The Economic, Banking, and Family Crisis

I think most of us are experiencing the current economic situation with a kind of "deer-in-the-headlights" response. We hear something bad coming but we can't see the 18-wheeler behind the high beams. We've been talking about the "housing bubble" ever since the "dot.com" bust and unfortunately no one could get the US out out of traffic and off the highway.

How we got here
According to Maya Angelou, to understand where we are now requires that we look back at where we came from. When the US emerged from the Great Depression and World War II, the US was the most powerful nation on Earth. Eisenhower was president, the Dollar was backed by gold, and the "Greatest Generation" was raising large families, moving out to the suburbs, buying cars and dishwashers from US companies. So what happened?

When the our parent's parent's bought a home, their mortgage only accounted for a small percent of their gross income. In 1949, mortgage debt was equal to 20 percent of total household income; by 1979, it had risen to 46 percent of income; by 2001, 73 percent of income (Bernstein, Boushey and Mishel, 2003). So, now almost all US family income is consumed to cover housing and travel expenses alone.

But there are other factors here that this paper doesn't tell you. Now that US mortgages consume 73 or more percent of our gross income. What we need to realize, is that number includes both incomes from the husband and wife. When the data was first collected, very few women worked outside the home. Now, in many cases, women are forced to stay in the work place to cover basic housing costs. What all this pressure has produced is a new class of middle-class poverty called "house poor."

Additionally, the housing crunch is limiting house size and family size. But not in the way you would think. Despite having ever-smaller families, the size of the average American house has doubled since the 1950s. Average house size now stands near 2,349 square feet. Bigger homes require more money to furnish them. And this additional pressure on the family budget leaves little room to fill rooms with kids instead of "stuff."

The Result
And what is the result? With more money devoted to basic necessities, there is no money left over for savings and growing the economy. Also, with both parent's working, children and spouses are increasingly not getting their emotional needs met and instead turning to the addictive behaviors of substance abuse, sexual promiscuity, emotional eating or shopping to escape their stress. When family members face stress, the best way to deal with it is through our family relationships. But if no one is home, then it is tempting to turn to harmful and destructive behavior to cover the pain. And what we are left with are Americans who are overweight, divorced, substance addicted people with huge credit card debts.

Illegitimacy is one of, if not the major cause of poverty in America. Since the sexual revolution in the 1960's, the US is suffering the grave consequences of extra-marital sex which has now become a socially acceptable and expected behavior. My wife went to an inner-city school in Atlanta, GA. She said something very insightful concerning teen pregnancy. She told me, in many cases, the girls who got pregnant in high school didn't get pregnant because they didn't understand how to use birth control. Many got pregnant because they wanted to be pregnant.

Why would a teenage girl want to be pregnant? One of the major needs of the human soul is to feel loved and valued. The family is designed to meet that need and all other needs of its members. But if the family is broken, there is a natural force to look to gangs or pregnancy to fulfill that need for identity and belonging. There is no greater validation or sense of belonging that a human experiences than becoming a parent. But we shouldn't become parents to fulfill our needs. We should become parents when we are ready and able to fulfill the needs of children.

That said, not every single mother gets pregnant on purpose. Despite what the literature tells you, birth control has documented failure rates which are even higher when used by immature adolescents. And the same reasons young people should not be having sex is the same reason young people cannot be expected to use birth control responsibly. Abortion and feticide is not the answer. The psychosocial and spiritual strain and guilt of killing your baby follows women throughout their whole lives.

Why This Happened
Knowing what is happening does not answer why it is happening. The housing bubble was caused by our current banking and home mortgage system. The system places a huge weight on US families and homeowners. When a family borrows money from the bank, they agree to pay back the bank at a certain interest rate. That's fine. The lender barrows money from the US government at a certain interest rate and they lend it to families at little higher interest rate. The margin is the profits that allow the bank to stay in business.

