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“The Wealth of a Nation is in How it Redistributes That Wealth” by Justaluckyfool

August 24, 2012
“Justaluckyfool”, Perhaps the answer lies in how you redistribute the wealth of a nation; as well as how you acquire it.
I would like to start this paper  with the following comment:  “this may generalize using so-and-so’s theorem or what’s-his-name’s method….”. Consider it a gift to the… person who reads … this  paper and wants to prove something new.”(comment I read by Cathy O’Neil “mathbabe”)
Perhaps the answer lies in how you redistribute the wealth of a nation; as well as how you acquire it.

“Great News !! Zero Federal Personal  Income Taxes Solves Worldwide Economic Crises” 

“Don’t End The Fed, Amend The Fed”

Summary
To lower taxes,you must raise revenue somewhere.How does a government fund, “a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity,…””  at the same time  reduce federal  personal income taxes to zero ?
The answer lies in not how the most powerful force in the universe is used ,rather how you redistribute what it creates !
albert einstein“The most powerful force in the universe is compound interest” –(This quote,upon research seems not to have been by  Albert Einstein, also another one , ” The greatest mathematical discovery is the RULE OF 72.” ,if in fact they are not valid quotes, please consider the validity of the statements regardless of who may have been the first to say them. Perhaps Einstein may still be quoted for using the concepts in gaining his  solutions. ”
We cannot solve our problems with the same thinking we used when we created them”.Albert Einstein
WHERE WE WENT WRONG:
ONE:
Possible $1 quadrillion in “potential currency” was created by the financial institutions leading up to the crisis of 2007-8.
WHERE WE WENT WRONG.
TWO:
Private debt bubble.
The Debtwatch Manifesto by Steve Keen (Jan 3rd, 2012)
“The fundamental cause of the economic and financial crisis that began in late 2007 was lending by the finance sector that primarily financed speculation rather than investment. The private debt bubble this caused is unprecedented, probably in human history and certainly in the last century …. Its unwinding now is the primary cause of the sustained slump in economic growth. The recent growth in sovereign debt is a symptom of this underlying crisis, not the cause, and the current political obsession with reducing sovereign debt will exacerbate the root problem of private sector de leveraging.”
WHERE WE WENT WRONG:
THREE:
Financial institutions allowed to create “currency”.
How the Banks Broke the Social Compact, Promoting their Own Special Interests
“The inherently symbiotic relationship between banks and governments recently has been reversed. In medieval times, wealthy bankers lent to kings and princes as their major customers. But now it is the banks that are needy, relying on governments for funding – capped by the post-2008 bailouts to save them from going bankrupt from their bad private-sector loans and gambles.
Yet the banks now browbeat governments – not by having ready cash but by threatening to go bust and drag the economy down with them if they are not given control of public tax policy, spending and planning. The process has gone furthest in the United States. Joseph Stiglitz characterizes the … vast transfer of money and pubic debt to the banks as a “privatizing of gains and the socializing of losses. It is a ‘partnership’ in which one partner robs the other.” Prof. Bill Black describes banks as becoming criminogenic and innovating “control fraud.” High finance has corrupted regulatory agencies, falsified account-keeping by “mark to model” trickery, and financed the campaigns of its supporters to disable public oversight. The effect is to leave banks in control of how the economy’s allocates its credit and resources.
If there is any silver lining to today’s debt crisis, it is that the present situation and trends cannot continue. So this is not only an opportunity to restructure banking; we have little choice. The urgent issue is who will control the economy: governments, or the financial sector and monopolies with which it has made an alliance.
Fortunately, it is not necessary to re-invent the wheel. Already a century ago the outlines of a productive industrial banking system were well understood. But recent bank lobbying has been remarkably successful in distracting attention away from classical analyses of how to shape the financial and tax system to best promote economic growth – by public checks on bank privileges.

Governments can create new credit electronically on their own computer keyboards as easily as commercial banks can. And unlike banks, their spending is expected to serve a broad social purpose, to be determined democratically. When commercial banks gain policy control over governments and central banks, they tend to support their own remunerative policy of creating asset-inflationary credit – leaving the clean-up costs to be solved by a post-bubble austerity. This makes the debt overhead even harder to pay – indeed, impossible.

