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Title: Rockwell's Thirty-Day Plan
Source:
Ludwig von Mises Institute
URL Source: http://www.mises.org/story/2685
Published: Aug 19, 2007
Author: Llewellyn H. Rockwell, Jr.
Post Date: 2007-08-20 04:33:13 by Uncle Bill
Keywords: Vote, Ron, Paul
Views: 184
Comments: 9
Ludwig von Mises Institute When Eastern Europe broke free in 1989, we all realized just how little thought had been given to the transition from socialism to capitalism. Mises had told us the collapse was coming, and we should have been prepared. As America comes to resemble a command economy, we need a transition plan here too. Yuri Maltsev proposed a "One-Day Plan" for the U. S. S. R. We're not in that bad a shape (yet), so we could do it in 30 days. DAY ONE: The federal income tax is abolished and April 15th is declared a national holiday. The 40% reduction in federal revenues is matched by a 40% cut in spending. The budget is still almost twice as big as Jimmy Carter's. DAY TWO: All other federal taxes are abolished, including the corporate income tax, the capital gains tax, the gasoline tax, "sin" taxes, excise taxes, etc. Businesses boom, and the few legitimate federal functions are funded with an inexpensive head tax. People who choose not to vote need not pay it. (Note: this was a mainstream view in the 19th century.) DAY THREE: The federal government sells all its land, freeing up tens of millions of acres for development, mining, farming, forestry, oil drilling, private parks, etc. The government uses the revenue to pay off the national debt and other liabilities. DAY FOUR: The minimum wage is reduced to zero, creating jobs for ex-federal bureaucrats at their market wage. All pro-union laws and regulations are scrapped. The jobless rate falls dramatically. DAY FIVE: The Bureau of Labor Statistics, like the rest of the Labor Department, is sent to that big hiring hall in the sky. Without detailed economic statistics, future economic planners will be blind and deaf. DAY SIX: The Department of Commerce is abolished. Big business has to make its own way in the world, without subsidies and privileges at the expense of its competitors and customers. DAY SEVEN: The plug is pulled on the Department of Energy. Oil and gas prices plummet. DAY EIGHT: All regulatory agencies, from the Interstate Commerce Commission to the Federal Trade Commission, are deep-sixed. Competition is legalized. DAY NINE: HUD is squashed like a bug. There's a buiding boom in cheap, private, apartments. DAY TEN: The interstate highways reopen as private businesses. Road entrepreneurs price travel according to consumer demand. Using modern technology, drivers get bills once a month. Credit risks-and drunks and dangerous drivers- aren't allowed on the road. Non-drivers no longer subsidize car owners. DAY ELEVEN: Government welfare is wiped out. Bums work or starve. The deserving poor find a cornucopia of private services designed to make them independent. Private charity explodes, as the American people, already the most generous in the world, find their incomes almost doubled, thanks to the tax cuts. DAY TWELVE: The Federal Reserve closes its open-market operations and stops protecting the banking industry from competition. But banks can now engage in all the non-bank financial activities previously forbidden to them. The business cycle, which is caused by monetary expansion through the credit markets, is liquidated. DAY THIRTEEN: Federal deposit insurance is scrapped. All insured deposits are redeemed from federal assets, which include the personal assets of high-level government employees. The threat of bank runs forces banks to keep 100% reserves for their demand deposits, and prudent reserves on all other accounts. There are no more inherently bankrupt banks propped up by the government, at taxpayer expense, and no more bail outs. DAY FOURTEEN: The shaky fiat dollar is defined in terms of gold, with the ratio determined by dividing the government's gold stock by all existing dollars on that day. DAY FIFTEEN: The federal government sells National and Dulles airports to the highest bidder, and stops all subsidies to other socialist airports around the country. All constraints on airline prices and service cease. It costs more to fly during peak hours than off-peak, but overall, air travel drops in price. DAY SIXTEEN: All government regulations that create and sustain cartels are abolished, including those for the post office, telephones, television, radio, and cable TV Prices plummet, and a host of new and unforeseen services becomes available. DAY SEVENTEEN: Centrally planned agriculture, as imposed by Hoover and Roosevelt, is repealed: there are no more subsidies, payments-in-kind, marketing orders, low-interest loans, etc. Farm prices drop. Entrepreneurial