialized country. The monarch has managed to wean his subjects off commodity money such as gold or silver, and instead they use fiat notes, rectangular slips of paper featuring the king’s portrait. The king has a printing press at his disposal, which gives him unlimited ability to create more slips of paper with which he can buy goods throughout his kingdom.

At first, one might think that our hypothetical king has infinite wealth. But upon reflection, we see that there are actually pragmatic limits on how much new money he will print up each year. It’s true that there are no legal constraints on how many notes he can create, but the more monetary inflation he sows, the greater the price inflation he will reap.

At some point, the monarch would actually make himself poorer in the long run by running the printing press too heavily in the present. For example, if he doubled the stock of money in one year, the resulting price inflation would destabilize his economy and cause much needless capital consumption. His subjects would be less willing to invest in their businesses and retirement portfolios, knowing that he might effectively confiscate their savings again through massive creation of new money. Foreign investors too would be wary of exposing themselves to his country if he made his fiat currency too volatile.

Because of these considerations, the monarch would no doubt run off new money every year from his printing press, but he wouldn’t overdo it. He would aim for a moderate level of constant price inflation, with the purchasing power of his fiat currency slowly falling over time in a predictable manner. Each year, the new influx of money into the economy would represent a transfer of wealth from all other currency holders into the king’s possession.

Now what if our monarch is really profligate? What if he wants to spend more money than the income and tribute he earns in his position as monarch, even including the amount of new money he dares to create each year with his printing press, can support? In this case, the monarch can still resort to old-fashioned borrowing. Therefore in any given year, the monarch can only spend what he collects in tribute (taxes), debt financing, and inflation.

Modern Counterfeiting, Fed Style

At first glance, our present monetary system is nothing like the simple tale of a king with a printing press. For one thing, the US Treasury is a distinct entity from the Federal Reserve. When the US federal government runs a budget deficit, it can’t simply have the Fed print up enough $100 bills to cover the shortfall. No, the Treasury always covers its budget deficits by issuing debt, referred to as Treasuries. These are bonds, IOUs sold by the Treasury to outside investors who lend the Treasury money today in the hopes of being paid back in the future.

But wait, there’s more to the story. One of the main buyers of this Treasury debt is the Federal Reserve itself. This phenomenon is especially pronounced during emergencies such as major wars and the current financial crisis. Indeed, in the second quarter of 2009, the Federal Reserve was the effective buyer of some 48 percent of the new Treasury debt issued that period, as part of its “quantitative easing.” It’s true, the Fed doesn’t show up at the Treasury auctions and directly buy the new T-bills and so forth, but private dealers pay higher prices for the Treasuries knowing that the Fed is waiting in the wings to pick them up.

At this point let’s review exactly what happens when the Federal Reserve buys Treasuries from private dealers. Let’s say the Fed wants to buy $1 million worth of T-bills from Joe Smith. So it writes Joe a check for $1 million, drawn on the Fed itself. Joe hands the T-bills over to the Fed, where they end up on the asset side of its balance sheet. Joe then deposits the check in his personal checking account, which goes up by $1 million.

“If nothing else, the Fed’s massive buying of Treasury debt pushes up the auction price of the Treasuries, meaning the federal government can borrow at cheaper interest rates.”

So at this point the Fed has increased the money supply by $1 million. In normal times, because of the fractional-reserve banking system, Joe’s bank would lend out $900,000 of the new deposit to another customer, so that the money supply would grow even further. But that’s not what interests us in this article, so we’ll leave that train of thought.

What we want to focus on is the effect of the Fed’s purchase on the US Treasury. By entering the bond market and buying Treasuries (with money created out of thin air), the Fed pushes up the price of the bonds. That of course means that their yield drops. So, for example, if the Treasury issues a T-bill promising to pay the holder $10,000 in 12 months, then the auction price determines how much money the Treasury actually gets to borrow now in exchange for this promise to pay back $10,000 in one year. If the demand is such that people pay $9,901 for each T-bill with a face value of $10,000, then the Treasury gets to borrow money for a year at an interest rate of 1 percent.

Already we see why the folks at the Treasury are big fans of the Fed’s “quantitative easing” program, in which Bernanke decided it was in the national interest to begin adding more than a trillion dollars’ worth of Treasury debt to the Fed’s balance sheet. If nothing else, the Fed’s massive buying of Treasury debt pushes up the auction price of the Treasuries, meaning the federal government can borrow at cheaper interest rates.

Now, if this were the whole story, it would be fishy but not nearly as bad as our hypothetical monarch with the printing press. Sure, the Fed would create new dollars (which would push up dollar prices of goods and services) in order to keep the Treasury’s borrowing costs low. But still, the Treasury would have to pay some interest on its debt, especially for longer-dated debt with higher yields, like 10-year Treasury notes. So although the mechanism we have described would encourage the Treasury to run higher deficits at the expense of average people, who suffer from rising prices, things don’t seem nearly as crooked as they were in the case of our monarch.

