The Truth Behind Terror - The Great Satan & CIA Drug Trafficking
Al-Qaeda Doesn't Exist
There's no such thing as al-Qaeda. It's a fraud perpetrated on the British and American people by the governments to scare us into submission. This is a clip from the excellent three-part BBC documentary *The Power of Nightmares".
Watch this video clip ...
Behind the Bin Laden
Hate Of America
The story starts over 60 years ago with the CIA, and the secret history is now documented by John Stockwell, (former CIA Station Chief in Angola in 1976, working for then Director of the CIA, George Bush) ...
He spent 13 years in the agency. He is the highest level CIA officer to testify to the Congress about his actions.
He estimates that over 6 million people have died in CIA covert actions, and this was in the late 1980's.
The United States CIA is running 50 covert actions (1987), destabilizing further almost one third of the countries in the world today.
John Stockwell intelligence gatherer
and task force commander goes public ...
Video 1 America's 3rd World WAR Video 2 Dark Alliance
Former President Bush Head
of the CIA Drug Import Agency
(see the videos)
Video 1 The CIA's Involvement in Drug Trafficking - Video 2 C.I.A The Drug Affair Part 1 - Video 3 C.I.A: "The Drug Affair Part 2 -
When the Nicaraguan contras began to covertly fund their war against the Sandanistas by selling drugs and guns to California street gangs, the Central Intelligence Agency turned a blind eye. While black neighborhoods were being ravaged by the crack cocaine plague, CIA operatives actively participated in this devastating drug explosion, protected from prosecution by a secret agreement between the Department of Justice and the CIA.
We now know that the CIA was a self-perpetuating agency, and it created the conditions to keep it growing, and to keep it in business.
Other Secret Deals
Gen. Gehlen (middle) was imported along with his Gestapo by the Dulles Brothers after WWII to help setup and train the CIA (operation paperclip)see ...
Under President Ronald Reagan America not only increased its involvement in the Middle East by supplying arms to both Iraq and Iran in their war against each other, but America stepped up its involvement in conflicts around the world, especially South America.
Why does a war begin?
CIA funding by drugs
This documentary gives quite an overview of what has
actually happened in the last 50 years regarding the CIA ...
The Truth Behind Terror
When the U.S. government sent more than 500,000 U.S. troops to invade Iraq in 1991, the operation was led by Sec. of Defense Dick Cheney. The unilateral decision to militarily invade a Muslim nation for the first time in American history was made on October 30, 1990 by George H. Bush.
*The Truth About Terror
Bin Laden's Letter to America
Why are we fighting and opposing you? The answer is very simple:
(1) Because you attacked us and continue to attack us.
a) You attacked us in Palestine:
(i) Palestine, which has sunk under military occupation for more than 80 years. The British handed over Palestine, with your help and your support, to the Jews, who have occupied it for more than 50 years; years overflowing with oppression, tyranny, crimes, killing, expulsion, destruction and devastation.
The creation and continuation of Israel is one of the greatest crimes, and you are the leaders of its criminals. And of course there is no need to explain and prove the degree of American support for Israel. The creation of Israel is a crime which must be erased. Each and every person whose hands have become polluted in the contribution towards this crime must pay its*price, and pay for it heavily.
(ii) It brings us both laughter and tears to see that you have not yet tired of repeating your fabricated lies that the Jews have a historical right to Palestine, as it was promised to them in the Torah. Anyone who disputes with them on this alleged fact is accused of anti-semitism. This is one of the most fallacious, widely-circulated fabrications in history.
The people of Palestine are pure Arabs and original Semites. It is the Muslims who are the inheritors of Moses (peace be upon him) and the inheritors of the real Torah that has not been changed. Muslims believe in all of the Prophets, including Abraham, Moses, Jesus and Muhammad, peace and blessings of Allah be upon them all. If the followers of Moses have been promised a right to Palestine in the Torah, then the Muslims are the most worthy nation of this.
When the Muslims conquered Palestine and drove out the Romans, Palestine and Jerusalem returned to Islam, the religion of all the Prophets peace be upon them. Therefore, the call to a historical right to Palestine cannot be raised against the Islamic Ummah that believes in all the Prophets of Allah (peace and blessings be upon them) - and we make no distinction between them.
(iii) The blood pouring out of Palestine must be equally revenged. You must know that the Palestinians do not cry alone; their women are not widowed alone; their sons are not orphaned alone.
(b) You attacked us in Somalia; you supported the Russian atrocities against us in Chechnya, the Indian oppression against us in Kashmir, and the Jewish aggression against us in Lebanon.