farmers get rich. Welfare farmers go into another line of work. The poor eat like kings. DAY EIGHTEEN: The Justice Department shutters its anti-trust division. Companies, big and small, are free to merge – up, down, or sideways. Stockholders can buy any other company, or sell their stock to anyone else. Marginal producers can no longer battle their competitors with bureaucratic weapons. DAY NINETEEN: The Department of Education flunks the constitutionality test, and is kicked out. Private charities set up remedial reading and writing programs for the former bureaucrats. Federally subsidized sex education and other anti-family programs go out of business. Local school districts become responsive to parents or close, pressured by a fast-growing private school sector (which many more parents can now afford). DAY TWENTY: All federal monuments are sold, in some cases to non-profit groups based on the Mt. Vernon Ladies Association, which owns and runs George Washington's home. The VFW buys the Vietnam memorial. There is much bidding for the Jefferson and Washington monuments. Nobody wants FDR's, so it's torn down and the land sold to a farmer. (With the federal government cut back to its constitutional size, much of Washington reverts to productive uses like agriculture, as in late 18th century.) DAY TWENTY-ONE: The computerized financial and political dossier maintained by the government on every American is erased. The public wanders through the federal offices to make sure, in a reprise of the East Berliners' visits to Stasi headquarters. DAY TWENTY-TWO: Equal rights are granted to all Americans, even members of non-victim groups. There is no affirmative action, no quotas, no set-asides, no public accommodations laws. Private property and freedom of association are fully restored. DAY TWENTY-THREE: The EPA is cleaned out, with all "clean air" and similar big-government laws repealed. Ten thousand lawyers leap from their balconies. Private property is established in air and water. Americans harmed by pollution are free to sue the polluters, who are no longer protected by the federal government. DAY TWENTY-FOUR: Americans are given complete freedom of contract, restoring rationality to malpractice and product liability law. DAY TWENTY-FIVE: Government scrambles for more assets to sell (i.e., the National Zoo, also known as Washington, D.C.) to pay off the liabilities of the privatized Social Security system. DAY TWENTY-SIX: Porno artists have to earn their own livings, as the National Endowment for the Arts tries to raise its budget through sidewalk painting sales. DAY TWENTY-SEVEN: Foreign aid is outlawed as unconstitutional, unjust, and un-economic. Foreign politicians have to steal their own money. The World Bank, IMF, and United Nations close their super- luxurious doors. DAY TWENTY-EIGHT: The American people are given the unrestricted right to keep and bear arms. DAY TWENTY-NINE: The Defense Department is reoriented towards defense. American troops come home from all around the world. We adopt a policy of armed neutrality, remembering the Founding Fathers' teaching that we could not have an empire abroad and a constitutional republic at home. DAY THIRTY: All tariffs, quotas, and trade agreements are put through the shredder. Americans can trade with anyone in the world, without barriers or subsidies. Japanese car prices drop an immediate 25%. In just 30 exhilarating days, we have established the outlines of free market. Radical? Maybe so. Me, I can't wait until Month Two. THE GREATEST ECONOMY IN THE HISTORY OF THE WORLD "I do however recognize this is the best economy in the history of man." inboxnews posted on 2007-08-02 16:51:38 ET Reply Trace - Source. WHAT DOES "FED PUMPS $68 BILLION INTO BANKING SYSTEM" ACTUALLY MEAN? Analysis of the Unfolding OTC Derivatives Melt Down In the normal course of business, the Company enters into arrangements with special purpose entities ("SPEs"), also known as variable interest entities ("VIEs"). SPEs are corporations, trusts or partnerships that are established for a limited purpose. SPEs, by their nature, are generally not controlled by their equity owners, as the establishing documents govern all material decisions. The Company's primary involvement with SPEs relates to securitization transactions in which transferred assets, including commercial and residential mortgages, consumer receivables, securities and other financial assets are sold to an SPE and repackaged into securities or similar beneficial interests. SPEs may also be used to create securities with a unique risk profile desired by investors and as a means of intermediating financial risk. The Company, in the normal course of business, may establish SPEs, sell assets to SPEs, underwrite, distribute and make a market in securities or