It is too early to forecast whether banks or governments will emerge victorious from today’s crisis. As economies polarize between debtors and creditors, planning is shifting out of public hands into those of bankers. The easiest way for them to keep this power is to block a true central bank or strong public sector from interfering with their monopoly of credit creation. The counter is for central banks and governments to act as they were intended to, by providing a public option for credit creation.Read more..by Prof. Michael Hudson ; http://www.globalresearch.ca/index.php?context=va&aid=28938
WHERE WE WENT WRONG:
FOUR:
The most powerful force in the universe is being used against mankind,rather than for the benefit of mankind.
“…. The Mathematics of Compound Interest (Michael Hudson)
A syndicate of less than one hundred American capitalists, if allowed to collect interest on their capital at a low rate and re-invest for 150 years or less, would at the end of that time own the earth and all real and personal property thereon. This is a simple mathematical proposition, capable of exact demonstration, and any one who doubts the truth of this statement may set all doubts at rest by computing compound interest on one and one-half billions of dollars for one hundred and fifty years, at five per cent per annum.
…Flürscheim elaborated that “All exertions, all improvements in the methods and tools of labor, the strictest economy, the severest self-denial, are powerless to compete with the rapidity of self-increase possessed by capital placed at compound interest, and they cannot keep up with its demands.” To illustrate the dynamic at work, he composed an allegory (pp. 327ff.). Many ages after man was driven from Paradise and told “to earn his bread by the sweat of his brow, mercy began to prevail. A loving angel was sent down by the Great Master, charged with the task of lightening the burden. The angel’s name was Spirit of Invention. He began his work by teaching man to make useful tools” and tame animals, and in time to mobilize water power, air and wind power, fire and steam power to drive machinery.
“It seemed that at last the golden era had come of which men had dreamed for ages past,” but “that envious spirit, that fallen angel, Satan,” was jealous that his own empire would soon be over for ever. Among the follies of man, one little imp, called Interest, managed to attract his attention. “‘What is the matter with you, Interest?’ he asked the saucy imp. ‘You don’t seem to be so dejected as your comrades are?'”
“‘Why should I be dejected, master?’ replied the spirit, ‘Am I not one of your favorite soldiers? Haven’t I always been victorious under your august guidance?'”
But Satan answered sadly, “Alas, You are no match for the Spirit of Invention.” The Interest imp, however, volunteered to demonstrate his prowess in a dual, helped by his son, Compound Interest.
At this point, Flürscheim introduced an image that Napier had suggested at the outset of his second book on logarithms in 1617, the Robdologia, likening the principle of geometric increase to that of a chess-board on which each square doubled the number assigned to the preceding one. An old Persian proverb told of a Shah who wished to reward the inventor of chess, a subject, and asked what he would like. To the Shah’s surprise, the man asked “as his only reward that the Shah would give him a single grain of corn, which was to be put on the first square of the chess-board, and to be doubled on each successive square; which, to the surprise of the king, produced an amount larger than the treasures of his whole kingdom could buy. It is this kind of chess-game which capital is continually playing with labor.” The remarkable growth of compound interest soon swallowed “products, capital, the earth and even the workers.”
This was in essence the ploy that Flürscheim’s Compound Interest demon used. “Look at this chess-board,” he told the angel against whom Satan had pitted him. “It seems just like any other chess-board, with sixty-four squares,” but it “had the peculiar quality of extending the dimensions of the squares, so as always to be large enough” to hold whatever was placed on them. Instead of asking for grains of wheat to be placed on them, the Interest Imp asked for soldiers. “Now, listen well to what I propose,” he said to the angel, pointing to the latter’s huge army.
I enter the first square with my son, and you match one of your warriors against us. We enter the second square doubled in number; you send two more warriors – and so on every succeeding square. . . . When we arrive at the last square, and you have a single soldier left after occupying the same, we shall declare ourselves vanquished, and Satan with all his troops will leave this world for ever. If I win, you and your army are to be at the commands of my master. Are you agreed?
