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pahunkboy -> A Moral Obligation to Pay Immoral Debts? (7/19/2010 7:21:25 PM)
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In A.D. 2008, Arizona installed 76 highway cameras to catch speeders.
Last Thursday, Arizona disconnected those cameras.
The cameras generated more than 700,000 photo-tickets in the first
year and should've produced $90 million in fines. But gov-co collected
only $30 million because 70% of the drivers simply /ignored/ the
tickets. Others shot at or otherwise sabotaged the cameras.
Drivers who ignored photo-tickets were supposed to be served and
compelled to come to court. But process servers were so overwhelmed by
photo-tickets, that service became virtually impossible. If a person
wasn't served within three months, his ticket was dismissed.
1st Point: /Having/ a debt and /collecting/ a debt are two very
different things—especially in times of recession or depression.
2nd Point: Effective debt collection depends more on the debtor's
/moral/ nature than the debt-collector's ferocity. If debtors aren't
willing to voluntarily pay, there's usually not much that the
creditors can do besides write off their losses.
A recent /NYTimes/ also illustrated the growing difficulty in
collecting debts:
“As millions of Americans have fallen behind on paying their bills,
debt collection law firms have clogged courtrooms with lawsuits
seeking repayment. One firm has been filing roughly 80,000 lawsuits a
year. With just 14 lawyers on staff, that works out to more than 5,700
cases per lawyer.
“How is that possible? The firm relies on computer software to help
prepare its cases.”
In other words, lawyers have attempted to /automate/ debt-collection
litigation.
That sounds terribly efficient, but such automation in bad economic
times is actually counter-productive. Why? Because our courts were
designed to enforce debts in a strong economy when defaulting debtors
are relatively rare. Those courts are overwhelmed when the economy
tanks and the number of defaulting debtors explodes. Automated
litigation only exacerbates the problem.
Thus, it's increasingly obvious that even if the average debtor has
the money to repay his debts, effective legal process to compel him to
do so is diminishing.
Result? As debtors realize that their debts can't be enforced, debtors
will ask Why should I even /try/ to pay my debts?
Many Americans view a refusal to repay debt as immoral and even
“un-American”. Surely, despite the growing technical impediments
to debt collection, American debtors will honor their /moral/
obligation to pay their debts—right? . . . . /Right?/
Maybe.
But maybe not. As Supreme Court Justice Louis Brandeis once observed,
“Our government is the potent, the omnipresent teacher. For good or
for ill, it teaches the whole people by its example. Crime is
contagious. If the government becomes a law-breaker, it breeds
contempt for law; it invites every man to become a law unto himself;
it invites anarchy.”
Government is not merely our moral model as to crime, it's also our
moral model as to debt. What kind of moral model has our government
(and it's most-favored special interests) set regarding the payment of
debts? The July 10th /Wall Street Journal /offered some indication*:*
“Bank of America Corp. admitted to making six transactions that
/incorrectly hid/ billions of dollars of debt . . . . The disclosure
in a letter to the SEC, comes as the SEC unveils the results of an
inquiry into banks' accounting for borrowing deals known as repurchase
agreements, or "repos." BOA's disclosure suggests the repo's may be an
example of end-of-quarter "window dressing" on Wall Street, in which
banks temporarily shed debt /just before/ reporting their finances to
the public. The practice . . . suggests the /banks are carrying more
risk most of the time than their investors or customers can easily
see/, and then juggling it during quarter-end reporting of financials.
“BofA said its incorrect accounting wasn't intentional.”
Say /whut?/ BOA hid over /$10 billion/ in debt, but it /wasn't
intentional?!/ Are we to believe that a /bank/ of BOA's size and
stature has such lax accounting practices that /$10 billion/ of debt
were misplaced “accidentally”?
BOA is lying—and lying repeatedly. First, BOA lied to the public
when they hid their debts in order to falsify their quarterly reports
and thereby maintain their stock prices. Second, BOA is lying now to
the government about not having hidden the debts “intentionally”.
(If the debts were hidden accidentally, no one goes to jail. If the
debts were hidden intentionally, somebody might do time.)
During A.D. 2007-2009, the Too-Big-To-Fail banks /cooked the books/ to
make their balance sheets look better than they really were. When it
came time to release quarterly reports, they'd bundle up all their
“toxic” assets (subprime loans) and swap them to another
“buddy-bank” for cash. These “repo-loans” made their balance
sheets look better than they really were.
