Quintile Plan
by Richard Lewis
Most Americans have never heard of the "Quintile Plan". Its origins are in World War II’s tremendous demand for scientist,
engineers, physicist, mathematicians, metallurgist, mechanics plumbers, welders, aircraft mechanics etc.
Technology was held to be crucial to winning world war II. Germany’s V2 rockets, jet aircraft and its audacious attempt
to create an atomic bomb convinced American politicians, scientist, engineers and economists that America’s post-war
future could only be secure through worldwide technological superiority. To that end and prior to the end of World War
II, a think tank was tasked with developing a plan to secure our national technological advantage!
The think tank recommended a G.I. Bill to produce more professionals, scientists, engineers funded by an unprecedented
increase in grants and loans for universities and industries engaged in research and development. As compliment to the
GI Bill, The Full Employment Act of 1946 authorized deficit spending to facilitate the easy credit needed to pay the
professional wages and for purchasing products generated by the "Quintile plan."
THE FULL EMPLOYMENT ACT OF 1946
Most Americans that are alive today have never heard of "The Full Employment Act of 1946".
The Full Employment Act was passed with strong bi-partisan support. This landmark legislation dramatically expanded the
power, scope, size, and cost of our federal government and in large part ushered America from its position as a free enterprise
economy into a command and control economy.
* Socialist nations like
France, The United Kingdom and Canada operate as Command and Control economies.
The American concept of limited government is clearly at odds with legislation that requires and empowers government
to guarantee "Full Employment"! [RAL]
"The liberal intellectuals who came of age in the New Deal institutionalized the idea more substantially. The Full Employment
Act of 1946, a milestone for its liberal political goals, also codified the technical methodologies on which the government
would manage the economy. The Council of Economic Advisors was created to assist the president with scholarly advice, an approach
copied subsequently across many other fields of public policy". quote from pg47 Who Will Tell The People by
William Greider
"To understand the present economic crisis in our country, then, is not just a matter of tracking the problem down to specific
“government policies,” accurate as such an analysis may be. It requires that we confront the invisible philosophy
of government underlying these policies. And of all the rationalizations for authoritarian rule which now surround our form
of government, the most essential is this: the belief that the state, under an FDR-like leader, has both the moral obligation
and the competence to “run” the economy and guarantee its citizens economic security."
"But from FDR on, American Presidents have indeed “run” the economy. And since 1947 their performances have
been faithfully recorded in the President’s yearly Economic Report to Congress, in accordance with the Employment Act
of 1946. Since that law requires that the state guarantee the American people “freedom from want,” the President
must rise once each year before Congress and solemnly proclaim that either
(1) he is about to create prosperity and security for all or (2) he has already created prosperity and security
for all. Those are the only two allowed alternatives. And that means essentially that America’s Presidents have been
legally mandated to engage in intellectual fraud." quotes are from pg.116 & 117 A Time For Truth by former secretary
of the U.S. treasury William E. Simon
"The year after World War II, Congress passed the “full employment” act declaring that our government would
vigorously promote both price stability and full employment. Even a college freshman with no more exposure to economics than
Economics 101 should know that these are two inconsistent goals."
"The Employment Act of 1946 was to be the embodiment of Utopia, and brilliant government administrators would do a balancing
act whereby high employment rates could be generated by accepting higher inflation. But what has the implementation of this
theory wrought? We have found that employment that results from inflation only lasts for a short period of time, and in order
to restimulate employment, inflation must again be accelerated." quote from pg. 43 Money Dynamics For The 1980s Venita
VanCaspel
The Employment Act (H.R. 2202, S. 380, 15 USC § 1021 et seq.) is a United States federal law
"The original bill, called the Full Employment Bill of 1946, was introduced in the House as H.R. 2202 and introduced without
change by Congressman Wright
Patman
in the Senate as S. 380. The bill represented a concerted effort to develop a broad economic policy for the country. In
particular, it mandated that the federal government do everything in its authority to achieve full employment, which was established as a right guaranteed to the American people.
In this vein, the bill required the President to submit an annual economic report in addition to the national budget. The
report, designated the Economic Report of President, must estimate the projected employment rate for the next fiscal year,
and if not commensurate with the full employment rate, to mandate policies as necessary to attain it." [ Excerpt from full article on WIKIPEDIA link included below ]
http://www.answers.com/topic/employment-act
"The two institutions the 1946 act established remain in operation and the act's then-controversial statement
of policy has become accepted as part of the Federal government's bureaucratic fabric.
A substantial government responsibility for the over-all performance of the American economy now is widely assumed. In fact, politicians of the opposition party readily hold
the administration in office accountable for whatever economic short comings occur." [ excerpt from full article link provided below ]
http://findarticles.com/p/articles/mi_m1272/is_n2618_v125/ai_18856940
PAYING FOR THE WAR AGAINST TERROR
by Richard Lewis
Several years ago I asked Senator McConnell’s office how the United States was paying for our "War Against Terror?"
