The following was copied from a newsletter I receive often regarding our economy and current world economics.  The quotes presented here below were intended to offset the grossly ‘spun’ numbers presented by two economists from Berkley, California.

…  a now-famous study by Thomas Piketty and Emmanuel Saez, professors of economics at the Paris School of Economics and the University of California, Berkeley, respectively.  Whether the issue is climate change or income inequality, however, problems with the underlying data significantly distort the debate.  [Click on ‘study‘ above to read the full report.  The retort to this study follows.]

…  America is the freest and most dynamic society in history, and freedom and equality of outcome have never coexisted anywhere at any time.  Here the innovator, the first mover, the talented and the persistent win out—producing large income inequality.  The prizes are unequal because, in our system, consumers reward people for the value they add.  Some can and do add extraordinary value, others can’t or don’t [won’t?].

How exactly are we poorer because Bill Gates, Warren Buffett and the Walton family are so rich?  Mr. Gates became rich by mainstreaming computer power into our lives and in the process made us better off.  Mr. Buffett’s genius improves the efficiency of capital allocation and the whole economy benefits.  Wal-Mart stretches our buying power and raises the living standards of millions of Americans, especially low-income earners.  Rich people don’t “take” a large share of national income, they “bring” it.  The beauty of our system is that everybody benefits from the value they bring.

Yes, income is 24% less equally distributed here than in the average of the other 34 member countries of the Organization for Economic Co-operation and Development (OECD).  But OECD figures show that U.S. per capita GDP is 42% higher, household wealth is 210% higher and median disposable income is 42% higher.  How many Americans would give up 42% of their income to see the rich get less?

Vast new fortunes were earned in the 25-year boom that began under Reagan and continued under Clinton.  But the income of middle-class Americans rose significantly.  These incomes have fallen during the Obama presidency, and not because the rich have gotten richer.  They’ve fallen because bad federal policies have yielded the weakest recovery in the postwar history of America.

Yet even as the recovery continues to disappoint, the president increasingly turns to the politics of envy by demanding that the rich pay their “fair share.”  The politics of envy may work here as it has worked so often in Latin America and Europe, but the economics of envy is failing in America as it has failed everywhere else.

Mr. Gramm, a former Republican senator from Texas, is a visiting scholar at the American Enterprise Institute.  Mr. Solon was a budget adviser to Senate Republican Leader Mitch McConnell and is a partner of US Policy Metrics.

Imagine if we could get out of the current ‘Carter era’ mentality economics and return to the Reagan approach.  You too could possibly be a mere 42% richer in income in the near future..!?  You’d probably love that compared to the current estimated 6% increase (high estimate) the average American has received since 2009!!

Quantitative easing has been going on for a few years now.  What is the consequence of this action?  We are in BIG TIME debt!!  How much debt?  Over four trillion dollars!!  The chart below shows how that debt was incurred over time.  The first point on this chart was Bush’s initial $700B ‘save the U.S.’ bill.

So how much is $4T..??  Well, if you stack dollar bills flat on top of each other that equal $1T, they will reach the moon and back….  FIVE TIMES!!  So guess what $4T equals?  TWENTY TIMES to the moon and back!!  How long do you think it will take to pay that back??!!

According to the experts, inflation IS coming.  It’s merely a question of when and how bad.

Recently (April) the largest lead mining company in the U.S. closed down.  This means that bullets (among other things) will become more expensive because we will have to rely on countries outside the U.S. to supply us with lead.

So what’s the big deal you ask?  Why would this affect me?

Well, if you like to shoot (buy) bullets, how much do you think you’ll pay for them if the U.S. manufacturers have to go outside the U.S. to get lead?  More or less?

Need a battery for your car?  Have an airplane?  Like to fly?  Aviation fuel (and others) typically must have lead in it as a lubricant for the cylinders and engine parts.  Aviation fuel costs, as an example, should go up as a result of this situation.

The following article gives the details of this company closing and its impact to the United States.

The following article is taken from a newsletter I recently received.  The author describes our government’s current financial direction and how it doesn’t work — and why.  Because this article is in plain language, I thought that it may help explain how our money printing is leading us to disaster in the near future.  The public should know in order to prepare.

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Bernanke’s Helicopter

In its September/October issue, Foreign Affairs wanders away from the calamity of its interventionist foreign policy consensus to offer equally calamitous interventionist monetary advice.

