“Truth persists and illuminates, even if there is no one to utter it.“

Government is not the solution; rather, it is causing the problems.  The below slides (view at Scribd) highlight the economic situation, updated from August and May presentation.  I’ve written about the solutions to the unemployment problem, the deficit, Social Security, and the high costs of health care which are linked below.  Thanks to Lee Trembley for providing some of the research and slides.

A giant land mine is about to go off in the United States, and those responsible walk the halls of our nation’s highest political offices and the Federal Reserve.  I know how to cushion the people from most of the damage.  I have the courage to explain reality to the Republocrats, that is why I am running for Congress.  And it is certainly not all gloom and doom – there is a very bright future for America if we just return to what made our country great – individual liberties, sound money, accountability and the rule of law.

I humbly ask for your vote on November 2nd to stop the endless debt and perpetual wars.

For Liberty and the Constitution,

Jake Towne

Will the real national debt please stand up? The national debt published in the papers and online – which is closely tied to the USTreasury market is now over $13.6 trillion.  Current government plans include massive deficit spending through 2013, and the government’s optimistic projections of a return to “normalcy” after 2013 are not anchored in reality.  Source of budget data.

However, the true national debt is hidden by the cash-based accounting method government uses.  The true national debt is over $120 trillion when GAAP (Generally Acceptable Accounting Principles) are used to identify future taxation sources and future debts such as Social Security and Medicare.  That’s around $400,000 for every man, woman, and child in the country.  Massive reductions in spending and taxation are necessary if America is to regain its financial sovereignty, my proposals are outlined here and in “Guns or Health Care?“

As seen in the official USTreasury report on page 178/254, the total unfunded liabilities for Medicare and Social Security is a jaw-dropping $107 trillion over the future of these programs.  While I predict the Democrats may bear the brunt of the blame for the collapse of Medicare, one must not forget that it was the Republican’s massive expansion of Part D’s prescription drug plan under Bush that severely worsened Medicare’s fiscal situation.  While the situation in Medicare will continue to worsen under the new healthcare legislation – some of my proposals to maintain Social Security are outlined in “Social Security or Insecurity?“

“He has erected a multitude of New Offices, and sent hither swarms of Officers to harass our People, and eat out their substance.” – Declaration of Independence, 1776

The quote above from the Declaration is far more true in 2010 than it was in 1776.   Not counting the millions of government contractors, the government’s Republocrat-controlled work force is currently 22.1 million bureaucrats.  This is America’s largest single job sector, and remember, the taxpayer bears the full cost to keep these bureaucrats employed.  Like something out of an Orwell novel, the Washington Post estimates 854,000 bureaucrats are employed to spy on and keep tabs on the rest of us and the world.  Lisa Benson’s cartoon says it all.

Keep in mind bureaucrats make nearly twice the average wage of the private sector, and have better benefits.  My solutions?  First, lead by example.  I will refuse the elite congressional pension and healthcare plans when elected, and keep just the median income for a salary and donate the rest of the $116,000 to local non-profit hospitals.  Second, I favor either a temporary income tax holiday, or simply halting the income tax on the median income, which will abolish the income tax for about 50% of the population and only result in a 3% drop in the taxes collected by the income tax.

Next, notice about 1 in 7 Americans is on food stamps, or 41.8 million people.  USDA link here.  Note the strong rise in number of SNAP food stamp recipients during the past year.  One would expect to see this number dropping or even flat-lining – along with employment rising – if a recovery were underway.  The annual projected cost is now $67 billion, paid for by the ever-diminishing work force.

No jobs, no recovery. BLS link here.  Note that while the “newspaper” unemployment rate is still 9-10%, the U-6 figure – which more accurately describes total unemployment is 16% – a depression statistic.  An estimated 1.6 million will file for bankruptcy this year.   I’ve described the common sense solutions to end the rampant unemployment created by the government almost overnight in the campaign’s Jobs plank.

Since the BLS drops off workers from its U-6 figure, the real unemployment rate is likely greater than 17%.  Shadowstats estimates the rate at about 22%.

The number of new housing starts has reached a 5-decade low, while about 25% of all residential mortgages are underwater.  Note that in prior recession cycles, a quick rebound occurred while this depression looks more like a dead cat bounce.  This is because….

The Federal Reserve bailed out the bankers and Freddie Mac and Fannie Mae.  The above is built from the Federal Reserve H.4.1 data here.  The black line is the total (reported) balance sheet of the FED, which has more than doubled since the time of the Banker Bailout.  While the original TARP bailout (not shown) accounted for much of the initial sharp increase, most of the debt has been replaced by $1.12 trillion of mortgage-backed securities (the yellow line).

This graph shows the nationalization and propping of America’s entire residential housing industry. The yellow and green lines show the cumulative totals of USTreasury and USAgency debt held by the FED.  While the Federal Reserve has admitted it will take losses on the MBS debt, the question remains as to how much and when.

The purchasing power of the dollar has lost well over 94% since FDR took America off the classical gold standard in 1933 through monetary inflation.  The monetary inflation is caused by the Federal Reserve.  They debase the dollar by creating more and more irredeemable paper dollars, which is of increasing concern since China has stopped buying Treasury debt.  A major reason why healthcare now appears so expensive is this money-printing, as I highlighted in my article “Health Care Solutions.”  Graph provided by Bloomberg Financial, 2009.

The relentless rise in the paper gold price from 2000-2010 is not due to any special circumstance with gold – nor is it a bubble yet – it is solely due to the money-printing and credit expansions of the world’s central banks.  Gold is insurance against the failure of unbacked paper currencies, and this is why all central banks – and more and more individuals worldwide – hold gold reserves.  I’ve written extensively on the Federal Reserve and how sound money effects jobs here.

Now, where do the government and bankers spend a good portion of this currency they created from thin air?  In a word, WAR.  The United States spends more on military expenditures than the rest of the world combined, and the military-industrial-congressional complex that Eisenhower warned about now serves as the world’s largest arms dealers.  Check out this movie clip from “The International” on debt and control. (Graph source and data here)  There are far better solutions to capturing the criminals who attacked America on 9/11 which I write about in my Afghanistan War plank.

To cap off the situation with the dollar, the latest quarterly banking profile from the FDIC state the deposit insurance fund (DIF) is bankrupt.  While consumers at failed banks still receive “insured” funds, the losses are presumably filled in with dollars from the FED, as reported last here.  The current FDIC “watch list” rose to 775 banks, or almost 10% of all FDIC-insured banks in the US per p. 3/26.

CAUTION: LAND MINES

In summary, do not expect a recovery until the Republocrat ruling elite are removed from power or are forced to address the problems the rest of society faces.  As the extravagant $5 million Bill Clinton wedding under heavy security – possibly paid for by the taxpayer – and $7 million John Kerry yacht (and avoidance of >$500,000 in taxes) demonstrate, the elite are not exactly suffering.

The “Great Recession” still has a firm grip on the economy, and the situation continues to deteriorate, now matter what cherry-picked news is shared in the mainstream media.  Sadly, the truth is the situation in America will not improve until the government removes its jackboots from the throat of the economy.  Ceasing all special privileges to special groups would help as well.

That Freedom Shall Not Perish,

TOWNE FOR CONGRESS

Article Archives

As those who have been following the campaign are aware, my independent candidacy was recently endorsed by a major local newspaper, the Express Times, and I destroyed my opponents in the debates, the last one you can watch here or 8 pm this evening on Channel 69 WFMZ-TV.  Momentum is all on the campaign’s side, and anyone in the area is encouraged to spread this issues flyer.

I’d like to conclude with a quote on youth by Randolph Bourne, which explains why the younger generation has to step forward to converse with the older generations.

“Youth is the incarnation of reason pitted against the rigidity of tradition; youth puts the remorseless questions to everything that is old and established – Why? What is this thing good for? And when it gets the mumbled, evasive answers of…… the defenders it applies its own fresh, clean spirit of reason to institutions, customs and ideas and finding them stupid, inane or poisonous, turns instinctively to overthrow them and build in their place the things with which its visions teem. . . .

“Youth is the leaven that keeps all these questioning, testing attitudes fermenting in the world. If it were not for this troublesome activity of youth, with its hatred of sophisms and glosses, its insistence on things as they are, society would die from sheer decay. It is the policy of the older generation as it gets adjusted to the world to hide away the unpleasant things where it can, or preserve a conspiracy of silence and an elaborate pretense that they do not exist. But meanwhile the sores go on festering just the same. Youth is the drastic antiseptic. . . . It drags skeletons from closets and insists that they be explained. No wonder the older generation fears and distrusts the younger. Youth is the avenging Nemesis on its trail. . . .

“Our elders are always optimistic in their views of the present, pessimistic in their views of the future; youth is pessimistic toward the present and gloriously hopeful for the future. And it is this hope which is the lever of progress – one might say, the only lever of progress. . . .

“The secret of life is then that this fine youthful spirit shall never be lost. Out of the turbulence of youth should come this fine precipitate – a sane, strong, aggressive spirit of daring and doing. It must be a flexible, growing spirit, with a hospitality to new ideas and a keen insight into experience. To keep one’s reactions warm and true is to have found the secret of perpetual youth, and perpetual youth is salvation.”