Later, after the quarterly report was published with a glowing
assessment of the bank's financial condition, the first bank would
“repossess” its toxic assets back from its “buddy”. Then, when
the next quarterly report came due, they'd again sell their junk to a
“buddy-bank,” and again, hide their debts and deceive the public
as to the true financial condition of the bank.
Lehman Brothers used their “Repo 105” loans to conceal the fact
that they were insolvent for /months/ before their bankruptcy. This
/$50 billion/ /fraud/ allowed Lehman executives to continue receiving
fat bonuses and also enticed investors into unwittingly purchasing
Lehman stock after Lehman was technically (but secretly) bankrupt.
Lehman's fraud was one of the critical precipitants of the A.D. 2008
financial crisis that led to our current recession/depression.
Surprisingly, Fed chairman Bernanke and Treasury Secretary Geithner
/knew/ about the Repo 105 loans /months/ before the financial crisis
hit but neither they nor the SEC did anything to disclose or stop the
accounting fraud. Why? Because the treasonous whores in the cathouse
on the Potomac have taken bribes (political campaign contributions)
from Wall Street bankers to /legalize/ “window-dressing” (hiding
debts from the public) in the big banks' quarterly reports. The frauds
committed by Lehman and BOA may go largely unpunished because they're
“/legalized/ frauds”.
If our government will excuse major corporations from the moral
obligation of repaying /billions/ of dollars, why shouldn't gov-co
also absolve private persons from their obligation to pay their
mortgages and credit card bills? Should the American people be held to
a higher moral standard than American corporations?
The national debt is so great that the July 12th /Washington Post/
warned:
“The co-chairmen of President Obama's debt and deficit commission
offered an ominous assessment of the nation's fiscal future, calling
current budgetary trends a cancer 'that will destroy
the country from within' unless checked by tough action in Washington.
The two leaders (former Republican senator Alan Simpson of Wyoming and
Erskine Bowles, White House chief of staff under President Bill
Clinton) said that, at present, /federal revenue is *fully* consumed
by three programs: Social Security, Medicare and Medicaid. 'The rest
of the federal government, including fighting two wars, homeland
security, education, art, culture, you name it, veterans—the whole
rest of the discretionary budget is being financed by China and other
countries/*.'*"
That's a lie. The feds' “discretionary budget” is not ultimately
financed “by China and other countries”. Instead, that
discretionary budget is financed by /deficit spending/ whereby today's
Americans receive enormous and unearned governmental benefits that are
intended to be paid for /by future generations/. Thus, by means of
deficit spending, America's /children, grandchildren and
great-grandchildren—/though too young to vote or understand—are
being sold into debt-bondage by their parents and government. The
fed's discretionary spending is financed by government promises that
future government officials will be able to persuade, cajole or compel
future generations of Americans to live in poverty in order to repay
the debts incurred by this generation's appetite for unearned
benefits.
But /will/ America's kids voluntarily pay their parents' and
grandparents' bills? Where is the morality in one generation “living
large” and leaving the bill for its “party” to its /children/?
Where is the moral obligation of a /child/ to pay a debt incurred by
/parents/ and a government that were too immoral and irresponsible to
pay for their own benefits?
What happens if the kids say, “Hell No! We Won't Pay!” What
happens if “China and other countries” anticipate the American
kids refusal to repay?
“Erskine Bowles said, "We could have /decades/ of double-digit
growth and /not grow our way out/ of this enormous debt problem. /We
can't tax our way out. . . . We've got to cut spending or increase
revenues or do some combination of that/.”
In short, there's no way out. The debt is so great that we can't
produce our way out and we can't raise taxes enough to tax our way
out.
Bowles lamely suggested that there might be some hope if,
“three-quarters of the deficit reduction was accomplished through
spending cuts, and the remainder with additional revenue.”
But where will gov-co find “additional revenue”? Gov-co moved our
industrial base to the third world, so we won't be able to increase
production to raise wages and tax revenues. We're already entering a
depression that will further shrink tax revenues. People are already
so over-taxed and indebted that they can't (or won't) pay any more.
American kids (if they have any brains and guts) will eventually
refuse to repay the debts incurred by their irresponsible parents.
Foreign countries will increasingly refuse to lend to a government
that will /never/ be able to repay its massive debts.