The angel agreed, expecting his horde of soldiers to easily exceed the number that the Interest Imp and his son, Compound Interest, seemed likely to accrue.
In the beginning the angel laughed, for, though twenty squares were passed, no noticeable diminution of his forces was perceptible. Demon Interest said nothing, but attended to business, quietly doubling his army on every succeeding square. At the thirtieth square the angel ceased to laugh, and soon saw he was lost.
‘I despised you, little fellow,’ he signed despairingly, ‘and I am punished for my vanity. I see there is no use fighting against you. Demon Interest is more powerful than the Spirit of Invention. I am your slave. Command your servant!'”
Justaluckyfool’s comment:(THIS IS THE TIPPING POINT ! (Where we went wrong)
‘I am the only servant of my great master,’ dryly replied the demon.
“Here I see him coming. He will give you his orders.’
And Satan gave his orders. He commanded that the angel was to continue in his work with all his troops, which were to be increased with all possible exertion, so that humanity – which did not know the nature of the antagonist it had to fight against – would always keep in fresh hope of final success when the new troops were forthcoming. But as fast as they appeared, Demon Interest was to send forth a larger army to capture the new forces, to enslave them, and – instead of their benefiting man – make them increase the slave-chains which weigh him down.
Justaluckyfool’s comment:WHAT IF DEMON INTEREST WERE TO ANSWER? (How we can fix it).
I will now be the servant of a new master,one that will pursue happiness for all mankind.”
“HOW THE MOST POWERFUL FORCE IN THE UNIVERSE” COULD BE USED TO PUT MANKIND INTO SERVITUDE OR UTOPIA !
Where we went wrong:
Fractional Reserve Banking,allowing private institutions to “print” our money ,which then allows them to charge compound interest on that potential money.
THEREBY MAKING PRIVATE FINANCIAL INSTITUTIONS MORE POWERFUL THAN THE SOVEREIGN NATION.
If it were possible to sum up the single greatest flaw to capitalism ,it would be :It allows for the “most powerful force in the universe”…”compounding  interest ,” to be used against that society.The lender becomes the owner of all the money based upon the act of compounding at any rate within a long period of time.
A cycle that commands total money control or it must bust. When will we learn and believe that a private bank is allowed to print new money and to leverage their “fictitious loans” ,Ten,twenty,even fifty times over. As Frederick Soddy says,”There are two types of loans” :
One, a” genuine loan”, one that is 100% backed by currency backed by goods and services that are given up by its owner for the purpose of the loan. As no two people will have the same demand on the one quantity.
Two, a “fictitious loan”, one that a second party makes to a borrower from currency (goods or services) that may or maynot be in storage  and the owner does not give up the demand rights for that currency. Thereby counterfeiting a second demand on that quantity.
SOLUTION:
ONE. AMEND THE FEDERAL RESERVE CHARTER; TURN THE FED RESERVE INTO THE FEDERAL RESERVE BANK OF AMERICA (FRBA),RESTORE MONETARY POWER BACK TO THE PEOPLE ,OPERATE THE FRBA WITH ABSOLUTE TRANSPARENCY, (“GLINDA,the Good Witch, owns a Great Book of Records that allows her to track everything that goes on in the world from the instant it happens.”_The Road to Oz)
ESTABLISH THE FRBA AS THE ONLY MEANS FOR MONETARY SUPPLY,ALL OTHER INSTITUTIONS MUST MAINTAIN 100% MARGIN ON ALL INVESTMENTS.
TWO:ESTABLISH A ZERO FEDERAL PERSONAL INCOME TAX.
INTEREST INCOME (REVENUE) WILL REPLACE PERSONAL INCOME TAX REVENUE.
The Federal RESERVE Bank of America,make it the melting pot for Federal Reserve.,FDIC,FHFA,and the GSE’s,Fannie,Freddie,Ginnie and Sally, as well as the IRS.These organizations will be needed to service the federal loans.