Lastly, a grassroots supporter sent this in to commemorate the campaign’s upcoming victory on November 2nd.  I have a dream as well, thanks to Arianne Elinich for the use of her song.

Jake Towne for US Congress PA-15 – Economy in Pictures (OCT 2010)

Upcoming Events

• Rally to Restore Sanity, 12 PM- 4 PM on Saturday, October 30 at Porter’s Pub, 700 Northampton St., Easton, PA 18036.  MAP.  The Comedy Central march in DC will be televised from 12-3 pm and Jake will be taking questions from 3-4 pm.  This is not a campaign sponsored event.
• Slatington-Walnutport Halloween Parade: 5:30 p.m. Oct. 30. Help hand out flyers before the parade begins!!  Contact the campaign at 610-392-8156 or towneforcongress@gmail.com for meetup details.
• Replay of “Debate at the State”, 8 PM on Saturday, October 30 on WFMZ Channel 69.

• Easton-Phillipsburg Halloween Parade: 12:30 p.m. Oct. 31. Help hand out flyers before the parade begins!!  Contact the campaign at 610-392-8156 or towneforcongress@gmail.com for meetup details.
• Allentown Halloween Parade: 1 p.m. Oct. 31. Help hand out flyers before the parade begins!!  Contact the campaign at 610-392-8156 or towneforcongress@gmail.com for meetup details.
• Bethlehem Halloween Parade: 1 p.m. Oct. 31. Help hand out flyers before the parade begins!!  Contact the campaign at 610-392-8156 or towneforcongress@gmail.com for meetup details.

• NOVEMBER 2nd ELECTION DAY!! Volunteers are needed to hand out literature outside of local polling stations, please volunteer here and share your name, phone #, city, and if you live in the district, your current polling location.
  • Post-Election Victory Party for all volunteers and supporters at 8 PM on Election Day at Pies On Pizzeria at Front and Pine Streets, Catasauqua!!!!

“Know ye not, Who would be free, themselves must strike the blow?” – Lord Byron

Last night at a local candidates’ night I gave the below speech, though the bracketed paragraphs were cut out due to time limitations.  The event was co-sponsored by the Lehigh Valley Tea Party and Lehighton Tea Party.  My Republocrat competition – for the second event in a row – failed to show up.

During the past 6 years, the official national debt has nearly doubled from $7.6 to $13.5 trillion. Per the US Treasury, the unfunded liabilities for Social Security and Medicare is $107 trillion dollars, which is nearly $400,000 for every man, woman, and child. What has the taxpayer gotten in return?

During the past 6 years, the number of service members killed in Afghanistan has risen from 160 to 1,311.

During the past 6 years, unemployment locally has doubled from 5 to 10%. The number of people living on food stamps has increased from 25 to 41 million which is nearly 1 in 8 Americans.

Now over 3 in 4 Americans live paycheck to paycheck, a figure which has about doubled since 2006. What has the taxpayer gotten in return?

We must stop the endless debt. I have pledged to balance the budget each year, and I have called upon my competitors to join me, and they have chosen to not do so.

I am against taxpayer bailouts of corporations like the TARP Banker Bailout. Mr. Dent voted to bailout the bankers, and Mr. Callahan has stated he would’ve voted FOR the bill as well. (source)  (Photo courtesy Roger Smith)

The banker bailouts served to benefit the government’s favorite corporations at the expense of every individual in America, costing close to $10,000 per household. By creating more future debt, the government worsens the present situation and places our next generation into unsustainable levels of debt.

Whether it is the military-industrial complex, Big Oil, Big Pharm, Big Ag, or the financial firms who bankroll their career politicians into power, the crony corporatism and revolving door between the government and Wall Street must end. I am the only candidate to not accept and pledge never to accept, money from corporations and lobbyist groups.

To create jobs, we must first realize that the massive unemployment we have today is purely a creation of the governments’ interventions in the economy. There is no shortage of work to be done, we must only stop the government’s harmful interventions in the tax, labor, and regulatory laws. To do this we must simply ask ourselves one simple question – does this law encourage or discourage employment? If it discourages employment, then Congress should change or amend the current laws.

While I am for some regulations like reinstating Glass-Steagall and closing loopholes in accounting laws so banks and Wall Street investment firms can no longer pull off accounting tricks, many other wasteful, ineffective regulations like the $100 billion dollar-a-year Sarbanes-Oxley Act must be removed since they place American firms at a disadvantage with the rest of the world.

To stimulate the economy, we could abolish the income tax for 50% of all Americans and lose less than 3% of all income tax collected or have an income tax holiday for several months.  This is a lot of dollars to help assist individuals, and very little income to the federal government – they increase the national debt by the same few billion just about every day. It would be easy enough to cut some of the government to pay for this, as well as reduce the salaries of federal workers who make an average salary of $71,000, which is about twice the median household income.

Governments do not create sustainable jobs, only people do. Government’s role is to preserve individual liberties and a sound business environment by enforcing punishments for fraud, contract violations, theft, and acts of aggression.

Now, the salary of a Congressman is $174,000. How can any voter believe that any candidate will represent them by slashing wasteful government spending if they fail to start with themselves?

That is why I will only accept the district’s median household income of $58,000. I will donate the remaining $116,000 to local non-profit hospitals to help provide health care to the poor. I will not enlist in the federal healthcare plan nor the congressional pension plan.

I have called upon Mr. Callahan and Mr. Dent to join me and cut the reckless federal spending by starting with themselves, and they have chosen to not do so.

Our founders clearly realized that all power stems from the PEOPLE, from US, and all officers of government are NOT masters, but SERVANTS. That is why I came up with an accountable and transparent form of open government where all residents will have a public voice to comment on all house floor votes called Our Open Office. Unlike the career politicians in power, I will always tell you WHY I voted each way, and in that way I will be held accountable to the people.

Now, Americans are not faced with many good choices between the Republicans or Democrats. It is more like the Arsenic Party versus the Cyanide Party. Each party tries to convince you that their Arsenic tastes great, but the other party’s cyanide will kill you.

The two-headed, one-party system that controls the federal government is repeating like a bad record – “MORE spending, MORE taxes, MORE war, MORE debt.” If you flip the record, all you hear is “LESS liberty, LESS safety, FEWER jobs, LESS prosperity.”

Now I would like to talk for a moment about a group of Americans who write a check for up to and including their lives to defend our country. Under the US Constitution, Congress has the responsibility to provide healthcare to every veteran for physical or mental trauma sustained while in the military. Many veterans suffer for their LIFETIMES from post-traumatic stress disorder, missing limbs, and brain injuries.

5,735 soldiers have died so far in the Iraq and Afghanistan Wars. [In Afghanistan, more troops have died under the 2 years of Obama administration than under the 7 years of Republican rule.] Around 32,000 have been wounded in Iraq alone, and behind each of these casualties are families and loved ones.

Just this weekend I was knocking on doors and a gentleman had to stop talking, all choked up, since his brother was killed in Afghanistan.

Since the War on Terror began in 2001, the expenditures for the Department of Veterans Affairs have skyrocketed from $48 to $125 billion dollars. Health care should never be lessened or denied to our veterans, but there are ways to cut costs and improve care at the same time.

For instance, most veterans are required to travel to far-away VA hospitals to obtain treatment and medicine in facilities that are very sub-par. In fact, rural heath initiatives to treat vets who live far from cities for the 2010 alone increased by over 600% to nearly a half billion dollars! Instead of requiring these veterans to go to the relatively few VA hospitals, they should be free to go to ANY existing hospital and a doctor of their choosing for treatment.

Veterans also face difficulty in obtaining employment upon retirement or separation from the military. In order to assist veterans, a temporary federal income tax credit could be granted to employers who hire veterans. This is a zero-cost benefit to veterans and employers alike.

It’s crucial that we have a strong military to deter attacks against the our country and protect it when attacked. However, asking our young men and women to participate in unjust war is a moral abyss that we as a country should NEVER leap into. If we aspire to be a just nation ruled by laws we must resolve to NEVER ask our military men and women to engage in unconstitutional warfare and nation-building missions.

That said, the United States of America has unfinished business with the al-Qaeda terrorist group. However, we are going about it all the wrong way for the past two decades.

The greatest threat to our national security is the national debt, not boogeymen living in caves in Pakistan. Osama Bin Laden and his ilk will never destroy America – it will be the Congress who first destroy the country financially and economically by looting our blood and treasure.  This is the true threat to our way of life.

George Washington would be aghast at our attempts to defeat Al-Qaeda. During the Revolutionary War, the mighty British empire was not defeated militarily by the colonists – George Washington lost just about every single major battle. Instead, Washington won the war by merely surviving, by causing the British to expend vast amounts of treasure and troops over a 3,000 mile supply chain.

The government spends well over $1 trillion dollars a year on our foreign adventures, with over 760 military bases in 150 of the world’s 194 countries, yet we do NOT have a strong national defense of our borders. We have 55,000 troops in Germany and 10,000 troops in Italy.

