Can Goldman Sachs save America? “Yes, but not alone“

Say the words Goldman and Sachs and most Americans get sick to the stomach. During our country’s bank bailout debacle, Goldman Sachs became the poster child for all things hated and every vice known to man.  The banking and investment giant became more famous for tales of executive greed and excess than it had ever been known for being an international financial giant and it has been blamed for everything that has gone bad in the United States including our embroilment in an international war on terrorism that has for all intent and purpose bankrupted the country.  It’s no secret that our wars in Afghanistan and Iraq and our other military misadventures in the ME were bankrolled by Wall Street and cost the US trillions of dollars in loans, loans that are not payable because they are overburdened with compounding interest.  

On October 17^th, payment on the interest on our loans is due, again. We never pay down the principle amount of our loans because we don’t have the money to pay it, yet we raise the debt ceiling every time the payment on the interest comes due because we fear being seen as a dead beat country that will not pay its debts.  There are also those evil credit raters like Moody and Finch who stand behind us ready at any second to lower the US credit rating as punishment for even thinking about defaulting on our debt We can’t even afford to borrow the amount needed to pay on the principle because the rate of compounding interest is so high that all we would be doing is still paying for more interest while increasing the amount of our principle debt.  

The reality is that the pressure to raise the debt ceiling and pay the interest really has nothing to do with the United States’ attitude towards the debt. It has everything to do with the fact that banks want to get paid, and paying the principle would only give them back what they gave us. The interest is their profit and they want to be paid first, even if it means that the US remain in debt forever, which we will unless we come up with a new strategy and model for debt reduction and that is where Goldman Sachs and the other Wall Street devils come in.

America needs to refinance. We need money and not only the money to pay the interest on our national debt.  The United States needs money to fund our government so it can reopen and function fully. We need money to stave off very destructive austerity cuts that will take billions of dollars out of the market place at a time when consumer confidence in the economy is falling and retail sales are falling too. That is not to mention the social instability caused by growing hunger and joblessness.   Raising the debt ceiling pleases Wall Street because they get paid, yet when we raise the debt ceiling, the United States gets nothing except more debt and more compounding interest and more destructive austerity.

The solution: The United States Secretary of the Treasury Department needs to put together a proposal for refinancing the United States.  That proposal should begin with a request to have the compounding interest on our present loans written off by the banks. Once that is accomplished, we must submit a request to refinance our present debt and to fully fund our government, while borrowing an additional amount, approximately 20% of GDP, to invest in our country and create real jobs and 15% of the total loan amount is to be paid as a simple flat fee for the loan.  This would allow us to immediately pay off the principle amount of our past debt, fully fund the day to day operations of the government, and   employ a strategy of government investment in our country’s private sector manufacturing industry and also to rebuild our crumbling infrastructure while also creating jobs.

If Goldman Sachs and the other Wall Street banks step up to the plate and bail out the people who once bailed them out, everyone wins. If they continue to sit on the sidelines, demanding to be paid and threatening economic collapse as an incentive for us to go further into unpayable debt, while our country’s economy implodes, they will lose and so will the global markets. The present situation is no longer sustainable.  

The Wall Street devils have an opportunity for redemption, the value of which is greater than any amount of gold.  Can Goldman Sachs save the US economy? Yes it can, but it cannot do it alone. We need our leaders to stop fighting over ideological approaches to health care and get to work on saving our country’s economy. Call Goldman’s now and let’s make a deal. 

China calls for solution to US financial crisis: We have one!

 

Mainstream media is reporting today that China is showing some concern over the political paralysis that has struck Washington DC.  As the United States’ primary creditor, China seems worried that the US is poised to default on loan payments. To date, there is no agreement to raise the debt ceiling so Washington can borrow the money it needs to make its payments on the national debt.  Not only has movement towards raising the debt ceiling stalled, Washington has also not been able to agree upon a new budget and that has temporarily shut the government down partially, until the two parties can agree upon a formula that will include deep austerity cuts along with defunding Obama’s health care reforms.

China invested in the US because it may have seemed at some point that the US would overcome all of the economic woes we have experienced since 9/11 which includes the bursting of the real estate bubble and the scandals that followed, including massive bank fraud, foreclosures and bank failures.  This suggests that China realizes that the United States is able resolve its economic woes. It also suggests that China realizes that our failure to resolve our economic challenges is not due to our country’s inability to create wealth. China’s continued faith and investment in the US and its call for the US to have a solution in hand by the 17^th means that China knows what is holding us back is not money, or the lack thereof.   China knows that what is plaguing the US economy is a lack of vision and an unwillingness to challenge the entrenched powers, making them see things differently and encouraging them to be willing to try new ways to tackle our economic problems.

There is no reason for the US to be satisfied to merely pay debts and finance the functions of a dysfunctional government that has less than a 10% approval rate. There is no reason for us to move like zombies from one financial crisis to another all created by our unwillingness to do what is needed to break free from the cycle of debt and austerity that has been prescribed for us by the Federal Reserve. The United States is able to create the economic momentum that is necessary not only to break free from control and a destructive cycle of increased debt and austerity, we are able to restart the engines of our economy and to create wealth and economic growth.

To initiate this new approach we must first tackle our massive debt. We can do this by refinancing our government. We can combine the amount needed to balance the budget without any austerity cuts, with the amount of the national debt, minus the interest owed, and include an additional amount that would be approximately 20% of GDP. We can take this proposal for refinancing to the Federal Reserve and request a new loan in the stated amount without compound interest but with a simple flat fee paid in gratitude for the loan. This fee should not exceed 15% of the requested amount. We would immediately pay off the national debt, fully fund the government so it can reopen and function without any financial pressures or major changes to entitlements and social programs. With the additional money we can begin an investment project, the goal of which is to get the US back into manufacturing, create jobs and become competitive in the global market place. We also have major infrastructural issues that can now be resolved while also creating real jobs. Once these pressing issues are resolved, we can begin the process of returning US monetary policy to the US Treasury Dept. as instructed by our Constitution, while repealing the laws that created the Federal Reserve banking system in the US. That along with the refinancing of our debt will make the dollar rebound and become stronger than ever.

If Wall Street and China decide to carry out a bond rebellion, the US would simply need to sweeten the bond deal for new buyers who will buy up the bonds turned in for payment.   I think we have every reason to expect that when China and other US bond holders see the new approach, they will realize that the economy is on its way back, and that with a new economic plan, and new enthusiasm the US will soon begin to create wealth and our economy will grow.  A solvent US is key to the rebirth of western economic growth and prosperity.