The Federal Government, More Wizards of Oz !!!!!
By John Shannon
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About this ebook
John Shannon
John Shannon is a Canadian sportscaster, television producer, and former panelist on Rogers Sportsnet’s Hockey Central. He’s known for producing Hockey Night in Canada, including Coach’s Corner and the Satellite Hot Stove. In 2003, he won a Sports Emmy Award for Outstanding Live Sports Special for his work on NBC’s broadcast of the XIX Olympic Winter Games in Salt Lake City. Follow him on Twitter @JShannonHl.
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The Federal Government, More Wizards of Oz !!!!! - John Shannon
Table of Contents
INTRODUCTION
AUTHOR’S NOTE
DEDICATION
DISCLAIMERS
PROLOGUE
CHAPTER I
THE UNITED STATES OF AMERICA – 2011
CHAPTER II
THE UNITED STATES OF AMERICA, 1960
CHAPTER III
WHAT CAUSED THE CHANGE FROM 1960 TO 2011?
CHAPTER IV
WHO ARE THE WIZARDS OF OZ?
CHAPTER V
A BRIEF HISTORY OF THE UNITED STATES
FROM 1776 TO 2011
CHAPTER VI
IS BUSINESS OR GOVERNMENT THE PROBLEM?
CHAPTER VII
DEMOCRATS VERSUS REPUBLICANS
CHAPTER VIII
WHAT IS GOVERNMENT?
CHAPTER IX
IS GOVERNMENT OUT OF CONTROL?
CHAPTER X
THE TEA PARTY MOVEMENT
CHAPTER XI
SOLUTIONS TO THE PROBLEMS OF 2011
POSTSCRIPTS
ABOUT THE AUTHOR
INTRODUCTION
The Federal Government, More Wizards of Oz
is a book that tries to show how America became a great country and the greatest economic and military power the world has ever witnessed. The book also shows how a decline over the last fifty years has slowly taken place to the point of where America is today. The economic, military, political, financial, and cultural decay is obvious to anyone aware of current events. This book also points out the solutions necessary to return to a growth path towards greatness once again. Chapter I describes the situation of today, 2011. Chapter III sets out to show the causes of America’s fall from greatness. Later chapters try to show who and what is behind the curtain producing the causes that are setting in motion the fall from greatness of the United States of America. Finally, in Chapter XI, The Solutions to many problems are enumerated and pointed out.
AUTHOR’S NOTE
The Federal Government, More Wizards of Oz
is the third book I have written. The first book I wrote, The Federal Reserve Board, The Wizards of Oz, The Men Behind The Curtain
was written because, at the time of writing in 2004, Alan Greenspan was looked at by the financial community, teaching community, and government community, as the greatest thing since spreading poop on a garden to make things grow. I believed Alan Greenspan and the Federal Reserve Board were great disasters for the American economy. I personally delivered that book to 80 of the 100 Senators, and approximately 285 of the 435 Representatives in Washington, DC, in 2005.
I wrote my second book The Gold Star Investment Strategy
to give friends, family, and others a sound economic strategy. Because of the incompetent investment advice that has been given over the years by financial planners, investment advisors, financial experts in the media, financial experts in government, and financial experts in academia. Most, I repeat, most financial experts do not have a clue regarding economics. That is a strong statement, but that’s my story and I’m sticking to it. That book was written so the average person could invest correctly without getting sidetracked by experts who have read a few economics books, but do not really understand the economy. The proof is: why is America in such financial difficulty. If the experts were experts, America and the world would not be in crisis.
This book, The Federal Government, More Wizards of Oz
was written because of my frustration seeing this great country slowly decaying, knowing the cause of the decay, and watching the experts decaying it further under the guise of solving the problem and stopping the decay.
DEDICATION
I would like to dedicate this book to my father, Leonard A. Shannon.
He would be happy and in agreement with this and my other two books. He introduced me to being aware of politics and convinced me to study economics in the early 1970’s. Without ever reading an economics textbook, his knowledge of common sense economics was far superior to most experts of today.
DISCLAIMERS
The author disclaims any liability or loss incurred as a result of not buying gold or not heeding the warnings listed in this book.
PROLOGUE
This is March 2011 and as this book is being written, the American economy is said to be improving. The Obama Administration and the financial news media are touting a recovery out of the depths of the financial crisis. Most Americans do not feel the recovery. Yes, the Federal Government workers and Wall Street professionals are doing very well, thank you. The economy and real estate market in Washington, DC and surrounding Wall Street is booming, but the rest of America is not doing so well.
The America people know the massive amount of stimulus and bailouts did not show up in Main Street, only on Wall Street, in government … and throw in the unions. The Federal Reserve, with the massive amount of money creation and zero percent short-term interest rates, is creating a very, very anemic recovery. I am in shock that the recovery is not more robust, given the amount of money creating and level of interest rates. I predicated just so in both of my other books that the Federal Reserve would not be able to pump the economy out of the next recession without massive inflation. I feel I am going to be right.
I believe the stock market is overpriced with the Dow at 12,000. I believe this will be a top for the market. There is no massive capital investment in plant and equipment that would produce a booming stock market. The only thing on the horizon is government spending, consumption, and more debt. I see a possible double dip in the economy in 2012 – if not sooner.
