Call or Email your Congressman Today

[Panzerfaust]

I urge us all to let these bastards know we disapprove of this
UNCONSTITUTIONAL bill. First it was $700 BILLION which failed, so they
go back and add even more on it making it $850 BILLION....who has $850
BILLION? America sure doesn't...this is being printed out of thin air
and will further destroy the purchasing power of the dollar. All it
takes is an email or phone call, I am going to email using Ron Paul's
basic outline message below. It won't take a but a minute to send this
out to every representative in your state. Use the link below to find
them. Let's get off our asses and do something for a change, we bitch
and bitch about not getting change, time to actually put our voices
out there instead of bitching in silence.

I wrote the following using Ron Paul's basic outline to both of my State Senators

Dear Senator (Last Name),

I urge you to oppose Treasury Secretary Henry Paulson's $700 Billion bailout of Wall Street.

The bailout:

- Violates the Constitution by authorizing the Treasury to purchase bad mortgage-related assets.

- Greatly enlarges our national debt and further erodes the value of our dollar.

- Bails out Wall Street at the expense of Main Street by putting taxpayer funds at risk while freeing up banks to continue making bad loans.
Already, hundreds of billions of dollars have been spent bailing out Freddie Mac, Fannie Mae, and AIG, and the final price tag for those moves could result in trillions of dollars being added to our national debt.
The bailout plan ignores the fundamental reason why our economy is in such crisis: the Federal Reserve and the federal government's interference in the market and manipulation of the money supply spurred major banks and other corporations to back bad mortgages.
Adopting this proposal will only continue the same flawed practices and greatly worsen the long-term effects.
The way out of this current economic crisis is to return to the principles that made this nation great: constitutionally-limited government, personal freedom, low taxes, and a belief in sound money.

I am asking that you strengthen our economy by taking action to:

1.) End the Bailouts - The Federal Reserve's authority to use taxpayer money to bail out Wall Street must be revoked and the Fed must be held accountable.

2.) Cut Taxes and Curb Regulation - If we really want to stimulate businesses and revive the market, we need to cut corporate and capital gains taxes, spurring investors to come back to the market and making it easier to attract new workers and clients. It is also time to repeal failed legislation like Sarbanes-Oxley, which has crippled capital markets, diminished our competitiveness, and greatly harmed small businesses.

3.) Reduce Spending - We must freeze all non-entitlement spending by the federal government at current levels and eliminate wasteful spending both domestically and in our trillion-dollar overseas budget. Our debt has to come down, and it won't until we start living within our means. Reducing spending and cutting the debt will strengthen our dollar and reduce our cost of living.

4.) Reform the Monetary System - If we are to have long-term economic progress, we must end the system of printing money out of thin air. The current laws limiting the circulation of gold and silver-backed currency must be overturned.
Thank you for your attention in regard to this matter. I will be closely watching as events unfold over the next several days. A vote to approve the bailout plan will cost you my vote for your next reelection bid.

Sincerely,

(Your Name)

[KingTenderloin]

Im not writing my congressman

[FallenWyvern]

I personally talked to my congress woman. I told her to support it.

She did, but I am sure it is not because of me.

They are not printing money, they are borrowing money at 3-4% to buy investment that is 30 to 40 cents on the dollar.

There is a serious contraction of the money supply right now. Money is being "unprinted". M3 was down 50 billion last month because banks are not lending money right now.

You clearly didn't read Ron Paul's statement or you didn't understand it. His point of view is valid(I disagree with him but I get it). Your statement about the rescue package money being printed is factually wrong and Ron Paul doesn't claim that.

[Kratos]

They need to do something, banks aren't lending.
Even with this package I've heard lending prolly won't start to relax until 2010.

I agree with reducing gov spending but trust me you don't want currency to be backed by gold and silver.

[SMCengineer]

They are not printing money, they are borrowing money at 3-4% to buy investment that is 30 to 40 cents on the dollar.

What makes you think the government is going to acquire investments at 30-40 cents on the dollar? What they're doing is buying high and, inevitably, selling low. In order to prevent more bank failures, banks will have to sell off their bad debts at a price that allows them to stay solvent, but nobody wants to pay for them at that price on the free market. So the governments solution is to buy mortgages and bad debts from them at their artificially inflated prices and holding them, supposedly, until they can turn them over for a profit, which won't ever happen because housing prices must come down. All this is done at the expense of the taxpayer.

The government buys these mortgages that have a high rate of default and wrongly assumes that they can just hold them indefinitely. Within a few months, however, most of those homeowners who bought more than they could afford will most likely default on their mortgages and they'll be foreclosed on. Of course the government will most likely restructure their mortgage so they can stay in their home that they couldn't afford in the first place.

The price of housing has to come down in order for the market to correct itself and, with time, it will. There is no way around this. Bad debt has to be liquidated and a recession is the first sign of that process taking place, which is not a bad thing unless the government gets involved.

I agree with reducing gov spending but trust me you don't want currency to be backed by gold and silver.

Why is that? And please don't throw some link up from a Keynesian or monetarist claiming that gold would send us into a deflationary depression. There are ways around that. Keynesians have been proven wrong time and again and monetarists can be blamed for our current situation. I want to hear why you actually think it would be bad. Before you answer you should look up 'Greshams law' and think about it in reverse with regards to competing currencies. Also read this from, ironically, one of the most popular monetarist (also a close friend of Ayn Rand and supposedly an objectivist): http://www.usagold.com/gildedopinion/greenspan.html.

[SMCengineer]

...and FallenWyvern, who is that in your avy? She's ridiculously hot and it's very distracting.

[Flagg]

...and FallenWyvern, who is that in your avy? She's ridiculously hot and it's very distracting.

I also need to know the answer to this.

[Pooks]

They need to do something, banks aren't lending.
Even with this package I've heard lending prolly won't start to relax until 2010.

I agree with reducing gov spending but trust me you don't want currency to be backed by gold and silver.

There is nothing wrong with backing currency with Gold.
It has to be done smart tho.
It has to be done how it used to done, not how winston churchill attempted to do it in the 20s and 30s. He churchill used pre WW1 value of the pound to the gold.. not considering that in the meantime, they printed a ton of paper..

this created a shortfall in currency, and massive unemployment.

It has to be in an intelligent and fair way, which is difficult since politicians always look for an edge or some pork.