Ah, but we’re not done yet. Not only does the Fed’s accumulation of Treasury debt artificially push down the interest rate, but the Fed gives the interest payments right back to the Treasury! After all, interest is how the Fed “makes money.” It writes checks on itself (created out of thin air) and accumulates assets, and then earns the interest and (in some cases) capital gains on the assets. But after the Fed pays its employees, pays its electric bill, and throws the staff Christmas party, it remits the excess earnings back to the Treasury.

For example, in fiscal year 2008 the Federal Reserve distributed to the US Treasury some $31.7 billion (page 173)Download PDF of its net earnings. To repeat, much of this money consisted of interest payments that the Treasury paid out to the holders of its debt, who just so happened to be the Fed for much of it. So not only is the official rate of interest kept artificially low by the Fed’s money-creation, but the interest payments themselves are largely refunded to the Treasury, to the extent that the Fed ends up holding the Treasuries rather than outsiders.

“But after the Fed pays its employees, pays its electric bill, and throws the staff Christmas party, it remits the excess earnings back to the Treasury.”

All right, so the Fed (a) suppresses the interest rate on Treasury debt and (b) refunds virtually all of the interest payments on Treasury debt held by the Fed. And remember, the way the Fed does this is through creating new dollars out of thin air, in order to buy the Treasury debt from the original investors who lent money to the Treasury. Therefore the Fed is clearly giving aid to the US government’s deficit spending at the expense of everyone holding assets denominated in US dollars.

Still, the one thing holding back the complete recklessness of the feds is that they still have to pay off the principal of their bonds when they mature, right? In other words, all we’ve really shown is that the Fed allows the Treasury to run deficits virtually at zero interest expense, at least for debt held by the Fed. But this is still a far cry from our hypothetical monarch, who had a whole component of his expenses which he met year in and year out by running the printing press.

Sorry, but our own monetary system has the same feature. When the Treasury securities held by the Fed mature — so that the Treasury has to pay back the face value in principal — the Fed rolls over the debt. Over time, the nominal market value of the Fed’s holdings of Treasury debt continually grows. Barring a sudden reversal in this policy, the Treasury knows that it will never have to pay off this debt. For all practical purposes, any Treasury debt ultimately finding its way onto the Fed’s balance sheet is economically equivalent to our monarch running the printing press to pay his bills.[1]

We have just one last consideration. Up till now we’ve seen that the modern US government, with its complicated central bank and fiat money system, operates essentially as a king with a simple printing press, to the extent that the Fed is willing to accumulate larger holdings of Treasury debt. But what determines how much the Fed is willing to take on? At what point would the Fed decide to ease off on its open-market operations and stop creating so many new dollars to (indirectly) hand over to the government?

The ultimate constraint on the Fed’s operations is the same one our hypothetical king faced: investor and citizen backlash in response to rising prices. That is, the Federal Reserve can only absorb so much of the Treasury’s new debt each year because too much dollar-creation would lead to unacceptably high price inflation. Thus our profligate government, like the hypothetical monarch, must finance some of its spending through traditional borrowing from private citizens and other governments.

Conclusion

Stripped of its fancy terminology and confusing mechanics, modern central banking boils down to a legalized counterfeiting operation. If there were suddenly a widespread public outcry to “punt the press,” we can bet our hypothetical monarch would mobilize all his allies in the media to discredit the people threatening his source of revenue. In that light, we can understand the reaction today to people calling to “end the Fed.”

Notes

[1] Actually, because private banks typically cause further money creation by pyramiding more loans on top of the Fed’s initial injection of new money, our financial system is arguably worse than the hypothetical monarch’s. In order for the king to finance a $1 billion deficit through inflation, he had to print up $1 billion worth of new currency. But if the Fed creates $1 billion in order to absorb that much in new Treasury debt, typically the actual money supply can end up rising by $10 billion. Thus modern inflation through central banking in democratic states is arguably less “efficient” than under a monarchy with an explicit printing press.

"Deficits May Alter U.S. Politics and Global Power"

February 3, 2010

By Matt Hawes

Via The New York Times:

By President Obama‘s own optimistic projections, American deficits will not return to what are widely considered sustainable levels over the next 10 years. In fact, in 2019 and 2020 – years after Mr. Obama has left the political scene, even if he serves two terms – they start rising again sharply, to more than 5 percent of gross domestic product. His budget draws a picture of a nation that like many American homeowners simply cannot get above water….

As Dr. Paul said in his “State of the Republic” speech, “We have lived, as a nation, far beyond our means and the message is, for the foreseeable future, that we will be forced to live beneath our means as this debt is paid.”

