The Constitution Party of Tennessee

The Federal Reserve in Washington, DC

Last night President Obama addressed the nation in primetime concerning what he called “a debate we’ve been having in Washington over the national debt—a debate that directly affects the lives of all Americans.”

The president’s position as announced in his speech could be summarized by saying that he emphasized compromise and what he called a balanced approach over the position of the Republican House. He said that compromise is a good thing, and he mentioned Ronald Reagan as an example of one who agreed with him about compromise.

His balanced approach would trim $4 trillion from the deficit over 10 years. Assuming interest rates do not increase over the next 10 years, that would reduce the rate of increase in the national debt from a projected $10 trillion to about $6 trillion, leaving a national debt of about $21 trillion.

The president asserted that the Republican no-tax-increase position is based on narrow ideological grounds and is not a balanced approach.

He then attacked the Republican offer of a 6-month temporary increase in the debt ceiling. A six month increase, he said, would simply require that he and Congress have the same debate 6 months from now, and that would be unacceptable. He placed strong emphasis on the critical nature of the debt debate with mentions of possible job loss and cuts in Social Security and Medicare. If the debt ceiling is not raised, he told us, the US could lose its AAA credit rating and that would be a disaster for jobs, businesses, etc.

In response, the Republicans said that they will not impose a tax increase on the American people, not even on those “wealthy people” who make at least $250,000 per year. They offer instead a program they call Cut, Cap, and Balance, which is designed to cut the deficit, cap the rate of increase, and start the process toward a balanced budget amendment to the US Constitution.

The Senate has already rejected the House version of Cut, Cap, and Balance, leaving only the president’s insistence on a tax increase as the chief sticking point to prevent the debt ceiling increase from happening.

Both the president’s balanced position and the Republican position of deficit cuts, with a suggestion of a balanced budget amendment, are misguided at best and disingenuous at worst. Neither solution as proposed will solve the problem long-term.

The president’s position of labeling people who make at least $250,000 per year as rich and equating them with millionaires and billionaires must be intended to appeal to what he thinks is the desire of his base for the scalps of those people responsible for the financial mess the nation is in. However, a Government Accounting Office (GAO) report that came out last week put the lie to that position.

According to the GAO, the Federal Reserve has provided more than 16 trillion dollars to banks, corporations, and other financial institutions all over the world. Employees of the Federal Reserve, including the current chairman of the New York Federal Reserve, were given special exemptions from conflict of interest laws so they could keep their investments in companies being bailed out.

The president’s refusal to accept a six-month increase also rings hollow, as does the offer itself. It is obvious that the reason for not accepting it is to prevent the debt debate from continuing into the 2012 election campaign, and the Republicans proposed it to make sure that it does.

That is what this whole debate is about: power and the desire to keep it. I doubt whether the president or Congress really care how much we owe or what it costs us. What they each care very passionately about is staying in power. Their plan for staying in power appears to involve serious disagreement and debate, but in the end nothing of any substance is ever done and the root of the debt problem is never attacked.

What is the root of the debt problem? Borrowing is the problem that makes our entire monetary system unsustainable. You can’t solve a problem caused by borrowing by borrowing more; but the attitude seems to be “let’s do more of what’s not working – perhaps we just haven’t done enough of it.” The problem then is not just borrowing to pay bills and finance debt but literally borrowing our money into existence.

The national government of the United States – “the greatest nation on earth” – as the president described it, has to go to a group of private bankers, hat in hand, to beg for enough money to pay its bills. This situation is intolerable and should be stopped immediately. The Federal Reserve should be disempowered and the trillions of dollars owed to it by the US Treasury should not be repaid. The Federal Reserve created that money from nothing on its computers and it therefore seems appropriate to repay it with nothing.

The other thing that would have an immediate effect on United States Treasury debt would be to change our policy of making war to a more Constitutional one. Recently President Obama took the US military to war against Libya without even consulting Congress. That should never be allowed. Coming home, minding our own business, and fighting only truly defensive wars should be our policy. That would save trillions of dollars and countless lives.

Our current path, the status quo, leads to bankruptcy, social unrest, and disorder, but if we would do the two things I just mentioned I am certain the most dynamic period in American history would begin.

- Darrell Castle