Fiscal Cliff: Time to Call Their Bluff By Ellen Brown (about the author)     Permalink       (Page 1 of 2 pages) OpEdNews Op Eds 12/20/2012 at 10:53:28

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cliff-hanger by Commonwealthbaptistchurch.org

The "fiscal cliff" has all the earmarks of a false flag operation, full of sound and fury, intended to extort concessions from opponents.  Neil Irwin of the Washington Post calls it "a self-induced austerity crisis."  David Weidner in the Wall Street Journal calls it simply theater, designed to pressure politicians into a budget deal:  
The cliff is really just a trumped-up annual budget discussion. . . . The most likely outcome is a combination of tax increases, spending cuts and  kicking the can down the road. 
Yet the media coverage has been "panic-inducing, falling somewhere between that given to an approaching hurricane and an alien invasion."  In the summer of 2011, this sort of media hype succeeded in causing the Dow Jones Industrial Average to plunge nearly 2000 points.  But this time the market is generally ignoring the cliff, either confident a deal will be reached or not caring. 
The goal of the exercise seems to be to dismantle Social Security and Medicare, something a radical group of conservatives has worked for decades to achieve.  But with the recent Democratic victories, demands for "fiscal responsibility" may just result in higher taxes for the rich, without gutting the entitlements. 
The problem is that no deal is going to be satisfactory.  If we go over the cliff, taxes will be raised on everyone, and GDP is predicted to drop by 3%.  If a deal is reached, taxes will be raised on some people, and some services will be cut.  But the underlying problems -- high unemployment and a languishing economy -- will remain.  More effective solutions are needed. 

Be Careful What You Wish for: Fiscal Hostage-Taking Could Backfire

 Taxpayers and governments that are pushed too far have been known to resort to more radical measures, and there are some on the table that could fix the problem at its core.  Here are a few that are receiving media attention:

 1.  A financial transactions tax.  While children's shoes and lunchboxes are taxed at nearly 10%, financial sales have so far gotten off scot-free.  The idea of a financial transactions tax, or Tobin tax, has been kicked around for decades; but it is now gaining real teeth.  The European Commission has backed plans from 10 countries -- including France, Germany, Italy and Spain -- to launch a financial transactions tax to help raise funds to tackle the debt crisis.  Sarah van Gelder of Yes! Magazine observes that the tax would not only help reduce deficits but would hit the highest income earners, and it would cool the speculative fever of Wall Street. 

Simon Thorpe, a financial blogger in France, cites figures from the Bank for International Settlements, showing total U.S. financial transactions of nearly $3 QUADRILLION in  2011.  Including other sources, he derives a figure of $4.44 QUADRILLION.  Even using the more "conservative" $3 quadrillion figure, a tax of a mere 0.05% (1/20^th of 1%) would be sufficient to raise $1.5 trillion yearly, enough to replace personal income taxes with money to spare. 
2.  The trillion dollar coin trick.  If Republicans insist on the letter of the law, Democrats could respond with a law of their own.  The Constitution says that Congress shall have the power to "coin money" and "regulate the value thereof," and no limit is put on the value of the coins Congress creates, as was pointed out by a chairman of the House Coinage Subcommittee in the 1980s. 
I actually suggested this solution in Web of Debt in 2007, when it was just a "wacky idea."   But after the 2008 banking crisis, it started getting the attention of scholars.  In a December 7^th article in the Washington Post titled "Could Two Platinum Coins Solve the Debt-ceiling Crisis?," Brad Plumer wrote that if Congress doesn't raise the debt ceiling as part of the fiscal cliff negotiations, "then some of these wacky ideas may get more attention."
Ed Harrison summarized the proposal at Credit Writedowns like this:

• The Treasury mints a $1 trillion coin, or whatever amount is desired.
• The Treasury deposits the coin into the Treasury's account at the Fed.
• The Treasury buys back bonds.
• The retirement of bonds is an asset swap, no different from QE2.
• The increase in reserve balances is not inflationary, as Credit Easing 1.0, QE 1.0, and QE 2.0 already have shown.
• These operations by the Treasury create no new net financial assets for the non-government sector.
• The debt ceiling crisis is averted. 

Plumer cites Yale Law School Professor Jack Balkin, confirming the ploy is legal.  He also cites Joseph Gagnon of the Peterson Institute for International Economics, stating, "I like it.  There's nothing that's obviously economically problematic about it." 
To the objection that it is a legal trick that makes a mockery of the law, Paul Krugman responded, " These things sound ridiculous -- but so is the behavior of Congressional Republicans.  So why not fight back using legal tricks?" 
3.  Declare the debt ceiling unconstitutional.  The 14^th Amendment to the Constitution mandates that Congress shall pay its debts on time and in full, and Congress does not know how much it will collect in taxes until after the bills have been incurred.  The debt ceiling was imposed by a statute f irst passed in 1917 and revised multiple times since.   The Constitution trumps it and should rule.   4.  Borrow interest-free from the government's own central bank.  If the government refinanced its entire debt through the Federal Reserve, it could save nearly half a trillion dollars annually in interest, since the Fed rebates its profits to the government.  The Fed's newly-announced QE4 adds $45 billion monthly in government securities purchases to the $40 billion for mortgaged-backed securities declared in QE3, and no time limit has been designated for ending the program.  Forty-five billion dollars monthly is over half a trillion yearly.  Added to the federal debt already held by the Fed, the whole $16 trillion federal debt could be bought back in 28 years. 