There is still time to prevent this kind of future from coming to pass, but it will require our elected officials to once and for all abandon their seemingly insatiable desire to run our lives – and real change like that has never been popular in the halls of Congress.

Read the rest.

View the original article at Campaign for Liberty

$12,313 of Government Per Person

February 2, 2010

By sjaye

Much discussion regarding Barak Obama’s estimated $3.8 Trillion 2011 budget is focused on which agencies are going to see budget increases, and which agencies will be cut.  For example, this budget scraps NASA’s amitions to return to the moon, reduces (albeit slightly) EPA funding, but increases funding for education as a part of a No Child Left Behind revamp [Source].  However, missing from much of the mianstream media and political pundit discussion of this budget is just how large the budget is!

In 2011, deficits are expected to soar to near $1.6 Trillion.  This estimate even includes optimistic estimates of economic growth, including a 40% decrease in expenditures for the Labor department, based on this assumption from the above link .. “The Labor Department would see a major drop in spending for its unemployment insurance programs. That’s because the administration forecasts an economic rebound and expects fewer people to claim unemployment benefits.”

As atrocious as the 40% increase in spending for the Treasury department is (which amounts to about $190 billion), what all Americans should stop and think about is the full number in the budget – $3.8 Trillion.  If you divide this number by the current US population estimate, 308.6 Million, you get $12,313.  RIght now, President Obama is proposing that our Federal Government spend $12,313 per person.  My question to you, everyday Americans is; Do you feel like you need over $12,000 worth of Government services?  While politicians will talk about nibbling around the edges of this mamoth budget (witness Obama’s joke of a spending freeze that only applies to 20% of the budget), I would very much like to hear someone justify why $12,000, or even $8-10 thousand worth of Government is necessary in our lives!

View the original article at Campaign for Liberty

Back-Door Taxes Hikes to Hit the Middle Class

February 2, 2010

By Jesse Benton

A central plank to Obama’s camapign was a pledge not to raise taxes on the middle class. Here’s a video on how that is going. (Thanks to my friend Adam Radman at ATR)

Now, Reuters and Drudge are reporting on the back-door, sneaky way to the Administration is planning to cut the deficit – not by cutting spending, or trimming back our overseas empire. No, it’s to squeeze more money out of your pocket.

In the 2010 budget tabled by President Barack Obama on Monday, the White House wants to let billions of dollars in tax breaks expire by the end of the year — effectively a tax hike by stealth.

Read the rest here.

View the original article at Campaign for Liberty

"Why You've Never Heard of the Great Depression of 1920"

February 2, 2010

By Matt Hawes

As President Obama continues to try to sell the country on the necessity of government intervention, this Mises Institute video from April 2009 looks at what happened when a president made the rare choice to restrain government action in an economic crisis.

View the original article at Campaign for Liberty

An Idea Whose Time Has Come

February 2, 2010

By Gary Howard

This is an interesting piece in Time Magazine online on the Vermont secession movement:

The Secessionist Campaign for the Republic of Vermont

The President on Wednesday may have reassured Americans that the state of the Union is “strong,” but, just the week before, a group of Vermont secessionists declared their intention to seek political power in a quest to get their state to quit the Union altogether. On Jan. 15, in the state capital of Montpelier, nine candidates for statewide office gathered in a tiny room at the Capitol Plaza Hotel, to announce they wanted a divorce from the United States of America. “For the first time in over 150 years, secession and political independence from the U.S. will be front and center in a statewide New England political campaign,” said Thomas Naylor, 73, one of the leaders of the campaign.

A former Duke University economics professor, Naylor heads up the Second Vermont Republic, which he describes as “left-libertarian, anti-big government, anti-empire, antiwar, with small is beautiful as our guiding philosophy.” The group not only advocates the peaceful secession of Vermont but has minted its own silver “token” – valued at $25 – and, as part of a publishing venture with another secessionist group, runs a monthly newspaper called Vermont Commons, with a circulation of 10,000. According to a 2007 poll, they have support from at least 13% of state voters. The campaign slogan, Naylor told me, is “Imagine Free Vermont.” In his fondest imaginings, Naylor said, Vermonters would not be “forced to participate in killing women and children in the Middle East.”  Read more…

These days folks seem to be talking about secession for all the right reasons. Let’s hope the principles behind this movement catch on, and it grows into something serious and worthwhile.

View the original article at Campaign for Liberty

A Tale of Two Speeches

February 2, 2010

By Matt Hawes

As President Obama calls for further government intervention and control, another speech on the state of our country reminds us that the crisis will only get worse if we do not abandon the establishment’s failed way of thinking and pursue liberty.

Click here for the full speech.

View the original article at Campaign for Liberty