The problem is not the interest rate. The problem is the amortization schedule of the mortgage. It turns out that on a typical 30-year loan, it takes 18.5 years before more than half the house payment goes to paying down any significant principle on the loan. Before that time, most of the house payment goes to pay interest. That means building equity requires that the home price goes up. And now that families are more mobile than ever, and going from job to job and house to house, home prices over-inflated to the point that the bubble has finally burst. US families can no longer afford to pay what is being charged for homes these days. And so we are experiencing a correction in the market and many poor and rich alike are defaulting an their mortgages now that their homes are now worth much less then what they purchased the home for. The falling home prices creates negative equity which means that even if the homeowners were to sell the home, they wouldn't make enough on the sale to pay the original loan amount.

"You either pay interest or earn interest." The loan and interest system between creditors and debtors is a system that enslaves people and nations, creates a class society between debtors and creditors, and prevents the easy generation of wealth. When a family (or a nation) gets a loan, nearly all the money that family generates goes immediately to interest. It can take 20 years for a family to begin to significantly pay down the principle on their mortgage and begin to earn equity. On the other hand, when a family chooses to save, the interest system is totally the opposite. It takes nearly 20-years for that money to begin to earn any significant interest. The deck is staked against the people to keep them from generating any significant savings and wealth. Instead, all that money is being pumped into the pockets of the world banks who own the majority of our T-bills and national debt.

The Perfect Storm
US Mortgages account for 10 trillion dollars in total value. The federal government during the Clinton years encouraged lenders to extend loans to risky or sub-prime borrowers. Instead of fixed-rate loans, these sub-prime borrowers were given adjustable rate mortgages (ARMs). The value of USA sub-prime mortgages is estimated at $1.3 trillion, about 10-20% of the total. When the rates increased on these loans, many homeowners with these mortgages could no longer afford their monthly payments and defaulted on their loans and gone into bankruptcy and foreclosure. By 2008, approximately 25% of sub-prime adjustable rate mortgages (ARM) were either 90-days delinquent or the lender had begun foreclosure proceedings. These ARMs represent 43% of all defaulted loans. The banks who offered these loans are left with a home that they are forced to sell at a considerable loss. Insurance companies like AIG who back these loans with private mortgage insurance (PMI) are being hit hard because they can't pay the $756 billion in defaulted mortgages (this is where the 700 billion number came from I think).

Other banks and financial institutions are being squeezed because a large portion of their worth is tied up in paper derivatives called mortgaged backed securities. These pieces of paper trade like stocks and bonds but derive their value from US mortgages. For some reason, despite the warning signs, investment firms were giving these mortgage backed securities their highest ratings (AAA). Banks are usually ultra-conservative with their investing and had been buying these securities in great numbers. However, since the Enron fraud, the Security and Exchange Commission has forced companies to account for these securities and others like it according to "Mark to Market" principles. This means that the value of the note is based on what you can sell it for today and not what you project it could be worth in 30-years when you plan on selling it. But, derivatives can be very volatile. And when the housing bubble burst, these securities became more worthless that the paper they were written on. So, many banks and companies lost money.

That set into motion another problem. And that is that banks do not borrow all the money they lend. Banks in the US operate and lend money on a principle known as leveraging. Leveraging means that for every $1 they own or borrow from the government, they lend $50 or even %100. The problem is that when a bank loses what little capital they have, it reduces the amount of money they can lend 50- to 100-fold. So, after the MBS's tanked, banks lost capital and became greatly limited in how much they could lend, investors got spooked and took their money out of the stock market, people's 401Ks took a huge hit, people stopped buying stuff, companies began losing money and can not find lenders to lend them money until the economy turns around, and many companies like the auto makers have huge pension plans and health care plans that they still are responsible to pay but no one is buying their cars causing them to run out of cash. Companies are now being forced to cut production, benefits and jobs. And these job cuts are adding to the already over-extended unemployment, Social Security, Medicare and welfare system in our country. That bubble is next to burst.

What should happen
There is not one simple answer to solve this problem. Our current economic and family crisis is caused by multiple weaknesses which have combined to create a catastrophic system failure. So, to solve this problem, we must avoid laying blame on any one thing, but look at how individual citizens, banks, and the government can change to get us out of this crisis. Only the application of a common-sense, principle-based approach will work.

