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'Rule of 72' Proves It Doesn't Pay to Save in America by Jim Traficant

'Rule of 72' Proves It Doesn't Pay to Save in America
By By Jim Traficant

American citizens are the most creative and industrious people in the world. When confronted with a problem, the American people seem to find a resolve that shapes a direct and intended response of successful action.

That takes me to America's current crises: Bankruptcy. Busted. Broke. You get the message. Forget all the hype of the mainstream media. There is no more free press in America. It's not necessarily a "controlled press," it's more of an "aligned press," joined at the hip with our central, federal government.

It's getting so apparent that I predict government subsidies to the mainstream print media to "insure a free press." Right. Who's kidding whom? The federal government needs this so-called "free press" to continue feeding America with self-serving propaganda.

Propaganda? Absolutely. You've read it right here in my column. I'll be direct: There is more government propaganda in America than any other so-called "free country" in this world. It's that bad, and it will get worse.

Having said that, let's return to our subject of last week. The national retail sales tax and the recommendations of two great Americans: Mr. John W. Osier and Mr. Ed Waggoner Sr.

Both of their views were painted in detail and worthy of your scrutiny and interpretation. I'm sure that most of you agree with most of their views, suggestions and ideas. I, too, agree with most of their positions.

I now present Mr. Waggoner's brilliant "Rule of 72." I present it to you exactly as Mr. Waggoner presented it to me in support of my proposed national retail sales tax.

Mr. Waggoner writes; "I've been an advocate of a national retail sales tax for nearly 40 years. I've enclosed my ideas that may be of use to you in your efforts to convince others of the efficacy of replacing the income tax with a national sales tax."

I presented most of Mr. Waggoner's ideas in my last column. However, I saved the Rule of 72 for your review and consideration.

Just what is Mr.Waggoner's Rule of 72?

The Rule of 72 is a simple mathematical theorem used to calculate the effect of interest or inflation on money. For example: you might wonder how long it would take for a $50 deposit in a savings account to double at a 3 percent annual percentage rate of return.

Divide 72 by 3. The answer is 24. It would take 24 years for a $50 deposit to double at a 3 percent rate of return. Again: How long would it take for the purchasing power of a $50 deposit in a savings account to be reduced by half? Let's say the annual percentage rate of return on the savings account is 3 percent and that the inflation rate is 10 percent. That means -10 percent plus 3 percent equals -7 percent.

The purchasing power of your savings account is being reduced by 7 percent every year. Now, divide 72 by seven. The answer is 10 years and three months. If you leave your money in the bank, in 10 years and three months, your savings will have one-half (50 percent) of its original purchasing power. This theft will be actually accelerated, of course, by whatever income taxes you are required-it's not voluntary-to pay on the meager, negative interest your savings may have earned.

Mr. Waggoner makes you think. Under our current system, it doesn't pay to save. As a result, savings have never been so scarce; thus the shortage of consumer loan activity necessary to drive a "capitalist" system. Now you may be able to figure out why America has become an absolute socialist economy.

Labor, folks, is the No. 1 ingredient of any successful and productive enterprise. Human labor can be mental or physical. Without a laborer, no production is possible.

The capitalist investor is also essential. The capitalist invests in the plants, factories and machinery necessary for the laborer to produce.

The capitalist and the laborers are partners in the economic economic struggle to form a system of free enterprise.

Under the Marxist system, the laborers and capitalists are adversaries, pitted one against the other.

Thus, to ensure the marriage of our laborers and investor capitalists, we should not tax neither. We should reward both.

There is only one way to accomplish that goal-the profit-oriented, economic system that has built America pursuant to the brilliance of our founders: tax consumption only.

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Taxing consumption will encourage thrift and savings, as well as promoting recycling and conservation. The sales tax will discourage unwise spending, thus reducing waste of our natural resources.

In simple terms of economic logic, to tax production through personal and corporate income taxes discourages the very things we should encourage.

You see folks, the Marxist, "progressive" income tax on labor and investors has turned America into a Marxist, socialist economic colony. We've become a colony by adopting a system that has failed in every society where it has been applied. "

Cut the Bankers Out of Money-Making
from The

Like a drug dealer who just cut off one of his best addicts because he's broke, Wall Street recently announced that Greece's debt rating has been lowered to junk status. This means that if the Greek government wants to borrow more money from international bankers, taxpayers there will now have to pay a lot more, assuming they will be able to even get a loan.