Why should the American taxpayer defend rich Europeans from a communist USSR that fell apart 20 years ago, so those same rich Europeans can cut their defense budgets to protect their welfare spending? Didn’t WWII end 70 years ago?

[However, the fact remains that the threat of suicide terrorism is enhanced – NOT lessened – by the conventional armies stationed abroad in Iraq, Afghanistan, and Pakistan. Suicide terrorist groups – whether Al-Qaeda, Hezbollah, or the Tamil Tigers - have a single strategic goal in mind – to compel modern democracies to withdraw military forces from territory that the terrorists consider to be their homeland.]

[Although Osama Bin Laden was a CIA “asset” against the Soviets in Afghanistan during the 1980s, if one reads the 9/11 Commission Report, one will find a very long record of inaction in tracking down Bin Laden who bombed US embassies in Kenya and Tanzania killed 12 American citizens in 1998 and was also tied to the USS Cole and the 1993 World Trade Center bombing.]

However, hurling armies of tens of thousands after Bin Laden is not cost effective, nor is it constitutional – nor has it succeeded after the past 9 years. Our nations’ generals admit there are less than 100 Al-Qaeda in Afghanistan, and yet to capture them the taxpayer is paying to send 100,000 troops – plus many more contractors – at a cost of over $1 million apiece to fight with one pack of tribal warlords against another pack of tribal warlords. Each gallon of gas burned in the Afghanistan War costs the taxpayer $400 per the Pentagon.

A strong national defense begins right here at home with our borders, not the borders of Iraq, Germany, and Italy. If one takes the time to read the Iraq and Afghanistan constitutions that the US guided them in writing, you will find that taxpayers here are not creating democracies or rule of law – they are creating impossible utopian governments that operate under sharia law.

We have our own Constitution, and it is about time we began following it!

To defeat suicide terrorists one must capture the current generation and prevent the next generation from being created from collateral damage. Capture of the terrorists who caused 9/11 will best be attained by small units of special forces acting to enforce the law under constitutional warrants called letters of marque and reprisal and increasing bounties for the wanted criminals. Without vastly expensive armies stationed on foreign lands, creating unintended damage and death to the civilian population, the next generation of suicide terrorists will have no reason to exist.

This November 2^nd, you can keep voting for those who caused all this economic strife or you can vote for a problem solver who not only has the solutions, but who will listen and be accountable to you.

I have more private sector experience than Mr. Dent, and more industrial experience working abroad than Mr. Callahan. I have a proven track record of results and success as a leader and serving customers.  I am the only candidate with some formal background in the study of economics.

Washington has far too many rulers, and not enough servants of the people. When I am elected, I will be your public servant, your employee.

Congress continues to vote for more debt, more war, and fewer jobs every year they remain in power. It is like my father once told me – “If you always do what you always did, you will always get what you always got.”

What have the people of the 15^th district received by voting for the Republocrats?  The same results – more taxes, more debt, more war, and less liberty.

For those of you who think you will be throwing your vote away by voting independent, nothing could be further from the truth. Nothing could be further from the truth.

Your parties have betrayed you.

Your parties have lied to you.

Your parties have let you down.

This year you have a real choice in voting independent. I humbly ask for your vote this November 2^nd.  (end)

Upcoming Events!!

• PA Liberty Conference. Friday, October 8.  I will be sharing the “Our Open Office” idea with this group at 3 PM in Harrisburg, PA.  Ticketed event, see here for details.
• Crop Walk, October 10th in Bethlehem, registration at 1p.m. under the Hill-To-Hill Bridge, Main and Spring streets.  This charity event benefits soup kitchens around the Lehigh Valley, including the one I volunteer at every week.  The walk begins at 1:30 p.m.  MAP.  Please RSVP to towneforcongress@gmail.com or call 610-392-8156.
• WFMZ-69 Debate to be televised live, October 13 on WFMZ-69, 8 PM.
• Lunch with Allentown Rotary Club, Friday, October 15 at the Holiday Inn, 12:30-1 PM.  904 W. Hamilton Streets, Allentown, PA 18101.  Map.  Briefly address and answer questions from this group.
• Nazareth Area of Commerce Debate on Monday, October 18th, from 9:30-11 AM.  Economic focus.  Tickets are necessary for breakfast, see www.nazarethchamber.com.  Location is Rt 22 and 512 at the Best Western.
• Morning Call Online Chat, online at noon on October 19th.  URL TBA.
• East Penn Taxpayer’s Association Candidates Night on October 19th, 7:30 PM.  Open to the public, will speak for a few minutes and answer questions.  Emmaus Fire Co. #1 on 610 Broad Street, Emmaus, PA.  MAP.
• Pen Argyl Area Concerned Citizens Debate, Wednesday, October 20, evening, exact time/place to be announced.
• De Sales University Debate, Thursday, October 21, 7:30-9 PM in Center Valley, PA.  Located in the Commonwealth Room in the University Center (Building #48 in this map).  Open Q&A from the audience.
• Express Times Debate, Monday, October 25 at the State Theatre in Easton, 7 PM.  453 Northampton Street
  Easton, PA 18042.  MAP.  Open to public.
• Northampton Community College Forum, October 28, 11 AM.  Open to public, Q&A. Location is the World War II Conference Room – CC117 located on the first floor of the College Center.  3835 Green Pond Rd Bethlehem, PA 18020.  Campus Map.
• NOVEMBER 2nd ELECTION DAY!! Volunteers are needed to hand out literature outside of local polling stations, please volunteer here and share your name, phone #, city, and if you live in the district, your current polling location.

“None are more hopelessly enslaved than those who falsely believe they are free.” – Johann Wolfgang von Goethe

The economic depression is waking up more and more Americans to the sad truth that the federal government is out of control. A fascist state is quickly developing in America, one of the few rare places in the history of the planet where “life, liberty, and the pursuit of happiness” was not an unattainable dream but instead a mission statement. I first fully grasped where the misguided actions and ideology of the Republocrats would lead America during the Banker Bailout of 2008, and I returned home to fight against the Establishment by running for United States Congress as soon as I could.

While modern politicians scapegoat the free enterprise as having failed, America has not had anything resembling a free enterprise for many years.   Free enterprise is neither the corporate welfare and corrupt cronyism of the Republicans, nor the wealth distribution and “gravy-train” welfare state of the Democrats, nor an all powerful economic warfare state and military-industrial force as supported by both parties.  Under free enterprise, special privileges, money, and benefits are never doled out by the government; business succeed if they please consumers by offering them what they want.   Free enterprise offers an abundance of sustainable jobs at the highest wages.  The government serves to provide a sound business environment under a rule of law and investigates and punishes fraud, theft, and contract violations.

Now when I use the term “fascism” in this piece, I do not mean its typical connotation with physical brutality, murder, and torture – though this is the easily recognizable final product. Fascism by Benito Mussolini’s originally intended economic meaning was symbolized by the “fasces” – bound sticks, sometimes with an axe, used as a totem for state power in ancient Rome.  Here are my definitions – which by and large agree with most literature – for four socioeconomic systems:

1. Free Enterprise – a social system based on the private ownership of the means of production.
2. Interventionism – a social system where the means of production is privately owned, but the government intervenes by passing regulations and orders.
3. Fascism – a social system where on paper the means of production is still privately owned, but the government has de facto control through the passing of a multitude of regulations and orders, accompanied by corruption.
4. Communism – a social system based on government (or “public”) ownership of the means of production.

The great confusion of today by many is that the evils of government-sponsored corporatism, “crony” capitalism, or “disaster” capitalism are instead somehow free enterprise, when in reality rarely do even local farmers’ markets pass as free enterprise today.

Many examine the current state of rampant interventionism and soft fascism, conclude the free market failed, and incorrectly decide that the solutions must be yet more centralized government control of the economy, as seen in many respects with corporate bailouts of AIG, GM, Citibank, and others. Unfortunately, more fascism will cause a downward spiral as can be predicted by reading my article “The Government’s “War” on Main Street” and the campaign’s Jobs plank.

Case in point is the healthcare takeover where a tax of almost $1 trillion dollars will be levied upon the American people in new taxes over the next several years to provide coverage – not necessarily actually providing healthcare as pointed out in the campaign’s Health Care plank. Congress, via the HMO Act of 1973 and other acts, has created a government-sponsored insurance cartel that does not serve consumers best. A system of free enterprise would deliver the most affordable, best-quality healthcare to consumers with the most features while naturally regulating the upcoming medical worker shortage as baby boomers attempt to retire. (photo)  The labor law stipulations required to force the new monopolized system on everyone will devastate the poor, which ostensibly is the true reason for the bill in the first place.

The solutions to the healthcare situation are to remove state mandates that dictate 15-40% of premiums in Pennsylvania, destroy insurance portability barriers over state lines, pursue tort reform on the state level, enact federal tax relief legislation, remove state restrictions on licensing and seats in the medical school system, and provide a sound currency to stop price inflation. Note that all these solutions call for LESS government intervention, not more.  Note that while Republican politicians may seem at first to support my line of reasoning, at heart they seek control just like the Democrats, like the Republican incumbent in my race, demonstrated in his healthcare bill last summer.