This is not a wild, untested idea.  Borrowing interest-free from its central bank was done by Canada from 1939 to 1974, by France from 1946 to 1973, and by Australia and New Zealand in the first half of the 20^th century, to excellent effect and without creating price inflation.       

5.  Decommission some portion of the military.  When past costs are factored in, nearly half the federal budget goes to the military.  The data speaks for itself.  I wrote about it here.

6.  Debt forgiveness.  Economists Michael Hudson and Steve Keen maintain that the only way out of debt deflation is debt forgiveness.  That could be achieved by the Fed by buying up $2 trillion in student debt and other asset-back securities and either ripping them up or refinancing the debts interest-free or at very low interest.  If the banks can borrow at 0.25%, why not the people? 

7.  Publicly-owned state and local banks.  Municipal governments are facing cliffs of their own.  Ann Larson, writing in Dissent Magazine, blames predatory Wall Street lending practices, which have inflicted deep and growing suffering on communities across the country. 

Predatory Wall Street practices can be avoided by establishing publicly-owned state and local banks, which leverage the public's funds for the benefit of the public.  The profits are returned as dividends to the local government.  German researcher Margrit Kennedy calculates that a whopping 40% of the cost of public projects, on average, goes to interest.  Publicly-owned banks slash borrowing costs by returning this interest to the government, along with many other advantages, detailed here.

Unshackle the Hostages and Let the Good Times Roll

The fiscal cliff has been said to be holding Congress hostage to conservative demands, but the real hostages are the debt slaves of our financial system.  The demand for "fiscal responsibility" has been used as an excuse to impose radical austerity measures on the people, measures that benefit the 1% while locking the 99% in debt. 

The government did not demand fiscal responsibility of the failed financial sector.  Rather, Congress lavished hundreds of billions of dollars on it, and the Fed lavished trillions more.  No evident harm from these measures befell the economy, which has fared better than the austerity-strapped EU countries.  Another couple of trillion dollars poured directly into the real, productive economy could give it a serious boost. 

According to the Fed's figures, as of July 2010, the money supply was actually   $4 trillion LESS than in 2008 .   ( The shrinkage was in the shadow banking system formerly reported as M3.)  That means $4 trillion could be added back into the money supply before general price inflation would be a problem.    

The self-induced austerity crisis is a diversion from the real crises, including unemployment, the housing crisis, a bloated military, and unrepayable debt.  Slashing services, selling off public assets, and raising taxes won't cure these ills.  To maintain a sustainable and productive economy requires a visionary leap into the new.  A new economy needs new methods of public financing. 

Ellen Brown is an attorney, president of the Public Banking Institute, and author of 11 books. Her websites are http://WebofDebt.com, http://EllenBrown.com, and http://PublicBankingInstitute.org. In her latest book, "Web of Debt: The Shocking (more...)

The biggest manipulative play in gold ever

Jim Sinclair: A move of desperation by the Fed

Submitted by cpowell on Thu, 2012-12-20 19:32. Section: Daily Dispatches

By Jim Sinclair
JSMineSet.com
Thursday, December 20, 2012

http://www.jsmineset.com/2012/12/20/a-move-of-desperation-by-the-fed/

You cannot fix the problems of the Western economic system by breaking the telltale thermometer, which is the price of gold.

There is not one professional who does not know that sales in extreme volume at a time of low activity internationally have but one purpose, and that is to reduce the price of gold.

Charts and technical analysis in such a manipulated, manufactured market, as understood by you, are useless. This is a move of desperation by the Federal Reserve via the gold banks based on the false premise that attacking symptoms without meaningful economic intervention is going to cure the problem.

Gold is going to $3,500 and above. The U.S. dollar is headed to .7200 and lower.

We are once again giving away greatness by driving gold into the coffers of Asia in a bargain process that a powerful academic bureaucrat has selected. It is just that simple.

Nobody said survival from the onslaught of the demons would be easy, but it will be successful. ...

It sure looks like the elitists are about to attempt the great train robbery in gold.

All the rumors are crap. This is the biggest manipulative play in gold ever. The only good part is that as soon as the criminals have their positions filled, we are off to $3,500 and above

Queen: where is our gold ?

Queen on gold bars at Bank of England: 'Regrettably not all of them belong to us'

Submitted by cpowell on Tue, 2012-12-18 15:25. Section: Daily Dispatches

10:27a ET Tuesday, December 18, 2012

Dear Friend of GATA and Gold:

Becoming today the first British monarch to attend a Cabinet meeting since George III in 1781, Queen Elizabeth remarked on her visit last week to the Bank of England's gold vault, which was greatly publicized in the United Kingdom. (See http://www.gata.org/node/12030.)

In a receiving line at 10 Downing St., addressing the chancellor of the exchequer, the UK treasury secretary, George Osborne, the queen said, "I saw all the gold bars. Regrettably not all of them belong to us."

Osborne replied that Britain still has some gold left, and apparently that was that -- nothing about swaps and leases and the purposes thereof, particularly secret currency market intervention to sustain the Anglo-American financial establishment that is bankrupting much of the Western world. (See http://www.gata.org/node/12016.)