Unless the United States of America gets a handle on the debt and deficits and a massive increase in capital investment in plant and equipment, stagflation will be our only ship on the horizon.
CHAPTER I
THE UNITED STATES OF AMERICA – 2011
2011, here we stand, the United States of America, the greatest country economy, civilization, military, etc. that the world has ever known. Americans believe we have the greatest economy; Americans believe we have the greatest civilization; Americans believe we have the greatest military; and Americans believe we have the greatest country. But do we? The better question is ‘If you believe we do, how long will the United States of America stay great?’
I believe and will show that we are in the midst of a massive decay if present trends continue. Our position as the number one power, economically, politically, militarily, and socially is deteriorating rapidly.
Let’s start with economic power. Who would question we are the most powerful economy? I would!! Our economy is in decay. We are becoming a service economy, a nation of shopkeepers. Loosing most of our high tech and manufacturing jobs to foreign countries, outsourcing every high paying, high benefit job that isn’t nailed down. Loosing $25 an hour high tech and manufacturing career jobs and replacing them with $8 an hour service jobs. That is the real squeeze on the American lower and middle class workers. The economic expansion over the past twenty years, as touted by governments, academics, and financial economists is a fraud. The expansion is a façade. The expansion is built on a foundation of mud. Touting a falling unemployment rate over the last twenty years is great until you look behind the statistics to see people going back to work from $25 an hour to $8 an hour. Going back to work from companies that have benefits, like healthcare, vacations, 401(k)s, pensions, education reimbursement, etc. to companies that do not have these benefits.
The government is touting a lower inflation rate, also. That sounds great until you look behind the statistics. The Federal Reserve has massively increased the money supply over the last twenty years, especially or exponentially in 2009 and 2010, depending on which word you choose to describe this printing press process. I believe the massive inflation will begin soon, possibly as early as the fall 2012. The reason inflation has not appeared sooner is because of our appetite for foreign goods, exporting inflation and those same foreigners willing to hold more and more American dollars under the mistaken assumption that this toilet paper is worth holding. Those dollars, not if, but when they come back, will create massive inflation. Please, please, do not forget that the story behind twenty years of buying foreign goods is that foreign factories increase production, hire more workers, pay better wages, have higher profits, higher tax revenues to their governments, build new factories, purchase more machinery and give employees more benefits. In short, their economy expands and their country becomes strong.
The other side of the equation is in this country … twenty years of buying foreign goods equals American factories have lower sales, decrease production, lay off workers, pay lower wages, lower benefits, lower profits, lower tax receipts to our government (which starts the printing press and Treasury borrowing), closing factories and reducing health care to employees, etc.
In short, our economy squeezes workers into the lower paying service sector and our country becomes weak.
U.S. businesses have a choice to stay in the U.S. and go out of business or move to a foreign country to be able to compete and survive. The U.S.A. is ‘hemorrhaging wealth’ because of our trade deficit over the past twenty plus years. This is all caused by Wizards of Oz at the Federal Reserve with their monetary policy, and Wizards of Oz at the White House and Congress with their fiscal policy. Our economy each year produces less and less of a percentage of the goods that we consume. The importance of this cannot be understated.
When an economy produces all its own food and hard goods, there is wealth generated to its people in the form of higher wages and benefits to workers, higher profits and investments to the companies, and higher tax receipts to federal, state and local governments. On the flip side of the equation, when an economy does not produce its own food and hard goods, ‘hemorrhaging wealth’ occurs. Higher wages, higher profits and higher tax receipts occur in the country we are buying the products from. We loose jobs to the service sector and all the U.S. economy produces is printed money. Do not be mistaken … money is not wealth. Goods produced are wealth, the fallacy of composition must be remembered. If the federal government gives everyone on Wall Street millions of dollars, that is wealth. But if the government gives every citizen millions of dollars, nobody has wealth, just a lot of money inflation. The U.S.A. is generating domestically a lot of money, not a lot of wealth. That is precisely why there is not any wealth to fix our infrastructure in the U.S.
After World War II, the U.S. economy produced all its own food and hard goods. Factories were humming and wealth generated. All the wealth generated at that time produced massive tax receipts for government: Federal, state and local to build roads, bridges, schools, fire stations, parks, etc., etc., etc. Today we, as Americans, import our hard goods and food, which does not generate tax receipts or wealth to pay for the same roads, bridges, schools, etc. We are only generating money, not real wealth. This is why our public infrastructure, i.e. roads, bridges, schools, etc. are collapsing, because our private infrastructure, i.e. factories, equipment, etc. are shrinking, or being used overseas. A strong private infrastructure, i.e. plant and equipment is 100% necessary to generate a strong public infrastructure, i.e. roads, bridges, school, and/or a vibrant service sector economy. A strong private infrastructure cannot occur with massive imports and trade deficits as the U.S. has experienced over the last forty plus years. To repair our bridges, roads and other public infrastructure, spending, as many in the Obama administration and others have proposed, would be absolutely inflationary, costly and ill-conceived until a massive build up in our private plant and equipment infrastructure can be attained. This can only be done by an elimination of the trade deficit, or a massive