(c) Under your supervision, consent and orders, the governments of our countries which act as your agents, attack us on a daily basis;
(i) These governments prevent our people from establishing the Islamic Shariah, using violence and lies to do so.
(ii) These governments give us a taste of humiliation, and places us in a large prison of fear and subdual.
(iii) These governments steal our Ummah's wealth and sell them to you at a paltry price.
(iv) These governments have surrendered to the Jews, and handed them most of Palestine, acknowledging the existence of their state over the dismembered limbs of their own people.
(v) The removal of these governments is an obligation upon us, and a necessary step to free the Ummah, to make the Shariah the supreme law and to regain Palestine. And our fight against these governments is not separate from out fight against you.
(d) You steal our wealth and oil at paltry prices because of you international influence and military threats. This theft is indeed the biggest theft ever witnessed by mankind in the history of the world.
(e) Your forces occupy our countries; you spread your military bases throughout them; you corrupt our lands, and you besiege our sanctities, to protect the security of the Jews and to ensure the continuity of your pillage of our treasures.
(f) You have starved the Muslims of Iraq, where children die every day. It is a wonder that more than 1.5 million Iraqi children have died as a result of your sanctions, and you did not show concern. Yet when 3000 of your people died, the entire world rises and has not yet sat down.
(g) You have supported the Jews in their idea that Jerusalem is their eternal capital, and agreed to move your embassy there. With your help and under your protection, the Israelis are planning to destroy the Al-Aqsa mosque. Under the protection of your weapons, Sharon entered the Al-Aqsa mosque, to pollute it as a preparation to capture and destroy it.
(2) These tragedies and calamities are only a few examples of your oppression and aggression against us. It is commanded by our religion and intellect that the oppressed have a right to return the aggression. Do not await anything from us but Jihad, resistance and revenge. Is it in any way rational to expect that after America has attacked us for more than half a century, that we will then leave her to live in security and peace?!!
(3) You may then dispute that all the above does not justify aggression against civilians, for crimes they did not commit and offenses in which they did not partake:
(a) This argument contradicts your continuous repetition that America is the land of freedom, and its leaders in this world.
Therefore, the American people are the ones who choose their government by way of their own free will; a choice which stems from their agreement to its policies.
Thus the American people have chosen, consented to, and affirmed their support for the Israeli oppression of the Palestinians, the occupation and usurpation of their land, and its continuous killing, torture, punishment and expulsion of the Palestinians.
The American people have the ability and choice to refuse the policies of their Government and even to change it if they want.
(b) The American people are the ones who pay the taxes which fund the planes that bomb us in Afghanistan, the tanks that strike and destroy our homes in Palestine, the armies which occupy our lands in the Arabian Gulf, and the fleets which ensure the blockade of Iraq.
These tax dollars are given to Israel for it to continue to attack us and penetrate our lands. So the American people are the ones who fund the attacks against us, and they are the ones who oversee the expenditure of these monies in the way they wish, through their elected candidates.
(c) Also the American army is part of the American people. It is this very same people who are shamelessly helping the Jews fight against us.
(d) The American people are the ones who employ both their men and their women in the American Forces which attack us.
(e) This is why the American people cannot be not innocent of all the crimes committed by the Americans and Jews against us.
(f) Allah, the Almighty, legislated the permission and the option to take revenge. Thus, if we are attacked, then we have the right to attack back. Whoever has destroyed our villages and towns, then we have the right to destroy their villages and towns. Whoever has stolen our wealth, then we have the right to destroy their economy. And whoever has killed our civilians, then we have the right to kill theirs.
The American Government and press still refuses to answer the question: Why did they attack us in New York and Washington?
If Sharon is a man of peace in the eyes of Bush, then we are also men of peace!!! America does not understand the language of manners and principles, so we are addressing it using the language it understands.
(Q2) As for the second question that we want to answer: What are we calling you to, and what do we want from you?
(1) The first thing that we are calling you to is Islam.
(a) The religion of the Unification of God; of freedom from associating partners with Him, and rejection of this; of complete love of Him, the Exalted; of complete submission to His Laws; and of the discarding of all the opinions, orders, theories and religions which contradict with the religion He sent down to His Prophet Muhammad (peace be upon him). Islam is the religion of all the prophets, and makes no distinction between them - peace be upon them all.
It is to this religion that we call you; the seal of all the previous religions. It is the religion of Unification of God, sincerity, the best of manners, righteousness, mercy, honour, purity, and piety.
It is the religion of showing kindness to others, establishing justice between them, granting them their rights, and defending the oppressed and the persecuted.