If any of our British friends happen to run into the queen -- and she does get around, being the most conscientious and selfless public servant in Britain -- they might let her know that GATA would be delighted to make a presentation to her about what her chancellor apparently won't tell her about her kingdom's gold and its former gold.

Of course under one of the basic U.K. laws -- is it the Act of Irrelevance? -- the sovereign and her immediate family are forbidden to do much more than serve as fodder for celebrity programs on television and the celebrity columns in the newspapers. But since there are no serious financial journalists anymore, one has to start somewhere, and if the queen could just keep talking about gold, maybe the issue eventually could break into "Inside Edition," "Entertainment Tonight," and People magazine if not "60 Minutes," "Panorama," and The Wall Street Journal.

The Telegraph's story about the queen's visit to the Cabinet meeting, posted at the link below, contains a 1-minute, 53-second video of the event, with the queen's exchange with the chancellor about gold coming at the 1-minute mark:

http://www.telegraph.co.uk/news/politics/david-cameron/9752199/Queen-rec...

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

People are awakening to their seigniorage right

Dear Friends of the AMI,
December 2nd was the deadline to submit comments to the Iceland Parliament on a proposed monetary study to be voted on by them, and AMI submitted the following comment:

AMERICAN   MONETARY   INSTITUTE

PO  BOX 601 ,  VALATIE ,  NY 12184

Tel. 224-805-2200, email  ami@taconic.net

http://www.monetary.org

Dedicated to the independent study of monetary history, theory, and reform

"Over time, whoever controls the money system controls the society."

Stephen Zarlenga, Director

Sunday December 2nd 

American Monetary Institute respectfully issues this public comment on Lilja Mosesdottir's Proposal for An Icelandic Parliamentary 

Resolution on forming a specialist committee to evaluate the benefits 

of "separating the money creation and money lending functions in 

Iceland." Matter nr. 239.

In brief, the AMI thinks it is a good proposal.

Iceland's crisis has received worldwide attention, and it would be 

good for the world to see Iceland taking such a good step toward a 

real solution.
Normally, "pretend reformers" go on endlessly describing the problem, 

but when it comes to the solution, they go off the "deep end," and
propose nonsense. That is an old tactic, and so this proposal is in 

the right direction.
Today there is a general awakening to the dangers to society, of any 

money system where the private banking establishment controls the 

process by which it issues what is used for money in the society. This
awakening results from several events, among which are the following:
The worldwide monetary and economic destruction brought on by such 

control, and a consequent recognition of the deeply parasitic nature
of banking systems being used in all parts of the Western World today.
Additionally, this became recognized in the United States
through several factors. For example:

My book, The Lost Science of Money - The Mythology of Money, the Story

of Power; which examines the historical aspects of the money problem 

from Aristotle forward, in 23 Chapters 

(see http://old.monetary.org/lostscienceofmoney.html). Then Chapter 24 

shows how to apply what is learned from history, to solving the
problem in the U.S. today (see The Need for Monetary Reform
at http://www.monetary.org/the-need-for-monetary-reform/2009/09)
That book resulted in the proposed American Monetary Act (see 

http://www.monetary.org/wp-content/uploads/2011/12/32-page-brochure-sept20111.pdf)

which became the basis for Congressman Dennis Kucinich's creation and
introduction of HR 2990 into the current U.S. 112th Congress. Called 

the NEED Act (National Emergency Employment Defense Act), it is 

essentially a monetary reform act, modeled on the Chicago Plan, which 

our great economic minds created in 1935 to end the Great Depression.
The National Committee of the U.S. Green Party approved a
national plank which embodied this proposal (see 

http://www.monetary.org/wp-content/uploads/2011/11/2010-GREEN-PARTY-APPROVED-MONETARY-PLANK.pdf).

Prof. Kaoru Yamaguchi, of Doshisha University in Japan put
the American Monetary Act and HR 2990, (see 

http://www.monetary.org/modeling-the-american-monetary-act/2010/12)
through his advanced System Dynamics computerized projection and 

concluded that they (1) provide the funding for infrastructure repair 

(which solves the unemployment crisis) (2) Pay off the national debt 

as it comes due (3) Does this without inflation!
These events are some of the facts leading to Dr. Michael Kumhof, 

(Deputy Division Chief, Modeling Dept., of the International Monetary 

Fund, IMF) doing his study, The Chicago Plan Revisited; an IMF Working 

Paper, which has swept the world's economist community like wildfire 

(see http://www.monetary.org/wp-content/uploads/2012/08/ChicagoPlanRevisited.pdf).
This is the first time anyone has done this exercise, and it showed 

outstanding results for the Chicago Plan; including that it would have 

much less tendency for inflation, than a privately controlled money 

system has. That is one reason for its wide interest. Another is that

it goes counter to many widely held, but unsubstantiated beliefs about 

monetary matters.

