John Williams described the Greenspan/Clinton conspiracy to defraud Americans as this:
"The Greenspan argument was that when steak got too expensive, the consumer would substitute hamburger for the steak, and that the inflation measure should reflect the costs tied to buying hamburger versus steak, instead of steak versus steak. Of course, replacing hamburger for steak in the calculations would reduce the inflation rate, but it represented the rate of inflation in terms of maintaining a declining standard of living. Cost of living was being replaced by the cost of survival. The old system told you how much you had to increase your income in order to keep buying steak. The new system promised you hamburger, and then dog food, perhaps, after that. Over a period of several years, straight arithmetic weighting of the CPI components was shifted to a geometric weighting. The Greenspan benefit of a geometric weighting was that it automatically gave a lower weighting to CPI components that were rising in price, and a higher weighting to those items dropping in price."
Now we hear the latest bipartisan plan to "save" Social Security is to alter the CPI again and further defraud Americans by pretending inflation does not exist. Why address a problem when you can obfuscate, misinform and lie? Anyone with critical thinking skills can clearly see that since 2007, real inflation for our widow has ranged between 5% and 10% while her subsistence level income has been slashed by 26% due to Ben Bernanke's zero interest rate policy. The good news is, our widow will have the peace of mind knowing the price of steak and hamburger hasn't really risen as she decides on whether to dine on dog food or cat food tonight.
"Government spending is always a "tax" burden on the American people and is never equally or fairly distributed. The poor and low-middle income workers always suffer the most from the deceitful tax of inflation and borrowing." -- Ron Paul
The Road to Impoverishment & Authoritarianism
There is a direct connection between Federal Reserve policies and the impoverishment of the middle class and seniors. The average American does not appreciate the disastrous consequences of deficit spending and currency devaluation by the Federal Reserve. Ron Paul has been sounding the warning for over a decade, but no one has been listening:
"The greatest threat facing America today is the disastrous fiscal policies of our own government, marked by shameless deficit spending and Federal Reserve currency devaluation. It is this one-two punch -- Congress spending more than it can tax or borrow, and the Fed printing money to make up the difference -- that threatens to impoverish us by further destroying the value of our dollars."
It is no longer a threat. It is reality. The chart below tells the story.
The Federal Funds rate was 6.5% when George W. Bush assumed the presidency in 2000. The economy was booming, unemployment was 4.2%, the country was running fiscal surpluses, and the National Debt stood at $5.7 trillion. Alan Greenspan was the Federal Reserve Chairman and had been in that position since 1987. The Federal Funds Rate averaged 5.25% from 1990 through 2000, as the country grew strongly and America came the closest to full employment in its history. In 2001, Greenspan set in motion the creation of a tsunami of debt that swept over the entire country in 2008. The short shallow 2001 recession convinced Greenspan to reduce rates to 1% and keep them below 3% until the middle of 2005. He did this with the full support of his right hand man at the Fed -- Ben Bernanke.
"The failure of Chairman Greenspan and other FOMC members to address the fiscal and monetary problems of the United States during his almost two decades at the Fed has left the United States on a trajectory for economic stagnation, hyperinflation, and the attendant political and social costs of such policies." -- Chris Whalen - Inflated -- How Money & Debt Built the American Dream
Greenspan kept interest rates excessively low three years into an economic recovery, creating the largest bubble in world history. He handed the inflation baton to Bernanke in February 2006, and Ben has been sprinting at top speed for the last five years. printing money faster than a Japanese bullet train. With a true rate of inflation running between 5% and 10% during the 2000-2011 time frame, market driven interest rates should have been in that same range. But Alan and Ben have kept the Federal Funds rate at an average level of 2.25% over this period. The result has been a consumer debt bubble, housing bubble, and now a government debt bubble. Instead of accepting the consequences of excessive liquidity, excessive debt and mal-investment by the Wall Street banks and liquidating the toxic poison from our economic system with the resulting economic depression and losses borne by the stockholders and bondholders of the criminal Wall Street enterprises, Ben Bernanke and Tim Geithner chose to sacrifice the American taxpayer, savers, and seniors to keep their Wall Street masters in their NYC penthouses and Hamptons estates.
The shrieking liberal left blames capitalism and demands more social welfare benefits for their entitled constituents. The fact is we have not had true capitalism in this country since 1913.
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