The Family
People are our greatest resource. All people deserve the opportunity to be educated, develop their God-given gifts and talents and become contributing members of society. How many potential Einsteins or Mozart's have lived and died; their talents and abilities untapped and undeveloped. The family is the cornerstone of our society and is the only institution that can adequately meet the emotional, and psychosocial needs of its members. The family must be empowered to fulfill its fundamental purpose.

Civic leaders need to speak out against any extra-marital sex. Children have the right to be born into a home with both a mother and a father. Illegitimacy is the number one contributor to poverty, drug use, crime, and gang activity. I don't want to go back to the days of the scarlet letter, but we need to recognize that what the Bible calls fornication weakens our society. Extra-marital sex needs to loose its social acceptance.

Women should be encouraged to be college educated but to stay home with children while keeping their skills current if possible. Educated mothers result in highly motivated and goal-oriented children. But children need the nurture only a parent can give. The dollar worth of a stay-at-home mom has been estimated to be over $120,000 per year. Unless she is making more than that, it doesn't make dollars or sense to have both parents work. With mom at home, children are taught proper diet and health practices and how to care for babies and children. The transmission of these basic life skills and knowledge will result in a healthier population and less strain on emergency departments that are overrun with the responsibility to trying to educate people on the most basic and fundamental life and health skills.

US Families should be encouraged to have a good number of children. Grandparents are not supposed to be raising grandchildren. Children should be able to find employment close to home. Parents who have children close by have a built-in care-giving system in place when they get older and require it. Elderly parents do better when cared for by family instead of being institutionalized. 2/3 of money paid for health care is spent in the last 6 months of life. If we created a culture and tradition as other countries do where family cares for its own, and those family members are better educated on end-of-life care, health care costs would significantly be decreased. Elderly patients in Nursing Homes will end up in the hospital and back to the Nursing Home much more than patients who stay at home with family. Home health, hospice and respite services should be further developed and expanded.

Banking and Government
1. Get rid of the Fed and sell your own bonds and print your own money.
2. Immediately pay off all debt by printing the money.
3. Get rid of the banking practice of extending loans on leveraged capital which will prevent inflation by creating a demand for all the newly printed dollars.
4. Revamp the interest system so that borrowers are able to immediately pay off a greater portion of their principal and begin earning immediate interest on savings. In other words, do away with the amortization of debt repayment or change it to a flat rate.
5. We need to be more self-sufficient and produce and buy American products.
6. Do away with the idea of pensions and any idea which puts financial burden on a future generation. Again, let people save today by earning better interest rates.
7. Carbon dioxide is not a significant greenhouse gas, realize the theory of man-caused global warming is a fraud and allow 3rd-world nations to industrialize and create electricity with coal.
8. Extend education and business loans to developing countries using our fair interest system and allow them to create their own wealth and produce and buy their own products.
9. Work to gain energy independence as well as economic independence which means limit borrowing and buying from other nations as much as possible if we can build it here.
10. Get rid of derivatives for sure. Allow companies to issue bonds to raise money at better interest rates (remember that only the federal government should print money).

Conclusion
Maya Angelou shared the following wisdom, "I looked up the road I was going, and since I wasn’t satisfied, I decided to step off the road and cut me a new path.” I think it's time in America to follow this wisdom and cut ourselves a new path that removes the chain of debt around the neck of our country and the American people and puts the family first.

Abolish the Federal Reserve

"The budget should be balanced; the treasury should be refilled; public debt should be reduced; and the arrogance of public officials should be controlled." -Cicero. 106-43 B.C.

The world stands dumbfounded at how Bernard Madoff could pull a $50 Billion Ponzi scheme while an even bigger ripoff was executed by the investment banks and investment bankers over the US Government and US taxpayers. The US just gave over a trillion dollars to bailout several banks and insurance agencies. Much of this money went straight into the pockets of executives who made off with multi-million-dollar bonuses with the excuse that the money needed to be used "to keep and attract talent."

What is wrong with the US Government and US banking system? The US Government makes money in 5 ways. #1 taxes, #2 fees, #3 tariffs, #4 prints money, #5 issues bonds. The US Treasure has the authority to print money and issue bonds. Sometimes the US needs to run a deficit like during a war. But the problem with using bonds to finance expenditures, is that the interest on those bonds make it impossible for the national debt to be paid off.