Should Iceland's Parliament become familiar 
with the above events and

how they relate to Iceland's possible future 
money system? Obviously 

and emphatically YES!
Can that be accomplished by January 1st, 2013 as the proposal 

recommends? We respectfully recommend giving the reporting committee at
least until March or June 1 to give its report. It takes more time than 

a month to do this work properly, and it must also be considered in

relation to the monetary system dominating around the world, and to 

what extent Iceland can go it alone. However, understand also that the 

dominant system must now go through substantial reform, and little 

Iceland can have an important impact on that reform by promoting a 

monetary system designed to aid humanity, production, and justice; not 

just a corrupt finance sector. That would be a shot heard round the world!
Submitted by Stephen Zarlenga, Director, American Monetary Institute
Sunday December 2nd, 2012

-- 
"Over time, whoever controls the money system
controls the nation."
Stephen Zarlenga
Director
American Monetary Institute

New Crash Warning Comes From Banking Spectre

New Crash Warning Comes From Proven Source

A warning over the global economy comes from the Bank for International Settlements - which voiced concerns before the last crash.

http://news.sky.com/story/1023326/new-crash-warning-comes-from-proven-source

1:19pm UK, Monday 10 December 2012

The Bank for International Settlements

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Ed Conway

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The Bank for International Settlements (BIS) is an odd organisation. Originally set up in the 1930s to facilitate the payment of First World War reparations by Germany to France, Britain and others, it has since transformed into a club of central bankers.

What is less well-known is that it came within a whisker of being shut down after the Second World War. It had been tainted by the failure of the reparations policy and by the presence of prominent Nazis on its board. At the Bretton Woods conference in 1944, the Norwegians lobbied for it to be shut down - after all, aside from anything else, what purpose did it have any longer? The British argued against this, but were overruled by the Americans* and the conference agreed that the BIS would be shut down.

But in the event, the undertaking was forgotten and the BIS survived. And, many economists would argue, a good thing too. For today, the BIS is renowned for being one of the only international institutions to have warned us of the risks and imbalances which eventually led to the great financial crisis of 2008.

John Maynard Keynes at the Bretton Woods conference

Which is why we should take note, today, that it has issued yet another warning.

According to the BIS' latest Quarterly Review financial markets are starting to behave in some of the ways they behaved before the crash. In particular, investors seem to be chasing riskier and riskier assets, despite the fact that the economic prospects are hardly all that great.

Here is the key passage from the BIS report: "Some asset prices started to appear highly valued in historical terms relative to indicators of their riskiness. For example, global high-yield corporate bond spreads fell to levels comparable to those of late 2007, but with the default rate on these bonds running at around 3%, whereas it was closer to 1% in late 2007.

Bond yields and economic growth forecasts

"The same was true of investment grade corporate bond spreads, but with respective default rates of a little over 1% and around 0.5%. Indeed, numerous bond investors said that they felt less well compensated for risk than in the past, but that they had little alternative with rates on many bank deposits close to zero and the supply of other low-risk investments in decline."

Bond yields usually move in line with the wider economy's growth prospects, but clearly these two lines have started to diverge in recent months. There is something going on.

At least part of the likely explanation - and this is my interpretation rather than the BIS' - is that the flood of money being set loose by central banks, including the Bank of England and the Federal Reserve, through quantitative easing is pumping asset prices higher.

The Bank for International Settlements was formed pre-Second World War

But either way, it is alarming that the very institution which first warned about the prospects of a crash is issuing a warning again about the same kind of behaviour happening in asset markets.

* After a confrontation about this with Henry Morgenthau, the US Treasury Secretary, John Maynard Keynes actually collapsed and had a heart attack. He was wrongly reported by European newspapers to have died shortly afterwards.

Constitutional authority to stop the pillaging of people

IRS taken to U.S. Supreme Court
for unconstitutional and illegal actions.
http://www.foundationfortruthinlaw.org/Griffin-article.html

What you have been told all your life about income taxes and the IRS is a lie. Hard to believe? Probably not, but then, HOW DO YOU PROVE IT? Well, let?s begin by asking one simple question out of dozens we could ask in challenging the IRS scam; Do you have lawful "income" subject to taxation by government?

We have all been led to believe that, "of course, my wages are "income," however, as you will soon discover, that is a lie. We have been presuming wages are income but have you ever you actually proven that belief? We have all been deceived on this fact, among many others, and there is only ONE way to prove that, and that is by looking at the actual evidence long suppressed.

The question of "what is income," along with many other questions, have been presented to the lower courts, and all have rejected the questions, and ignored the plain evidence, calling the challenges "frivolous." Now, in this Supreme Court case, (http://www.supremecourt.gov/Search.aspx?FileName=/docketfiles/12-6169.htm), they can't ignore it any longer without violating their oaths of office, and their duty to Americans across this country to uphold their own past rulings and constitutional law.

So, let's say I tell you that you owe me $10,000 for work I did for you, and send you a bill. Would you pay it? Why not? Of course, you'd fight that because you know you don't owe it, and yet, we have all accepted without question the presumption that all we bring in as wages is "income" and that we owe tax on this. Is this the truth?

Well, let's address this in a few simple Supreme Court cases to set the stage, and YOU decide for yourself if you want to know more, and discover that you have lawful, constitutional authority to stop the pillaging of your monies. Is that a fair request?

We have all been led to believe that "income" is our wages, salary or compensation for services. Our parents and grandparents have accepted this social propaganda, and believed it without question. Why should we question it when everyone accepts it as fact?

