This is the most difficult challenge facing the next president. There are actually hundreds of millions of people in our own country depending on him to get this correct. It is a very complex problem, yet the solution is clear.
Today I must broach the reality of a $34 trillion national debt. This number is beyond the ability for anyone to grasp. When Jon Tester came into office in 2007, our national debt was $4.6 trillion. At the risk of being redundant, he and his cronies in Congress, with the help of three presidents, have wasted $30 trillion.
Have you ever heard a politician say, “We are the richest country in the world.” How could this possibly be true, owing $34 trillion? We take in $4 trillion in taxes, pay $1 trillion in interest and it is climbing every year, and this year we borrowed $3 trillion to support our government. They either don't know what the word rich means or they are lying to us. Now that you know who's the blame for this pending doom hanging over our country, let me get on with the task explaining some of the things that caused this debt.
Two major wars in the Middle East were financed by this debt. One war is currently raging in Europe, and one in the Middle East financed by this debt. The untold suffering of millions of people throughout the world and the death of millions more is linked to this debt by the wars it has purchased.
For some reason, that I have yet to understand, our elected leaders think they have the right to tell other countries how to govern themselves, spreading money around in an effort to buy influence. They behave irrationally by imposing sanctions on countries in order to destroy their economies.
We have decades of examples demonstrating that this never works, it has only spread suffering throughout the world. We only need to look 90 miles off our southern shore to Cuba. It's obvious that draconian sanctions on the people of Cuba in the past 50+ years has not resulted in a change of government, only hardship for the people.
Cuba is a communist country, so is China. We certainly don't mind doing business with China. Perhaps the reason why many people in the world see us as they do is the corruption within our own country, and how we influence corruption in many other countries.
I'm a simple person so I will try to keep this simple as well. We all need to be able to understand this problem. As always, there's terms that need to be identified and words that need to be defined for both of us to understand what I'm talking about.
The first is deficit, which is an excess of expenditures over income or assets in a given period. For our purposes, this is the amount of money each year that Congress allocates to spend, that we do not have. Therefore, we must borrow it in the name of our unborn generations, and it will have to be financed through treasury bonds. Anybody with a credit card can understand the ramifications of borrowing more than you earn to support your lifestyle. Doing this is a short-term strategy to put off the discomfort of a problem till another day.
Next is debt (typically money) that is owed or due. In reference to the national debt, the treasury bonds sold to support this money that is owed is our burden to bear as a nation. On the other side of the ledger, it's someone else's asset because they own it. By virtue of someone owning our debt they have a certain amount of control over our policies.
In your personal life, when you oblige yourself for things that you purchase now with credit, you effectively reduce your lifestyle because you have to subtract the principal and interest from your income. If you continue to borrow to the point that you are just getting up in the morning and going to work to pay your creditors, you effectively have become an economic slave to your existence.
We have bankruptcy laws that enable us to salvage our lives and start over, at the expense of our creditors. Our country does not have the benefit of this possibility. Which brings us to the next term to be defined. Reserve currency of the world.
After World War II we had the only economy not shattered by conflict. Just the opposite, our economy was booming. We seized this opportunity to set a new rule for the world. If you want to do business internationally you must use dollars as a means of crossing borders.
Simply put, a country wishing to purchase products from another country would first need to purchase dollars, then pay the second country with those dollars. The second country could maintain those dollars for future purchasing power or exchange them for their own currency. They would do this by using the SWIFT banking system which has 3500 members that use this system to communicate and transfer money between themselves.
This is how our government sticks its nose in everybody's business by sanctioning them. Effectively telling them who they can do business with and who they can't. Almost sounds like an extortion racket.
Now let me stop at this point. I must say that if I am incorrect on one of these points, please put it in the comments below. Make your first word bold print and say correction needed. Don't give me your opinion, we all have one of those, give me facts and point me in the right direction so we can all learn. I don't have a massive staff to do my research. That's something a United States senator would have.
The Federal Reserve System (FRS) is the central bank commonly called the Fed. The Fed was created by Congress in 1913. It was intended to stabilize our monetary system and regulate our banking system. It currently has four mandates:
Conducting the nation's monetary policy by influencing money and credit conditions in pursuit of full employment and stable prices. They do this by adjusting the interest rates at which the banks can borrow money. Consequently, this also controls what the banks will charge the consumer for borrowing money.
Before we go to the second mandate of the Fed, I need to briefly touch on the relevance of monetary policy to inflation. It is the stated goal of the Fed to have a target inflation rate between 2 and 3% annually. To put this in simple terms, think of this as a tax on every single citizen each time they make a purchase. If the Fed reaches their target at 3% each year, in a 10-year period of time things will cost 30% more. This is not noticeable till you get 8% inflation in one year. This is when people become outraged at what is happening and demand something be done. This is why interest rates went up so quickly, to squash the inflation that was caused by the Fed’s monetary policies and congresses knee-jerk reaction when Covid hit. Between the two of them, they dumped more than 2 trillion dollars into our financial system in less than a month.
Now back to the mandates we were discussing
Supervising and regulating banks ensuring safety and soundness of the nation’s banking system to protect credit rights of consumers. To illustrate the Feds effectiveness, one only needs to ask how many banks have failed in the past 20 years. The answer is more than 544 banks.
3. Maintaining the stability of the financial system
4. Providing financial services to the US government, US financial institutions, and overseeing the nation's pay system.
(Source: https://www.investopedia.com/terms/f/federalreservebank.asp#toc-the-federal-reserve-systems-mandate-and-duties )
The Fed chairman is nominated by the president and confirmed by the U.S. Senate. The Fed has never been audited. They have allowed crony capitalism to flourish in our country and participated in the greatest transfer of wealth in history.
The US Treasury is a department within the government that manages federal finances by collecting taxes and paying our bills. They also sell our debt in the form of treasury bills. Treasury bills are the instrument by which we create the nation’s debt.
There are few things as complicated as our financial system. This is the framework created to control and operate the monetary system on behalf of our citizens. Some parts work well while other parts are destructive to our society. Remember how many banks failed in the past 20 years? If our politicians were not purchased and operated by the 1%, then the banks would not be bailed out.
The most alarming thing about this is that very few people have ever paid a price for this dereliction of duty. The Budget and Accounting Act of 1921 established a framework for the modern federal budget process, including the role of the president in submitting an annual budget proposal to Congress.
The last president to abide by this law was George W. Bush. This brings us to why we have $30 trillion of debt created in the last 20 years. It's called continuing resolutions; we never look at what needs to be cut from the budget, we just add more money to the existing budget year after year after year. If this is allowed to continue, it will collapse the entire world’s financial system. There is not one rational person that could look at this problem and come to the conclusion that their children's future is safe.
I propose a balanced budget amendment be brought forward immediately for the consideration of the states to ratify. It will take a minimum of five years to cut the spending, and obligations enough to balance our budget.
Common sense dictates we cannot just cut and run. There are far too many countries that have grown dependent upon our overspending. They will need to make arrangements for their own security. I suggest the world will be a much safer place if we bring our troops home and defend our own borders. If excessive money is not dumped into our monetary system, it will stabilize itself.
There are many people in Congress that are willing to sign on to a balance budget amendment. I hope I can be the bridge across the aisle that can start the conversation. I will work tirelessly with this goal in mind. That, you have my word on.
I hope I have made my case to you, the American people, for the change that we need. Montana is taking the first step; we are depending on the rest of the country to examine whose representing them and make the changes necessary to save our country.
Thank You,
- MICHAEL HUMMERT