Congress has also been hard at work creating new barriers for small businesses on the economic front with HR 4173, the Wall Street Reform and Consumer Protection Act of 2009. I dubbed this bill the Automatic Bailout Bill in November 2009 as the bill grants sweeping new powers to the Federal Reserve and creates more central planning unelected bureaucrats with the Financial Services Oversight Council.

Section 1105 gives this council vast powers to takeover transactions of all financial holding companies that pose a “grave threat to the financial stability or economy of the United States” which of course is let undefined.

Section 1701 gives the Federal Reserve “in unusual and exigent circumstances… that a liquidity event exists that could destabilize the financial system” power to authorize immediate bailouts and assistance to any “individual, partnership, or corporation.” This enables the FED to neatly bypass Congress when the next crisis occurs. The dollar limit on the FED’s new bailout authority? A cool $4 trillion dollars.

Section 1405 is a tragic comedy. It brazenly stipulates that the FDIC deposit insurance fund (DIF) reserve ratio must be higher than 1.15% for bank accounts. Unfortunately, the DIF is ALREADY at negative 0.39% and is completely insolvent by nearly $21 billion. While the government is intent on printing its way to prosperity, down this route only lies madness.

Fascism, communism, and even much of interventionism that violate individual liberties are just varying degrees of central planning, aka socialism. As America installed more interventions in the economy, the great Austrian economist Ludwig von Mises in 1950 delivered a lecture “Middle-of-the-Road Policy Leads to Socialism” which warned that interventionism, over the long run, would still lead to socialism. Mises was correct, and the impending dollar currency crisis which will make the current situation pale in comparison remains unheeded by the money-printers in Congress and the FED.

If America is to have freedom from fascism, the current healthcare and economic takeovers must be firmly rejected. The greatest threats to America’s prosperity, liberties, and way of life do not tread in forsaken deserts but instead infest the halls of Washington, D.C.  The choice between the two socioeconomic systems – the failed status quo or the solution that will create prosperity – is stark, but easy to make once the facts are understood.  America must leave the Road to Serfdom or pay its eventual consequences.

I pledge to immediately act to revoke the above economic takeovers Congress has passed once I take office in January 2011 as an independent private citizen, beholden not to lobbyists and special interests, but to the people in my district who I will faithfully serve by delivering true transparency and real accountability.

Originally written in March 2010 here.

Updated debate schedule:

• Delta Kappa Gamma/League of Women Voters Candidate Forum, this Friday, September 24th, 2010 at Cedar Crest College, 6-9 PM, Harmon Hall of Peace in the Miller Family Building (#15) next to Lees Hall at Cedar Crest College.  Campus Map.  Google map to the college at 100 College Drive, Allentown, PA 18104.  Open Q&A from public.  6 PM doors open, 6:30 PM coffee/tea/desserts, 7 PM debate starts.
• Tea Party of the Lehigh Valley Candidates’ Night, Monday, October 11, Penn’s Peak in Jim Thorpe, 6 PM.  325 Maury Road, Jim Thorpe, PA 18229-2811.  Directions.  I will probably be speaking around 7:00 PM.
• WFMZ-69 Debate to be televised live, October 13 on WFMZ-69, 8 PM.
• Morning Call Debate on  Thursday, October 14th.  Towne for Congress is BANNED from this event, details here!!
• Pen Argyl Area Concerned Citizens Debate, Wednesday, October 20, evening, exact time/place to be announced.
• De Sales University Debate, Thursday, October 21, 7:30-9 PM in Center Valley, PA.  Located in the Commonwealth Room in the University Center (Building #48 in this map).  Open Q&A from the audience.
• Express Times Debate, Monday, October 25 at the State Theatre in Easton, 7 PM.  Open to public.
• TBA – Northampton Community College, Date/Time/Place to be announced

The first debate just concluded a few hours ago, PCN was taping the event but had technical difficulties so the first half is missing.  See below for part 1 and part 2 that was taped.  A volunteer videotaped the event so we hope to have footage soon!  It was the first debate of my life, and went great!!   The event was mobbed with people — after the first several hundred people, the event staff had to turn away scores of residents.  Now that I have debate experience under my belt, I can hardly wait for the next debate on September 24th at Cedar Crest College!!!   Debate schedule here.

Today is the September 14th Money Bomb, put together by grassroots supporters.  The last money bomb in August raised exactly $3000 from 52 donors, and was used to purchase yard signs.

It is expected that all money raised today will go towards radio ads, which are affordable on the local favorite radio stations.  A 30-second spot costs roughly $30 depending on the time and will reach thousands of listeners.  The campaign’s first radio buy commences today at 6 AM, you can listen to the ad and share it below!

The vast majority of the money spent already was used to build the campaign enough momentum to get to this point and finish the arduous petitioning process for ballot access.  I cannot highlight enough how at this point a little money goes a long way. Thank you very much for your support!!



“Is there no danger to our liberty and independence in a bank that in its nature has so little to bind it to our country?… [Is there not] cause to tremble for the purity of our elections in peace and for the independence of our country in war?… Controlling our currency, receiving our public monies, and holding thousands of our citizens in dependence, it would be more formidable and dangerous than a naval and military power of the enemy.”

- President Andrew Jackson, a sound money Democrat president, on central banking.  His 1832 re-election campaign was primarily focused on one issue – his successful abolition of the nation’s central bank.

One of the key reasons I resigned my engineering job abroad and returned home to begin this campaign is my belief that the Republocrats – left unchecked – will create a dollar collapse brought on by the endless debt and reckless deficit spending by the federal government.

Beyond the tide of resentment created most significantly by the TARP Banker Bailout in 2008, the media has failed to warn the people of simple truths:

• The dollar is an unbacked piece of paper debt, an I.O.U.
• The dollar was loosely linked to gold up until 1971.
• Over the past century, the dollar has been devalued against gold by 98-99%.
• The dollar has depreciated against gold for the past 9 years at a steady 16% annual rate.
• The price of gold has more than quadrupled this decade, setting an all-time monthly close on August 31.
• China stopped purchasing US Treasuries well over a year ago.
• $107 trillion in unfunded liabilities from the Social Security and Medicare programs is unsustainable.
• Gold is a major financial market, trading well over $20 billion per day on the London exchange alone.

“Printing dollars out of thin air” is an accurate – though over-simplification – of what the government has done to our money.  The reality is the system has two tiers – a worthless printed or electronic fiat dollar currency and a worthless fiat government bond that “secures” the dollar.  (Fiat means “by decree” or installed by the force of government.)

The below reviews the differences, pros, and cons of single-tier (or straight currency-printing), two-tier “Republicae” gave me permission to share his in-depth article below, check out his articles here.  The highlights and bolded areas are mine to save the reader time and capture the most important points.  From one comment received, my use of “imminent” is not tomorrow or next week, but the relative short-term future in the coming years.

Fiat Money: Dual and Single Tier Systems

by Republicae
Saturday, September 4, 2010

Despite all the efforts of governments to substitute irredeemable paper, they have failed to demonetize gold and even though it is not used as legal tender, it still is recognized as money. That is a strange fact considering the immense pressure that has been placed on society by governments to erase the monetary value from gold. In the most widest consideration, given the sum of history, neither men nor governments for that matter, will actually trust anything other than gold as a hedge against economic collapse. That is evident, even today, as we see more and more people purchasing gold, the same is true with many governments and their central banks.

Unlike Fiat Money – notes issued by government – gold needs no endorsements or coercion to be used as money and valued in exchange. Fiat money of any kind always must be forced upon the population, introduced by stealth into circulation by governments who desire to manipulate the power of monetary economics and eventually siphon off the wealth of the productive population. Unlike Fiat Dollars, gold money does not even have to have a government stamp upon it, it does not require legal tender laws or to lay taxation to enforce its use. Gold money does not require the full faith and credit of a government to make it money or to influence the use of it in an economy, there is therefore no compulsion required when gold money is in circulation, it is a desired commodity, whether it is in the form of money or any other form.

Unlike gold money, fiat money is accepted as money as long as there is faith in the government of issue and in the stability of the purchase value of the fiat money itself, the problem, of course, is that eventually the depreciation becomes evident through price inflation, people see their hard labors wasted on a form of money that no longer holds the same value as it did just a few years prior. Additionally, fiat money must rest upon the expectation that the promises made by the government of issue will be kept, once that expectation dwindles through the various foibles of a government that abuses the power of fiat monetary creation, such as the massive deficit spending that usually accompanies all fiat currency regimes, then the currency suffers and people search out other forms of value, particularly gold. History has proven this fact time and time again since at least 20 B.C.; fiat monetary economies always end the same way, collapse. There is evidence however, that fiat currencies were used as far back as the time of the Pharaohs, with equally disastrous results. In a historical context, the Book of Genesis 47: 15 states a very interesting event: “So when the money failed in the land of Egypt and in the land of Canaan, all the Egyptians came to Joseph and said, “Give us bread, for why should we die in your presence? For the money has failed.”