In the past, we raised taxes and sold war bonds to finance a War. I pointed out that our government was not promoting
the sale of "War Bonds" and this President had cut taxes at the same time he was expanding government cost by providing "Prescription
Drugs" for seniors.
The answer is now obvious. Americans were encouraged to refinance their homes and appraisers were encouraged to overvalue
homes providing large loans that would keep Americans spending.
The housing industry boomed as cheap illegal labor built more homes and bank regulators looked the other way so banks could
profit from loans that should never have been made! Our booming market convinced foreign investors to continue funding
our national debt and that paid for our war against terror.
If Enron were our government under the "Full Employment Act" cooking the books and over valuing assets to encourage more
investment in Enron would be as legitimate as facilitating a housing bubble or lowering interest rates and issuing tax rebates
to encourage spending or sending in the plunge team to artificially support an already overvalued market as long as it is
part of a plan to accomplish full employment!
"If the Plunge Protection Team is doing what I suspect - namely, coming to the rescue of stocks whenever it deems it necessary
- this would not only change the entire nature of investing in this country but would be the biggest financial story ever" [
excerpt from NewYork Post article NO FREEDOM OF INFO ON PLUNGE PROTECTION TEAM May 15, 2007 by John
Crudele ]
The economic virtues that made Free Enterprise America strong... a sound dollar, personal pass book savings, and individual
responsibility have been replaced by economic theories that make government responsible for guaranteeing full employment
this inflationary policy, has encouraged consumption, discouraged savings, and has made a weak dollar a virtue.
* a weak dollar helps reduce our trade deficit but it also destroys
retirement savings!
The Housing Bubble has burst! Our over-valued stock market has caused foreign investors to get cold feet. Some countries
are refusing to accept dollars as payment for oil and the United States may soon lose its Moody Triple A Bond Rating!
The truth: the United States is faced with a supply and demand problem. The United States dollar
is created from debt. Our huge foreign debt has created a surplus of foreign owned dollars and those dollars are
rapidly losing value! Foreign governments are dumping dollars because they are unable to earn enough interest to protect the purchasing
power of their dollar earnings! Instead of loaning the U.S. more money to service the ever increasing U.S.
deficit foreign governments are buying or investing in tangible U.S. assets, in an attempt to protect their economies from
U.S. Inflation. Sovereign funds are investing in, leasing or buying U.S. businesses our banks, heavy industry, roads and bridges,
because of waning faith in the dollar.
By definition a devaluing dollar can not serve as the medium to repay debts to a foreign nation unless that foreign nation
can earn sufficient interest to offset the dollars inflationary devaluation.
THE U.S. HOUSING BUBBLE
by Richard Lewis
The FED induced the housing boom by offering unrealistic short term interest rates.
Banks are required to keep a cash reserve against each new loan they make and for each outstanding loan. Bank examiners
treat performing loans as cash reserves but bad loans are deducted from a banks cash reserve!
We are told that staggering losses from bad mortgage loans have left U.S. banks with a liquidity crisis.... A bank
that has inadequate cash reserves is not allowed to make new loans and will soon be out of business.
Mass foreclosures can not save U.S. banks because the houses are not worth their loan value. Houses deteriorate
rapidly when they are left vacant and there is a shortage of qualified home buyers!
Given these facts... is President Bush or Mrs. Clintons plan designed to protect the banks or the home buyers? Will the
home buyers serve as performing loan custodians for five years so the banks can recover and then lose their homes to
higher interest rates as the proposed moratorium ends?
CURSING THE RESPONSIBLE AND BLESSING THE IRRESPONSIBLE
The United States largest banks began making large soverign loans to thirty four developing nations in 1974.
Bankers acted under the false assumption that governments could not default on loans. The principal that supported
those loans belonged to nations that were members of OPEC.
Those developing nations eventually defaulted on their loans. Those Loans were in excess of a
"Trillion Dollars"! Most U.S. Taxpayers are unaware that
they were forced to bail out our nations largest banks!
In 1987 the United States experienced the S&L Crisis. The total cost to U.S. Taxpayers is estimated to be
500 Billion Dollars but we will not know the actual cost until the bonds are paid off in the year 2020.
The biggest most profitable con of this century has been "making bad loans" ....just make sure that the bad loans or investments
are large enough to threaten the entire U.S. economy and taxpayers will bail you out!
Now we are faced with another housing bubble. But this time our national circumstances are different.... This
time taxpayers may not be capable of bailing out the lenders !!!
Did negative real interest rates fuel the U.S. housing bubble? * refer to quote below & linked
article
The last time the Fed pushed real rates so low was in 2005, in the middle of the three-year housing bubble,
when consumers took on $2.9 trillion in new home-loan debt, the biggest increase of any three-year period on record.