Consider this:

A business or corporation can deduct all costs to be able to be in business and to make a "profit." The "profit" is what is above and beyond all expenses to pay employees for working, pay their costs for goods sold, electricity, everything that they had to pay for to make it possible to be in business and to actually make a profit.

Question: Does it cost you anything to be able to arrive at work, do the work, and go home? Anything? No, you say? What about gas to get to work? What about food to feed yourself to be able to work? What about a home to live in to be able to sleep, and have the ability to work, or insurance, or whatever costs it takes to keep you functioning as a human being able to work?

Make the connections... there is NO difference between a business expense sheet, and YOURS. Is all that a business brings in, a "profit?" No... they have lots of costs. So why should the IRS, or you, presume that all you bring in is "profit" when the courts don?t support that contention?

"In principle, there can be no difference between the case of selling labor and the case of selling goods." United States Supreme Court, Adkins v. Children's Hospital, 261 U.S. at 558.

The Supreme Court clearly understood that a person?s labor "cost" the person to be able to provide it, just as it costs corporations or businesses money to sell goods. However, the IRS claims your labor is worth nothing, and is all "profit."

"...income; as used in the statute should be given a meaning so as not to include everything that comes in. The true function of the words "gains" and "profits" is to limit the meaning of the word "income." United States Supreme Court, S. Pacific v. Lowe, U.S. 247 F. 330. (1918). (Emphasis added).

Notice "gains" and "profits" are linked to the word "income," limiting what can be defined as "income." So, ask yourself this again; Did it cost you anything to be able to get to work? Yes! So all you receive as "wages" cannot possibly be all "profit," right?

"If there is no gain, there is no income." [1] ...It [income] is not synonymous with receipts. Simply put, pay from a job is a 'wage,' and wages are not taxable. Congress has taxed income, not compensation." United States Supreme Court Conner v. United States. 303 F. Supp. 1187 (1969) pg. 1191: 47 C.J.S. Internal Revenue 98, Pg. 226. (Emphasis added).

The IRS claims that all you make is "gain," or "profit," but the S.Ct case above states otherwise. Whom do we believe? What is it that you are actually taking home for your labor? All "Gain," all "Income," or something else?

"We must reject in this case...the broad contention submitted in behalf of the Government that all receipts - everything that comes in - are income within the proper definition of the term 'gross income'..." United States Supreme Court Doyle v. Mitchell Brother, Co., 247 US 179 (1918).

Notice the IRS? own code in Section 22 GROSS INCOME:

(a): Gross income includes gains, profits, and income derived from salaries, wages, or compensation for personal service...

Gains, profits and income are redundant terms, and confuse the lawful definition of what a "profit" is because it is the same thing as income. They all mean the same thing. Defining it in Section 22 gives the false and misleading impression there is a difference between these terms when none exists.

If "gains, profit and income" are the same as "salaries, wages, or compensation," why state "derived from?" One does not "derive" income "FROM" a wage if they lawfully mean the same thing. If wages ARE income already, why use the term "derived from?" The code speaks truth in many cases, but we have to decode their confusion.

"The statute and the statute alone determines what is income to be taxed. It taxes only income "derived" from many different sources; one does not "derive income" by rendering services and charging for them." Edwards v. Keith, 231 F. 110 (2nd Cir. 1916). (Emphasis added).

You render services and are paid a wage in exchange for your service... but that wage is NOT "income" according to original intent. "Derived" income is something completely different. You "derive" income from a source for that income, much like you derive an apple from your apple tree. You don?t consider the branches of the tree to be "income," or you diminish the source for income, and attack the tree itself, causing a loss of potential income.

"The poor man or the man in moderate circumstances does not regard his wages or salary as an income that would have to pay its proportionate tax under this new system." Gov. A.E. Wilson on the Income Tax (16 ) Amendment, N.Y. Times, Part 5, Page 13, February 26, 1911.

It was common knowledge that wages were not considered "income" under original intent.

"The claim that salaries, wages, and compensation for personal services are to be taxed as an entirety and therefore must be returned by the individual... is without support, either in the language of the Act or in the decisions of the courts construing it... it is not salaries, wages or compensation for personal services that are to be included in gross income. That which is to be included is gains, profits, and income derived from salaries, wages, or compensation for personal services." United States Supreme Court, Lucas v. Earl, 281 U.S. 111 (1930). (Emphasis added).

Sound confusing given what you have been told all your life? Everything the IRS does is confusing and convoluted to deceive. Understanding the fraud can take some time but it is as easy as A, B, C. So, what IS lawful, constitutional "income?"

Simple example. You make a wage. You pay all your expenses. You have some left over "principal," and you invest this in some means, and "derive" some interest from the extra money. THAT is what is lawful income. You are deriving NOTHING from your wages. It is the value of your labor, which costs money.

That being said, this U.S. Supreme Court case is being asked these and many more questions which have never been adjudicated in any court of the land. This isn't an easy 15 minute read, any more than learning to speak another language would take you an hour to master.

If you are tired of the fraud, want to know what your constitutional and lawful rights are, then you NEED to begin educating yourself on this topic, as many others are doing, so that you can stand on the laws there for you, and quit being a government slave to unconstitutional and illegal taxation.