What the following article and YouTube video simply suggest is to pay off our debts by printing money, get out of debt immediately. This video says that printing money to pay the debt would not cause inflation if you also at the same time abolished fractional reserve banking. Fractional reserve banking is the practice that allows banks to lend $10 dollars for every $1 they own. By forcing banks to lend only what money they had on hand, there would be an instant demand for the excess US notes. The result is that we would maintain a balance between supply and demand and at the same time we would substitute interest carrying debt with interest-free US currency.

The international investment bankers run by the ultra-elite families such as the Rockefeller's, Oppenheimer's, Schroeder's and Dulles, and the Rothschild's (De Beers, Bank of England, JP Morgan) own over 50% of the national debt while private US-held treasury bonds account for 2.5%. Now if the Fed didn't have more control of the US Government, Barack Obama has made Rahm Emanuel, an big-time investment banker and on the board of directors of "Freddie Mac" under the Clinton Administration, his Chief Of Staff. He has also made the previous Fed Reserve President, Timothy Geithner, the Secretary of the Treasury.

There is no reason the US Treasury Department can't do everything the Federal Reserve Bank does except pay their top executives obscene paychecks and bonuses. See, because if they worked for the government, they'd have to be paid like a government employee. But because the Fed is private, they get paid anything they want. The US needs to abolish the Federal Reserve.

(by Melvin Sickler)
Abraham Lincoln
During the Civil War (from 1861-1865), President Lincoln needed money to finance the War from the North. The Bankers were going to charge him 24% to 36% interest. Lincoln was horrified and went away greatly distressed, for he was a man of principle and would not think of plunging his beloved country into a debt that the country would find impossible to pay back.

Eventually President Lincoln was advised to get Congress to pass a law authorizing the printing of full legal tender Treasury notes to pay for the War effort. Lincoln recognized the great benefits of this issue. At one point hi wrote: "... (we) gave the people of this Republic the greatest blessing they have ever had - their own paper money to pay their own debts..." The Treasury notes were printed with green ink on the back, so the people called them "Greenbacks". Lincoln printed 400 million dollars worth of Greenbacks (the exact amount being $449,338, 902), money that he delegated to be created, a debt-free and interest-free money to finance the War. It served as legal tender for all debts, public and private. He printed it, paid it to the soldiers, to the U.S. Civil Service employees, and bought supplies for war.

Shortly after that happened, "The London Times" printed the following: "if that mischievous financial policy, which had its origin in the North American Republic, should become indurated down to a fixture, then that Government will furnish its own money without cost. It will pay off debts and be without a debt. It will have all the money necessary to carry on its commerce. It will become prosperous beyond precedent in the history of the civilized governments of the world. The brains and the wealth of all countries will go to North America. That government must be destroyed, or it will destroy every monarchy on the globe."

The Bankers obviously understood. The only thing, I repeat, the only thing that is a threat to their power is sovereign governments printing interest-free and debt-free paper money. They know it would break the power of the international Bankers. After this was published in "The London Times", the British Government, which was controlled by the London and other European Bankers, moved to support the Confederate South, hoping to defeat Lincoln and the Union, and destroy this government which they said had to be destroyed.
They were stopped by two things.

First, Lincoln knew the British people, and he knew that Britain would not support slavery, so hi issued the Emancipation Proclamation, which declared that slavery in the United States was abolished. At this point, the London Bankers could not openly support the Confederacy because the British people simply would not stand for their country supporting slavery. Second, the Czar of Russia sent a portion of the Russian navy to the United states with orders that its admiral would operate under the command of Abraham Lincoln. These ships of the Russian navy then became a threat to the ships of the British navy which had intended to break the blockade and help the South.

The North won the War, and the Union was preserved. America remained as one nation.
Of course, the Bankers were not going to give in that easy, for they were determined to put an end to Lincoln's interest-free, debt-free Greenbacks. He was assassinated by an agent of the Bankers shortly after the War ended.

