Why The Government Is Destroying The U.S. Dollar

1. Creating money out of thin air on a massive basis is all that stands between the current state of hidden depression, and overt depression with unemployment levels in excess of those seen in the US Great Depression of the 1930s...almost 9% of the US economy is currently funded by deficit spending. From a political perspective, this $1.3 trillion a year is "free money" that politicians get to disburse on a political district and favored special interest group basis...

2. It is the most effective way to meet not just current crushing debt levels, but to deal with the rapidly approaching massive generational crisis of paying for Boomer retirement promises... To hide a depression.

3. It creates a lucratively profitable $500 billion a year hidden tax for the benefit of the US government which is not understood by voters or debated in elections.The US government has been waging currency war since September of 2010. One solution is that when a nation slashes the value of its currency, its workers become relatively cheaper. There is no free lunch, however. Older citizens will be bearing most of the pain can be found in my article linked below, "Bullets In The Back: How Boomers & Retirees Will Become Stimulus, Bailout & Currency War Casualties".http://danielamerman.com/articles/Bullets.htm

4. It is the weapon of choice being used to wage currency war and reboot US economic growth;
The graph below is from my article, "Six Layers Of Deficit Impossibilities Mean Retirement Catastrophe".

If taxes can’t pay (and it’s ludicrous to think they can), and the US doesn’t declare bankruptcy, then just how do we cover the gap?
Short answer: pay in full, but make the dollar worth five cents. This drops the per household cost for everything from almost $800,000 down to about $40,000. Painful, but manageable over a period of 20-30 years. Merely make a dollar worth five cents, and impossible government promises become quite payable. The problem with this "solution" is that it also requires making most people's life savings worth five cents on the dollar.

5. It is an essential component of political survival and enhanced power for incumbent politicians.
The Federal Reserve effectively controls short, medium and long-term interest rates in the United States, and this means that it controls the borrowing costs of the United States government. As developed my article linked below, "Hiding A $500 Billion Tax On Savings: How The Government Deceives Millions", by forcing interest rates below the rate of inflation, the Federal Reserve creates about a half trillion dollar per year "windfall" gain for the Federal government.

This is not "free money", far from it. Every dollar of benefit for the government from interest rate manipulations comes directly out of the pockets of savers.
From a politician's perspective this massive tax - almost three times the size of federal corporate taxation - is a "dream tax". Half a trillion dollars a year is available to spend without raising taxes or increasing deficits. Sure, there is a cost, which is the entirely deliberate destruction of retirement dreams and promises for tens of millions of US workers and retirees - particularly Boomers - as well as pushing forward the insolvency of state and local government pension funds around the country. But the deliberate bankrupting of a generation is a long term problem with no clear accountability and almost no voter understanding, which means it is more or less irrelevant for how political decisions are made today.

By Dan Amerman