Also the gov't needs to know how many "GOODS" there are to purchase out there.
If the amount of GOODS increases, but money supply remains the same.. u would get massive deflation.
but the opposite is also true..

during times like the Internet boom of the 90s, some money would have to printed ever so often, and currency devalued..
but than once that passes,... u'll be stuck with too much money supply,, so than this when being linked to gold is a good thing.. cause it naturally creates deflation... so you would let it return back to equilibrium.

so basically you would have most years... DEFLATION..
than some infusion of money supply ever so often,, when the economy heats up...
than back to deflation.
This pattern should avoid the BS we are in today, and seem to find ourselves in every 8 years or so... 2008.. 2001.. 1992 etc... right now BUST years are cylicial.. and they just seem to be getting worse and worse.. something needs to change.

People that like to Borrow.. don't like the Gold standard.., because it holds them to their "true" debts. Gold standard would decrease interest rates.. Credit Card companies would not have to charge people 12-20%.. to stay ahead of inflation.. Credit Card companies with the gold standard, would charge maybe 1-2% .. if its a good deflation year, they might even pay you to take credit.

People that like to SAVE MONEY would love the GOLD standard.

than that brings us back to the whole CREDIT issue... and how to regulate it, and make sure people are making smart decisions financially.

With the gold standard the whole outlook on life would change in the United States, people would kick the bad Credit habit, and would pick up the save habit. You would actually see, other nations indebted to us, and trying to borrow from us.. instead of the United States borrowing 500million every day from china just to run the government.

[Kratos]

during times like the Internet boom of the 90s, some money would have to printed ever so often, and currency devalued..
but than once that passes,... u'll be stuck with too much money supply,, so than this when being linked to gold is a good thing.. cause it naturally creates deflation... so you would let it return back to equilibrium.

so basically you would have most years... DEFLATION..
than some infusion of money supply ever so often,, when the economy heats up...
than back to deflation.

What you outlined right there sounds like a business cycle to me, although not nessarily what would happen

This pattern should avoid the BS we are in today, and seem to find ourselves in every 8 years or so... 2008.. 2001.. 1992 etc... right now BUST years are cylicial.. and they just seem to be getting worse and worse.. something needs to change.

Wait? How, you were just talking about a theroretical self correcting cycle above, now cycles are a problem

People that like to Borrow.. don't like the Gold standard.., because it holds them to their "true" debts.

Why's that? Inflation is built into the interest rates, if banks were losing money by loaning they wouldn't do it. If banks are making money, the cost is on somebody...that would be the borrower no matter what.

Credit Card companies would not have to charge people 12-20%.. to stay ahead of inflation.. Credit Card companies with the gold standard, would charge maybe 1-2% .. if its a good deflation year, they might even pay you to take credit.

Huh? First people who borrow hate the gold standard...now they're paying me to take money...although I understand you are saying under deflation the money will be worth less, what additional penalty are you paying if the interest rates are in fact lower? Conversly how does it encourage saving? Interest rates payed to savers would be lower. You aren't going to put money in the bank if you have to pay reverse interest...c'mon, you'd put it under your mattress.

With the gold standard the whole outlook on life would change in the United States, people would kick the bad Credit habit, and would pick up the save habit. You would actually see, other nations indebted to us, and trying to borrow from us.. instead of the United States borrowing 500million every day from china just to run the government.

First of all, why are people suddenly going to stop trying to live beyond their means. Saving is rewarded under our current system. I'm able to make a substantial return every year outpacing inflation, just because inflation no longer exists, savers we will not become. We're in a trade deficit with China, in addition to a financial one, have you looked at what happens to a nation in a trade deficit under the gold standard?

Let's not repeat history, by the time of the second world war, the inherent problems of the gold standard became apparent to governments and economists.

http://www.j-bradford-delong.net/Pol...dstandard.html

[Kratos]

First of all Blome that article is a little outdated...1967...I'm not sure Greenspan would still even agree with himself there.

A fully free banking system and fully consistent gold standard have not as yet been achieved. But prior to World War I, the banking system in the United States (and in most of the world) was based on gold and even though governments intervened occasionally, banking was more free than controlled. Periodically, as a result of overly rapid credit expansion, banks became loaned up to the limit of their gold reserves, interest rates rose sharply, new credit was cut off, and the economy went into a sharp, but short-lived recession. (Compared with the depressions of 1920 and 1932, the pre-World War I business declines were mild indeed.) It was limited gold reserves that stopped the unbalanced expansions of business activity. From the article you posted.

The total amount of gold that has ever been mined has been estimated at around 142,000 tons.[6] Assuming a gold price of US$1,000 per ounce, or $32,500 per kilogram, the total value of all the gold ever mined would be around $4.5 trillion. Quote from Wikipedia.
Any idea what will happen to the price of gold in relation to other goods if the world bases it's economic system on such a small asset? Not to mention much of that gold is held privatly...I think I read somewhere like 80% but don't quote me on that.

the welfare state is nothing more than a mechanism by which governments confiscate the wealth of the productive members of a society to support a wide variety of welfare schemes. A substantial part of the confiscation is effected by taxation. But the welfare statists were quick to recognize that if they wished to retain political power, the amount of taxation had to be limited and they had to resort to programs of massive deficit spending, i.e., they had to borrow money, by issuing government bonds, to finance welfare expenditures on a large scale.

The ultimate burdon of these programs is always on the tax payer no matter what's backing the money. Why wouldn't they resort to taxing the bejesus out of us under the gold standard?

Thus, government deficit spending under a gold standard is severely limited. The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit.

Not nessicarily, there are cute ways around it for countries looking to increase their trade surplus.

In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value.

If a country wanted to devalue their currency, it would produce sharper changes than the smooth declines seen in fiat currencies. They just slap a new exchange rate on the currency vs. gold, and yes they pay a price for it, but it's no greater than the price they pay for decreasing the value of their fiat money. It's not like nobody notices us doing it.

[Pooks]

Kratos.. seems like u've been doing some reading lately on this subkect :-)

I'm gonna get back to u, after my work out n other errands.. u make some good points, things that did run in the back of my mind as i wrote that.. this subject is well worth researching.

[Hoggage_54]

Don't lend money to people with bad credit.

Problem solved.

EDIT: In reference to the housing mess lol

[FallenWyvern]

What makes you think the government is going to acquire investments at 30-40 cents on the dollar?