It is indeed a very strange psychological occurrence among peoples and governments who are subjected to established fiat regimes, it tends to make them unwilling to view their irredeemable fiat paper money as anything other than what that fiat paper money really is, nothing more than promissory notes that can never actually be redeemed because the promises of the issuing government always become far too extended for such a redemption. It is strange that people seem to think that government authority and laws can create something out of nothing and call it money, it is this undeserved faith, this belief system that allows fiat money to sustain a degree of value as money, but that too ends when the inflated supply of the fiat regime depreciates the purchase value of the currency and such faith is destroyed.

The degree and depth of faith necessary in government issued fiat money is comparable to the faith necessary in religion, for what else could account for the fact that when people see a piece of paper with the numerals $100 printed on it, that they view it as more valuable as the same piece of paper that simply has $1 printed on it?  The ruse is complete, the deception is extensive and the faith that has been built around the fiat monetary system must be of the utmost dedication. The Fiat God commands total faith and allegiance! Talk about idolatry, gold makes no such commands of faith, it is its own promise of payment, and it requires no government seal of approval or legal tender laws to enforce or coerce its usage as money.

The constant hunger of government issues its fiat currency that ultimately devours itself, eating up its own purchasing power. There is no doubt that history teaches from an extensive experience concerning money; perhaps one of the greatest lessons is that government is the premier counterfeiter and can no more be trusted with the power to control money than a thief with the keys to a bank. One must wonder why so few believe the fact that governments and money don’t mix. There is a history however, one of sound money, one which is either completely ignored or partially ignored by most in government and in the population in general. Perhaps the strangest fact is that so many are fooled by the absolute folly of fiat money, even stranger still is the fact that this folly is recurring time and time again without the actual lesson being learned.

Except for a period in the 1860s and 1870s, [the federal] government relatively kept its hands off money for nearly a century, except for the barest minimum Constitutional requirements of establishing a standard of weights and measures. The laws necessary for various liabilities and for banking were kept to a minimum; the market took care of the rest by awarding the prudent and penalizing the less prudent. It was a century that saw the most incredible increase in widespread prosperity that the world had ever seen before. The reach of government was restricted, its presence in monetary and economic matters was limited and the result of that policy was the unleashing of market enterprise, voluntary and free. Government was not in the money business, it did not create it nor did it control it or the supply, nor did it intrude in the affairs of business except in the case of fraud.

The attempts at fiat money in the early experiences of our country were lessons not soon forgotten, but given the greed of government for both power and spending power it did not take long for those lessons to be laid aside in an attempt to grasp and then unleash the power of monetary creation and control. The first major push toward a government-controlled money came during the Lincoln Administration, the problem of course is that government fiat money cannot compete against gold; the attempt was a complete and utter failure. By the time the Lincoln’s illegal War of Conquest was over the Greenback was valued at 35 cents gold. It represented nothing of value and as a result the market created a two-tier pricing structure, one in fiat money, the other in gold money that continued through the 1870s. Coined money disappeared from the United States, gold was exported for goods while the Greenback swayed with instability and through the process the credit of the government was considered questionable, especially by foreign trading partners.

The search was on and government sought a method to use that would allow it to spend far more than the revenue collected and to do it in a way that would be relatively concealed from the population. Through its search, government also sought to control credit, as the ancillary power of money, for just to control the creation and supply of fiat money would not provide the government with the instrument it really needed and that was a market for its debt. Thus the bond market became the ultimate reality of a managed money supply that would produce a managed economic market to allow the control of the ebb and flow of the economy as needed or in more cases than not, as was politically expedient.

The government, not the market was to become the heart of the economy, with credit money being transformed into the fluidity of economic life-blood. Thus, taking the power of money away from private enterprise and placing its control in the grasp of government as a “proper function of government”. It was government that would determine what the proper supply of money would be, the rise and fall of interest rates and in the process; it would determine the actual beneficiaries of its own managed economy.

The problem, of course, is the ability to trust a government, which sees itself without limitations. To aid government in its unlimited vision, a monetary system was necessary and that system was one that provided few restrictions on the supply of money government could “raise”, the best way around that problem of revenue was a two-tier system of fiat currency since all single-tier fiat systems tend to collapse rapidly from government abuses.

Part of the problem government has always had with gold money is the restrictive character of the money that demands budgetary restraint. Another part of the problem, at least on the part of government, is that a sound money economy punishes abuse, both by government and by businesses. Under a gold monetary system combined with the free-market, there are few places to hide fiscal imprudence. These facts however, while viewed by government and those who are politically connected as problems, are actually beneficial in ways that are really beyond calculation. A sound money free-market economy will always indicate problems of excess and malinvestment, it is essentially the nervous system of a free-market economy and will, when necessary demand a remedy to match the abuses.

While there have always been critics of bankers, there is a huge difference between free-market banking and the type of banking that we are now subjected to under government authority. In the free-market a banker must abide by the necessity of good business practices otherwise the bank and banker will face insolvency. The government, on the other hand, has an unlimited supply of fiat money or at least the power to product an unlimited supply; additionally, the government is not bound by free-market restrictions, nor, as it appears, are the banks chartered by government.

In the free-market, bankers are required to maintain the trust of their depositors, as well as their stock-holders, with the responsibility to keep the bank solvent, the same is not true with government or its banking partners. Under a sound monetary system there is the demand that the banker holds his depositors money in trust, not simply to use it as he pleases under a fraudulent fractional reserve system of divided and unsustainable titles. While it is true that a banker under a sound monetary 100% reserve system can issue credit beyond the deposited funds, he does so at his own risk, for to extend credit beyond the funds held on deposit can ruin his bank and his life, particularly in the cases of outright fraud.

Unlike the current fiat fractional reserve system, under a sound monetary system, integrally linked to the free-market, the banker is limited by the amount of real money he has in deposit, lending at the behest of only those customers who give the banker permission to lend their deposits. If, by either chance or deliberate risk, the banker lends out more than his customers have deposited me must immediately stop lending, but additionally he must call in the outstanding loans. This is one of the benefits of sound money under a free-market banking system, it requires absolute adherence to the highest level of responsibility to the customers of the bank. While such measures are not pleasant, it is a necessary medicine under a sound money free market system of banking.

Unlike free-market money and banking, government is not bound by such limitations, nor is it at much risk since it will rarely, if ever, force a contraction of the fiat money supply, thereby tightening its budgetary belt. Government hates the political consequences of bursting economic bubbles and will always attempt to inflate or re-inflate a bubble. Its ability to create money at will helps the government in its attempt to side-step the painful aspects of a collapsing economic bubble. The control of money in the hands of government is the control of society, it is absolutely necessary if government is to retain control and expand its ability to rule without limitation.

Given these facts, it is extremely odd that there are those who laud the Lincoln Greenback or any other single-tier fiat system, for to do so it to laud the government in its unlimited ability to create money for both peace, but especially wartime expenditures. Since wartime expenditures tend to be exorbitant, the ability to wage war under a sound monetary system is limited only to those [wars] which are purely defensive in nature. So too, are internal improvement projects and projects of unlimited entitlement programs, the sound monetary system will simply not allow the novelties of popular political expediency.

Unlike the dual-tier fiat system, sound gold money places limitations on government since the government must abide by the law of the free-market. Sound money prevents the unlimited accumulation of debt always associated with fiat money, additionally, sound money cannot easily be manipulated in terms of supply, nor are interest rates easily manipulated by government for political and social gain, the market determines the rate of interest. Of special note, it should be recognized that under free market sound money system the rate of natural interest is relatively stable compared to the manipulated system of fiat interest rates.

The ability to control government by controlling the money available to government makes perfect sense, it restricts government to revenues raised and since the population is sensitive to taxation, the limitation mechanism is ultimately sound. It also effectively controls the ability of government to accumulate debt, since it must abide by the sound practices of borrowing only that which it is certain of repayment within a reasonable amount of time, the money is, after all, the People’s money, not the governments.

In the early years of the 20th Century, a new innovation was created, the monetization of public debt, this technique unleashed the economic, military and social powers of government in ways never seen before. While it is true that prior to this period the government issued bonds, it did so with the restrictions placed upon it by the limitation that sound money placed on revenues and on its ability to repay those bonds under the sound monetary revenue system. The problem, however, was that the government was also limited by the amount of the bond issue the public was willing to purchase. That was another limitation of sound money that government saw as a limitation on its ability to powers, especially when it came to any imperial inclinations of a ruling class of politicians. The solution was to create a dual-tier fiat monetary system that would function through the government’s ability to issue unlimited amounts of marketable monetized securities.

Here is the key to the entire system; the dual-tier fiat monetary system had major advantages to the single-tier system. In a single-tier system the government simply issues fiat money, but that system is extremely unstable and usually collapses within a matter of years. The government required a system that could be sustained for decades and one that would provide it with a virtual unlimited supply of funding and therefore, an unlimited resource of power. In the single-tier system, the government can issue its fiat currency, a piece of paper with all the official seals that promise some sort of redemption, but since such fiat notes represent nothing of marketable value, history has shown that such single-tier systems are usually repudiated as the system deteriorates through rapid inflationary depreciation.