Now, don't get me wrong here. Income taxation is lawful and constitutional, as long as it is on true income. The key is "lawful income."

Now, the facts of this U.S. Supreme Court case to date are these:

1. The IRS attacked me for allegedly not paying what I owe for 4 years of not filing, but deprived me of due process of law to defend my position.

2. I went through 9 federal courts, and am now in the Supreme Court, having filed my writ with application to not have to pay court docket fee of $300, and being allowed to file a much simpler document under less stringent criteria.

3. The court accepted this document, provided a case number for it and docketed it.

4. The IRS had opportunity to respond, but waived its right to respond to my writ. One wonders why it would waive its right to respond to allegations it claims are true, however it seems that it believes the Court will NOT take the case, so they don't have to respond. This lack of response, in any other court would be an automatic default under Rule 55.

5. Documents sent that address this default have NOT been filed in the U.S. Supreme Court as the law requires in all other courts.

6. The U.S. Supreme Court is avoiding this issue in violation of its own laws, and it does NOT "have" to take the case, however, all case precedent in its own court clearly states that they would take constitutional issues which address a huge population.

7. I filed for Motion for reconsideration of the fee issue, but the Court denied this once again, despite its own past rulings stating that all courts were to take "substance" over "form." They have my original document accepted and filed, so they have the substance, but are forcing "form," in order for me to even have a chance at due process.

8. The denial of my application means I now have to pay the court cost of $300, as well as having to redo the writ according to attorney standards (actually printed books) at a cost of about $1500... 40 copies and the original to the Court, three copies to the IRS, and copies for my records.

Of course, it appears they are doing everything in their power to deter me from getting this before them, as they are hugely aware of the ramifications. If they take it, the truth will be exposed. If they do NOT take it, due process has been denied by the highest court in the land, and government can now run roughshod over any one of us as it pleases.

The Courts have a sworn duty to apply law and rules to every one of us, so where they do not, it is treason, and warring against the constitution...

"When a judge acts where he or she does not have jurisdiction to act, the judge is engaged in an act or acts of treason." Cohens V Virginia, 19 US (6 Wheat) 264, 404, 5LEd 257 (1821). .

"No state legislator or executive or judicial officer can war against the Constitution without violating his undertaking to support it." Cooper v. Aaron, 358 U.S. 1, 78 S.Ct. 1401 (1958).

"The court is to protect against any encroachment of Constitutionally secured liberties." Boyd v. U.S., 116 U.S. 616

"The Constitution of these United States is the supreme law of the land. Any law that is repugnant to the Constitution is null and void of law." Marbury v. Madison, 5 US 137

As much as is possible, this is going out to the true supreme court, that of PUBLIC OPINION, and need to be understood by all Americans. Simply read the questions being addressed to the Court in the documents filed to date at Supreme Court case Documents. Read the evidence, and then YOU decide.

You can also research the document "What is Income" by going here... http://thematrixhasyou.org/PDF/Exhibit-A-What-is-Income.pdf for a far larger body of evidence on this one question alone. If you want to delve into this tax scam issue much more, go here... http://thematrixhasyou.org/no-tax.html, and http://www.foundationfortruthinlaw.org/income-tax.html

Lastly, if you feel engaged in this in the least, please help support the costs for getting this into the Court, not to mention the costs which will be incurred with having to travel to DC for oral argument should it come to that. This is TOO big of an issue to let this opportunity go because of lack of funds. You can go to foundationfortruthinlaw.org

We, the People, MUST stand on the laws and facts. Prove to yourself the validity of the facts.

This case could change every man, woman and child?s life in our republic if the court does its job of protecting us from such encroachment by government. Be a part of it by simply knowing your rights and some basic law, and pass on to everyone you know.

This will be resisted, of course, but media exposure and public pressure will force them to address these issues, sooner or later. In so doing, and we can bring some of the change we all want.

Jeff Maehr
Pagosa Springs, Colorado

Inside the Risky Bets of Central Banks

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By JON HILSENRATH and BRIAN BLACKSTONE, WSJ

BASEL, Switzerland—Every two months, more than a dozen bankers meet here on Sunday evenings to talk and dine on the 18th floor of a cylindrical building looking out on the Rhine.

The world's major central banks are embarking on an aggressive new phase of policy activism, a course fraught with economic and political risks. WSJ's Jon Hilsenrath reports on the News Hub. Photo: AP Images.

The dinner discussions on money and economics are more than academic. At the table are the chiefs of the world's biggest central banks, representing countries that annually produce more than $51 trillion of gross domestic product, three-quarters of the world's economic output.

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Of late, these secret talks have focused on global economic troubles and the aggressive measures by central banks to manage their national economies. Since 2007, central banks have flooded the world financial system with more than $11 trillion. Faced with weak recoveries and Europe's churning economic problems, the effort has accelerated. The biggest central banks plan to pump billions more into government bonds, mortgages and business loans.

Their monetary strategy isn't found in standard textbooks. The central bankers are, in effect, conducting a high-stakes experiment, drawing in part on academic work by some of the men who studied and taught at the Massachusetts Institute of Technology in the 1970s and 1980s.

While many national governments, including the U.S., have failed to agree on fiscal policy—how best to balance tax revenues with spending during slow growth—the central bankers have forged their own path, independent of voters and politicians, bound by frequent conversations and relationships stretching back to university days.