All loans by any financial institution must be backed with 100% reserves.No more Fractional Reserve Banking.No more production by private banks of this Monetary Sovereignty’s currency.All loans may be used as assets for borrowing from The FRBA so that they comply with the 100% reserve. Any loan that is not in compliance must be sold to the FRBA or the financial institution would be placed into receivership.
 Private banks will have to be self-insured. Risk 100% their own investors money for 100% reward.
It will be operated by the people,of the people and for the people”.THE FEDERAL RESERVE BANK OF AMERICA will be the source for the American borrower to acquire funds and the interest paid shall be revenue income to be used as funding of their government agenda,for the general welfare.
THE FEDERAL RESERVE BANK OF AMERICA will issue new currency in the form of loans that will bear interest thereby allowing control of the quality and quantity of the currency.This central bank  they will be the maker of these loans and will retain all profits. Profits which by law will be turned over to the US Treasury,as funds for Congress for government appropriations.
The Federal Reserve Bank of America:
-SHALL  no longer allow the paying of interest for the use of its own money,rather it will charge interest for the use of its money..
-SHALL  take away from others the right to “print” our own currency.
-SHALL   realize that “There is only one fair rate for federal income taxes;only a rate of  zero is fair.
-SHALL  not take deposits from anyone other than for the US Treasury.
-SHALL  not be involved in any financial investment services.
-SHALL  Any financial institution that wishes to loan American Dollars ,those dollars must be acquired (read borrowed) from the Federal Reserve Bank of America,as all loans must be backed with a 100% reserve from either dollars on hand or borrowed from the FRBA.
FRBA  SHALL purchase ALL residential and commercial REAL ESTATE loans outstanding at full balance owed.Any private lender may retain any loan it has by simply showing 100% reserve.
The American people will be the lenders and no longer will they be the victims of private greed of those printing our own money..No longer will they allow the banks that they have entrusted with their money to use that money to make profits for themselves .Profits will be made by the people,of the people, for the people. Taxpayers bailout for Taxpayers by Taxpayers paying compounded interest to Taxpayers . These loans would provide trillions of dollars as TAXPAYER PROFIT (REVENUE)!
Compound interest will cause any amount to double over a certain period of time.This doubling alone will provide an enormous income stream. If loans are made for $100 trillion,the incoming payments would exceed $5 trillion a year for 36 years @2%. What a magnificent way to fund a government.
Since the FRBA will be taking back all currency issued,it would be absolutely necessary to redistribute most if not all over a period of time.(If not ,then the debt would be UN PAYABLE).
As Einstein said,”Make it simple.”
“TERMINATE THE STUPID PRACTICE OF PAYING INTEREST ON OUR OWN MONEY TO PRIVATE BANKS .A PRACTICE THAT CAN ONLY END WITH A FINANCIAL BUST” Ellen Brown (web of Debt), OR SERVITUDE !
The next wave of stuff that will hit the fan may be the “CRISIS in the derivatives market” if you think stuff was “too big to fail” before,join me in sleepless nights knowing the derivatives market is more than $800 trillion ! ! That’s $800,000,000,000,000 !
If $1 quadrillion is needed,better yet,that would produce(2% for 36 years) an income for “We the People” of over $55 trillion a year .WITH NO INFLATION (it would be an asset purchase, not disposable income) and $55 trillion a year would be vacuumed out of the economy each year ($55 trillion) with only needing to use a portion for funding for the general welfare and the remainder for quality and quantity control of the currency. as well as making new loans.No inflation,no new bubbles (with 100% margin, a greater fool would not be able to continue the escalation needed to fuel the bubble,plus who would be willing to take the risk using “just their own money”..
MUST IMPORTANT it will allow the financial institutions to de leverage their now 100% margin assets over 36 years,thereby preventing a ” burst”.
It will prevent a “crack- up-boom” because the “created potential money” will not be available for circulation,it will be needed to payback the loans, since they would be otherwise un payable.
The final collapse,as stated by Ludwig von Mises,
“There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of the voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.” — Ludwig von Mises
THE MEANS OF AVOIDING THE FINAL COLLAPSE !