It is the religion of enjoining the good and forbidding the evil with the hand, tongue and heart. It is the religion of Jihad in the way of Allah so that Allah's Word and religion reign Supreme.
And it is the religion of unity and agreement on the obedience to Allah, and total equality between all people, without regarding their colour, sex, or language.
(b) It is the religion whose book - the Quran - will remained preserved and unchanged, after the other Divine books and messages have been changed.
The Quran is the miracle until the Day of Judgment. Allah has challenged anyone to bring a book like the Quran or even ten verses like it.
(2) The second thing we call you to, is to stop your oppression, lies, immorality and debauchery that has spread among you.
(a) We call you to be a people of manners, principles, honour, and purity; to reject the immoral acts of fornication, homosexuality, intoxicants, gambling's, and trading with interest.
We call you to all of this that you may be freed from that which you have become caught up in; that you may be freed from the deceptive lies that you are a great nation, that your leaders spread amongst you to conceal from you the despicable state to which you have reached.
(b) It is saddening to tell you that you are the worst civilization witnessed by the history of mankind:
(i) You are the nation who, rather than ruling by the Shariah of Allah in its Constitution and Laws, choose to invent your own laws as you will and desire. You separate religion from your policies, contradicting the pure nature which affirms Absolute Authority to the Lord and your Creator. You flee from the embarrassing question posed to you: How is it possible for Allah the Almighty to create His creation, grant them power over all the creatures and land, grant them all the amenities of life, and then deny them that which they are most in need of: knowledge of the laws which govern their lives?
(ii) You are the nation that permits Usury, which has been forbidden by all the religions. Yet you build your economy and investments on Usury. As a result of this, in all its different forms and guises, the Jews have taken control of your economy, through which they have then taken control of your media, and now control all aspects of your life making you their servants and achieving their aims at your expense; precisely what Benjamin Franklin warned you against.
(iii) You are a nation that permits the production, trading and usage of intoxicants. You also permit drugs, and only forbid the trade of them, even though your nation is the largest consumer of them.
(iv) You are a nation that permits acts of immorality, and you consider them to be pillars of personal freedom. You have continued to sink down this abyss from level to level until incest has spread amongst you, in the face of which neither your sense of honour nor your laws object.
Who can forget your President Clinton's immoral acts committed in the official Oval office? After that you did not even bring him to account, other than that he 'made a mistake', after which everything passed with no punishment. Is there a worse kind of event for which your name will go down in history and remembered by nations?
(v) You are a nation that permits gambling in its all forms. The companies practice this as well, resulting in the investments becoming active and the criminals becoming rich.
(vi) You are a nation that exploits women like consumer products or advertising tools calling upon customers to purchase them. You use women to serve passengers, visitors, and strangers to increase your profit margins. You then rant that you support the liberation of women.
(vii) You are a nation that practices the trade of sex in all its forms, directly and indirectly. Giant corporations and establishments are established on this, under the name of art, entertainment, tourism and freedom, and other deceptive names you attribute to it.
(viii) And because of all this, you have been described in history as a nation that spreads diseases that were unknown to man in the past. Go ahead and boast to the nations of man, that you brought them AIDS as a Satanic American Invention.
(xi) You have destroyed nature with your industrial waste and gases more than any other nation in history. Despite this, you refuse to sign the Kyoto agreement so that you can secure the profit of your greedy companies and*industries.
(x) Your law is the law of the rich and wealthy people, who hold sway in their political parties, and fund their election campaigns with their gifts. Behind them stand the Jews, who control your policies, media and economy.
(xi) That which you are singled out for in the history of mankind, is that you have used your force to destroy mankind more than any other nation in history; not to defend principles and values, but to hasten to secure your interests and profits. You who dropped a nuclear bomb on Japan, even though Japan was ready to negotiate an end to the war. How many acts of oppression, tyranny and injustice have you carried out, O callers to freedom?
(xii) Let us not forget one of your major characteristics: your duality in both manners and values; your hypocrisy in manners and principles. All*manners, principles and values have two scales: one for you and one for the others.
(a)The freedom and democracy that you call to is for yourselves and for white race only; as for the rest of the world, you impose upon them your monstrous, destructive policies and Governments, which you call the 'American friends'. Yet you prevent them from establishing democracies. When the Islamic party in Algeria wanted to practice democracy and they won the election, you unleashed your agents in the Algerian army onto them, and to attack them with tanks and guns, to imprison them and torture them - a new lesson from the 'American book of democracy'!!!