Thereafter, Congress revoked the Greenback Law and enacted, in its place, the National Banking Act. The national banks were to be privately owned and the national bank notes they issued were to be interest-bearing. The Act also provided that the Greenbacks should be retired from circulation as soon as they came back to the Treasury in payment of taxes.

In 1972, the United States Treasury Department was asked to compute the amount of interest that would have been paid if that 400 million dollars would have been borrowed at interest instead of being issued by Abraham Lincoln. They did some computations, and a few weeks later, the United States Treasury Department said the United States Government saved 4 billion dollars in interest because Lincoln had created his own money. So you can about imagine how much the Government has paid and how much we owe solely on the basis of interest.

The Federal Reserve Act
There were changes in the money and banking laws for the next fifty years. Finally, in 1913, the Bankers were able to get their Federal Reserve Act passed through Congress which replaced the National Banking Act that had earlier replaced the Greenback Law. If the Government would have continued the policy of Abraham Lincoln, the warnings given in "The London Times" would have come to pass. America would be a debt-free nation, the most prosperous in the world. And the brains and the wealth of the world would have come to America.

But with this Federal Reserve Act being passed, Congress gave up its power to create its own money that it was given in the United States Constitution, and gave this power over to private Bankers who called themselves the Federal Reserve. The Bankers had achieved their ultimate goal, for now the United States operated under a central bank that was privately owned. They now had the power to run the country by controlling the creation of the money, and were free to charge the interest they so desired.

As Mayer Anselm Rothschild once said: "Permit me to issue and control the money of a nation, and I care not who makes its laws..."

Education Reform

My mother Gayle Ann Brosnahan is one of the finest 3rd-grade teachers ever. In a conversation about education, she made the following observations and suggestions.

The education system in the US is failing a large majority of our population. Many inner-city schools have unacceptable drop-out rates. Some lay the blame on the teachers, or parents, or the students themselves, but maybe the system itself is not meeting the needs of our students. What do I mean?

Over the past 30 years, technical training in US high schools has been cut until it has become nonexistent. Part of this is because its expensive to maintain auto-, woodworking, and metal shop. What states have done instead is to invest all this money in technical colleges. It's much cheaper to pay for one well-equipped technical college than 12 minimally equipped high schools. While this saves money, many high school students have long since dropped out of school before they are eligible for the technical college. In many cases, high school students are forced to drop out because of their family financial situation. Many teens go into the full-time service and unskilled labor industry as soon as they are employable at 16.

What do I suggest? Fund a well-equipped technical college in every area and allow high schoolers to attend as early as 14 years old. By that age students will have the basic reading, and math skills and they can start learning a trade as a plumber, electrician, auto mechanics, and med techs etc. Then at 16, let them work days and take night classes or work nights and take day classes.

Our current education system is tailored for those going on to traditional 4-year Universities. Additionally, our current education system has been greatly feminized. I am sure its tough for many being expected to read "Pride and Prejudice" and "Wuthering Heights" when your family has been hit with the financial stress of an expensive medical bill or home foreclosure.

My father was raised in poverty but was able to work as an apprentice electrician through high school. He eventually went on to college and graduate school, but had he remained an electrician, he would have had a marketable skill that would have provided a decent living for his future family.

The National Debt

Lawrence Malkin is an economic reporter for Time Magazine wrote an excellent book explaining the complexities of the National Debt. The problem? This book was written in 1986, published in 1987 and since then nothing has changed. The National Debt is such an institution that it even deserves capitalization as a formal noun.

Malkin begins by review the 3 ways the US Government makes money. The US taxes, prints money and borrows money in the form of US Treasury Bonds or T-Bills. Way back during the days of Alexander Hamilton and Thomas Jefferson, there was a debate over whether the US Government should have a national debt and run deficits. US Treasury Secretary Alexander Hamilton argued that during war time, a national deficit would be important because wars are generally a test of economic power as well as military power and resolve. The idea was that during the war the country could tap into its credit reserves, and then pay off the dept during peace time and though continued economic growth. That is, if the GDP or gross domestic product of the nation increases faster than inflation. 10 billion dollars yesterday is not the same as 10 billion dollars today. As the country grows, more people are making money and paying more taxes. However, on the other side, borrowed money accrues compound interest and 10 billion dollars borrowed yesterday becomes many more billions of dollars owed today.

