Great article. Redditors upvote it on the politics reddit. http://reddit.com/info/6e9q3/comments/

Submitted to Ron Burley.

He is an advocate for the 50+ croud at "World's Largest Circulation Magazine".

Of course that is AARP. If he puts something in the magazine, you may have a significant jump in your fax usage.

We old geezers WILL make our voice heard in Washington!

Karl,

Get off your ass.

RUN FOR OFFICE.

really.

Instead of kissing babies he can skullfu.., oh, ok, that's pretty bad. I'll go away.

KD wrote..

When, not if, this flows through to the public balance sheet we will see immediate and severe cramping of the Federal Budget. Unable to fund itself on reasonable terms the government will find itself forced to drastically slash entitlement spending.

That, in turn, will lead to severe "voter unrest", and from there you can figure it out - what always happens will happen once again, as "someone" will appear on the political stage offering bread and circuses, which of course will require that the citizens give up "just a bit" of their freedom........

I don't get it. The other day you were very forceful saying the government WON'T put it on the public balance sheet because of the subsequent rise in debt financing. And now you say 'when, not if' they do this.

So now the only thing we differ on is the second to last step. The step before the "someone" comes along. ("Someones" usually do take a little while to work their magic over the masses. And "someones" do have setbacks from time to time: Hitler's prison term, Chavez' last 'reform' defeat, etc.) My stance is that the voter unrest will force the politicians to force the Treasury-Fed to print, if they haven't done it willingly before then, in order to placate the voters.


(And no, I'm not sitting idly by while all this happens.)

They won't print because if they attempt it the bomb goes off immediately.

IF we allow this sort of unconstitutional usurpation to continue, the problem is that Congress loses control of this - and thus, so do we!

You're not thinking like a politician in that senario. They think they will be able to get away with it. Any country who has ever gone down that path thinks they have no choice and they think they can get away with it. And if the current government won't, the "Someone" will still need to come up with the money to pay for the bread and circuses in an amount to satisfy the masses. Like you said, "what always happens will happen once again". I could be wrong, as all sorts of things will be occuring in such a situation, but either way will not likely turn out well.

I'll re-iterate that we are talking about two different things here. Every example that the Ticker provides as comparison is effectively an appropriation (obligating the US government for future spending). The Fed action is a potential reduction in future revenue to the government. This is a critically important distinction. The Fed makes decisions all of the time that effect the potential profit that goes to Treasury. Maximizing income to Treasury is not high on the Fed's list of priorities.

I am particularly concerned about this statement:

Quote:

….shove off that cost on the taxpayer by demanding it of Treasury

The Fed is demanding nothing from Treasury. It is making a business decision that it believes is in the best interest of the country (and Treasury agrees) that may reduce future payments to Treasury.

There are a lot of reasons to oppose this decision. Calling it an appropriation is not one of them.

Rmonical, either the Fed's profits belong to the taxpayer or they don't.

If they don't belong to the taxpayer, why does the Fed not keep them, or invest them, or speculate with them? Why hand over any of it to Treasury? Why do they care in the slightest whether Treasury approves or not?

If those profits do belong to the taxpayer, then aren't the Fed's "business decisions" that affect that profit rightfully under Congressional authority since Congress is the CFO of this "business"?