Letter - Massive debt will eventually implode US economy

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What’s a key element that makes a society prosperous? The answer is to put people to work producing something. And that should be a primary goal of the Federal Reserve and politicians.

If people have good jobs, they can be self-supporting, help the disabled, pay taxes and can buy more goods and services.

And the money the Fed creates to stimulate the economy won’t cause inflation because for every dollar created, the economy will produce a good or service that absorbs the extra money.

Unfortunately, our Fed and politicians are doing the exact opposite.

The money the Fed creates is just ending up in the stock market, or some other financial asset, causing global asset bubbles, which explains why the rich are getting richer.

The money doesn’t end up as loans to small businesses to help them grow and hire more workers who produce more goods and services, which explains why the middle class is shrinking.

Yes, some of the money the Fed creates does trickle down to consumers who buy more stuff. Sadly, most of that stuff is made in China, increasing employment there, but not here.

The politicians are lousy at their jobs just like the Fed. Instead of investing the money on projects that benefit all Americans, politicians simply give the money away to whoever will vote for them.

Most of the money given away by the government isn’t used to put people to work producing something, but is simply spent on consumption.

The work force participation rate is only 63 percent, a 35-year low. But, even with a shrinking work force, we’re still able to pay our bills.

For every dollar the government pays its bills with, it borrows 40 cents. Again, the 40 cents isn’t being invested to put people to work, but is simply being spent to consume more.

The vast majority of Americans feel the borrowing can go on forever.

The U.S. is a debtbased monetary system monopolized by the Fed. When the Fed creates one dollar, the dollar it creates is in the form of debt, something that has to be paid back with interest. If incomes don’t go up as much as the debt, at some point, our debt-based economy will implode.

Oh, by the way, since 1970 incomes for the middle class have been almost stagnant while our national debt has gone up by 4,747 percent (from $371 billion to $17.5 trillion).

Richard Strozinsky

Walla Walla

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