So, how did we get into this mess? Malkin begins by taking us back to WWII. When the US emerged from the war after the long years of The Great Depression, due to huge investment by the US Government in industry and infrastructure, there was a huge post-war boom. Companies like Ford, Chrysler, Boeing had huge production facilities built for them during the war which they were gifted to them after the the war was over. In an example of Keynesian Economics, the investment of the government in industry and the US Highway System stimulated a huge boom in the economy. The 20 years following the war, the US was at the peak of its power and influence during the Eisenhower and Truman administrations.

So, what happened? Vietnam and the Sexual Revolution. During the prolonged Vietnam conflict, the US ran up big deficits. Additionally, the birth control pill was introduced which gave women a false sense of security about pre-marital sex as well as making pre-marital sex socially acceptable. So, during this critical time, while the country was paying for the Vietnam War, hundreds of thousands of unmarried women in the US were getting pregnant, moving from rural America to the city and going on the new welfare system created by Lyndon B. Johnson's "the Great Society."

Due to the prolonged war, Richard Nixon was elected into office and eventually stopped the war. However, he made a critical mistake which signaled the decline of the US. President Nixon took our currency off the gold standard. The US Dollar used to be the world's leading currency. In times past anyone could exchange a US Dollar for the equivalent amount of gold. Well, during the war, the US started printing money instead of just borrowing to pay for LBJ's Food Stamps, Medicare, Medicaid and the war. Simply printing paper money results in inflation, devalues the currency, and weakens the dollar. Consequently, foreign governments and banks who held billions of US Dollars began to exchange them for gold. Nixon wanted to hold onto the gold so, he took the Dollar off the Gold Standard. What this did is let the value of the Dollar float and be entirely determined by how many dollars are owned by foreign companies and governments.

The next critical mistake was that the US Government ignored the oil issue. It used to be that the Western Powers had control over the world supply of oil. It was true then as it is today that a majority of oil came from the Middle East countries of Saudi Arabia, Iran, Iraq, and Lybia. But, these countries did not refine the oil into gasoline. Western companies such as Exxon, Mobile, Chevron, Texaco, Shell, and BP controlled oil because they controlled the distribution, and refining of oil to gasoline. These 7 companies could tell the Middle East what they were willing to pay for oil. This is the same concept of how Walmart controls the producers and dictates to a producer what it will pay for the product. Well, this power over oil and gas distribution only lasted as long as the US had its own oil and gas reserves. But environmentalists forced the US to stop drilling and exploration and the building of oil refineries. At the same time, the oil producing nations in the Middle East unionized and formed OPEC. As the US began exporting more and more oil from the Middle East, OPEC gained control to dictate oil prices. This new control resulted in the Oil Crisis and embargo in 1967 and 1973 and the high gas prices today. Now gasoline distribution and production is controlled by a new 7 sisters which includes nationally held companies from Russia, Saudi Arabia, Brazil, China, Malaysia, Iran and Venezuela.

So, what happened in the 80's and 9o's? More of the Same. The welfare programs such as Social Security, Medicare, Medicaid etc began to grow out of control. At the same time the US continued record spending in defence during the the Cold War as we "out spent" the Soviet Union. Since the fall of the Soviet Union we haven't seen the expected "peace dividend" because of the unrest and threat by smaller nations destabilized by the fall of the Soviet Union and organized terrorism.

Now there are record numbers of single women on welfare and children born into poverty. There are record numbers of "Baby Boomers" who are retiring and expecting to cash in on Medicare and Social Security which returns 5 dollars for every 1 dollar paid into it. We live in a different world today. Housing after the war was exceptionally inexpensive. An average home cost about $10,000 and the mortgage payment was less than a 1/5 of the family income. That left more money available to buy cars, appliances, TVs and microwaves, which our grandparents did. They spent and spent and didn't save and looked forward to Social Security after retirement. Now the Baby Boomers were born and housing became more expensive. That same house that was $10,000 now became $85,000 and the mortgage payment was 1/3 of the family income. To live after the manner in which they were accustomed to living, the Baby Boomers sent mom into the work place and children went to day care.