other beneficial interests issued by SPEs, transact derivatives with SPEs, own securities or other beneficial interests, including residuals, in SPEs, and provide liquidity or other guarantees for SPEs. I make mention of the use of SPE’s – where the use of derivatives is concerned – because this term has a familiar “ring” to it. SPE’s were the very same accounting structures which Enron used to hide a quagmire of fraudulent OTC derivatives transactions. This is normal, even good, be happy, know that everything is ok. Think positive. Be a winner. On the otherhand: It's all over. Wave good-bye to our former Constitutional Republic. Say hello to destruction, collapse, depression, hyper-inflation, crash, poverty, foreclosure, bankruptcy, fear, panic, murder, theft, riots, police state, martial law, slavery, and death. OTC derivatives markets activity in the second half of 2004 Remember, 248 trillion, 248 trillion, 248 trillion. Over the past six years, global futures trading on the world's exchanges has grown nearly 30% a year, expanding the total derivatives market to about $500 trillion -- four times the value of all publicly traded stocks and bonds. As a result, the Chicago Mercantile Exchange surpassed the New York Stock Exchange in market value in 2003. This, as Aaron Lucchetti and Alistair MacDonald report, helps explain why exchanges are in a merger frenzy: They want one another's hot trading products. As technology has transformed trading, most stock and commodity exchanges have converted to for- profit corporations and invested in giant computer trading systems to compete, while earning lower and lower margins. But the new cost-efficient systems have also made experimentation more affordable, and the first exchange to launch a popular derivative usually ends up virtually owning the market for it. At the same time, the growth of private-money pools looking for new investments have made the efforts potentially more lucrative. Now, exchanges as a group make most of their money by developing and trading their own futures products, not by trading stocks -- a reverse from just six years ago. More than 300 new derivatives products have hit the market in just the past few years -- a third of them from derivatives designers at the Merc -- meaning that winning formulas are getting harder to find. At a result, the exchanges are in a race to come up with the next successes -- and to acquire rivals to get control of their star products. Read Aaron Lucchetti and Alistair MacDonald's report: Bank Crisis! Bank Crisis! There has been a veritable revolution in the attitude of the nation's economists, as well as the public, toward our banking system. Ever since 1933, it was a stern dogma--a virtual article of faith--among economic textbook authors, financial writers, and all establishment economists from Keynesians to Friedmanites, that our commercial banking system was super-safe. Because of the wise establishment of the Federal Deposit Insurance Corporation in 1933, that dread scourge--the bank run--was a thing of the reactionary past. Depositors are now safe because the FDIC "insures," that is, guarantees, all bank deposits. Those of us who kept warning that the banking system was inherently unsound and even insolvent were considered nuts and crackpots, not in tune with the new dispensation. But since the collapse of the S&Ls, a catastrophe destined to cost the taxpayers between a half-trillion and a trillion-and-a-half dollars, this Pollyanna attitude has changed. It is true that by liquidating the Federal Savings and Loan Insurance Corporation into the FDIC, the Establishment has fallen back on the FDIC, its last line of defense, but the old assurance is gone. All the pundits and moguls are clearly whistling past the graveyard. In 1985, however, the bank-run--supposedly consigned to bad memories and old movies on television--was back in force, replete with all the old phenomena: night-long lines waiting for the bank to open, mendacious assurances by the bank's directors that the bank was safe and everyone should go home, insistence by the public on getting their money out of the bank, and subsequent rapid collapse. As in 1932-33, the governors of the respective states closed down the banks to prevent them from having to pay their sworn debts. The bank runs began with S&Ls in Ohio and then Maryland that were insured by private insurers. Runs returned again this January among Rhode Island credit unions that were "insured" by private firms. And a few days later, the Bank of New England, after announcing severe losses that rendered it insolvent, experienced massive bank runs up to billions of dollars, during which period Chairman Lawrence K. Fish rushed around to different branches falsely assuring customers that their money was safe. Finally, to save