<schoenfeld.one@gmail.com> wrote in message
news:1159233790.633929.297330@m7g2000cwm.googlegroups.com...

The Trucker wrote:

<schoenfeld.one@gmail.com> wrote in message
news:1159138759.241695.101940@i42g2000cwa.googlegroups.com...

The Trucker wrote:

While it may well be true that, due to Republican tax cutting, all the
proceeds of income taxes are now being used to pay the bondholders,
that is absolutely NOT the FED.

http://www.apfn.org/apfn/reserve.htm

If there is something in this very long dissertation that refutes what I have
said below then perhaps you could point it out right here.

#1: The interest does not go back to the govnerment, it gets reimbursed
to the member banks. The government gets a small portion.

If the member banks are holders of T-Bills or other government
debt instruments bought on the open market then these banks will
receive interest just as any individual would. But do not confuse this
with the initial funding of the Treasury accounts to allow the government
to spend money into existence. That "loan" is of very short duration
and it is repaid with tax collections and T-Bill sales on the open market
by the Treasury. It is the interest on this very short term loan that is
collected by the Fed and then refunded to the Treasury.

#2: The notion that a government needs to borrow money from a private
corporation (which is what the Fed is), who creates money out of thin
air, and then loans it out at an interest, is a characteristic of the
thorough brainwashing prevalent in academia (especially in financial
circles). Do you need to borrow money in order to cut a loaf of bread?
Do you need to borrow money in order to eat that loaf of bread?

This is a point with which I will most certainly agree. It is silly for the
Fed to loan the initial money into existence in the first place even if the
interest is refunded. I guess it is some sort of religious thing with the
banker types. The fed makes no money doing this and the loans are
very quickly repaid by the Treasury through tax collections and T-Bill
sales.

#3: The constitution is very clear and the powers of coining money are
reserved soley for the congress, NOT a private corporation called the
federal reserve bank, NOT a bunch of international bankers who expand
and contract the money supplies to empoverish nations and buy up all
the wealth.

And I also agree with this point (sorta). The proper question is: Why
do we let banks create money from thin air when there is more than
ample money already in circulation? What if we insisted that the US
government would no longer pay any interest on any Government
debt; insisted that all of this debt must be cashed in into the banks
and then all of that money used in a 100% reserve system to do
"speculative" loans such as real estate loans and credit card purchases
and the like. The bond holders would still get paid but they would
get their interest from the real economy as opposed to getting it from
the government. And the banks would have to run an honest S&L
system. But this would not be true for non-speculative loans where
good collateral was involved:

http://GreaterVoice.org/essays/credit.php

As you say, the gummint gets the
money from the Fed and the Fed does, in fact, create the money from
thin air and loan it to the gummint. That part is true enough, but once
the money is placed into circulation (i.e. in the hands of the rich
people) then the Treasury sells T-Bills to those folks and uses the
proceeds of these sales to repay the Fed. And at the end of the
year all of the interest paid to the Fed is refunded to the Treasury.
It is the rich bondholders that suck the common people dry; not
the Fed. Ask yourself how many people that work at burger flipper
jobs are buying T-Bills. The objective of the Bush Republicans is
and always has been to bankrupt the government and thus kill it,
leaviing a caste of nobility to, in league with the church, rule the
land with an iron fist. Republicans HATE freedom, liberty,
justice, and democracy.

--
"I know no safe depository of the ultimate powers
of society but the people themselves; and
if we think them not enlightened enough to
exercise their control with a wholesome
discretion, the remedy is not to take it from
them, but to inform their discretion by
education." - Thomas Jefferson
http://GreaterVoice.org