Back the credit with 100% of borrowed dollars,allowing the financial institutions to de-leverage at a cost of 2% for 36 years.Prevent collaspe and at the same time serve a new master-“We The People”
Make the potential currency real with an attached means for recovery over a period of time.Make the bubble whole, so that it can be disintergrated slowly over time.
THE PEOPLE’ S CHOICE:
Total catastrophe
or
ZERO Federal personal Income Taxes.
When will we show our leaders,
(as stated on ” 60 minutes” (12/11/11)”
President Obama said,”You can’t raise revenues by lowering taxes unless you get the money from somewhere else.” ?
YES, JUST COLLECT INTEREST ON OUR OWN MONEY, INSTEAD OF TAXES !
The Federal Reserve Bank of AMERICA will be agency for the Federal Reserve Charter and will be mandated to preserve the quantity and quality of the US Dollar and to provide Congress with funding for the general welfare,life,liberty and the pursuit of happiness
Just like that ,we the people may just have solved our;
financial crisis (read loan the financial institutions the money to unwind their derivatives to 100% asset based with a rate of 2% for 36 years.) ,
housing crisis (read modify all loans that are purchased from the lenders AT FULL REAL BALANCE modify with a rate of 2% for 36 years.Very low and affordable payments (@ $460/month/$100,000) on an assumable mortgage. READ,how this will make a gigantic increase in revenue for the taxpayers, and replace  income taxes.Read how can we prove that the purchase of $51 trillion of REAL ESTATE LOANS with a FAIR VALUE of maybe just $30 trillion would give the taxpayers a revenue income GREATER than the $51 trillion.
THE ANSWER AS EINSTEIN SAYS, “KEEP IT SIMPLE”,
is in the “magic” of that “most powerful force in the universe”.
It allows for the borrower to be willing to pay off the higher amount in order to gain the asset and eventually actually increase the value of the asset.
E.G., A loan with todays terms and conditions on a home that has a balance of $200,000 on an asset that is valued at $100,000 with a payment of $1,200 per month (6%rate). Why pay it ? If the loan is for 30 years you would have to pay in $560,000. Plus no one would want to get you out of that nightmare mortgage.
But if you take that same loan, $200,000 on that same value $100,000 with a payment of $920 per month (2% rate/36 years)with an assumable mortgage you create an instant “$200,000 ” asset value ,because any one  would be willing to pay $960 a month for that home and more if rates go up because the assumable mortgage guarantees a payment of $960 per month no matter  how high interest  rates go !. Plus if rates increase, they would pay you some added cash for that “mortgaged home” ! PLUS there is the added bonus that “We The People” receive a payback of $400,000 ,double our investment…..!!!!!
  • ….,monetary crisis (read pay off our debt at a rate of 10% or 10 equal payments per year,by using the income generated by The Federal Reserve Bank of America’s interest (revenue) bearing LOANS.This would be a symbolic gesture since really we could pay off the debt with a click of a computer.
  • …,Other nations monetary crises could be resolved by LOANS from the WORLDS RESERVE CURRENCY  BANK.Establish a pool of $10 trillion available to any other country to de leverage at a rate of 2% for a term of 36 years. Also funds would be available for commercial loans that would improve employment and growth for 1% with a 6 year term that would have first payment due on 1 year anniversity date.
  • We must however always be mindful of change and enforce TOTAL TRANSPARENCY in all transactions.
  • WE NEED TO CHANGE THE PRESENT SYSTEM AND START ON THE PATH OF A GREATER PROSPERITY.
    SOLUTION TO FINANCIAL,HOUSING, MONETARY CRISIS AND CREATION OF MILLIONS OF JOBS (READ BUSINESS LOANS MADE AT 1% FOR 6 YEARS with no payment due till 1 year anniversary date.The terms and rate will vary depending upon each sectors need.) IMMEDIATELY AT NO COST TO THE TAXPAYERS;RATHER AT A PROFIT (READ INCOME) TO THE TAXPAYERS.