(b)Your policy on prohibiting and forcibly removing weapons of mass destruction to ensure world peace: it only applies to those countries which you do not permit to possess such weapons. As for the countries you consent to, such as Israel, then they are allowed to keep and use such weapons to defend their security. Anyone else who you suspect might be manufacturing or keeping these kinds of weapons, you call them criminals and you take military action against them.
(c)You are the last ones to respect the resolutions and policies of International Law, yet you claim to want to selectively punish anyone else who does the same. Israel has for more than 50 years been pushing UN resolutions and rules against the wall with the full support of America.
(d)As for the war criminals which you censure and form criminal courts for - you shamelessly ask that your own are granted immunity!! However, history will not forget the war crimes that you committed against the Muslims and the rest of the world; those you have killed in Japan, Afghanistan, Somalia, Lebanon and Iraq will remain a shame that you will never be able to escape. It will suffice to remind you of your latest war crimes in Afghanistan, in which densely populated innocent civilian villages were destroyed, bombs were dropped on mosques causing the roof of the mosque to come crashing down on the heads of the Muslims praying inside.
You are the ones who broke the agreement with the Mujahideen when they left Qunduz, bombing them in Jangi fort, and killing more than 1,000 of your prisoners through suffocation and thirst. Allah alone knows how many people have died by torture at the hands of you and your agents. Your planes remain in the Afghan skies, looking for anyone remotely suspicious.
(e)You have claimed to be the vanguards of Human Rights, and your Ministry of Foreign affairs issues annual reports containing statistics of those countries that violate any Human Rights. However, all these things vanished when the Mujahideen hit you, and you then implemented the methods of the same documented governments that you used to curse. In America, you captured thousands the Muslims and Arabs, took them into custody with neither reason, court trial, nor even disclosing their names. You issued newer, harsher laws.
What happens in Guantanamo is a historical embarrassment to America and its values, and it screams into your faces - you hypocrites, "What is the value of your signature on any agreement or treaty?"
(3) What we call you to thirdly is to take an honest stance with yourselves - and I doubt you will do so - to discover that you are a nation without principles or manners, and that the values and principles to you are something which you merely demand from others, not that which you yourself must adhere to.
(4) We also advise you to stop supporting Israel, and to end your support of the Indians in Kashmir, the Russians against the Chechens and to also cease supporting the Manila Government against the Muslims in Southern Philippines.
(5) We also advise you to pack your luggage and get out of our lands. We desire for your goodness, guidance, and righteousness, so do not force us to send you back as cargo in coffins.
(6) Sixthly, we call upon you to end your support of the corrupt leaders in our countries. Do not interfere in our politics and method of education. Leave us alone, or else expect us in New York and Washington.
(7) We also call you to deal with us and interact with us on the basis of mutual interests and benefits, rather than the policies of sub dual, theft and occupation, and not to continue your policy of supporting the Jews because this will result in more disasters for you.
If you fail to respond to all these conditions, then prepare for fight with the Islamic Nation. The Nation of Monotheism, that puts complete trust on Allah and fears none other than Him. The Nation which is addressed by its Quran with the words: "Do you fear them? Allah has more right that you should fear Him if you are believers.
Fight against them so that Allah will punish them by your hands and disgrace them and give you victory over them and heal the breasts of believing people. And remove the anger of their (believers') hearts. Allah accepts the repentance of whom He wills. Allah is All-Knowing, All-Wise." [Quran9:13-1]
The Nation of honour and respect: "But honour, power and glory belong to Allah, and to His Messenger (Muhammad- peace be upon him) and to the believers." [Quran 63:8]
"So do not become weak (against your enemy), nor be sad, and you will be*superior ( in victory) if you are indeed (true) believers" [Quran 3:139]
The Nation of Martyrdom; the Nation that desires death more than you desire life:
"Think not of those who are killed in the way of Allah as dead. Nay, they are alive with their Lord, and they are being provided for. They rejoice in what Allah has bestowed upon them from His bounty and rejoice for the sake of those who have not yet joined them, but are left behind (not yet martyred) that on them no fear shall come, nor shall they grieve. They rejoice in a grace and a bounty from Allah, and that Allah will not waste the reward of the believers." [Quran 3:169-171]
The Nation of victory and success that Allah has promised:
"It is He Who has sent His Messenger (Muhammad peace be upon him) with guidance and the religion of truth (Islam), to make it victorious over all other religions even though the Polytheists hate it." [Quran 61:9]
"Allah has decreed that 'Verily it is I and My Messengers who shall be victorious.' Verily Allah is All-Powerful, All-Mighty." [Quran 58:21]
The Islamic Nation that was able to dismiss and destroy the previous evil Empires like yourself; the Nation that rejects your attacks, wishes to remove your evils, and is prepared to fight you. You are well aware that the Islamic Nation, from the very core of its soul, despises your haughtiness and arrogance.