Governments found that they simply can’t issue paper money on a single-tier system, it cannot be sustained nor does it provide government with a relatively stable monetary system on which it can build its empire. It is odd indeed, that there are those who continue to advocate that the government simply replace the current dual-tier fiat system with one where the government simply issues fiat money directly, without the use of debt monetization. The fact is that such a system has been tried throughout history without any success whatsoever.

Thus we come upon the distinct differences between the two types of fiat monetary systems. The dual-tier system provides a degree of stability, but the manner in which it is achieved is ultimately very costly and dangerous. Under the two-tier fiat monetary system public debt is monetized using what amounts to essential two pieces of fiat paper, one being the fiat bond issued by government and the other being the fiat currency note issued by government. The bond is issued and provides a surety of repayment, the problem, of course is that the repayment of the bonds is promised with the very fiat notes the issuance and sell of bonds create. So, the government promises to pay its bonds by the very paper fiat notes created by those bonds. Neither the fiat bonds nor the fiat notes represent anything of actual value in terms of purchasable goods, there is no real asset value to either the underlying bond or the repayment of those bonds with the fiat currency created through the salable issue of those bonds.

Essentially the government states that it will repay its bond issues, but repay it with what? Certainly not anything holding any more value than the bond issue itself. It promises to repay its bond obligations with nothing more than the very Federal Reserve Notes created from the security of those bonds. Thus, in the simplest sense, one piece of worthless paper is serving as security for another piece of worthless paper. The Government Treasuries secures the fiat money and the fiat money secures the Government Treasuries.  Have you recognized the folly yet? Thus, the fiat bonds secure the fiat money and the fiat money secures the fiat bonds. Who is the greater fool, the debtor or the creditor? They are equally foolish in their conceit of the system.

The government has no worries as long as the ruse continues to deceive the buyer of its bonds, but it can only last so long before the over-issuance of bonds, combined with massive deficit spending rips the veil from the fiscal Ponzi scheme.

In order to complete this dual-tier fiat monetary system it was absolutely necessary to attempt to demonetize gold. It was essential for Gresham’s axiom to be circumvented; otherwise the new dual-tier fiat monetary system would not work. As long as money and credit were related and thus restricted by gold money, the government would not be free to pursue unlimited power; it could not manipulate the sound money supply to an extent that would satisfy its insatiable appetite for domination over the economic and social arenas. The government, if it were to be successful in its powerful desires, would have to eliminate gold money from the economy. History proves that governments hate the restriction of gold money and have, through the centuries, attempted to contain the power of gold money, without much success. You see, there was no way for the system to function while gold was considered and used as money; not only that, but to implement this dual-tier fiat monetary system it was absolutely necessary for the government to outlaw gold altogether until the fiat monetary system was firmly established.

To accomplish this there had to be a stratified repudiation of all debt payable in gold. The first step began, of course, during the Administration of FDR when the domestic public debt was repudiated and private ownership of gold declared illegal in this country. The second step came when Nixon repudiated all foreign debt of this country when he declared that no U.S. Government debt obligations would be paid in gold, at which point private ownership of gold no longer posed a real threat to the pure dual-tier fiat monetary system.

This was the crucial moment in time when there was an almost complete seizure of the entire financial economic system of money, banking and credit. With such a seizure, the ability to control and thus manipulate the social policies needed to create a welfare/warfare state was achieved. No longer would the restrictions of gold or the flaws of a single-tier fiat monetary system limit the powers of government. Public debt could be monetized and the repayment of that debt could be achieved through a slight-of-hand structure that paid debt through the very same instrument used to create it in the first place.

The dual-tier fiat monetary system avoided all the pitfalls of a single-tier system, such as the Greenback system, or all the other single-tier systems throughout history that failed within a short period of time. This government fiat money, like all before it, had to be the only legal money allowed in the country, there could be no competition, especially from the most powerful and liberating money in the hands of the People, which is gold money. Governments are limited and thus controlled, when its ability to spend is restricted. Such a restriction came from gold money, its quantity could not be easily increased, nor could it be easily manipulated once in circulation and it became titled money when in the hands of a private individual.

There is such a delusion created by the entire system that government must continually promote the impossible, and that is a perpetual boom through its inflationary fiat monetary policies. While it appears that cheap money and credit offer some sort of immunity from the laws of economics, the truth is that eventually the system is consumed from government excess. It is evident that the last thing our government ever wants to experience is the pain of economic realities created by the system it uses to stay in power and it will use the fiat monetary system to the extreme, if necessary, to maintain its power even if it means such policies will ultimately cause the entire foundation of the economy to crumble.

All the proper functions of money have been suspended, and economic law delayed, by the government’s dual-tier fiat monetary mechanism. It can continue for a while, but eventually all the principles of economic law will bear down upon the fraudulent system. As those principles press against the system, its structure will be exposed, its flaws manifested in economic pain and ultimately economic disaster.

At this point in our fiat history the government is attempting to postpone the inevitable and the system itself is exposing the helplessness of the government and, in all its folly, its own insolvency and corruption. The government, with its debased currency, is facing its final repudiation of debt and, in the process, an actual repudiation of the fiat monetary system. The government’s seal, its promises, beautifully engraved on all its fiat obligations cannot prevent the catastrophe that faces this country, and indeed the world. There is no trust in the promises of this government, no matter how the words are engraved on its fiat paper money, no matter how its engraved bonds are promoted as a safe-haven from economic distress.

END

While I am not for a government-controlled gold standard myself – read here for my thoughts on transitioning from the current situation, you can also check out my planks on Sound Money and Jobs and the Federal Reserve.  Another interesting read for those still skeptical that government would do such a thing should read about the London Gold Pool, which is documented in the Federal Reserve’s own meeting minutes.

We need to stop the endless debt before it destroys our nation.

One of the most important issues for Pennsylvania and our district is the development of the Marcellus Shale Gas formation. The Marcellus formation has the potential to provide for the nation’s natural gas needs for a decade or more, not to mention provide a tremendous economic boom in our state. (1) From my travels in the district, the public is not yet highly aware of the full impact of what could easily become a curse instead of a blessing.   Video link.

The purpose of the below is to share my opinion on what should be done both as a citizen and federal candidate for US Congress.  As a disclaimer, while I do hold a chemical engineering degree from Lehigh University, most of my working experience is in the semiconductor industry, not natural gas.  (Photos courtesy EPA)

Hydraulic fracturing, aka “fracking,” is done by rupturing shale formations to release gas trapped inside. A water-and-sand based solution is forced into the cracks to allow the gas to be captured after the pressure is removed. Wells are repeatedly “fracked” until the yield of gas is no longer economical.

There are four main environmental dangers and concerns involved in fracking, the first two being of the most concern:

1. Proprietary fracking solutions pumped into the well are a chemical cocktail including known carcinogens such as benzene and xylene, and ethylene glycol, the hazardous chemical in anti-freeze, and sometimes even diesel fuel. (2) These chemicals can remain in the ground and migrate into drinking water wells and aquifers, including through the well’s casings, and cause serious health problems to all living organisms. After a “frack,” these hazardous chemicals are isolated with the recovered water and dissolved methane gas in settling ponds, which can also leak or evaporate.
2. The natural gas (primarily methane) can migrate through the ground, through well casings, or through the settling process into the water supply. Residents’ drinking water from contaminated wells sometimes can be ignited from the faucet with high levels of foul-smelling sediment. Firewater can also occur naturally, which highlights the importance of baseline studies prior to any drilling activity.
3. To pressurize the wells, large quantities of water are necessary, in the realm of several millions of gallons per “frack.” Pumped far below aquifer depth, much of this water will remain trapped in the well. Detailed studies of the impact on local roads from heavy tanker traffic, and the local drinking water supply and reservoirs need to be completed, and of course is of particular concern during droughts.
4. Soil and rock tailings removed from the well during drilling can contain hazardous chemicals like arsenic, which have been isolated underground. While this may be less of a concern than the above, caution and testing is necessary to confirm the tailings are not harmful.

Normally, fracking operations would be covered as Class I or Class II injection wells under the federal Safe Drinking Water Act (SWDA).  However, in 2005, my competitor, Congressman Charlie Dent, during the Bush/Cheney administration voted for HR 6 which included Section 322, aka the Halliburton Loophole, which deregulated hydraulic fracturing from environmental regulations and precautions under the SWDA.  (Dent accepted campaign donations from Halliburton in 2004.)  The Environmental Protection Agency (EPA) has no authority to even monitor the amount, type or toxicity of the chemicals used in fracking.