Today large family homes are $250 to 350,000 and up. Many families who cannot afford the same size house as their parents live in town houses at a cost of $100,000 or small 3 bedrooms homes at $150,000. Men and women are getting married later in life, from 23 to age 25 in 1980 and 27.5 in 2006. Families are having less kids today 1.8 per family which means less workers to pay for Social Security and Medicare. Also, Generation X is not only not saving but also racking up record consumer and credit card debt.

With the increase in housing costs, the average salary of the US worker is not following suit. Industrial and Manufacturing jobs are increasingly going overseas. Even technical computer jobs are going overseas. Manufacturing has become increasingly automated and the robots and computers only need supervision. So, an increasing amount of US jobs have become service oriented. These jobs in the service industry usually are part-time, low pay, temporary, and do not provide benefits. As transportation costs increase, raw materials are mined from the US, shipped to Asia where components are produced and shipped back to the US for final assembly in an automated factory. While Blue Chip companies have been loosing jobs to foreign outsourcing and automation. Small US companies have been the source of a majority of job creation. However, much of the rise in US productivity is reflected in US workers working longer hours for less pay, working two and three jobs, or an increasing amount of women in the work place.

How much is the National Debt? Educated Upper middle class Americans pay 40-50% of their pay check for taxes, of which 9% of the National Budget goes just to pay the interest on the National Debt which is calculated to be over 9.6 trillion dollars. 22% of which is owed to foreign governments and 40% is owned by our own federal reserve which is controlled by the worlds largest investment banking institutions. These same institutions that ask for a government bailout when they make a bad financial deal and loose money speculating in the market.

This book is complimentary of the Federal Reserve Chairman Paul Volcker who prevented the US from printing money, causing inflation, devaluing the US Dollar instead of issuing bonds. The Book gives the equation MV=PT (money)(velocity)=(price)(transactions). If the US prints more money are there is more money in circulation, that could cause the price of everything to inflate and devalue the dollar. That would also devalue T-bills and cause foreign holders to cash in and the large world banks who own the Fed to take the loss. During the administration of Paul Volcker, the Fed Reserve held record high interest rates (20%) which made it difficult for the US to borrow money, made record profits for the reserve, and made borrowing for individual buyers in the US for homes difficult. The result of high interest rates did moderate double digit inflation in the late 70's and early 8o's.

The book is critical of Ronald Reagan and Alan Greenspan and so-called "supply-side" "trickle-down" economics or "Reaganomics." The idea here is that if you reduce taxes for the rich, that will put more money into the hands of people who will go out and spend or save it. Problem is that most of that money goes to China because of the US trade deficit and therefore doesn't grow our GDP at home. Inflation has been outpacing our rise in GDP destroying any home in outgrowing the National Debt. It seems after 20-30 years, supply-side economics hasn't delivered on its promises. You can increase the amount of money in the pockets of the rich and middle class but you can't force them to save it, invest it, or buy American.

What does Malkin suggest? He suggests for the US government to not print money and to control inflation. He suggests for the American people to tightening our belts and for the US government to cut programs and defence spending. But so far it seems the government is nowhere near ready to cut entitlement spending and defence spending now as it was in 1987.

The Book does try to explain what the Federal Reserve is. It says that a couple times a year the US government decides to issue bonds. The Fed determines at what rate they will be sold for. The Large World Banks buy up these Bonds and then hold or resell them. They really don't have real money to buy them as they only are expected to carry a small percentage of actual cash on-hand for the amount of money they loan (8%?). A sizable amount of these bonds are then resold to foreign governments, corporations, and a small amount make up individual accounts, and corporate pension funds.