If the central bankers are correct, they will help the world economy avoid prolonged stagnation and a repeat of central banking mistakes in the 1930s. If they are wrong, they could kindle inflation or sow the seeds of another financial crisis. Failure also could lead to new restrictions on the power and independence of central banks, tools deemed crucial in such emergencies as the 2008-2009 financial crisis.

"Will history decide they did too little or too much? We don't know because it is still a work in progress," said Kenneth Rogoff, an economics professor at Harvard and co-author of a book, "This Time Is Different," examining financial crises over eight centuries. "They are taking risks because it is an experimental strategy."

The U.S. Federal Reserve now buys $40 billion of mortgage-backed securities each month and appears set at a meeting Wednesday to spend billions more on Treasury securities. The Bank of England has agreed to funnel billions of pounds to businesses and households through banks. The European Central Bank pledged to hold down borrowing costs of governments that sought help. The Bank of Japan,8301.JA +2.64% under increased pressure to fight deflation, is purchasing ¥91 trillion yen ($1.14 trillion) in government bonds, corporate debt and stocks.

The goal is to lower borrowing costs and stimulate stock markets to encourage spending and investment by households and business. But the method is untested on such a global scale, and central bankers have labored in behind-the-scenes meetings this year to size up the risks.

A day after their June dinner here, the central bankers were warned by one of their hosts in a speech to the group.

"Central banks find themselves caught in the middle, forced to be the policy makers of last resort. They are providing monetary stimulus on a massive scale," said Jaime Caruana, general manager of the Bank for International Settlements, where the dinners are held. "These emergency measures could have undesirable effects if continued for too long."

Another worry: Boosting stock markets and easing credit costs allow national governments to postpone difficult political decisions to fix such problems as swelling budget deficits, according to this contrary view.

Vocal critics include economists at the BIS, an international body based here that is increasingly an important staging ground for talks about the postcrisis financial landscape. They say central banks, seeking faster growth, are stretched too thin.

"Central banks cannot solve structural problems in the economy," said Stephen Cecchetti, who runs the BIS monetary department. "We've been saying this for years, and it's getting tiresome."

Central banks control the spigot of the world's money supply. When opened, the flow of new cash heats up economies, driving down interest rates and unemployment but risking inflation. Closing the spigot, on the other hand, raises interest rates and cools economies but tamps down prices.

The central bankers have promised that once the global economy gets back on its feet, they will shut off the spigots quickly enough to forestall inflation. But pulling back so much money, at exactly the right time, could become a political and logistical challenge.

"We're all very conscious that we're in an environment that's unusual and we're using a policy weapon that we don't have a lot of experience with," Charles Bean, deputy governor of the Bank of England said in an interview.

Central bankers themselves are among the most isolated people in government. If they confer too closely with private bankers, they risk unsettling markets or giving traders an unfair advantage. And to maintain their independence, they try to keep politicians at a distance.

Since the financial crisis erupted in late 2007, they have relied on each other for counsel. Together, they helped arrest the downward spiral of the world economy, pushing down interest rates to historic lows while pumping trillions of dollars, euros, pounds and yen into ailing banks and markets.

Three of the world's most powerful central bankers launched their careers in a building known as "E52," home to the MIT economics department. Fed ChairmanBen Bernanke and ECB President Mario Draghi earned their Ph.D.s there in the late 1970s. Bank of England Governor Mervyn King taught briefly there in the 1980s, sharing an office with Mr. Bernanke.

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Many economists emerged from MIT with a belief that government could help to smooth out economic downturns. Central banks play a particularly important role in this view, not only by setting interest rates but also by influencing public expectations through carefully worded statements.

While at MIT, the central bankers dreamed up mathematical models and discussed their ideas in seminar rooms and at cheap food joints in a rundown Boston-area neighborhood on the Charles River.

Over Sunday dinners in Basel, which often stretch to three hours, they now talk of pressing, real-world problems with authority. The meals are part of two-day meetings held six times a year at the BIS. Dinner guests include leaders of the Fed, ECB, Bank of England and Bank of Japan, as well as central bankers from India, China, Mexico, Brazil and a few other countries.

"That is where it really gets down and dirty," said Nathan Sheets, a CitigroupC +0.83% economist and former head of the Federal Reserve's international affairs division. He didn't attend the dinners during his tenure at the Fed but is familiar with them. "Every one of the dinners was important through the crisis."

The Bank of England's Mr. King leads the dinner discussions in a room decorated by the Swiss architectural firm Herzog & de Meuron, which designed the "Bird's Nest" stadium for the Beijing Olympics. The men have designated seats at a round table in a dining area scented by white orchids and framed by white walls, a black ceiling and panoramic views.

"It is a way in which people can talk completely privately," Mr. King said in an interview. "It is a big advantage if you have some feel for how central banks think about questions, what they're likely to do in the future if certain events were to occur."

Serious matters follow appetizers, wine and small talk, according to people familiar with the dinners. Mr. King typically asks his colleagues to talk about the outlook in their respective countries. Others ask follow-up questions. The gatherings yield no transcripts or minutes. No staff is allowed.