You are correct. I have a real problem with them buying them at above market prices. If they do this reverse auction thing, it will be fine, otherwise there will be favoritism. More banks need to go under, just not all of them.

Bro, gold is horrible. No real economist thinks going back to the gold standard is a good idea. Wrapping your head around how the federal reserve works today is just more difficult to understand than the overly simplified gold standard idea. It is not like the government prints money and spends it itself. It lends the money to banks. The only way government raises money to spend is by taxes and debt(treasuries).

[MuscleScience]

I called my Congressman and he said, "Wow..... I would like to help you son but your too young to vote."

[FallenWyvern]

I called my Congressman and he said, "Wow..... I would like to help you son but your too young to vote."

I hope you don't get banned here then....

[MuscleScience]

I hope you don't get banned here then....

that was like 8 years ago I mean......

[SMCengineer]

First of all Blome that article is a little outdated...1967...I'm not sure Greenspan would still even agree with himself there.

A few quicks points here. First, basic principles of economic freedom and free market capitalism don't change all that much with time. In fact, they just about never change. You wouldn't say Adam Smith's "Wealth of Nations" is outdated just because it was published in 1776.

Second, it's a pretty well known fact that Greenspan still believes the gold standard is among the best currencies, although not perfect and wouldn't suffice on it's own. This is a more recent interview: http://www.youtube.com/watch?v=z5MVsm2cpc0.

Here's another article from 1981 to show that he doesn't believe the gold standard could exist under current policies, but at the same time he lays out a blueprint for sound monetary policy: http://www.gold-eagle.com/greenspan011098.html. Keep in mind, the only reason that I'm posting articles from Alan Greenspan is because he one of the most notorious monetarists.

My intention wasn't for you to respond solely to his article and I'm not necessarily defending the gold standard, which is why I asked you look up competing currencies and greshams law. It's a much more free market approach and, in my opinion, the only way to implement sound monetary policy.

The total amount of gold that has ever been mined has been estimated at around 142,000 tons.[6] Assuming a gold price of US$1,000 per ounce, or $32,500 per kilogram, the total value of all the gold ever mined would be around $4.5 trillion. Quote from Wikipedia.
Any idea what will happen to the price of gold in relation to other goods if the world bases it's economic system on such a small asset? Not to mention much of that gold is held privatly...I think I read somewhere like 80% but don't quote me on that.

Admittedly, one the greatest obstacles to the gold standard would be where the price of gold was pegged at. It would literally make or break the currency. This is why the gold standard wouldn't be able to work as the lone currency.

The ultimate burdon of these programs is always on the tax payer no matter what's backing the money. Why wouldn't they resort to taxing the bejesus out of us under the gold standard?

That's not difficult to answer. Americans would not only feel the direct hit of the welfare state in their wallets, which we really don't right now, but they would never allow the politicians who implmented the high taxes to stay in office. It would be political suicide. Think of it this way: If we, as Americans were billed directly for the war in Iraq every month, do you think we would continue to support such a war unless there existed a real imminent threat? Same thing with jails, if we were billed for every non-violent criminal in the our overcrowded prisons, do you think we would continue to support the so called "war on drugs?"

Thus, government deficit spending under a gold standard is severely limited. The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit.

Not nessicarily, there are cute ways around it for countries looking to increase their trade surplus.

Sure, there is exist ways around it with any currency, but it would be much more difficult under a gold standard.

If a country wanted to devalue their currency, it would produce sharper changes than the smooth declines seen in fiat currencies. They just slap a new exchange rate on the currency vs. gold, and yes they pay a price for it, but it's no greater than the price they pay for decreasing the value of their fiat money. It's not like nobody notices us doing it.

During the gold standard, the consumer price index remained relatively stable, however when we came off of it prices exponentially increased (in actuality, the dollar decreased). (http://www.economics-charts.com/cpi/cpi-1800-2005.html)
Not to mention, todays consumer price index is so skewed it can hardly be considered accurate and prices are actually much higher than they're claimed to be.

You are correct. I have a real problem with them buying them at above market prices. If they do this reverse auction thing, it will be fine, otherwise there will be favoritism. More banks need to go under, just not all of them.

Again, the problem is this, the banks that participate in the reverse auction have to offer their most toxic assets at their lowest possible price that still allows them to remain solvent. However, the reason the securities didn't sell on the free market is because there's too much risk in the mortgage backed securities and they were priced too high. In essence, taxpayers would be paying a premium for assets that would normally sell at a much lower price.

Bro, gold is horrible. No real economist thinks going back to the gold standard is a good idea. Wrapping your head around how the federal reserve works today is just more difficult to understand than the overly simplified gold standard idea.

There's some truth to this and I'm not saying the gold standard is either practical or possible to implement. What I am saying is that during true gold standard years, price fluctuation was much more stable than anything we see today. Inflation during gold standard years pales to that of fiat currencies. With that said, there is a way to have a stable fiat currency and it relies heavily on free market principles.

Gold is certainly not a "horrible idea" when it's introduced in a competitive environment. The free market could easily decide which is better and it would force monetary constraint on behalf of the government and fed policies. Otherwise, their would be a mass exodus from the dollar. Of course, laws that grant the fed a government sanctioned monopoly would have to be repelled and other currencies would have to be allowed to circulate. If a competitive currency was allowed to circulate (let's just use gold as an example), dollar hegemony would come to an end and the monetary policy would be subject to the same free market principles as every other business. So our fiat money wouldn't necessarily be replaced by a gold backed currency nor would it be abolished, but the two could mutually co-exist and serve as a competitive check on the other.

It is not like the government prints money and spends it itself. It lends the money to banks. The only way government raises money to spend is by taxes and debt(treasuries).

That's correct, so what happens if the government can't fund this bailout just from selling treasury debt? Does the Fed cut interest rates? And if foreign investors purchase our debt, don't you think they'll demand higher interest rates?

[FallenWyvern]

Treasury rates are very, very low. Looks like every one(especially china) is willing to lend money at low rates to the US. Factor in inflation, they are getting nearly nothing back. Who is being taken advantage?

[Kratos]

No, no, no Blome, you aren't listening
Gold is horrible!!!
Greenspan has wrote many papers about the gold standard and fesibility of return to it and stuff like that as have many economists. I have read a few of his papers.

What you are failing to see is that you get nothing, zip, nada out of the gold standard in relation to fiat currency. Fiat currency does not get in the way of the free market. If you think gold ties the govt's hands to spend money, it's just not true. In fact you only tie their hands to act in a time of financial crisis.