Of course, it was Wall Street that enabled the Greek government to borrow so much in the first place. Then it helped Greece's leaders to hide their liabilities from everyone.

Why is this issue important to the United States? As AMERICAN FREE PRESS has reported in recent issues, this country is not that far behind Greece based on projected federal deficits and the U.S. national debt. According to some estimates, each American taxpayer is on the hook for $113,000 to cover the principal on all of Washington's commitments, including Medicare, Social Security and the wars in Afghanistan and Iraq-and that doesn't even include the interest that will have to be paid to international bankers for years to come.

The talk right now in Europe is for Greece to leave the European Union so it can lick its wounds as it tries to pay down its debt, which has miracu-lously grown from $40 billion when the crisis first hit last month to $158 billion right now-and growing. That debt will still have to be borne by Greek taxpayers- the very people who have been victimized and deceived by their own government and Wall Street.

As we see it, the only real solution to the problem is to rip up that paper debt and run Wall Street out of the country, a move Americans should also make before the bankers lay even more claim to the land our forefathers fought and died to free.
But how will Greece and the United States be able to pay their bills if they can no longer borrow money?

Whatever you may think of President Abraham Lincoln's conduct during the War of Northern Aggression, he had the right idea when it came to paying his war bills. Greece and the United States-really, any government in any country around the world-have the power to issue their own interest-free currency. How will the people avoid trading corrupt bankers for corrupt bureaucrats? The treasury can simply issue an amount of currency commensurate with that country's gross domestic product. No more, no less.
Would you rather have crooked bankers issuing interest-bearing money or politicians you can replace at the ballot box issuing interest-free money? "

Even Bankers Fear Rising World Debt
By Christopher J. Petherick

Last month, the bankers to the world's central banks issued a dire warning that official debt is threatening to topple economies around the globe. It's a shocking study that concludes U.S. and European governments are ready to collapse as did the nation of Greece recently…

Sovereign debt-the fancy term for direct loans, bonds and other financing accrued by governments around the world-is out of control in industrialized countries, says the Bank of International Settlements (BIS) in a new report. The situation is so bad, claims the global financial institution that is the "bank for the central banks," in the years to come the United States and Europe could be facing the same disaster that befell Greece two months ago.

In a study, "The Future of Public Debt," BIS's chief economist Stephen Cecchetti writes: "The aftermath of the financial crisis is poised to bring a simmering fiscal problem in industrial economies to the boiling point."

For the past several months, the focus has been on the sovereign debt of the so-called "PIGS" countries- Portugal, Ireland, Greece and Spain. But, according to BIS, trouble is brewing for the largest economies in the world, namely the United States, Japan, England and all of Western Europe. According to BIS calculations, by the end of 2011, sovereign debt for these countries is expected to rise above 100 percent of their GDPs.

In the years following World War II, total U.S. debt actually exceeded GDP, thanks to the frenzied borrowing spree carried out by President Franklin D. Roosevelt to "stimulate" the economy and wage war in Europe. It was only the unprecedented productivity on the part of middle-class Americans in the 1950s that outpaced U.S. debt and brought it back under control.

As AFP has reported on numerous occasions, this is impossible today, given that the global plutocracy has gutted America's working class, replacing the highly skilled productive jobs once commonplace in America with low-skilled service sector work or no job at all.

In its study, BIS specifically looked at bond markets. In February, investors around the world had a "come to Jesus" moment when it was revealed that Goldman Sachs had concealed a huge amount of Greek debt through complicated financial derivatives called interest- rate swaps. They responded by shunning Greek debt, forcing a crisis that required European nations to step in with a multibillion-dollar bailout. As a result, investors have become highly suspicious of governmental accounting.

Cecchetti writes that these suspicions are expected to start showing up in bond markets. "The question is when markets will start putting pressure on governments, not if," writes Cecchetti. "When will investors start demanding a much higher compensation for holding increasingly large amounts of public debt?"

Making matters worse, when Wall Street collapsed, pension funds took a huge hit. Governments now have to chip in even more to cover the promises that have been made to retired bureaucrats and other civil servants. With dwindling tax revenues and high unemployment, debt is the only way governments can fund liabilities.

"Rapidly aging populations present a number of countries with the prospect of enormous future costs that are not wholly recognized in current budget projections," writes Cecchetti. "The size of these future obligations is anybody's guess."