All of which suggests that “Big (immoral) Government” is about to
become openly insolvent. If so, we should soon see enormous
governmental “spending cuts”. Big Government is about to get a
/lot, lot smaller/. And those Americans who depend on Big Gov-co for
their jobs, welfare, medical care, food and pensions are about to
suffer the greatest financial shock of their lives. It may take a
couple more years, but Big bro' is so broke that it will soon have to
release its employees and pensioners to fend for themselves.
Why is this happening?
As I've argued for several months, the current crisis is less
“economic” than /moral/. Our economy is not collapsing because
somebody failed properly adjust the unemployment rate, interest rate
or the velocity of money. We're headed towards calamity because we've
lost our moral foundation and become lovers of money. In a nation
where “greed is good,” collapse is inevitable.
Part of our national immorality is seen in government paying its
employees /twice/ what they could expect to earn for the same work in
the private sector and providing government pensions that make So-So
Security look like alms. Why are government employees (“public
/servants/”)/ /better/ /paid than the public (who should be the
government's “masters”)?
Answer: Gov-co has become an overt hustle, a racket, a con, an
in-your-face system of institutionalized lies and liars who don't give
a damn about the American people . . . except as patsies to pay off
the gov-co's outrageous debts.
So, what is the /moral/ obligation of a people to repay the debts of
an /immoral/ government?
For example, gov-co admits that our “national debt” is about $13
trillion. But in A.D. 2008, John Williams at Shadowstats.com, /USA
Today/, and former US Comptroller David Walker each calculated that
the real national debt was closer to $55 trillion—about /four times/
the amount currently reported by the government. Just like BOA and
Lehman Bros., our federal gov-co has been “cooking the books” and
/hiding/ the true extent of our national debt for decades.
Perhaps the American people have a moral obligation to repay the $13
trillion national debt /that we know about/. But what is our moral
obligation to repay another $45 trillion in debt that's been
effectively /hidden/ from us?
What is our children's moral obligation to repay debts that were 1)
incurred by irresponsible parents and grandparents; 2) technically too
large to /ever/ be repaid in full; and 3) were immoral (“something
(gov-co benefits) for nothing”) to begin with?
And I haven't even begun to explore the inherent immorality and
unconstitutionality of gov-co imposing a legal tender upon the
American people rather than providing the gold and silver coin as
currency guaranteed at Article 1.10.1 of The Constitution of the
United States.
The whole damned system of paper debt instruments is nothing but a
racket. At bottom, this racket is all about the money, and trying to
degrade the American people to the status of permanent debtors. This
system is worse than immoral, it's wicked.
Inevitably, wickedness invites retribution.
We are fast approaching a time where government, desperate for
additional revenue, will encourage Americans to /voluntarily/ pay more
taxes while they also accept huge cuts in governmental services. Part
of government's pitch will stress the people's “moral obligation”
to repay the debts.
But, lessee, given that:
1) government policy has been to inflate the currency and thereby
systematically /rob/ creditors for over 70 years;
2) government has /hidden/ the true size of its existing debt so as to
deceive the people;
3) government has allowed favored, financial institutions deemed
“too big to fail” to flat-out avoid paying their debts; and,
4) government seeks to impose a debt burden upon the American people
that is greater than the people could possibly repay—
Then it's apparent that government, at no time in the past four
generations has dealt honestly with /its/ debt. In fact, it's
established government policy to /cheat/ the world's creditors with
inflation and lies (promises to pay debts that can't possibly be
kept). In short, gov-co recognizes no moral obligation to its
creditors.
Therefore, what /moral/ obligation exists for the American people to
repay the debts of an /immoral/ government? More, the total American
debt is too great to /ever/ be repaid. So what is our moral obligation
to attempt the impossible?
If America can, at best, repay only a small /part/ of its enormous
debt and has (or will have) little moral inclination to do so, what do
you think will happen to the debt?
Any fool can see that most of it won't be repaid. /Ever/.
So, what do you think will happen to those people who've invested
their savings in paper debt instruments like stocks, bonds, pension
funds, bank accounts, etc.? When the existing debt is recognized as
impossible to pay, most creditors are going to lose their assets.
Implication: The prudent should covert their paper debt instruments
(promises to pay) into real “payments” (things owned and
/personally/ /held/ like land, food, tools, machinery, silver and
gold).
If we encounter the “Greatest Depression,” those who enter with
paper wealth will be ruined. Those who have real wealth /in hand/ in
the form of tangible substances (especially monetary metals like gold
and silver) might not only avoid ruin but may even prosper.
/snip
for the entire article - go here->
http://www.discountgoldandsilvertrading.net/Weekly_Market_Update.htm
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