If the Americans refuse to listen to our advice and the goodness, guidance and righteousness that we call them to, then be aware that you will lose this Crusade Bush began, just like the other previous Crusades in which you were humiliated by the hands of the Mujahideen, fleeing to your home in great silence and disgrace. If the Americans do not respond, then their fate will be that of the Soviets who fled from Afghanistan to deal with their military defeat, political breakup, ideological downfall, and economic bankruptcy.
This is our message to the Americans, as an answer to theirs. Do they now know why we fight them and over which form of ignorance, by the permission of Allah, we shall be victorious?
Thursday, February 19, 2009
In A World of Lies, the Truth Is a Dream
Lets start things off with one of the old American Propaganda Cartoons ...
USA Propaganda Cartoon 1948
Newspapers, radio, TV and the mudslingers are trying to cover up what is becoming obvious to anyone but the blind: America had become a dictatorship with a strongly entrenched bureaucracy under the control of powerful special interests. This is not, in any way, an overstatement of fact.
Trying to disable a dictatorship that has ruled America outside her legislature and Constitutional structure is turning into a nightmare few of us have expected.
The War on Terror is turning out to be little more than a front for a massive financial scam stealing billions of dollars from, not only America, but Western Europe, the Middle East, Russia and China. None of this could be done until America herself was brought down and crushed under the heel of a police state.
What we have left is a justice system crippled by years of secret arrests, phony trials, torture, election rigging and a huge new bureaucracy answerable to no congressional authority.
Our Patriot Acts, passed by our cowardly congress, removed all Constitutional rights from Americans and allowed uncontrolled corruption at every level, banking, oil, defense, agriculture, pollution, election rigging, literally anything imaginable, to go on with full impunity.
The rule of law in America died overnight. No authority existed that couldn't be overridden by a phone call from a fat cat to their local party headquarters. Arrests were ordered, not by government, but by "business" insiders who bought their way into power with their checkbooks.
It turned out that their "business" was phony government contracts, looting banks and selling America to her enemies. We know that millions of people have lost their homes, their jobs and families around America are suffering. We know this must be true, although nothing is ever reported.
We only see empty highways, closed factories, empty houses and closed stores, not by the dozens but all around us. We hear numbers and suffering, yes, the suffering of the occasional Wall Street thief, now under arrest, or millionaire whose huge estate is sold off.
A trillion dollars was already sent to our banks to save America. Those banks are not lending that money to finance homes, cars, new businesses or anything else. Billions were paid out in bonuses, billions were stolen but little really went into our economy.
It seems the idea of people having good paying jobs, driving decent cars, sending their kids to college and owning homes offended people with the will, the influence and the power to take it all away.
All they had to do is crush the value of real estate, suck the money out of the banks, bond and stock markets, push up oil prices, food prices and keep the world at war. What our middle class worked for, saved for and sacrificed for was gone in a flash.
The same magicians that could take gasoline from a dollar a gallon to four dollars to two dollars on a whim can make your job, your home and your savings disappear in the wink of an eye.
They did it with your civil rights even easier and you said nothing.
The result, carefully planned, I assure you, was to make certain that every home was worthless, every retirement account was empty. Fear makes us compliant.
Only then could we live as intended, fearful of each other and turning to anyone or anything that promised us safety, our next meal, and a third rate version of the American dream, life half an inch above the poverty level for the lucky and total despair for tens of millions of Americans. Real estate prices, unless something drastic is done, have only begun to drop.
Foreclosures will continue for years until up to 40% of American homes are empty. Industrial jobs will all disappear, even China is closing hundreds of plants a month.
Low paying retail jobs are going away by the hundreds of thousands, jobs that kept millions in poverty off welfare and provided second jobs for families skirting poverty.
When the stock market crashed in 1929, brought on by "not so accidental" manipulation of the money markets by the very illegal Federal Reserve System, the private banking group created unConstitutionally in 1918 to print money and manage our economy, an economy that has been in collapse since 1918 except for times of war, it took years for the real "depression" to kick in.
Perhaps you can find a few union leaders, some college professors and an environmental activist or two to arrest and detain in the basement of the local police station. Chances are your local police will be right there with you, patrol cars with lights flashing.
In 8 years we went from full employment, peace, plenty, economic surplus to massive unemployment, endless war and total economic collapse while America's money, that didn't go overseas, went into the hands of a very few, 95% of whom had ties to the Bush administration.