the bank the FDIC took it over and is in the highly expensive process of bailing it out. A fascinating phenomenon appeared in these modern as well as the older bank runs: when one "unsound" bank was subjected to a fatal run, this had a domino effect on all the other banks in the area, so that they were brought low and annihilated by bank runs. As a befuddled Paul Samuelson, Mr. Establisment Economics, admitted to the Wall Street Journal after this recent bout, "I didn't think I'd live to see again the day when there are actually bank runs. And when good banks have runs on them because some unlucky and bad banks fail . . . . we're back in a time warp." A time warp indeed: just as the fall of Communism in Eastern Europe has put us back to 1945 or even 1914, banks are once again at risk. What is the reason for this crisis? We all know that the real estate collapse is bringing down the value of bank assets. But there is no "run" on real estate. Values simply fall, which is hardly the same thing as everyone failing and going insolvent. Even if bank loans are faulty and asset values come down, there is no need on that ground for all banks in a region to fail. Put more pointedly, why does this domino process affect only banks, and not real estate, publishing, oil, or any other industry that may get into trouble? Why are what Samuelson and other economists call "good" banks so all-fired vulnerable, and then in what sense are they really "good"? The answer is that the "bad" banks are vulnerable to the familiar charges: they made reckless loans, or they overinvested in Brazilian bonds, or their managers were crooks. In any case, their poor loans put their assets into shaky shape or made them actually insolvent. The "good" banks committed none of these sins; their loans were sensible. And yet, they too, can fall to a run almost as readily as the bad banks. Clearly, the "good" banks are in reality only slightly less unsound than the bad ones. There therefore must be something about all banks--commercial, savings, S&L, and credit union--which make them inherently unsound. And that something is very simple although almost never mentioned: fractional-reserve banking. All these forms of banks issue deposits that are contractually redeemable at par upon the demand of the depositor. Only if all the deposits were backed 100% by cash at all times (or, what is the equivalent nowadays, by a demand deposit of the bank at the Fed which is redeemable in cash on demand) can the banks fulfill these contractual obligations. Instead of this sound, noninflationary policy of 100% reserves, all of these banks are both allowed and encouraged by government policy to keep reserves that are only a fraction of their deposits, ranging from 10% for commercial banks to only a couple of percent for the other banking forms. This means that commercial banks inflate the money supply tenfold over their reserves a policy that results in our system of permanent inflation, periodic boom-bust cycles, and bank runs when the public begins to realize the inherent insolvency of the entire banking system. That is why, unlike any other industry, the continued existence of the banking system rests so heavily on "public confidence," and why the Establishment feels it has to issue statements that it would have to admit privately were bald lies. It is also why economists and financial writers from all parts of the ideological spectrum rushed to say that the FDIC "had to" bail out all the depositors of the Bank of New England, not just those who were "insured" up to $100,000 per deposit account. The FDIC had to perform this bailout, everyone said, because "otherwise the financial system would collapse." That is, everyone would find out that the entire fractional-reserve system is held together by lies and smoke and mirrors, that is, by an Establishment con. Once the public found out that their money is not in the banks, and that the FDIC has no money either, the banking system would quickly collapse. Indeed, even financial writers are worried since the FDIC has less than 0.7% of deposits they "insure," estimated soon be down to only 0.2% of deposits. Amusingly enough, the "safe" level is held to be 1.5%! The banking system, in short, is a house of cards, the FDIC as well as the banks themselves. Many free-market advocates wonder: why is it that I am a champion of free markets, privatization, and deregulation everywhere else, but not in the banking system? The answer should now be clear: Banking is not a legitimate industry, providing legitimate service, so long as it continues to be a system of fractional-reserve banking: that is, the fraudulent making of contracts that it is impossible to honor. Private deposit insurance--the proposal of the "free-banking" advocates--is patently absurd. Private