    The FRBA shall control the money supply by setting terms and conditions for the loans,thereby fulfilling their mandate to control inflation,deflation,and stagnation. .Affordable loans at low rates and longer terms ( 2012 residential real estate loans would be at 2% for 36 years as rates will be changed depending upon economic conditions .2012 Business loans would be at 2% for 6 (six) years with no payments for the first year.)This would create at least 4 million jobs immediately and may even reduce the unemployment rate to under 4% within that year by creating the jobs and homes and products needed for this new prosperity that would be a result of this new monetary policy.
    The Federal Reserve Bank of AMERICA will replace the Federal Reserve and will be mandated to preserve the quantity and quality of the US Dollar and to provide Congress with funding for the general welfare,life,liberty and the pursuit of happiness
    AMERICAN GOLD.
    The American Dollar will be based upon THE AMERICAN TREASURE (“ITS GOLD”) !
    That is the full faith and credit of the American people backed up by the US Constitution and all assets physical and intellectual…
    Americans ” shall and will pay all debts,foreign and domestic.”
    The American people are BETTER THAN GOLD, and have tremendously more assets then the worlds gold. Why would we limit our future to only a single metal ?We have all the elements as assets that are greater and in more abundance than gold as well as  intellectual assets that are limitless,why trade them for such a finite amount of gold,gold that is already owned by others?
    Ben Franklin,Thomas Jefferson,and many more used this method ,the lending of taxpayers money , to start the colonies on the road to financial success. Then the lender banks took it away from the people by having legislators replace the practice allowing them to make the loans (make our money) and keep the interest for themselves,and at the same time guarantee that they the lenders get paid. We the people will no longer pay interest for the use of our own money,or guarantee lenders that they will be paid interest on our money for making loans.
    To insure the funding of this great society and insure prosperity there would be a great stream of income:
    (INTEREST FROM DOLLAR LOANS.):
    Lets use a start figure of $51 trillion in loans,that which is already in circulation.(guesstimate,hope it is more)It will go on the balance sheet as $51 trillion loan assets. This asset will double every 18 years….1 X 18 = 102 trillion,2 X 18 =204 trillion.
    Private Banks will be the only source for deposits and savings. Private Banks will no longer be allowed to do fractional banking . All loans will require 100% deposit backing. PRIVATE BANKS WILL BE ENTITLED TO THEIR PROFITS SINCE THEY WILL BE RISKING THEIR OWN MONEY AND MONEY THEY ARE INSURING THEMSELVES. Banks may borrow from The Federal Reserve Bank of the United States of America (HOPE THEY NEED ANOTHER $51 TRILLION) and use that borrowed money for their own account for their own investing;at the prevailing rate and terms.(2012 would be 2% for 36 years)  NO MORE FREE RIDE !( Some say they may need over $200 trillion to unwind their derivatives, and yes we could do international lending.)
    Good-bye income taxes as they are known today.
    CAUTION: They will try FEAR tactics to keep US away from our rights. Remember ,”We have nothing to fear but fear itself”
    They will use the fear producing words,”inflation, hyperinflation, stagnation”.
    You can answer with the words,”I will not be enslaved by the most powerful force in the universe because we the people can use that most powerful force for the betterment of mankind and prosperity.”
    We the people can use that “most powerful force in the universe to control inflation,hyperinflation and stagnation “! !
    We the people will deal with the present possible economic tsunami,one tidal wave at a time .
    WE THE PEOPLE MUST TAKE CONTROL OF THE MOST POWERFUL FORCE IN THE UNIVERSE AND USE IT FOR THE BETTERMENT OF MANKIND, OR WE SHALL PERISH !
    -WE NEED:
    TO CHANGE OUR ELECTED CHOICES!
    TO GET THOSE ELECTED TO OFFICE TO AGREE TO THE ONE MOST IMPORTANT ITEM OF CHANGE;THEY WILL ENDORSE THE “AMEND THE FEDERAL RESERVE CHARTER,THE NEW INCOME TAX OF  ZERO PERCENT, ( 0% )
    May “The Invisible Hand” continue to bless America.
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