The publication offers a piece instructing the Federal Reserve to give the money it prints directly to the people.

To make sure there is no mistake about this, the article is even entitled Print Less but Transfer More: Why Central Banks Should Give Money Directly to the People.

The Federal Reserve has already created trillions of dollars at the printing press, most of which ended up as bank reserves on deposit with the Fed.

Why isn’t that money being used in the economy making loans, funding new and expanding businesses, and creating jobs?

Because under the prevailing conditions of mal-investment and distorted credit conditions, capable borrowers are not lining up to take out loans. Why should a business expand its plant and add to its employment when it can’t sell what it can produce with its existing capacity?

Why expect a business to borrow more when its existing debt is too great? Why would lenders willingly make loans to borrowers who may not be credit worthy?

The distortion caused by the Fed’s interference with interest rates has concealed problems in the economy, and even enabled marginal and otherwise failing business to limp along a while longer thanks to artificially low rates. Many of them will fall by the roadside when rates rise, succumbing to real market conditions.

In other words Fed policies have prevented the liquidation of bad debt and clouded real financial conditions.

Much of the economy is operating in the dark.

The Fed can print money, but it can’t force borrowers — households or businesses — to borrow when they are concerned with whether they can pay the money back. And except for costly government guarantees, the Fed has a hard time making lenders loan money to risky borrowers.

Under these conditions, when banks won’t make loans, all the freshly printed money sits idly on the sidelines of the economy, parked in the present environment in the reserves the banks keep on deposit with the Fed.

That’s where Helicopter Ben Bernanke comes in. Under such conditions Bernanke, citing Milton Friedman before him, said that if need be the Fed could simply drop cash from helicopter doors into the waiting hands of people below.

What incentive is there to work when money falls like manna from heaven?

The Fed, according to this incompletely thought-out option, could generate consumer spending in this way, bypassing financial institutions like banks and employers altogether.

It is an idea of Keynesian absurdity. What will make merchants willing to sell their goods, or businesses willing to sell their production, at yesterday’s price when they see today that free money is raining down from the skies above?

What assures savings and capital formation when it rains money? What assures productive effort — work — when money falls like manna from heaven?

Of course the business about shoving money out helicopter doors is just a metaphor, much as is the expression “printing money.”

The Fed actually creates money in a way that is the functional equivalent of just printing it up, except that it’s a more sophisticated sleight of hand. And it is all done digitally, without even the expense of old-fashioned paper and ink.

In the same way, the provision of liquidity directly into the hands of the populous is not really dependent on a fleet of Fed helicopters. Other more sophisticated means are available, like the negative income tax that envisions sending money directly to people below some fixed income level.

The authors of the Foreign Affairs piece write, “The Fed should hand consumers cash directly. In practice, this policy could take the form of giving central banks the ability to hand their countries’ tax-paying households a certain amount of money.”

While there’s no need for actual helicopters in this proposed mechanism, the authors make up for it by proposing another even more bizarre scheme.

The Fed should issue debt, they propose, and invest the proceeds in a global equity index. “After around 15 years, the funds could distribute their equity holdings to the lowest-earning 80 percent of taxpayers.”

Now there’s a shell game for you. Who pays the interest on all that money the Fed is supposed to borrow to make cost-free government speculation possible? Who is impoverished by the currency debauchment implicit in these rackets?

Among the first victims are the lowest 80 percent.

The whole thing has the ring of adolescence, like little Mickey Rooney saying, “Hey kids! Let’s put on a show!”

In fact the authors even conclude with an eager sounding, “All it will take to change course is the courage, brains, and leadership to try something new.”

Hey, kids!

But there is nothing at all new about thimble-rigging and no brain power at work in helicopter money stunts. Such schemes are older than John Law of the Mississippi Bubble, the assignats of the French Reign of Terror, or Gideon Gono.

Gono was the central banker who made the 100 trillion Zimbabwe dollar bill the currency of everyday commerce. One can easily imagine Gono in 2003 bubbling with childish enthusiasm, “Hey kids! Let’s increase the money supply by a factor of 20,000,000 times.”

That the editors of Foreign Affairs take seriously such puerile nonsense suggests how frighteningly close the governing classes of this country are to adopting something like it.

I hope this helps…