Here are the solutions proposed:

1. I would co-sponsor, and urge Congressman Dent to immediately co-sponsor, HR 2766, the Fracturing Responsibility and Awareness of Chemicals (FRAC) Act of 2009. This short bill removes the Halliburton Loophole and also specifies that drilling companies must disclose safety-related information about all chemicals used to the public or during a medical emergency.  This removes a special privilege granted to special groups.
2. However, I view the FRAC Act as only a band-aid that highlights the ineffectiveness of both the EPA and federal Congress versus the lobbyists. Pennsylvania already has “primacy” over the SWDA, meaning that Pennsylvania’s own requirements are equivalent or more stringent than federal guidelines, and the SWDA is enforced by the Pennsylvania Department of Environmental Protection (DEP). It is urgent to understand that Pennsylvania, as a sovereign state under the principles of nullification, can override the federal law and pass the FRAC Act and necessary acts or regulations on its own. More localized control will mean more satisfied local residents.
3. Non-toxic fracking solutions should be developed, or even a new extraction method should be considered. This can only be done by private industry, not the government.
4. Well casings through aquifer zones must be water-tight or even gas-tight, and have multiple redundancies for failure.
5. Drilling companies should clearly be 100% liable for any damages caused to individuals and their property, unlike the BP oil blowout in the Gulf of Mexico where there was a $75 million liability limit on oil spills created by lobbyists in cahoots with Congress. The state congress should own this action, as US Congress is too slow and also has no constitutional authority over state contract and tort law.
6. Localities and landowners could require “surety bonds.” This contract stipulate that the drilling company should set aside funds in the event they are liable for damage caused to individuals. In the event of an infraction, money is paid directly to individuals currently living on the land. Once the company finishes the well and completes the clean-up procedures, the bond money then fully reverts back to the company. This prevents companies from simply claiming bankruptcy instead of paying for damages caused.  Surety bonds create a valid “win-win” incentive to safely produce the gas for their management, shareholders, and public alike.
7. Drilling company engineers should disclose their FMEAs (failure mode effects analysis) reports to the public that highlights all of the technical and environmental dangers and the installed safeguards to prevent them.  These engineering documents not only list all possible dangers, but also categorize them by level of severity.
8. Pennsylvania’s state congress should seriously consider a temporary halt to hydraulic fracturing operations in the state and issue a report to the public addressing concerns. Have baseline soil and groundwater reports been completed? Do the local people agree, and are plebiscites (popular votes) necessary?

We must as a society also ask “Cui bono?” or who profits? Local landowners, future job seekers, and of course the drilling companies (otherwise why produce the gas in the first place?) should be the clear winners, NOT a windfall for the government. In the past, government has usually acted like a private cartel to tax and spend on silly pet projects and bureaucracy, and everyone knows Harrisburg and DC would be broke except for the irresponsible money-printing.

It is my personal opinion that if the gas extraction is to be taxed, it should serve a useful purpose for the people. My suggestion is to have such a tax used for abolishing the property tax on primary residences that currently funds the educational system. Furthermore, such as taxation stream should first go directly to the LOCAL coffers of the areas affected by the drilling, then directly to LOCAL school boards on a per capita basis.  This gives localities control over their educational budgets, which are way too highly controlled by Washington and Harrisburg currently, in my opinion.

As a federal representative, my job functions are limited by the Constitution, but I feel compelled to make this statement as a candidate for the welfare of the people as I feel this to be a gravely important topic that will impact every Pennsylvanian’s future.

Sadly, protecting the environment is falsely perceived as just a compartmentalized wing of the Democrat party in our failed two-headed, one-party system instead of a valid concern for all of society.

The two ultimate priorities I have within politics are peace and the environment. However, in many cases peace has precedent over the environment; for instance, our armies starting a nuclear war with Pakistan or Iran has precedence over deforestation in California.  For without peace, we can not really enjoy our environment.   Without a clean environment, everyone’s standard of living and health is impacted, as I learned while living in the smoggy cities of China for 4 years.  As a federal servant for the people, I feel my efforts in office will have the most impact by ending the unconstitutional, nation-building wars in Afghanistan, Pakistan and Iraq.

Yours in liberty,

Jake Towne

(1) While official 2009 estimate is 262 trillion cubic feet recoverable (see Dept. of Energy study, page 33/116). Dr. Timothy Constadine, et. al of Penn State University offers a 2009 estimate of 489 trillion cubic feet. More information about the Marcellus Shale gas can be found from this website.

(2) Pennsylvania Department of Environmental Protection. “Hydraulic Fracturing Overview.”

A printable version in PDF is available from Scribd here.

Jake Towne – Hydrofracking 2 Page

Article Archives

There is nothing super-complicated about sound money.  Rather, the truth is pretty simple.

In cahoots with the central bank, the government prints unbacked currency.  Most dollars are not physical linen – it is merely electrons in bank accounts, which is shown simply here, “Fractional Reserve Banking in Pictures.”  This is really just an indirect way to tax anyone who holds dollars.  Anyone who whines that the banks “needed” the TARP bailouts fails to understand it is not just the banks who are failing – it is the entire monetary system, which remains a giant Ponzi scheme.

Today’s monetary system is not sustainable, and tomorrow’s bubble is the US Treasury sovereign debt market.  As I wrote recently, China has halted purchase of Treasury bonds which may be the modern-day equivalent of France redeeming its paper dollars for gold in 1967-1968, which led to the collapse of the London Gold Pool and the complete severance of the dollar from gold by Nixon in 1971.

Unknown to most Americans, the global gold market is one of the world’s largest, trading over $25 billion a DAY – or $6.5 trillion annualized – on the London gold market alone.  I have previous highlighted how governments and central banks suppress the gold price with “paper gold” contracts last year here.

Within the past several years, during my time spent in China, I witnessed the methodical promotion of gold and silver by the Chinese government to their people – who already have a traditional respect for these metals as a form of wealth.  After my return to the United States in 2009, I was somewhat alarmed to see all the “Cash for Gold” advertising and full-page newspaper ads appear urging Americans to sell their gold and silver where they had been none several years earlier.

This is the exact opposite of what should be happening – gold and silver belong in the hands of the PEOPLE, not the financial elite.  The recent dramatic rise in the gold price over the past decade has nothing to do with gold getting more “expensive” but has everything to do with the depreciation of the dollar currency.

As seen in the below video centered in Indonesia, more and more people around the world are figuring out the governments’ scam.   The world we live in today – an unbacked paper currency with >25% interest rate credit cards and hundreds of trillions of dollars in derivatives – is an unsustainable illusion and will cease to exist in the years to come.

From the end of the Revolution of 1776 until 1964, Americans circulated 90% silver coins.  Credit card companies were only permitted to charge obscene interest rates over 10% after the Monetary Control Act of 1980 eliminated the usury laws.  The recent bubble in derivatives was only made possible courtesy with the reckless Alan Greenspan and Congress revoking parts of the Glass-Steagal Act in 1999.  (See “What the Heck Are Derivatives?” in case you are wondering.)

While the future holds more short-term economic pain, if society recognizes the actions of the government as the root cause, we will have a shot at mending the situation for ourselves and future generations.  A world where people own their money is the vital missing key to improving the living standards and comfort of all mankind.  Today’s problems are not solvable by the harsh dictat of government, but instead by the free will and ingenuity of all individuals.

TOWNE FOR CONGRESS

PS – If you have any paper or electronic dollars you don’t want, feel free to donate them to the campaign during the August 16th Money Bomb, see here for details.   See also the platform article “Sound Money and Jobs” for more info.

“Truth persists and illuminates, even if there is no one to utter it.“

Government is not the solution; rather, it is causing the problems.  The below slides (view at Scribd, backup PDF) highlight the economic situation, updated from a May presentation.  I’ve written about the solutions to the unemployment problem, the deficit, Social Security, and the high costs of health care which are linked below.

For Liberty and the Constitution,

Jake Towne

Will the real national debt please stand up? The national debt published in the papers and online – which is closely tied to the USTreasury market is now over $13.3 trillion.  Current government plans include massive deficit spending through 2013, and the government’s optimistic projections of a return to “normalcy” after 2013 are not anchored in reality.  Source of budget data.

However, the true national debt is hidden by the cash-based accounting method government uses.  The true national debt is over $120 trillion when GAAP (Generally Acceptable Accounting Principles) are used to identify future taxation sources and future debts such as Social Security and Medicare.  That’s around $400,000 for every man, woman, and child in the country.  Massive reductions in spending and taxation are necessary if America is to regain its financial sovereignty, my proposals are outlined here and in “Guns or Health Care?“

As seen in the official USTreasury report on page 178/254, the total unfunded liabilities for Medicare and Social Security is a jaw-dropping $107 trillion over the future of these programs.  While I predict the Democrats may bear the brunt of the blame for the collapse of Medicare, one must not forget that it was the Republican’s massive expansion of Part D’s prescription drug plan under Bush that severely worsened Medicare’s fiscal situation.  While the situation in Medicare is worse – and changing daily due to the new healthcare legislation – some of my proposals to maintain Social Security are outlined in “Social Security or Insecurity?“

“He has erected a multitude of New Offices, and sent hither swarms of Officers to harass our People, and eat out their substance.” – Declaration of Independence, 1776

The quote above from the Declaration is far more true in 2010 than it was in 1776.   Not counting the millions of government contractors, the government’s Republocrat-controlled work force is currently 22.8 million bureaucrats.  This is America’s largest single job sector, and remember, the taxpayer bears the full cost to keep these bureaucrats employed.  Like something out of an Orwell novel, the Washington Post estimates 854,000 bureaucrats are employed to spy on and keep tabs on the rest of us and the world.  Lisa Benson’s cartoon says it all.