deposit insurance agencies are the first to collapse, since everyone knows they haven't got the money. Besides, the "free bankers" don't answer the question why, if banking is as legitimate as every other industry, it needs this sort of "insurance"? What other industry tries to insure itself?. The only reason the FDIC is still standing while the FSLIC and private insurance companies have collapsed, is because the people believe that, even though it technically doesn't have the money, if push came to shove, the Federal Reserve would simply print the cash and give it to the FDIC. The FDIC in turn would give it to the banks, not even burdening the taxpayer as the government has done in the recent bailouts. After all, isn't the FDIC backed by "full faith and credit" of the federal government, whatever that may mean? Yes, the FDIC could, in the last analysis, print all the cash and give it to the banks, under cover of some emergency decree or statute. But . . . there's a hitch. If it does so, this means that all the trillion or so dollars of bank deposits would be turned into cash. The problem, however, is that if the cash is redeposited in the banks, their reserves would increase by that hypothetical trillion, and the banks could then multiply new money immediately by ten-to-twenty trillion, depending upon their reserve requirements. And that, of course, would be unbelievably inflationary, and would hurl us immediately into 1923 German-style hyper-inflation. And that is why no one in the Establishment wants to discuss this ultimate fail-safe solution. It is also why it would be far better to suffer a one-shot deflationary contraction of the fraudulent fractional-reserve banking system, and go back to a sound system of 100% reserves. Capitalization Of The Bank Insurance Fund "Another question that has come up frequently with Kitco, and I’ll ask Congressman Paul this one. Do you think it is appropriate for the American people to ask for an audit of Fort Knox for full disclosure of how much gold is really in there? R. Paul: Yes, and going back to the Gold Commission, that subject came up then and I recommended that we do that, and that was again defeated 15 to 2. They said they have an ongoing audit. They audit 5% every year, so eventually they audit the whole thing. They also said that there once was an audit in the 1970’s but those who participated in the audit considered it inadequate. I think it would be a good idea because you hear stories and of course those who believe in conspiracies drum up a lot of stories. It seems like someone like myself on the Banking Committee, on the Domestic Monetary Subcommittee, having served on the Gold Commission, that you think that I would have the ability to get this done. But I can’t even figure out what The Fed is doing because their meetings are totally secret and they don’t reveal their policies. It’s a closed system in the monetary sense, and I think that is tragic." Press 1 for English, Press 2 for English, Press 3 for deportation Death of Habeas Corpus: “Your words are lies, Sir.” The Greatest Economy In The History Of The World ABOLISH THE FEDERAL RESERVE - Rep. Ron Paul Ask Bush about the CFR and the Federal Reserve in the Yukonian Empire Do not ask questions. Obey me WHO RULES AMERICA So, ok all you suckers, get debt, lots of debt. Pretend like you're getting somewhere. 
Rockwell's Thirty-Day Plan
By Llewellyn H. Rockwell, Jr.
August 19, 2007
"What they don't talk about is a dirty little secret everyone in Washington knows, or at least should. The vast majority of economists and budget analysts agree: The ship of state is on a disastrous course, and will founder on the reefs of economic disaster"
David Walker, Comptroller General of The United States.
"In Bear Stearns latest 10-K filing with the SEC, they self-describe [at the top of page 54 if you want to play along at home] their activities conducted in off-balance-sheet-arrangements are described as follows: 
According to the data released today by the BIS, positions in the global over- the-counter (OTC) derivatives market recorded a robust expansion in the second half of 2004. Overall amounts outstanding were up by 12.8%, to $248 trillion at the end of December. The growth in the latter half of the year was slightly higher than in the first six months, when positions had grown by 11.6%. In sharp contrast to the trend that had emerged in the previous two semiannual surveys, gross market values rose noticeably, by 43% to $9.1 trillion as of end-December. Taking account of legally enforceable bilateral netting agreements does not lead to a lower rate of expansion in gross market values. Derivatives Explosion Spurs
Exchange Consolidation
July 6, 2007
http://online.ws j.com/article/SB118366011112358238.html
Ain't ever heard of no deerative, you Ethel?
