THE FEDERAL BUDGET IN LAYMAN'S TERMS

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Subject: The Federal Budget

in Layman's terms

Federal Budget 101

The U.S. Congress sets a federal budget every year in the trillions 

of dollars. Few people know how much money that is so we created a 

breakdown of federal spending in simple terms. Let's put the 2011 

federal budget into perspective:

* U.S. income: $2,170,000,000,000
* Federal budget: $3,820,000,000,000
* New debt: $ 1,650,000,000,000
* National debt: $14,271,000,000,000
* Recent budget cut: $ 38,500,000,000 (about 1 percent of the
budget)

It helps to think about these numbers in terms that we can relate to.
Let's remove eight zeros from these numbers and pretend this is the
household budget for the fictitious Jones family.

* Total annual income for the Jones family: $21,700
* Amount of money the Jones family spent: $38,200
* Amount of new debt added to the credit card: $16,500
* Outstanding balance on the credit card: $142,710
* Amount cut from the budget: $385

So in effect last month Congress, or in this example the Jones
family, sat down at the kitchen table and agreed to cut $385 from its
annual budget.

It is a start, although hardly a solution.

Now after years of this, the Jones family has $142,710 of debt on its
credit card (which is the equivalent of the national debt).

You would think the Jones family would recognize and address this
situation, but it does not. Neither does Congress.

The root of the debt problem is that the voters typically do not send
people to Congress to save money. They are sent there to bring home the
bacon to their own home state.

To effect budget change, we need to change the job description and
give Congress new marching orders.

It is awfully hard (but not impossible) to reverse course and tell
the government to stop borrowing money from our children and spending
it now.

In effect, what we have is a reverse mortgage on the country. The
problem is that the voters have become addicted to the money.
Moreover, the American voters are still in the denial stage, and do
not want to face the possibility of going into rehab.

By: DAVID THOMAS
Chief Executive Officer
Equitas Capital Advisors LLC

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WHAT IS MONEY? SOMETHING YOU SHOULD START KEEPING IN A HOLE IN YOUR BACK YARD.

Millions of Americans are facing foreclosure.
Is this avoidable?
You bet!, and it's been done.

What is money? (and what is it NOT?)
Originally in England, the unit of money was called "one pound sterling". That was because it was literally, sterling silver a weighing one pound. As it was quite difficult to carry several pounds weight of currency round with you, it was arranged that the actual silver could be held in a bank and a promissory note which was essentially, a receipt for the deposit of each pound of silver, was issued. It was much easier to carry these "bank notes" around and to do business with them. If you wanted to, you could always take these notes to a bank and ask for them to be cashed, and what happened then was that the bank would hand you the equivalent weight of sterling silver in exchange for the notes.

Today, the currency in England is still "bank notes" which are certainly easier to carry around, but there is one very important difference. These notes are issued by the private company called "The Bank of England" (which is as good a name for a company as any other name). However, if you were to take one of their bank notes to the premises of that company and ask for it to be cashed, all that they would do is give you another note with the same number of pounds written on it, or alternatively, some other notes with smaller numbers printed on them. This is because, unlike the original bank notes, there is nothing of any physical value backing up the bank notes of today - they are only worth the physical paper on which they are printed.

It actually gets worse than that. What happens most commonly nowadays is that they do not even bother printing those pieces of paper. Now, they just tap some numbers into a computer record, or if they are old-fashioned enough, they write the numbers into a ledger. What do those numbers represent? Nothing at all - they have no actual value, in other words, just as much value as if you typed them into your own computer - quite meaningless. And yet, a bank or other financial institution will merrily "lend" you those numbers in return for years of your work - now isn't that really generous of them?

Actually, this is not at all funny, because if you don't keep paying them money earned by your very real work, then they will attempt to take your house and possessions away from you. This won't happen if you understand that what they lent you was actually valueless.

Take the case of Jerome Daly of Minnesota.

In court, Jerome challenged the right of the bank to foreclose on his home which had been purchased with a loan from the bank. Jerome argued that any mortgage contract required that both parties (that is, himself and the bank), to put up a legitimate form of property for the exchange. In legal language, that is called a legitimate "consideration" put forward by both parties to the contract.

Jerome explained that the "money" was in fact, not the property of the bank as it had been created out of nothing as soon as the loan agreement was signed.   That is, the money does not come out of the bank's existing assets as the bank is simply inventing it and in reality, the bank is putting up nothing of it's own, except for a theoretical liability on paper.  

As the court case progressed, the President of the bank, Mr Morgan, took the stand and admitted that the bank, in combination with the (privately owned commercial company called) "The Federal Reserve Bank", created the entire amount of the loan in credit in it's own books by means of a bookkeeping entry, the money and credit coming into existence when they created it.

Further, Mr Morgan admitted that no United States Law or Statute existed which gave him the right to do this.

A lawful consideration must exist and must be tendered to support the loan agreement.   The jury found that there had been no lawful consideration put forward by the bank and so the court rejected the bank's application for foreclosure and Jerome Daly kept his home