Keep in mind bureaucrats make nearly twice the average wage of the private sector, and have better benefits.  My solution?  Lead by example.  I will refuse the elite congressional pension and healthcare plans when elected, and keep just the median income for a salary and donate the rest of the $116,000 to local non-profit hospitals.

Next, notice that more than 1 in 8 Americans are on food stamps, or 40.4 million people.  USDA link here.  Note the strong rise in number of SNAP food stamp recipients during the past year.  One would expect to see this number dropping or even flat-lining – along with employment rising – if a recovery were underway.  The annual projected cost is now $66 billion, paid for by the ever-diminishing work force.

No jobs, no recovery. BLS link here.  Note that while the “newspaper” unemployment rate is still 10%, the U-6 figure – which more accurately describes total unemployment is 17% – a depression statistic.  An estimated 1.6 million will file for bankruptcy this year.   I’ve described the common sense solutions to end the rampant unemployment created by the government almost overnight in the campaign’s Jobs plank.

Since the BLS drops off workers from its U-6 figure, the real unemployment rate is likely greater than 17%.  Shadowstats estimates the rate at about 22%.

The number of new housing starts has reached a 5-decade low, while about 25% of all residential mortgages are underwater.  Note that in prior recession cycles, a quick rebound occurred while this depression looks more like a dead cat bounce.  This is because….

The Federal Reserve bailed out the bankers and Freddie Mac and Fannie Mae.  The above is built from the Federal Reserve H.4.1 data here.  The red line is the total (reported) balance sheet of the FED, which has more than doubled since the time of the Banker Bailout.  While the original TARP bailout (not shown) accounted for much of the initial sharp increase, most of the debt has been replaced by $1.12 trillion of mortgage-backed securities (the purple line).

This graph shows the nationalization and propping of America’s entire residential housing industry. The yellow and green lines show the cumulative totals of USTreasury and USAgency debt held by the FED.  While the Federal Reserve has admitted it will take losses on the MBS debt, the question remains as to how much and when.

The purchasing power of the dollar has lost well over 94% since FDR took America off the classical gold standard in 1933 through monetary inflation.  The monetary inflation is caused by the Federal Reserve.  They debase the dollar by creating more and more irredeemable paper dollars, which is of increasing concern since China has stopped buying Treasury debt.  A major reason why healthcare now appears so expensive is this money-printing, as I highlighted in my article “Health Care Solutions.”  Graph provided by Bloomberg Financial, 2009.

To cap off the situation with the dollar, the latest quarterly banking profile from the FDIC state the deposit insurance fund (DIF) is bankrupt.  While consumers at failed banks still receive “insured” funds, the losses are presumably filled in with dollars from the FED, as reported last here.  The current FDIC “watch list” rose to 775 banks, or almost 10% of all FDIC-insured banks in the US per p. 3/26.

In summary, do not expect a recovery until the Republocrat ruling elite are removed from power or are forced to address the problems the rest of society faces.  As the extravagant $5 million Bill Clinton wedding under heavy security – possibly paid for by the taxpayer – and $7 million John Kerry yacht (and avoidance of >$500,000 in taxes) demonstrate, the elite are not exactly suffering.

As Stuart Carlson’s great cartoon shows, the “Great Recession” still has a firm grip on the economy.  Sadly, the truth is the situation in America will not improve until the government removes its jackboots from the throat of the economy.  Ceasing all special privileges to special groups would help as well.

That Freedom Shall Not Perish,

TOWNE FOR CONGRESS

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Jake Towne for US Congress PA-15 – Economy in Pictures (AUG 2010)

Independent congressional candidate Jake Towne issued this statement today:

“During his sorry 20-year political career, Charlie Debt has repeatedly supported unconstitutional legislation that has created raging, out-of-control deficits. He also supports vast expansions of federal control over the people’s healthcare, such as his support of S-CHIP, the Medical Rights Act of 2009, and now HR 5424 below, which is absurdly titled as “Reform Americans Can Afford Act of 2010.”

“While it is constitutional for the state legislature of Pennsylvania to discuss healthcare options that work best for Pennsylvanians, the federal Congress has no constitutional authority to do so, and I have explained in detail why the current federal laws make healthcare both more expensive and lessen the quality of care. Therefore:

• I call upon Dent to sign Discharge Petition #11 to bring about a House floor vote on the healthcare tax.
• I call upon Dent to immediately cease his co-sponsorship of HR 5424, which replaces the $1 trillion tax by passing into law yet another 220-page boondoggle, HR 4038, which still attempts to “establish universal access programs.” HR 5424 usurps Pennsylvania’s state sovereignty with ridiculous use of taxpayer money to provide corrupt donkey-eat-the-carrot “state innovation programs.”
• I call upon Dent to cosponsor HR 4995, the End the Mandate Act, which restores the freedom of Americans to choose health insurance that best meets their individual needs by repealing the mandate that all Americans MUST obtain government-approved health insurance or pay penalties.
• I call upon Dent to realize that while HR 4995 leaves most of the $1 trillion tax intact, it removes the mandate – the most objectionable portion of the bill – and has a chance of gaining enough House-wide support from Democrats and Republicans alike to be passed into law. It is a decent compromise (an unrecognizable term in DC these days) while HR 5424 has about as much chance of passing as a snowball surviving Hades.

“Heritage Action for America has also called on Dent to sign Discharge Petition #11.

“My other Republocrat challenger, John Callahan, supports the $1 trillion healthcare tax and probably just does not understand its economic impact, or else just blindly believes what his Washington handlers are telling him – it’s impossible to find out as this candidate has not actually campaigned for the past 12 months.

“I challenge both Mr. Dent and Mr. Callahan to lengthy public debates on not just this important topic but also the ENDLESS DEBT and ENDLESS WARS. I offer to the public my constructive ideas to improve healthcare in my summary “Health Care Solutions,” my Health Care Plank and look forward to the public’s feedback in the novel-yet-simple “Our Open Office” program.

“Speaking of a snowball’s chance in Hades, I also challenge both Dent and Callahan to never enroll in the overly-lucrative congressional healthcare plans and donate $116,000 of their congressional salaries to local non-profit hospitals to assist the needy as I have pledged to do.

A Note to Mr. Dent and Mr. Callahan -

Buy your healthcare on the marketplace just like everyone else. Last time I checked the Constitution, Congressmen are not entitled to free healthcare, especially while they are destroying the country I love.   And that goes for your Republocrat buddies as well.

Sincerely,

TOWNE FOR CONGRESS

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If one owes a bank a thousand dollars, he has a problem. But if one owes a bank a billion dollars, then the bank has the problem. From the four years I spent in China, I assure you this truism is not lost on the Chinese, though one must never forget the banks’ nifty little ability to create their own money.

While America tends to act rather brashly on the world stage – think Bush proclaiming “Mission Accomplished” in a jumpsuit in 2003, or Obama graciously accepting a Nobel Peace Prize while simultaneously expanding the ridiculous Afghanistan War – the Chinese government acts in a far more subtle manner.

The below chart shows the total US Treasuries owned by China which includes both Hong Kong and the mainland. In July 2009, the total was $1.051 trillion. In April 2010, the total is $1.052 trillion, and the trend is a flat plateau. The Chinese have wisely chosen to contain their US debt exposure by halting the purchase of dollars.

In February 2009, Luo Ping, director-general at the China Banking Regulatory Commission, said:

“Except for US Treasuries, what can you hold? Gold? You don’t hold Japanese government bonds or UK bonds. US Treasuries are the safe haven. For everyone, including China, it is the only option.”

Of course, Ping was lying on two counts. First that US Treasuries were a safe haven – if Ping believed his own drivel, Chinese holdings would surely have increased during the past year to help pay for the Obama stimulus plan. Instead, Ping wanted other foreigners and his creditor, the USA, to continue to believe his feint.

Ping’s second lie was that US Treasuries were the only option. In May 2009, as I explained in “The Gold War – China and the US Treasury Market,” gold is a form of insurance to protect against sovereign defaults and money-printing by the Bernanke gang at the FED. Sure enough, shortly after Ping’s speech, China reported a near-doubling of its gold holdings.

This week Dagong Global Credit Rating downgraded its rating of US Treasury debt from AAA to AA with a negative outlook, and now rates Chinese sovereign debt slightly better than America’s. The Financial Times immediately downplayed the announcement by inferring the privately-owned Dagong is a creature of the Chinese government. While this may be true to a large degree, it does nothing to change the message: China has downgraded our debt and has ceased increasing its Treasury holdings.

The FT concludes: “Despite the discredit the financial crisis has brought to the big three global ratings agencies [Standard and Poor's, Moody's, and Fitch], investors are still more likely to trust their ratings…” Lemmings off a cliff, but for each loser there is sometimes a winner.  Who will the winners be? TO BE CONTINUED…

Feel free to ask any questions below, I’ll do my best to answer, further suggested reading is my “Bailouts and Corporatism” and “Federal Reserve” planks.  You can help my campaign take on the Republocrats by making a donation of any amount below.

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