Chapter 78
"Our liquidity is fine. As a matter of fact, it’s better than fine. It’s strong."
"The FDIC is required to maintain Bank Insurance Fund(BIF) reserves of at least 1.25% of insured deposits"
1.25%? Come here sonny
In the United States, wealth is highly concentrated in a relatively few hands. As of 2001, the top 1% of households (the upper class) owned 33.4% of all privately held wealth, and the next 19% (the managerial, professional, and small business stratum) had 51%, which means that just 20% of the people owned a remarkable 84% , leaving only 16% of the wealth for the bottom 80% (wage and salary workers). In terms of financial wealth, the top 1% of households had an even greater share: 39.7%. Table 1 and Figure 1 present further details drawn from the careful work of economist Edward N. Wolff at New York University (2004). 
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#2. To: Uncle Bill (#0)
Thanks for this one.
The thing that worries me is, if this restoration requires the consent of the peeps (at the ballot box) then it will fail. The AARP will send emergency alerts to all of its members telling them that their own kids will be calling them names like "welfare swindlers" and "charity cases" because the parents will be the last to receive social security checks. Those oldsters won't want to overhear people grumbling about "those damned socialists who are still ripping us off" and how the rest "can't wait for them to die". Seniors won't enjoy their Winnebago vacations or cruises once the money is no longer an entitlement. And, they'd rather that the whole country collapse after they're dead than to bear any shame while they're still alive. If you don't believe this, and you believe that once the facts are presented then seniors will want what's best for America, then I respectfully submit that they already know that their own kids will never see a dime of their "contributions" to SS, and that they are "eating the seed corn" and saddling their own grandkids with crushing debt. Do they care about that? No, because they have been taught that their SS checks are an entitlement because they paid in and "the govt was supposed to invest it". The fact that there are no such investments (it would be impossible to have govt investments competing with private capital anyway, especially the entire unfunded liability of social security) and that the average recipient gets all of their money back within the first two years of retirement means nothing to the folks who want the AARP to make them feel good about taking the money. And, seniors and other govt dependents are the largest single block of voters, and damned few will vote to be shamed. Social Security is a religious belief. And, if the hard numbers cannot be reconciled with reality then the recipients will turn to their "pastor" for reinforcement of the dogma, and seniors will repeat the AARP prayer and vote to continue the Ponzi scheme. They've defied the laws of economics for so long that they'll seize on whatever sound bite relieves them of any guilt and resent the Hell out of Lew Rockwell, Ron Paul and any other who tries to tell them what they will not hear. So to summarize, the system will have to collapse first. Just as there has never been a mass exodus of people leaving govt service because of low pay or deplorable working conditions (even striking air traffic controllers who were working under ridiculous conditions were horrified when the old man fired their asses, and they sued to get back on the public payroll even though nothing had changed) govt dependents will never vote to abolish the free lunch. As much as I respect Ron Paul I believe that any such attempt to restore the republic through peaceful means is doomed to fail because it makes no provisions for human nature. Corruption is now as American as apple pie. The phony drug war has corrupted the courts, the cops, lawyers and even millions of our kids, and seniors can certainly see that they aren't alone. Tell me again which demographic will be the first to step forward and say, Gimme that old time Social Darwinism and let me die if I can't make it on my own!"?
#4. To: HOUNDDAWG (#3)
Good post Dawg-Man. About the only thing I might add is that people need to remember that about 60% of the people now rely on the government as their primary source of income, whether it be a city, county, state, or federal check. Gonna be hard to get people to cut their own throats.
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#3. To: lodwick, Uncle Bill, christine (#2)
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