Commodities such as silver and gold are by definition unstable. Neither supply nor demand is constant. So you say the consumer price index is rising, and even more so the cost of goods per dollar. Well, what goes into the cost of goods? Hmmm, Labor (wages), Commodities (which also take labor, energy, transportation, and capitol equipment) , energy, transportation, capitol equipment, and don't forget taxes. So, if wages aren't going up in relation to the eggs you buy at the grocery store and it's tougher to afford a dozen to make an omelete, what is going up? Other costs!!! So, guess what, if gold is holding a steadier value in realtion to the eggs, it's cost and value went up, guess who's didn't? The worker at the chicken farm and he gets to take a pay cut. Which means what exactly? As long as the cost of goods are raising in realation to the value of a worker, his cost of living will increase in realation to paycheck. What did you gain?

Competitive currency??? C'mon dude, you're taking us back to the 1800's. Conterfeiting was rampent, nobody knew what was worth what, paying exorbinat exchange rates, and what do you get out of it?

Fiat currency is not being used to hide the cost of the welfare state. Gov. gets the money just where it says it does, taxes and borrowing. The revenues from the small amonut of inflation we experience are trivial. Often attempts to overcontrol inflation result in unemployment.

In fact Americans don't feel the cost because they are never directly billed for anything. Businesses bear the heavy burdon of gvt spending. And people like Barrack Obama who are "for the middle class" time and again get elected for going after more from them. Except when you're done ass raping the companies the people work for, nobody is left to work for.

If we ever find ourselves in a war we are having trouble financing we aren't going to stop printing the soldier's paychecks or building fighter planes. We're going to re-establish a new value for dollars vs gold. Or what happened in 1971 with the Vietnam war, gold went away.

Who's going to gaurantee the price of gold is stable...that's easy the gvt has to do it. All of a sudden you're in the gold buying and storage business. Consistantly run a sloppy budget like I have faith people in current government would do, and what happens to that gold. As soon as lendors feel the deficit is decreasing the ability of the gvt to meet it's gold obligations, gold starts leaving your vaults. So the tax payers either just bought a lot of gold to give away to dollar holders and other nations, or the gold needs a new value established in relation to dollars (they're goes your stable dollar value), or do away with exchange of gold for money. Sounds like a lot of fun. We use more than we make, where's our gold gonna end up?

I'm sorry but Ron Paul isn't always right.

[Kratos]

I think it remains to be seen if the banks will ever buy back that debt, no less at a profit. It would be nice if it works out that way.

[SMCengineer]

What you are failing to see is that you get nothing, zip, nada out of the gold standard in relation to fiat currency. Fiat currency does not get in the way of the free market. If you think gold ties the govt's hands to spend money, it's just not true. In fact you only tie their hands to act in a time of financial crisis.

Your point that fiat currency doesn't get in the way of the free market is true only by itself. However, when it's sanctioned by the government as the only legal tender than it most certainly does interfere with free market forces. It creates a monopoly on tender, which is the opposite of free markets. Monopolies, by and large, are facilitated by government not the free market. With government intervention in the market, people are forced to use the dollar and thus subject to the monetary policies of the fed chairman. If they apply a loose monetary policy, as we've seen with Alan Greenspan, than you have the perfect conditions for a bubble and the inevitable bursting of that bubble, which we're experiencing now. From the first speculative bubble known as Tulip mania in Amsterdam to the current housing bubble, the phenomenon of boom and bust cycles can just about always be traced back to government intervention in the market.

Inevitably, fiat currencies force governments to act in a time of crisis, precisely because they created the crisis that they have to act upon. Further, governments acting in a time of crisis only serve to hamper the markets abilities in recovery during recessions. You can look back at all the major crisis’ before the government believed it had to “act” and you’d see that after a large financial crisis there exists a sharp depression that lasted for about a year and than the economy returned to normal. During the Great Depression, however, we witnessed the exact opposite, in which the government did everything possible to try to revive the economy, which only served to make the depression “Great.” Contrary to popular belief, the stock market crash of 1929 wasn’t the sole cause of the great depression.

Commodities such as silver and gold are by definition unstable. Neither supply nor demand is constant. So you say the consumer price index is rising, and even more so the cost of goods per dollar. Well, what goes into the cost of goods? Hmmm, Labor (wages), Commodities (which also take labor, energy, transportation, and capitol equipment) , energy, transportation, capitol equipment, and don't forget taxes. So, if wages aren't going up in relation to the eggs you buy at the grocery store and it's tougher to afford a dozen to make an omelete, what is going up? Other costs!!! So, guess what, if gold is holding a steadier value in realtion to the eggs, it's cost and value went up, guess who's didn't? The worker at the chicken farm and he gets to take a pay cut. Which means what exactly? As long as the cost of goods are raising in realation to the value of a worker, his cost of living will increase in realation to paycheck. What did you gain?

I’m a little confused as to what you’re getting at here, but you say the workers cost of living increases in relation to his paycheck. What about his savings? They aren’t adjusted for inflation, so his savings looses value. This is especially true for someone who is retired and relies on their savings to live. Fiat money is constantly being debased at a steady rate, as you clearly just indicated, so why should it be trusted over gold? If you compare gold with fiat money, you find that between the years of 1949-1979 there were higher annual rates of growth for fiat money than that of gold. While you say that gold is unstable, yet fiat money is being constantly debased, the question is which system retains purchasing power better and which provides more stabile economic growth as opposed to huge boom/bust cycles? The market could easily answer that.

Competitive currency??? C'mon dude, you're taking us back to the 1800's. Conterfeiting was rampent, nobody knew what was worth what, paying exorbinat exchange rates, and what do you get out of it?

The operative word here is competitive. If alternative currencies were legal people could use whatever they wanted, but if it doesn't compete with the dollar in terms of credibility and strength than it's not likely to be accepted by anybody. If the dollar continued it’s hegemony than nothing changes, but if a currency, something like the liberty dollar, starts circulating that actually competes in strength and credibility with the dollar the result would be stability through competition.

Fiat currency is not being used to hide the cost of the welfare state. Gov. gets the money just where it says it does, taxes and borrowing. The revenues from the small amonut of inflation we experience are trivial. Often attempts to overcontrol inflation result in unemployment.

