While I'm flattered the Speaker would call something "the Bowles plan," the approach outlined in the letter Speaker Boehner sent to the President does not represent the Simpson-Bowles plan, nor is it the Bowles plan. In my testimony before the Joint Select Committee on Deficit Reduction, I simply took the mid-point of the public offers put forward during the negotiations to demonstrate where I thought a deal could be reached at that time.
Heh heh heh....
Boehner thinks he can just grab someone's name and use it without asking them first.
By the way, for those who think that folks like Rand Paul have a good idea in their proposals, well, no. Rand, like so many others, fails to understand that in a fiat monetary system money and credit are fungible and therefore in the classic monetary equality (GDP = MV) "M" is not money, it is money and credit.
The reason that we have not seen massive inflation is not, as Rand insists, that we have "exported" our inflation (e.g. to China.) Most of that "exporting" happened in the 1990s and 2000s, not in the last four years. The infuriating part of reading crap like Rand has published over and over again is that ideology has blinded him, along with others such as his father, to the facts even when the facts are right under their nose!
This chart, which you have all seen countless times, is the summary picture of all aspects of our monetary system, because all money is debt in a fiat, debt-backed monetary environment.
The acts of Congress and The Fed have done exactly one thing -- they have replaced the credit in "Financial Instruments."
If you look at GDP in unit-invariant terms (that is, getting "dollars" out of the definition) you would find that of course it has grown materially since 1980, as population has gone up as well in the United States. But population has not gone up by a factor of 10, nor has gross output. The difference is monetary inflation, and much of it (that "green bar") has been hidden as that part of the chart does not circulate.
In short that is the "skim" that the money-changers steal from society. They provide nothing in exchange for it.
In 1980 this was $531 billion out of a total of $4.39 trillion, or 12%.
In the 4th quarter of 2008, just before the market turned, it reached $17.1 trillion, or thirty-two times larger, and represented thirty-two percent of the total, or roughly three times as much.
What the Federal Government has done is protect these firms from the consequence of attempting to skim a full third of the economy off for themselves -- an utterly outrageous and unsustainable attempt that should have resulted in their mass bankruptcy. As that credit went from $17.12 trillion to $13.86 trillion, a decrease of $3.26 trillion, Federal Credit increased from $6.36 trillion to $11.11 trillion, a $4.75 trillion increase.
69% of the new Federal Debt to for the sole and exclusive purpose of propping up those firms. It did not go to help the people in any way -- not even by transfer payment! It simply filled in the hole in bank balance sheets.
But that credit is still unsustainable. It represents $13.86 trillion today out of $55.18 trillion. That is, a full 25% of the economic lifeblood of the economy is still being siphoned off by these jackals and people like Rand Paul either don't understand it (in which case they're incompetent to hold their office) or are too damned corrupt to speak of it (in which case it's worse.)
There is some price for intermediation in the market, of course. The low 10% range seems reasonable to me. If you go back to the 1950s, however, you'll find that the financial industry took just a couple of percent of the total economic activity!
The problem with what The Fed and Government have done is that they transferred responsibility for the financial credit to the public at large. That's theft folks.
And it is exactly what Boehner, Reid, Pelosi, McConnell, Obama and even Rand Paul along with the mainstream media are advocating.
History records that the money changers have used every form of abuse, intrigue, deceit, and violent means possible to maintain their control over governments by controlling money and its issuance. - James Madison
… The modern theory of the perpetuation of debt has drenched the earth with blood, and crushed its inhabitants under burdens ever accumulating. -Thomas Jefferson