[ Quote above from International Herald Tribune article January 29, 2008 "Bernanke may push
interest rates below U.S. inflation rate" By Craig Torres and Simon Kennedy Bloomberg News ] link above
Best Definition of Negative Real Interest Rates:
"Why rising interest rates won't save the US dollar"
http://www.moneyweek.com/file/9630/why-rising-interest-rates-wont-save-the-us-dollar.html
U.S. citizens have been forced to bailout banks, thrifts, savings and loan organizations airlines and automobile manufacturers.
Of course each of these businesses contribute to the federal governments effort to create "Full Employment" and
these bailouts have hidden the true state of our economy and the deficiencies in U.S. financial regulatory agencies!
"On October 17, 1957 Malcolm Bryan then president of the Federal Reserve Bank of Atlanta stated: If a policy of active
or permissive inflation is to be a fact, then we can secure the shreds of our self respect only by announcing the policy.
This is the least of the cannons of decency that should prevail. We should have the decency to say to the money saver, "hold
still little fish ! All we intend to do is gut you!"
( page
78 The Invisible Crash by James Dine )
There are fundamental differences between saving and investing. U.S. monetary policy has discouraged individual savings,
with negative real interest rates, in an attempt to direct all excess income into consumption or into
stockmarket investments, it is also destroying individual retirement savings by devaluing the dollar again as it
did at "The Plaza Accords" on September 22, 1985.
"Economist Alan Greenspan calculated that in the first three months of 1987, the central banks of Japan, western Europe,
and Canada provided most of the money needed to finance the U.S. trade deficit. The questions that seem to trouble many policy
makers are: What will these governments demand in return? And how long will they continue to bail out the United States?"
10 Quote from pg.11 Buying Into America by Martin and Susan Tolchin
The dollar devalued by 50% as a result of the Plaza Accord, a weak dollar encouraged foreigners
to buy U.S. businesses at fire sale prices. Foreign purchases are accelerating again because of the current dollar
devaluation. Our debt and our dependence on foreign loans has increased exponentially.
"Able-bodied citizens must work to sustain their lives, and in a healthy economic system they should be enabled
and encouraged to save for their own old age. Clearly, so long as the government's irrational fiscal policies make this impossible,
present commitments to pensions and Social Security must be maintained at all costs, for the bulk of the population has no
other recourse."
( page 220 paragraph 3 A Time For Truth by William E. Simon @1978 )
The United States no longer produces machine tools. precision ball bearings and a myriad of products that were once considered
to be crucial to our national security. Most developed nations have actually increased their industrial base. The
United States continues to stress education as the panacea that will solve our problems but as our children struggle
to afford a college education our businesses continue to out source professional jobs and our government continues to issue
work visas for professional immigrants who come to fill jobs that qualified Americans are available to do!
Self Government is more than just being responsible for your actions and meeting your own needs, it also includes
the "RIGHT" to make your own economic choices. When our government adopts strange economic theories, incurs huge
debts and then manipulates the value of the dollar in order to control how Americans spend their after tax
incomes, that government loses its "morale authority" to appeal to earlier ethical standards!
"Bottom line question: How much longer will banks get away with paying negative real interest rates to savers?"
Do these acts define limited government or fiscal responsibility?
Conclusion
Our government is clearly not capable of running our entire economy, guaranteeing full employment, or accurately
predicting and developing plans to address future economic problems. If our government had these capabilities
why are private businesses and state governments struggling to meet retirement plan obligations that seemed
reasonable 30 years ago when we had a strong industrial based economy!
Developing nations clearly have an abundance of "natural resources" on which the developed nations are dependent. Developed
nations have emphasized privatization, globalization and free trade in an effort to "de-emphasize the nation
state" in favor of a system in which corporations freely distribute wealth and resources!
Congress has avoided the oil problem too long. Economic reality is starting to rear its ugly head.
Economic Reality:
(1) Chavez has nationalized the oil fields in Venezuela and wants oil payments in Euros.
(2) Putin has decided to direct the oil pipeline into China.
(3) Iran is attempting to participate in and Oil Bourse in which oil payments are made in Euros instead of Dollars.
(4) The United States buys a lot of oil from Mexico and Mexico accepts dollars in payment....but Mexico has a
huge unemployment problem and it is not pleased with U.S. Immigration policy.
(5) The United States is at WAR and that war is very expensive! In any other era citizens would be encouraged to buy
War Bonds.
(6) For the first time in its history the United States has a negative savings rate. Savings accounts at most U.S.
banks are paying so little interest that savers can not keep up with inflation.
(7) U.S. private pension plans have been in their negative capital formation stage since the late 1990's
(8) A huge surplus of dollars is developing and it threatens the dollars stability. Is a surplus of foreign owned
dollar denominated savings also depressing interest rates and discouraging savings in the United States at the exact time
that the U.S. needs to begin saving?
(9) Will the U.S. Dollar cease to be the worlds "Key Currency"?