I never said fiat currencies are being used to hide the cost of the welfare state. In fact, fiat currencies permit the welfare/warfare state, which is why statists rely so heavily on it.

In fact Americans don't feel the cost because they are never directly billed for anything. Businesses bear the heavy burdon of gvt spending. And people like Barrack Obama who are "for the middle class" time and again get elected for going after more from them. Except when you're done ass raping the companies the people work for, nobody is left to work for.

Now you’re delving into the naivety of leftist political ideology, which is a whole different topic.

If we ever find ourselves in a war we are having trouble financing we aren't going to stop printing the soldier's paychecks or building fighter planes. We're going to re-establish a new value for dollars vs gold. Or what happened in 1971 with the Vietnam war, gold went away.

That's the beauty of tighter credit. You can't have the liberal foreign policy that we currently employ. Nobody in a time of real threat would object to higher taxes as long as it was actually used to protect us. That’s called conservatism and it’s one of the basic principles of this country. Plus, in time of emergency the government can and has suspended the gold standard.

Who's going to gaurantee the price of gold is stable...that's easy the gvt has to do it. All of a sudden you're in the gold buying and storage business. Consistantly run a sloppy budget like I have faith people in current government would do, and what happens to that gold. As soon as lendors feel the deficit is decreasing the ability of the gvt to meet it's gold obligations, gold starts leaving your vaults. So the tax payers either just bought a lot of gold to give away to dollar holders and other nations, or the gold needs a new value established in relation to dollars (they're goes your stable dollar value), or do away with exchange of gold for money. Sounds like a lot of fun. We use more than we make, where's our gold gonna end up?

Why does anybody have to guarantee that the price of gold stays stable? The market can determine the price of gold much better than any governing body.

I'm sorry but Ron Paul isn't always right.

I never mentioned Ron Paul, but you certainly aren’t providing a very good argument to the contrary.

[***xxx***]

welcome to the socialistic republic of america! I bet you just made some nice friends with hugo chavez and co

I very welcome comments from my republican friends, who were beating on me, because of our so called socialism in Germany! seems that your own party is pretty much ahead of us :P

[SMCengineer]

I very welcome comments from my republican friends, who were beating on me, because of our so called socialism in Germany! seems that your own party is pretty much ahead of us :P

...so true and so sad.

[Kratos]

It creates a monopoly on tender, which is the opposite of free markets. Monopolies, by and large, are facilitated by government not the free market.

A monopoly on money is a good thing.

Inevitably, fiat currencies force governments to act in a time of crisis, precisely because they created the crisis that they have to act upon. Further, governments acting in a time of crisis only serve to hamper the markets abilities in recovery during recessions.

The Panic of 1819 lasted until 1821. The effects were felt most in the west and south.

The Panic of 1837 was triggered by a combination of factors including the failure of a wheat crop, a collapse in cotton prices, economic problems in Britain, rapid speculation in land, and problems resulting from the variety of currency in circulation. It was the second-longest American depression, with effects lasting roughly six years, until 1843. The depression caused the collapse of real estate prices. The price of food also collapsed, which was ruinous to farmers and planters who couldn’t get a decent price for their crops.

The Panic of 1857 was triggered by the failure of the Ohio Life Insurance and Trust Company, which actually did much of its business as a bank headquartered in New York City. Reckless speculation in railroads led the company into trouble, and the company’s collapse led to a literal panic in the financial district, as crowds of frantic investors clogged the streets around Wall Street. Recovery from the depression began in early 1859.

The investment firm of Jay Cooke and Company went bankrupt in September 1873 as a result of rampant speculation in railroads. The stock market dropped sharply and caused numerous businesses to fail. The depression lasted for five years, until 1878.

The depression set off by the Panic of 1893 was the greatest depression America had known, and was only surpassed by the Great Depression of the 1930s. ending in 1897.


You can look back at all the major crisis’ before the government believed it had to “act” and you’d see that after a large financial crisis there exists a sharp depression that lasted for about a year and than the economy returned to normal.

I don't think so, look above

During the Great Depression, however, we witnessed the exact opposite, in which the government did everything possible to try to revive the economy, which only served to make the depression “Great.” Contrary to popular belief, the stock market crash of 1929 wasn’t the sole cause of the great depression.

UK was the first to abandon the gold standard in 1931 and saw the quickest recovery. US in 1933 and recovery was quick and dramatic after that. France Netherlands and Poland sayed on thru 1935 and continued to see economic decline. Why? Because the gold standad ties the govement's hands to act.

I’m a little confused as to what you’re getting at here, but you say the workers cost of living increases in relation to his paycheck. What about his savings? They aren’t adjusted for inflation, so his savings looses value.

What I'm saying is just because gold holds a value closer to other goods doesn't mean it's tied to labor. Some of the same variable costs that go into making any good go into gold production. So, labor the cost of labor is idependant of gold even if gold is tied to dollars.
Where do you keep your money? Burried in the back yard? Even something as conservative as a CD can keep up with inflation if you shop the rates even a little bit. I won't mention social security cause I know you hate that as do I, but those checks will also get smaller.

Fiat money is constantly being debased at a steady rate, as you clearly just indicated, so why should it be trusted over gold? If you compare gold with fiat money, you find that between the years of 1949-1979 there were higher annual rates of growth for fiat money than that of gold. While you say that gold is unstable, yet fiat money is being constantly debased, the question is which system retains purchasing power better and which provides more stabile economic growth as opposed to huge boom/bust cycles? The market could easily answer that.

The cycles would be the same if not worse.


The operative word here is competitive. If alternative currencies were legal people could use whatever they wanted, but if it doesn't compete with the dollar in terms of credibility and strength than it's not likely to be accepted by anybody.

Ok, so banks are realeasing their own currency now right? It's backed by gold or silver or whatever. This money is common in my hometown, it comes out of the ATM machine, I know it well. What happens when I go on a trip to Florida? It has a value of gold, but I have to pay another bank to convert to their currency for their trouble of dealing with it. I get confused on how much stuff costs in florida because it's not what I'm use to.

Ok, so maybe we only let big banks distribute currency...Bank of America, Citi Corp., and there is only a few currencies floating around and you can use them anywhere. Those banks have to keep enough gold on hand to pay whatever debts they have in circulating money. If not the money isn't any better than the paper it's printed on.

