PhD Economist: Fed has Caused Soaring Unemployment, Millions of Foreclosures, Millions Losing Life Savings and More than $6 Trillion in Lost Output

In endorsing the bill to audit the Fed, PhD economist Dean Baker wrote last week:

The country now has almost 25 million people who are unemployed or underemployed as a result of the Fed’s disastrous policies. Millions of people are losing their homes and tens of millions are losing their life savings. The country is likely to lose more than $6 trillion in output ($20,000 per person) due to the Fed’s inept job performance.

He forgot trillions in unnecessary interest payments (and see this).

The 75% of Americans who support auditing the Fed are right. Those calling for the Fed to be broken up or dissolved are even more right.

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  • http://classlink.lcusd.net/classlink/viewfiles.php?pid=4096 Carl Herman

    Excerpt from my brief, "The Heart of Economics," available by clicking my name. Literally, you do not have anything more valuable to understand:Cost-Benefit Analysis for Monetary Reform: Monetary reform would nationalize the Federal Reserve (this name is deceptive so the public would perceive it as a government entity) and retain its use for bank administrative functions. Fractional reserve lending would be made illegal, with the US Treasury having sole legal authority to issue new money for the benefit of the American public rather than the benefit of the banking industry. About 40% of the national debt is intra-governmental transfers and 10% held by the Fed; this debt would be cancelled as it becomes a bookkeeping entry with nationalization. Of the publicly-held debt of various parties holding US Securities, the US Treasury would monetize (pay) the debt in proportion to fractional reserves being replaced with full reserves over a period of one to two years to monitor money supply and avoid inflation. The governmental cost of this reform is negligible. The benefits are astounding: the American public would no longer pay $500 billion every year for national debt interest payments (because 40% of the debt is intra-governmental transfers, this is a savings of $300 billion/year). If lending is run at a non-profit rate or at nominal interest returned to the American public (for infrastructure, schools, fire and police protection, etc.) rather than profiting the banks, the savings to the US public is conservatively $500 billion. If the US Federal government increased the money supply by 3% a year to keep up with population increase and economic growth, we could spend an additional $400 billion yearly into public programs or refund it as a public dividend. This savings would allow us to simplify or eliminate the income tax. The estimated savings of eliminating the income tax with all its complexity, loopholes, and evasion is $250 billion/year. The total benefits for monetary reform are conservatively over a trillion dollars every year to the American public. One trillion is $1,000,000,000,000. To give you an idea of this amount, imagine a new stack of $1 bills. New bills are about 200/inch. Imagine if you laminated bills in a horizontal stack; this would be the same size as a 2×4 board. Now imagine that this board of money was to travel on the 210 Freeway beginning at the Oak Grove on-ramp heading east toward Pasadena. How far would the money-board go to equal $1 trillion? All the way to PCC? To Phoenix? Make your guess, then check the footnote. The private sector economic costs of monetary reform are transfers of wealth from the banking industry to the American public. The replacement would be either non-profit banks operating as needed with minimum public cost such as fire departments and the postal service, for-profit banks lending time-deposits in regulated free-market competition, or a hybrid of the two (perhaps with government mortgages at a non-profit rate of 1%).Monetary reform stops 95% of the current increase of the money supply through fractional reserve banking, and redirects it for direct payment of taxes for public goods and services. Each dollar transferred from bank creation to public benefit is one dollar less in public tax payment.

  • http://www.blogger.com/profile/18004113361843794058 RealEstateGuy

    Wow. And to think that I wrote the same thing over a year ago. More importantly, I have also come up with a solution that would address the mortgage "situation" in a free market manner. In addition, my system has within it the potential to subvert and replace the fed banking system with a community based and commodity based banking system that would be immune from political tampering and completely transparent. http://www.dnusbaum.com/fix.htmlAnd if you want to see the root cause of or gradual losses offreedom, then try thisI hope to start a discussion on the true nature of the problem, and it is not some conspiracy. It is us. — At least I think that it is.Orwell's Boot: our inevitable? descent into tyranny>From the book 1984"If you want a vision of the future, imagine a boot stamping on a human face – forever."To paraphrase Sun Tzu: If you do not know the nature of the problem you are dead meat. Please go here, read and comment I would like to start a discussion among people who agree that we do not know why more people do not want freedom, and how we may address the problem of growing government and eroding freedoms.Here are some ideas to remember.If (an agency of) the government can tell you what drugs not to take, it can tell what drugs you must take.If (an agency of) the government can tell you when and where to pray, it can prohibit you from prayingIf (an agency of) the government can tell you you can not have an abortion, then it can tell you that you must have an abortion.If (an agency of) the government can tell you who you can not marry, it can tell you who you must marry.If (an agency of) the government can tell you who you can not have sex with, then it can tell you who you must have sex with.All of these agencies consume our resources, and produce nothing useful.http://factotum666.livejournal.com/829.html#cutid1

 

 

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