On February 16th and 27th, and April 4th, I posted three blogs about National Fiscal Responsibility and Reform. I hope they helped you understand and appreciate what was coming and has recently passed, that is, the Great Debate on Raising the National Debt Ceiling.

The best thing about the Great Debate is that it made the problem so visible, at least for awhile. Some identify the problem as economic, and certainly federal government expenditures of roughly $ Three Trillion per year when federal government revenues are roughly $ Two Trillion per year is an economic problem.

However, I suggest you think for yourself on this one. I suggest that you view the problem as one of personal responsibility: no one owns up to the personal responsibility for the economic circumstances in which we find ourselves as a nation. Anyone can see that this stretches from one administration to the next, and that, where debt is concerned, this administration stepped onto a runaway train. But is that an excuse for the current administration? No. Both parties have been there through the development of the debt, both saying yes to every budget, so both have been equal participants in creating the problem that we are struggling with. What were they thinking?

In rough terms, economically, something like this: we’ll grow out of it. No, not as in, “We’ll grow up.” But rather, the economy will grow in Gross Domestic Product rapidly enough that the National Debt, no  matter how large, will always be manageable, because tax revenues will always be enough to pay for current spending, plus interest on the debt, and sometimes to reduce the principal in chunks, like when there’s no war going on. It will therefore be stable enough for the U.S.A. to keep the AAA credit rating for the bonds (debt) it issues and for the U.S. Dollar to remain forever the Reserve Currency of the Entire World, even though the debt will continue to grow. So don’t worry, growth of debt is O.K., and everything will be just fine. In other words, some kind of plausible rationale for going forward at each step.

In rough terms, politically, something like this: “I hope we don’t have to make a public explanation of this situation any time soon.” And, indeed, we did not receive economic explanations during the Great Debate. All of our leaders agreed the situation was very bad and that the other party and its agenda was the cause of it. Some were blatant blamers and some were more restrained, but blaming was the order of the day.

There is a blame story of sorts to tell, but it’s not that one. The President and Congress have very little, if any, influence on the economy. They handed over all monetary powers to the Federal Reserve Bank in 1913. The Fed is a private bank, owned by banks, and pays dividends on its shares owned only by banks. The Fed is a private Bankers’ Bank. Fed policy, not Government policy, is the dominant factor in economic growth and contraction.

The Fed has a legal monopoly of money granted by Congress and the President in 1913. No one sees Fed accounts; they are not audited. No balance sheets are issued. The Congress has never investigated the Fed and is highly unlikely to do so. The Fed has the power to create money. This money is fiction, created out of nothing. This can be money in the form of created credit through the discount window at which other banks borrow at the discount rate of interest, or it can be notes printed by the Treasury and sold to the Fed and paid for by Fed-created funds.

In brief, this private group of bankers has a money machine monopoly that is uncontrolled by anyone and is guaranteed to make a profit for them. Further, the monopoly doesn’t have to answer questions or produce books or file annual statements. Its activities are unrestricted, and it is not subject in any way to your vote or mine.

Once you understand how this works, you can understand how frustrating it is to be a politician when political control over the economy is so marginal. For example, as a politician, you would like to make promises to create jobs and then live up to those promises, but you haven’t a clue whether anything you do will really produce the results you intend.

So, when I said above you should view the National Fiscal Responsibility problem as one of personal responsibility, what might that mean for you? Perhaps learning more about how your country’s economy really works, like, who’s in charge here? What are the limitations under which my elected officials are functioning? How can the U.S. economy be run by people I never heard of who aren’t subject to being voted in or out of office?

Things like that. This is a self-study by the way. As you can imagine, there are very few books on the subject that aren’t of the “tin hat” or “conspiracy” variety, so you  must select your reading material responsibly.