Without goverment oversite and government guarantees of deposits or banknotes, the economy would be plagued by overissuance of banknotes, fraud, and suspensions of redeemability, all of which would give rise to runs on banks. The inability of any one bank to meet a run could cause runs to spread contagiously until the entire system collapsed. The people might also take their asset to another bank they feel is more stable. At any rate bank failures would be more likely simply because of public confidence.

If the dollar continued it’s hegemony than nothing changes, but if a currency, something like the liberty dollar, starts circulating that actually competes in strength and credibility with the dollar the result would be stability through competition.

From what I understand liberty dollars are made out of gold or silver sold at a significant mark up over the actual price of gold/silver. Funny you mentioned Gresham's Law earlier because circulating commodities is exactly what it really refers to. People scrape off a little gold, plate a lead coin with gold and spend the "bad" money. Commodites should never be the circulating currency as a result of this.

I never said fiat currencies are being used to hide the cost of the welfare state. In fact, fiat currencies permit the welfare/warfare state, which is why statists rely so heavily on it.

Politicians permit it, not the currency they pay for it with.

Now you’re delving into the naivety of leftist political ideology, which is a whole different topic.

You said we'd never vote for increasing taxes...I say we will as long as they're taking from someone else to give to me.

That's the beauty of tighter credit. You can't have the liberal foreign policy that we currently employ. Nobody in a time of real threat would object to higher taxes as long as it was actually used to protect us. That’s called conservatism and it’s one of the basic principles of this country. Plus, in time of emergency the government can and has suspended the gold standard.

Suspend the gold standard? How safe is your money then? The value will be the same? No...Britian tried that and lost all their gold in the process. You'll lose money, your money is only as safe as the ability of the country to stick to the gold standard. The gold standard is only as good as a nation's ability to sick with it. After suspending gold convertibility in World War I, many countries stayed off gold and experienced chaotic fiscal and monetary policies in the early 1920's.

Why does anybody have to guarantee that the price of gold stays stable? The market can determine the price of gold much better than any governing body.

Because if it doesn't banks and gold dealers will only pay in gold for dollars what they see as the value of it, which would be the current system.

I never mentioned Ron Paul, but you certainly aren’t providing a very good argument to the contrary.

You're yet to negate any of my points and they're have been many.

I'm not sold Blome. Never will be. Fiat money is fine, as long as our leadership is sound, if it isn't we're screwed anyway.

[Voice of Reason]

Mavericks!

[SMCengineer]

It creates a monopoly on tender, which is the opposite of free markets. Monopolies, by and large, are facilitated by government not the free market.

A monopoly on money is a good thing.

"Centralization of credit in the hands of the State by means of a national bank with State capital and an exclusive monopoly." - Karl Ma** (Fifth plank of the Communist Manifesto) 1848

Monopolies are never a good thing and, generally, aren’t natural in free markets.

Inevitably, fiat currencies force governments to act in a time of crisis, precisely because they created the crisis that they have to act upon. Further, governments acting in a time of crisis only serve to hamper the markets abilities in recovery during recessions.

The Panic of 1819 lasted until 1821. The effects were felt most in the west and south.

The Panic of 1837 was triggered by a combination of factors including the failure of a wheat crop, a collapse in cotton prices, economic problems in Britain, rapid speculation in land, and problems resulting from the variety of currency in circulation. It was the second-longest American depression, with effects lasting roughly six years, until 1843. The depression caused the collapse of real estate prices. The price of food also collapsed, which was ruinous to farmers and planters who couldn’t get a decent price for their crops.

The Panic of 1857 was triggered by the failure of the Ohio Life Insurance and Trust Company, which actually did much of its business as a bank headquartered in New York City. Reckless speculation in railroads led the company into trouble, and the company’s collapse led to a literal panic in the financial district, as crowds of frantic investors clogged the streets around Wall Street. Recovery from the depression began in early 1859.

The investment firm of Jay Cooke and Company went bankrupt in September 1873 as a result of rampant speculation in railroads. The stock market dropped sharply and caused numerous businesses to fail. The depression lasted for five years, until 1878.

The depression set off by the Panic of 1893 was the greatest depression America had known, and was only surpassed by the Great Depression of the 1930s. ending in 1897.

All of which can be traced back to government intervention in the market.


You can look back at all the major crisis’ before the government believed it had to “act” and you’d see that after a large financial crisis there exists a sharp depression that lasted for about a year and than the economy returned to normal.

I don't think so, look above

All those are true, but none of those match the scale of the Great Depression where the government intervened more than in any other period prior.

During the Great Depression, however, we witnessed the exact opposite, in which the government did everything possible to try to revive the economy, which only served to make the depression “Great.” Contrary to popular belief, the stock market crash of 1929 wasn’t the sole cause of the great depression.

UK was the first to abandon the gold standard in 1931 and saw the quickest recovery. US in 1933 and recovery was quick and dramatic after that. France Netherlands and Poland sayed on thru 1935 and continued to see economic decline. Why? Because the gold standad ties the govement's hands to act.

Your reasoning is a little skewed. The reason the UK abandoned the gold standard first is because Winston Churchill reinstated it after WWI, but they didn’t take into account the amount of fiat dollars they produced compared to the amount of gold they held in reserves and as a result was sent into a deflationary depression. This is the absolute wrong way to implement a gold standard if one were to be implemented. There exists a difference between harmful deflation and harmless deflation.

I’m a little confused as to what you’re getting at here, but you say the workers cost of living increases in relation to his paycheck. What about his savings? They aren’t adjusted for inflation, so his savings looses value.

What I'm saying is just because gold holds a value closer to other goods doesn't mean it's tied to labor. Some of the same variable costs that go into making any good go into gold production. So, labor the cost of labor is idependant of gold even if gold is tied to dollars.
Where do you keep your money? Burried in the back yard? Even something as conservative as a CD can keep up with inflation if you shop the rates even a little bit. I won't mention social security cause I know you hate that as do I, but those checks will also get smaller.

With fiat currencies wages are always the last to increase and usually never proportionately. That fact that I'm forced to hedge against inflation should immediately send up red flags that something is screwed up with the entire system. The fact is it shouldn’t matter how I choose to save my money because it’s my money. If I want to put it in a box under my bed, than so be it, but nobody should be lawfully allowed to steal that money whether it’s through taxes or inflation. Further, if I do put it in a CD, as you suggest as a means for keeping up with inflation, than I’m not really rewarded for saving, rather I’m just keeping up with a corrupt system that debases my savings. Not to mention the fact that even is you do find a CD to keep up with inflation, which isn’t easy if you look at accurate inflationary statistics, you still get taxed on that interest. So, that most certainly leaves you worse off than when you started.