Now we are going to see if that money, those billions, and the vicious stooges left can make Americans turn on each other rather than stop the theft, tax some of the freeloaders and put Americans back to work.
Michael Tsarion - Future of Mankind
See the full three hour lecture and more at ...
*World of Lies
Tuesday, February 10, 2009
Pros & Cons of Kickstarting Capitalism
|Today's Obama "Yes We Can" - A stranger was seated next to a little black girl on the airplane when the stranger turned to her and said, "Let's talk. I've heard that flights go quicker if you strike up a conversation with your fellow passenger."|
The little girl, who had just opened her coloring book, closed it slowly and said to the stranger, "What would you like to talk about?"
"Oh, I don't know," said the stranger. "Since you are a Negro, do you think that So-called President Elect Barak Obama is qualified for the job?" and he smiles.
"OK", she said. "That could be an interesting topic. But let me ask you a question first. A horse, a cow, and a deer all eat the same stuff 'grass '.
Yet a deer excretes little pellets, while a cow turns out a flat patty, and a horse produces clumps of dried grass. "Why do you suppose that is?"
The stranger, visibly surprised by the little girl's intelligence, thinks about it and says, "Hmmm, I have no idea."
To which the little girl replies, "Do you really feel qualified to discuss President Barak Obama... when you don't know shit?"
Whenever the economy stumbles, politicians and interest groups commonly argue that government spending should be increased. Based on a theory known as Keynesianism, this increase is supposed to boost economic performance.
Yet the notion that bigger government leads to more growth is both theoretically unsound and empirically false.
This strange theory was first put forth back during the 1930s, when America was suffering from a deep downturn. An economist named John Maynard Keynes argued that the economy could be boosted if the government borrowed money and spent it.
According to this Keynesian approach, this new spending would put money in people’s pockets, and the recipients of the funds would then spend the money. This would, according to the theory, prime the pump as the money began circulating through the economy.
Watch This First
See the Complete series ...
*The New World Order Is Not New
The Keynesians also said that some tax cuts — particularly lump-sum rebates — could have the same impact since the purpose is to have the government borrow and somehow put the money in the hands of people who will spend it.
So is this the right recipe to boost a flagging economy? Keynesian theory sounds good, and it would be nice if it made sense, but it has a rather glaring logical fallacy. It overlooks the fact that, in the real world, government can’t inject money into the economy without first taking money out of the economy.
Money Government Puts In Economy's Right Pocket Is Money First Removed From Economy's Left Pocket ...
Put more bluntly, Keynesianism only looks at one-half of the equation. It conveniently ignores the fact that any money that the government puts in the economy’s right pocket is money that is first removed from the economy’s left pocket. As such, there is no increase in what Keynesians refer to as aggregate demand.
The bottom line is that Keynesianism doesn’t boost national income, it merely redistributes it.
The people who lend the money to government generally are not the same people who get money in their pockets because of the new spending or tax rebates, but that’s not important. The Keynesian theory is based on the notion that there will be an increase in overall spending power, yet that clearly is not the case.
Some advocates of this theory get a bit more creative and say that Keynesianism works because it increases consumer spending rather than the money sitting idle.
But money that is unspent by consumers does not sit idle. It winds up in the banking system someplace and is used to finance investment spending.
Stimulus Programs Increase Consumption No Increase In Economic Output ...
So-called stimulus programs, at best, shift how national income is used so that more gets consumed rather than invested, but at noted earlier, there is no increase in overall economic output.
It is worth noting that government could finance new spending through inflation. Thankfully that option doesn’t seem to be on the table since almost all politicians now realize that it would be foolish to mimic the disastrous policies of basket-case economies such as Argentina and Zimbabwe.
The real-world evidence also confirms that Keynesianism is a failure. Indeed, it was a failure even before Keynes published *The General Theory in the mid-1930s. More recently, George W. Bush gave out so-called rebate checks in 2001 and 2008, yet there was no positive effect in either case. And Bush certainly was a big spender, yet that didn’t work either.
Not that this should be a big surprise. *Surveys of the academic literature reveal that even left-wing international bureaucracies are producing research showing that bigger government hurts economic performance by misallocating national resources.
The American Recession - Depression Experience
What is even more interesting is that if you look at the GDP output for the era, the US recovered by 1936-37 (including the pre-1927 growth rate) and was then hit with the price tag for all the New Deal starting in 1938 which caused a recession.