The 18-member group, formally known as the Economic Consultative Committee, has only once issued a public statement: a two-line missive in September, promising to look for solutions in interbank lending markets, responding to allegations that some private banks had conspired to manipulate the Libor interest rate.

On Mondays after the dinner, the bankers join a larger group of central bankers at a large round table on a lower floor of the BIS building, which is shaped like a rook chess piece. Staff members sit nearby at desks decorated in white leather.

"These meetings are a very important forum to understand the global situation," said Duvvuri Subbarao, governor of the Reserve Bank of India and a Sunday dinner participant. "People speak freely."

The central bankers often act with the common goal of bringing the world closer to full employment. Other times, though, they are starkly at odds.

In November 2010, for example, the Fed launched a $600 billion bond-buying program known as quantitative easing. A few days later, New York Fed PresidentWilliam Dudley and Fed vice chairwoman Janet Yellen attended a weekend meeting here and were surprised by the furor the Fed's stimulus program had stirred among developing countries, according to people familiar with the talks. Mr. Dudley and Ms. Yellen spent much of the meeting explaining the Fed's actions, as other central bankers raised worries the program would cause inflation or spark an unwanted flood of capital into their markets.

"Every time there is quantitative easing by the Fed, that gets discussed," said Mr. Subbarao. "We all have to reckon with the spillover impact of our policies on other countries." Basel, he said, is the place to air such concerns.

The role of the Bank for International Settlements has broadened since it was formed in 1930 to handle reparation payments imposed on Germany after World War I. In the 1970s, it became the center of discussions on bank capital rules. In the 1990s, it became the meeting place for central bankers to talk about the global economy.

The central bankers typically stop short of formally coordinating their moves. Mr. Bernanke, Mr. Draghi and Bank of Japan head Masaaki Shirakawa are more focused on domestic challenges. Mr. Shirakawa has often warned others in Basel about the effectiveness of easy money policies, according to people familiar with his statements. That hesitance has made the BOJ an issue in Sunday's Japan elections. Shinzo Abe, the front-runner to become prime minister, has promised to rein in the BOJ's independence and demand more aggressive efforts to end consumer price deflation.

But as central bankers grapple with doubts and disagreements over reviving the global economy, they form a tightknit fraternity, tied by efforts to manage growth and gird against financial instability. Their relationships play out during conversations by phone and in person.

"A big secret of central bank cooperation," Mr. King said, "is that you can just pick up a phone and have an agreement on something very quickly" in a crisis.

This summer, the central banking clique kept in close touch as they readied for a new round of monetary activism. On June 8, Mr. Bernanke and Mr. King spoke by phone for a half-hour before policy meetings at their central banks, according to Mr. Bernanke's phone records, obtained in a public records request. A few days later, Mr. Bernanke spoke by phone with Mark Carney, head of the Bank of Canada—and last month named as Mr. King's successor. Shortly after, Mr. Bernanke called Stanley Fischer, head of the Bank of Israel, and a former MIT professor who was Mr. Bernanke's dissertation adviser.

On June 18, Mr. Bernanke had an early morning call from his home on Capitol Hill with Mr. Draghi and Mr. King, according to his phone records, as the men assessed the impact of the Greek election on Europe's financial system.

Two conflicting views tug at the world's central bankers. One view is that central banks haven't done enough to attack economic malaise. The other is that easy-money policies lack sufficient power to help economies and risk triggering runaway inflation or another financial bubble.

In August, tension over the two positions spilled into the open during the Fed's annual retreat in Jackson Hole, Wyo. Adam Posen, who recently finished a four-year term as a member of the Bank of England's monetary policy committee, chastised central bankers for their unwillingness to do more to stimulate their economies because of "self-imposed taboos."

Mr. Posen said central banks should give more help to such weakened markets as U.S. mortgages and European government bonds.

Athanasios Orphanides, another MIT professor who recently finished a term as the head of the central bank of Cyprus, took the opposing view. In the 1970s, he said, central banks sought to return unemployment to low levels of the 1960s. They made the mistake of keeping interest rates too low for too long, he said, yielding inflation instead of full employment. If banks repeat the mistake of overestimating their ability to push unemployment lower, he said, "disaster will follow on the price front."

Mr. Bean, meanwhile, said he worried that current low-interest-rate policies were losing their efficacy, an idea recently echoed by Mr. King. Low rates, he said, might induce less-than-expected business and consumer spending when governments and the private sector are burdened by too much debt.

"There is a lot we don't understand," said Donald Kohn, the Fed's former vice chairman.

Mr. Bernanke sat quietly during the discussion. But he and the other major central bankers were already primed to launch a new monetary onslaught.

A few days later, the ECB announced an agreement to buy bonds of struggling European governments in exchange for a country's adherence to fiscal austerity.

Then the Fed announced plans to buy bonds every month until U.S. job market improves "substantially." The BOJ, despite Mr. Shirakawa's hesitance, soon followed with news it also was expanding its bond-buying program.

Economists at the BIS, meanwhile, have grown more skeptical about the central bank tilt. They say their warnings of a credit bubble were ignored before the financial crisis. "Nobody took it seriously," said William White, formerly the top BIS economist.

Now, he said, the central banks may again be steering toward long-term troubles in their elusive quest for short-term growth.