Fiat money is constantly being debased at a steady rate, as you clearly just indicated, so why should it be trusted over gold? If you compare gold with fiat money, you find that between the years of 1949-1979 there were higher annual rates of growth for fiat money than that of gold. While you say that gold is unstable, yet fiat money is being constantly debased, the question is which system retains purchasing power better and which provides more stabile economic growth as opposed to huge boom/bust cycles? The market could easily answer that.

The cycles would be the same if not worse.

You’re gonna have to provide some evidence for that. Stability and fiat currencies are, by nature, contradictory. Fiat currencies are implemented for the ability to inflate.

The operative word here is competitive. If alternative currencies were legal people could use whatever they wanted, but if it doesn't compete with the dollar in terms of credibility and strength than it's not likely to be accepted by anybody.

Ok, so banks are realeasing their own currency now right? It's backed by gold or silver or whatever. This money is common in my hometown, it comes out of the ATM machine, I know it well. What happens when I go on a trip to Florida? It has a value of gold, but I have to pay another bank to convert to their currency for their trouble of dealing with it. I get confused on how much stuff costs in florida because it's not what I'm use to.

Ok, so maybe we only let big banks distribute currency...Bank of America, Citi Corp., and there is only a few currencies floating around and you can use them anywhere. Those banks have to keep enough gold on hand to pay whatever debts they have in circulating money. If not the money isn't any better than the paper it's printed on.

Without goverment oversite and government guarantees of deposits or banknotes, the economy would be plagued by overissuance of banknotes, fraud, and suspensions of redeemability, all of which would give rise to runs on banks. The inability of any one bank to meet a run could cause runs to spread contagiously until the entire system collapsed. The people might also take their asset to another bank they feel is more stable. At any rate bank failures would be more likely simply because of public confidence.

If you were selling a bike for $800 and I offered cash for it, you would most likely sell it to me. If I offered you $800 worth of some unknown currency you would most likely refuse it and tell me to leave. If, however, I offered you an ounce of certifiable gold you would be smart to take it. The point is, if a currency is nationally well known and regarded as credible; it would be accepted by everyone. If, on the other hand, someone went to another state and was offered some obscure unknown currency, who would accept it when the dollar would still be readily available and would most likely maintain predominance over any other currency?

Credit cards are sort of an example of a competitive currency (I'm pushing it with that example). Sure, there are many credit card companies, but only a few are nationally excepted and trusted. They are forced to offer better benefits as a result of competition to garner customers. The same would be true for currencies.

If the dollar continued it’s hegemony than nothing changes, but if a currency, something like the liberty dollar, starts circulating that actually competes in strength and credibility with the dollar the result would be stability through competition.

From what I understand liberty dollars are made out of gold or silver sold at a significant mark up over the actual price of gold/silver. Funny you mentioned Gresham's Law earlier because circulating commodities is exactly what it really refers to. People scrape off a little gold, plate a lead coin with gold and spend the "bad" money. Commodites should never be the circulating currency as a result of this.

I mentioned a reversal of Gresham’s law, where good money forces out bad money.

I never said fiat currencies are being used to hide the cost of the welfare state. In fact, fiat currencies permit the welfare/warfare state, which is why statists rely so heavily on it.

Politicians permit it, not the currency they pay for it with.

True, but the ability to do so is infinitely more difficult with a commodity backed currency than with a fiat currency.

That's the beauty of tighter credit. You can't have the liberal foreign policy that we currently employ. Nobody in a time of real threat would object to higher taxes as long as it was actually used to protect us. That’s called conservatism and it’s one of the basic principles of this country. Plus, in time of emergency the government can and has suspended the gold standard.

Suspend the gold standard? How safe is your money then? The value will be the same? No...Britian tried that and lost all their gold in the process. You'll lose money, your money is only as safe as the ability of the country to stick to the gold standard. The gold standard is only as good as a nation's ability to sick with it. After suspending gold convertibility in World War I, many countries stayed off gold and experienced chaotic fiscal and monetary policies in the early 1920's.

We suspended the gold standard during the civil war and returned to a sound currency afterwards with little disruption to the value of money, but it was a gradual return not an immediate withdrawal from greenbacks.

Why does anybody have to guarantee that the price of gold stays stable? The market can determine the price of gold much better than any governing body.

Because if it doesn't banks and gold dealers will only pay in gold for dollars what they see as the value of it, which would be the current system.

...and? I would much rather be forced to accept speculation over manipulation.

I'm not sold Blome. Never will be. Fiat money is fine, as long as our leadership is sound, if it isn't we're screwed anyway.

It's cool that you think it wouldn't work, I don't mind that, but before this thread dies out answer this: Do you know of any fiat currency that has maintained stability for more than 30 years?

[Kratos]

Sure, ours. Some inflation is good for the economy. It's getting to be a bit much lately partly because of energy driving up the cost of living. Credit crisis isn't helping, but it's a problem bigger than the US, look at Iceland. Price relationship of the dollar to forigen currency is important, and it's a miracle they keep it so stable given our huge trade deficit, and china is helping by normalizing their money to ours.

I'm totally with you on less goverment, but attempting to tie their hands through a change of currency is not the way to do it.

[SMCengineer]

Sure, ours. Some inflation is good for the economy. It's getting to be a bit much lately partly because of energy driving up the cost of living. Credit crisis isn't helping, but it's a problem bigger than the US, look at Iceland. Price relationship of the dollar to forigen currency is important, and it's a miracle they keep it so stable given our huge trade deficit, and china is helping by normalizing their money to ours.

You're comparing the dollar to other fiat currencies, but to calculate true stability you have to look at inflation charts (calculated by either CPI or PPI), debt charts or money supply charts and you'll clearly see that all have exponentially increased since we came completely off the Bretton Woods system.

I'm totally with you on less goverment, but attempting to tie their hands through a change of currency is not the way to do it.

Unfortunately, you can't have one without the other.

[FallenWyvern]

Sure, ours. Some inflation is good for the economy. It's getting to be a bit much lately partly because of energy driving up the cost of living. Credit crisis isn't helping, but it's a problem bigger than the US, look at Iceland. Price relationship of the dollar to forigen currency is important, and it's a miracle they keep it so stable given our huge trade deficit, and china is helping by normalizing their money to ours.