Combine that with the unemployment figures, however, and you get the result of each person employed being more productive, which is one of the effects of getting rid of inefficient businesses: those that survive or start-up with new manufacturing methods employ fewer people, but produce more goods at a lower cost.
When you get to WWII the New Deal retirement system kicks in just as the economy needs every worker of older age that it can get: from that you get the temporary tax benefit to private firms to offer health insurance, which was previously a ‘perk’ to high paid employees and executives.
That temporary relief became a permanent problem, so that we now spend more today, per person and adjuste for inflation, than our grand parents did on health care.
It isn’t that procedures are too expensive, it is that health care is subsidized which sets a minimum floor of pricing due to insured payments and government encouraging increases in payments through the government run health benefits plans.
It isn’t that so many people are uninsured (and what an awful way to pay for something) but that so many *are*. Insurance only works if a pay-out happens rarely - and that is not the case with health insurance… but then learning that subsidies cause over-use of whatever is being subsidized is something politicians love to ignore, across the political spectrum.
In spite of all the circumlocution and commotion by President Roosevelt, the 1930s President never came close to ending the depression economy. The massive deficit spending of World War II did end the depression economy and set it upon the road to postwar prosperity.
Consider World War II from an economic viewpoint. It was a huge public works operation financed by unprecedented deficit spending. It commandeered the productive capacity of this country and then destroyed this production in the battlefield. Why didn’t this bankrupt the country?
Theoretically, an operation like that should have bankrupted the country like a closed system business operation would have been bankrupted. (Fortunately, free-market capitalism at the macroeconomic level is open system.)
One can only imagine the derision and criticism had anyone of stature, in the 1930's, proposed such a program to end the depression economy. But there’s no denying that World War II deficit spending did do it.
Until one has a theoretical framework that can satisfactorily explain why World War II, not only did not bankrupt the country, but was the key factor in economic recovery — all one can do is bewail the problem without offering any solutions that will work *Open system perspective.
Its republicans, not democrats you need to convince of the truthfulness of this thesis. Its republicans who have been spending down the treasury for the past decade. That’s the whole reason they got their asses kicked in the past two elections. If we can’t depend on republicans to exercise some fiscal responsibility, then what are they good for?
Its the only reason that I tolerate all their incessant moralizing, their over-dependence on religion for their politics and their unending desire to get involved in the affairs of my bedroom. If they can’t control themselves when it comes to the budget, then they’re worthless. Which is exactly why they got their asses kicked. There are 700 billion reasons why they should be fired.
The depression didn’t end until 1946 or so. Ask anyone who lived through the war, or read any available history, and you will find that the citize4ns at home still didn’t have much. Rationing and scarcicty were still the order of the day. Aggregate cash flow numbers mean nothing.
The situation only got fixed when the wartime and other depression-era controls were lifted and after many trade limitations were listed.
We might also remember that the US could also sell to the rest of the world as many other countries could not because they were lying in ruins after the war.
In short, all WWII did was kill many millions of people, ruin the psyches of millions more, destroy untold amounts of wealth, and set economic progress back by a decade or more.
During WW-II, there was massive increase in destructive consumption, but also a massive increase in capital investments, the net result was a stagnant economy for the individual.
After the war, the capital investment was already in place, and the destructive consumption ceased. Individual productivity, forced upon the economy by manpower shortages, and amplified by the capital investment, rose to unprecedented heights.
We were able to sell our production for a profit instead of blowing it up.
The Fools Running The Federal Reserve
The half of Mr. Paulson’s 700B TARP funds which he’s already spent shoring up banks, including the one where he used to work, seems to have been vaporized already by short sellers. Too bad Mr. Cox is a fool on the subject of short selling and uptick rules. Maybe we should ask Robert Mugabe to take over at the Treasury, but then they seem to be following his policies anyway…print money.
After all, my fellow Republicans seem to have vaporized more wealth through ineptitude than Mugabe has by design. For what they’ve lost they might have purchased Uganda lock stock and barrel. Now the Democrats are going to try to outdue the present crop of nitwits. Throw money at the Big Three, now there’s a novel idea. Amtrack only managed to sublimate 13B in a decade. GM and Ford will easily go better in a quarter, or maybe even a month if they really work at it.
Ultimately, it was the increase in worker productivity, enabled by capital investment that ended the Great Depression.
Let us see how well worker productivity fares with stimulus checks drawn at the expense of capital investment this time around.
It has never worked before, but I hear that since the right people are in charge now, it is bound to work this time.
The only thing that is known to truly work is to lower taxes and help small business create jobs. Reagan had it right.