What this book doesn't address. There are some people who are suspicious of the Federal Reserve and consider it a front for several world investment firms and international banking institutions such as the Rothschild Bank of London, Warburg Bank of Hamburg, Rothschild Bank of Berlin, Lehman Brothers of New York, Lazard Brothers of Paris, Kuhn Loeb Bank of New York, Israel Moses Seif Banks of Italy, Goldman Sachs of New York, Warburg Bank of Amsterdam, and Chase Manhattan Bank of New York. Some conspiracy theorists claim these banks are controlled by the ulta-elite and the national debt allows them to exert political power over US policy. These conspiracy theorists claim that both Abraham Lincoln and John F. Kennedy were assassinated after attempting to dissolve the Federal Reserve or print money without approval of the Fed.

Basic Chemistry of Steel Making

A little clarification on Steel and Wootz, becasue there is considerable confusion about what is Wootz, Damask, Bulaut, Damascus steel.

Noone knows how to make Wootz. It is a secret that has been lost for several centuries. Noone has made steel to the quality of Wootz since. Wootz is like 3-5 times stronger than any know modern steel. making Wootz has nothing to do with laminating, forge welding, pattern welding, layering, etc, etc. Japan did use lamination to produce their blades. But pattern welding was how knockoff sword makers tried to imitate Wootz. Pattern welding actually makes weak spots and if you buy ammunition some boxes say that it is not to be used in gun with Damsk or Wootz steel barrels. There have been several cases of the these cheaply made barrels blowing apart.

True Wootz has to do with creating the correct conditions to grow carbon nano-tubes matrix inside the molten iron. Some theorize this had to do with vanadium nucleation sites, and repetative heating and cooling cycles. But, like I said, noone knows. Pattern welding can fake the swirl pattern on Damascus Sabers, but noone knows how to make real Wootz. Wootz steel had extrememly high carbon content over 2% which should result in worthless Cast Iron. But instead of the carbon making the steel brittle, the carbon formed into a carbon nanotube matrix. This nano-steel was extrememly hard, yet flexible and elastic. (Ancient Nanotechology = Cool)

About regular modern and ancient steel. Cooled wrought Iron (ferrite-Faced Centered Cubic structure) cannot disolve signifanct amounts of carbon. If you heat it up to almost molten (910oC), it will phase transition to austenite (Body Centered Cubic) and readily dissolve carbon up to 2%. When the iron is allowed to cool, the carbon will precipitate as cementite. Mixtures of cementite and iron are called pearlite and bainite and are found in steel and cast iron.

To make steel you need to disolve the carbon in molten wrought Iron and then cool it rapidly. Instead of the carbon precipitating as cementite, the carbon will precipiate as martensite. Martensite is the key to non-wootz, non-stainless, ancient and modern steels. The martensite itself is not what is important. What is important is that when martensite forms it changes the configuration of austenite from a Body Centered Cubic configuration to a body-centered tetragonal structure. BCT is what leads to steel.

However, BCT iron full of martensite is extremely hard hard but still brittle. The large martensite crystals needs to be broken down. That is where tempering comes in. BCT iron is then reheated which transforms some of the brittle martensite to transform back into bainite or pearlite or a combination of ferrite and cementite. This is done until the right balance of hardness, brittleness and ductility is achieved. Steel has a mixture of martensite, bainite, ferrite and cementite. But if you see martensite, then you know the iron has been austenized and quenched. tempering only requires gentle reheating.

3 steps for making steel 1.austenizing. 2. quenching 3. tempering.
www.technologystudent.com/equip1/heat1.htm

Bronze was supperior to wrought iron and cast iron in every characteristic. But steel beats Bronze hands down. So, some believe what drove history from the bronze age to the Iron age was a shortage of Tin traded by the phoenecians which produced pressure on countries to invest in steel research. When steel was discovered (think Manhattan Project), and able to be produced in large amounts, the Assyrians used steel chariots and swords to conquer Northern Israel and Egypt. Steel making didnt make your country dependent on foreign tin. Therefore, steel could be made locally, and became the the material of choice.

Steel also has elastic and memory properties that ancient bronze did not. So, steel could be used as a material to make springs and tension bars to store potential energy. Steel spring technology was used later in this way to make seige weapons and cross bows. Steel spring technology was the secret of sucess of the Romans and was involved in the fall of Carthage (end of the Phoenecians).