The credit crisis is huge contraction of money supply, this is quite deflationary.

[SMCengineer]

The credit crisis is huge contraction of money supply, this is quite deflationary.

True, but that doesn't mean that banks aren't sitting on massive reserves and accumulating more. It just means there's a lack of confidence, which in turn leads to less lending.

[Kratos]

The credit crisis is huge contraction of money supply, this is quite deflationary.

I worded that wrong, heath of the economy is hurt by the credit crisis.

[Kratos]

You're comparing the dollar to other fiat currencies, but to calculate true stability you have to look at inflation charts (calculated by either CPI or PPI), debt charts or money supply charts and you'll clearly see that all have exponentially increased since we came completely off the Bretton Woods system.



Unfortunately, you can't have one without the other.

Creating a more accurate CPI and tighter money policy can be done without nuking the banking system. The political machine in this country and the will of the common man is what's driving us closer to communism. All people can't be equal, because all people aren't created equal.

[SMCengineer]

Creating a more accurate CPI and tighter money policy can be done without nuking the banking system.

Legalizing competing currencies wouldn't disrupt the banking the system in the least bit.

The political machine in this country and the will of the common man is what's driving us closer to communism. All people can't be equal, because all people aren't created equal.

I find it ironic that you say in defense of Keynsian economics.

[Pooks]

The real problem is the Federal Reserve.. it controls the cost of money.

A bank is in business of buying money for cheap and selling it for more.

The Federal Reserve can make money cheap by lowering interest rates, causing more loans, more inflation.

When the economy goes to fast, the federal reserve jacks up the rate, trying to cool things down.

BUT.. THIS IS NOT FREE TRADE... the cost of money should be established by competitive banks. Only if Banks are able to charge each other what they want will we have liquidity in the credit markets. Right now banks are just hoarding all their cash.

"Just because the Fed floods banks with cash doesn’t mean that banks will lend each other money - at the targeted Fed Funds rate, or at any rate. Banks are all fearful of each other - I’m talking on a worldwide basis - they are increasingly hoarding cash as a cushion against their own upcoming losses. They’re facing increasing weakness in their commercial-loan and commercial mortgage-backed securities inventories (the next shoe to drop). And banks are increasingly facing heightened exposure to leveraged loan portfolios on their books that they can’t off-load, and rapidly deteriorating credit-card-based securities and portfolios.

If the Federal Reserve is unable to facilitate overnight-bank lending, and is unable to actually lower the Fed Funds rate to its target rate of 1.5%, what will that do to its credibility? It is devastating that we have no trust in our banks; but if we also lose trust in our central-bank firefighter’s ability to quell the financial conflagration, the darkening skies may make the last three weeks seem only partly cloudy."

[FallenWyvern]

The real problem is the Federal Reserve.. it controls the cost of money.

A bank is in business of buying money for cheap and selling it for more.

The Federal Reserve can make money cheap by lowering interest rates, causing more loans, more inflation.

When the economy goes to fast, the federal reserve jacks up the rate, trying to cool things down.

BUT.. THIS IS NOT FREE TRADE... the cost of money should be established by competitive banks. Only if Banks are able to charge each other what they want will we have liquidity in the credit markets. Right now banks are just hoarding all their cash.

"Just because the Fed floods banks with cash doesn’t mean that banks will lend each other money - at the targeted Fed Funds rate, or at any rate. Banks are all fearful of each other - I’m talking on a worldwide basis - they are increasingly hoarding cash as a cushion against their own upcoming losses. They’re facing increasing weakness in their commercial-loan and commercial mortgage-backed securities inventories (the next shoe to drop). And banks are increasingly facing heightened exposure to leveraged loan portfolios on their books that they can’t off-load, and rapidly deteriorating credit-card-based securities and portfolios.

If the Federal Reserve is unable to facilitate overnight-bank lending, and is unable to actually lower the Fed Funds rate to its target rate of 1.5%, what will that do to its credibility? It is devastating that we have no trust in our banks; but if we also lose trust in our central-bank firefighter’s ability to quell the financial conflagration, the darkening skies may make the last three weeks seem only partly cloudy."

Every thing you said is true, but I don't get the first sentence, nor do you explain why their ability to control the cost of money is a problem.

Fed reserve is not a free market idea. Does that mean that it is evil?

Are free markets/free trade the best thing ever? No. Extreme booms/busts are human nature. The consequences can be very painful.

http://en.wikipedia.org/wiki/Tulip_mania

[Mike Anderson]

Bad credit= less likely to pay loan. simple

[SMCengineer]

Fed reserve is not a free market idea. Does that mean that it is evil?

No, but it makes it much more suseptible to political manipulation and corruption.

Are free markets/free trade the best thing ever? No. Extreme booms/busts are human nature. The consequences can be very painful.

http://en.wikipedia.org/wiki/Tulip_mania

Free markets aren't naturally prone to boom/busts cycles. Just as "manias" always have a cause and usually that cause is some expansive monetary policy. Tulip mania is no exception. If you look back at the causes of Tulip mania, you'd see several government policies that served to instigate and bolster the mania. Free coinage, the Bank of Amsterdam and, as result, the influx of gold from the "New World" all led up to a large increase in the money supply and the subsequent Tulip speculation/trade. So, just because fractional reserve banking wasn't the cause of Tulip mania doesn't mean monetary policy wasn't at the root of the problem.

[FallenWyvern]

No, but it makes it much more suseptible to political manipulation and corruption.



Free markets aren't naturally prone to boom/busts cycles. Just as "manias" always have a cause and usually that cause is some expansive monetary policy. Tulip mania is no exception. If you look back at the causes of Tulip mania, you'd see several government policies that served to instigate and bolster the mania. Free coinage, the Bank of Amsterdam and, as result, the influx of gold from the "New World" all led up to a large increase in the money supply and the subsequent Tulip speculation/trade. So, just because fractional reserve banking wasn't the cause of Tulip mania doesn't mean monetary policy wasn't at the root of the problem.

Interesting and logical take on that event.

[Kratos]

Legalizing competing currencies wouldn't disrupt the banking the system in the least bit.
.

You don't think it reduces transaction costs to have a single accepted currency?

[RA]

The problem is now the dems are talking another 350. Money for some of their buddies and you make the private sector more dependent on govt. Sound like a lib double shot.