The Stock Market approves because capital starts to filter down into the economy, the government approves because they receive more revenue from increased production and consumer spending, and the people approve because they get to go back to work.
Government welfare programs don’t kickstart anything, they only seem to prolong a recession; FDR proved that! The prewar economy was characterized by excess supply side capacity versus demand (farmers dumping milk, killing livestock and burning fields).
The war economy was precisely opposite: due to war, more demand than supply thus rationing: so it is true the citizens still didn’t have much. But there was full employment with wandering hobos shanghaied off the streets to work in factories. The private economy greatly improved their equity position and when the war was over, with price controls lifted, there was a burst of inflation due to pent-up demand.
During deflation, when money supply is in a collapsing spiral due to debt deleveraging, the result is currency values soaring relative to other assets — the marketplace is saying that there is a shortage of dollars. This is nothing more than an imbalance in the supply/demand equation.
It is so simple to solve this problem that it seems to defy comprehension. Print money and introduce this cash flow into the private economy through tax rebates or cuts.
This would be just the same as if the US treasury owned a mine, with a shaft of solid gold, for use in an emergency such as this. If this doesn’t seem like it’s possible that the value ascribed to dollars is real those dollars could be buried and recovered through mining with the purpose of installing real value to the asset.
It is just as important to create money for price stability as it is to stop printing money for inflation.
The government can indeed create an asset to which the marketplace will ascribe full value. And this would not be a liability to be paying off with future cash flow.
The only thing the conservatives can offer is the inevitability of financial collapse in severe economic downturn from excess credit expansion. Just try selling this load of pessimism to the electorate. This is the conservatives’ Achilles heel in the current crisis.
The political party that allows this to happen will be tossed out of office and wander in the political wilderness for the next 40 years, if it doesn’t destroy the party.
Conservatives should (posthaste) support large rebate like cash flow into the private economy until asset prices stop declining and housing prices start levitating. At this point to crisis will be over because toxic mortgages will be tradeable.
Otherwise, the big government political class will offer the World War II argument for huge public sector spending that won’t end like it did when World War II was over.
This could end up to be a permanent entrenchment of liberal/leftist European-style ruling political class which would destroy our dynamic entrepreneurial economy. It’s much better to have this money in the private economy for investment and consumer demand — for much greater multiplier effect. This allows the economy to grow in the direction it ought to.
Unemployment remained very high throughout the 1930s and overall output did not get back to the 1929 level until World War II. But why did WWII end the depression? Oh, because government spending increased aggregate demand. That put the unused capacity of the nation to work.
Under serious recession/depression conditions deficit spending is indicated. The problem becomes it is addictive.
Fiat money inflation (temporarily) benefits only those who are first to get the new currency - the politicians and their friends. From there, as the purchasing power of the dollar declines, each successive receiver and holder of dollars gets successively more shortchanged for his past real labor and savings. This is why counterfeiting - whether legalized or not is always morally wrong; it’s theft!
Fiat does not create real sustainable, stable, reliable value; only production of real, not fiat, goods and services can create real wealth.
The Root of the Problem
This is the root problem of the mainstream modern economics profession: virtually no economist studies the root of economics - production and trade by individuals and corporations. They’re too busy studying consumption for the statistic folly of concocting ever more impossible schemes to centrally “plan” and manage” the flow of billions of individual trades.
When you accept money in payment for your effort, you do so only on the conviction that you will exchange it for the product of the effort of others… Destroyers seize gold and leave its owners a counterfeit pile of paper. This kills all objective standards and delivers men into the arbitrary power of an arbitrary setter of values. [like the FED] Gold was an objective value, an equivalent of wealth produced.
Paper is a check drawn by legal looters upon an account which is not theirs: upon the virtue of the victims. Watch for the day when it bounces, marked ‘Account overdrawn. We need to return to free banking and privately issued, competing currencies.
Then the quality of our money would be restored and its value would again be objective - set by millions of individual traders every day instead of by the whims of 12 Fed governors every 6 weeks.
Of course, the statistics demand a monopoly on the issue of currency because if they had to compete with REAL money, they be out of business in a week and their giant looting scheme would be over.
Under a free market, only reckless fools would take Federal Reserve IOU Nothings in payment for their hard work. Abolish the Fed.
What the government should be doing, is borrowing now, whilst the economy heads to recession, and increase spending in order to bolster consumer spending and investment, but then be taking the money out of the economy in the good times, the boom.
This way the two extremes of the standard boom and bust economic cycle are softened and the standard of living can still increase over time with recessions being shallower and shorter, and booms not being so dramatic and, increasing inflationary pressure.
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