Posted by: thefinancedude | March 28, 2008

BSC Bailout

Is any other taxpayer out there paying attention to politician’s intent on bankrupting this great nation? I’m not the sharpest tool in the shed, but I can read.  Worse, I can read a lot and comprehend most of it.  Apparently I’m ahead of just about everyone else then because what the Federal Reserve Bank has done by backstopping the Bear Stearns deal is a complete and utter violation of the Constitution. 

I know the Constitution is SO boring it’s almost a waste of our time to discuss, right?  Article one section eight outlines the financial arrangement between government and the people.  The three separate branches don’t share equal power and Congress is the only one allowed to appropriate monies. That is, until they authorized the Fed in 1913 to take over handling the supply of money.  For every dollar you have in your pocket, it is intrinsically worth less than face value. Let me explain. 

The Treasury authorizes Treasury bond sales to the Fed in clear violation of the Constitution.  The FED prints up money in exchange for a piece of paper that yields interest income from the Treasury. If the Treasury, that is the taxpayers, are in need of money, they are BORROWING it from the FED, not coining it as outlined in Article one, section eight. So your dollar in your left pocket is really only worth the face value minus the interest cost. Ever wonder why inflation exists? This money is no longer tied to ANYTHING of value and therefore is fiat – printable at the discretion of politicians and private bankers. 

By bailing out BSC, the FED has authorized an appropriation on behalf of American taxpayers without Congress even wincing. The executive branch, through the Treasury, has declared they have the power to appropriate our tax dollars.  So let me get this straight…A private bank and the executive branch has authorized tax payer money to be spent in complete violation of the basic framework PROTECTING citizens FROM government.  Go back and read the PURPOSE of the Constitution to understand why this is such a magnanimous event. 

Every member of Congress has taken the oath of office declaring to defend the Constitution.  Obviously CONgress hasn’t held up to their oath and it’s the citizens’ fault.  We are deluded by our own grandeur and have lost our focus.  The easy answer is to claim nothing is wrong so when the smoke clears, culpability will be shared by everyone equally and used as justification for failing to act. It’s time we all begin tuning out the sound bytes and we start tuning into the facts.  The fact is fiscal year 2006 interest payments on our national debt cost us $406 billion.  The operating budget of the government in the same year was $2.5 trillion.  We’re spending nearly 20% of our operating income on servicing debt and have NO plan on paying it back.  Can you get away with that?

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