At microphone, Michael Enright, left, and Chip DiPaula.
By Len Lazarick
Anne Arundel County Council member Jamie Benoit is taking off the entire second half of December from his day job as CEO of Federal Data Systems, not to get ready for Christmas or go skiing, but to lobby the many members of Congress he knows to “fix the debt.”
“This is the time that kicking the can (down the road) has got to stop,” Benoit said at Monday’s launch of the Maryland chapter of “Fix the Debt.” This bi-partisan group has been set up to urge members of Congress to “compromise” and come up with “a grand bargain” that will avoid driving over the “fiscal cliff” of massive tax hikes and budget cuts scheduled for Jan. 1.
The goal is “comprehensive and long-term solution to the debt problem,” said Michael Enright, former chief of staff of Democratic Gov. Martin O’Malley. “The math involved in this is inescapable” and “it will involve pain and sacrifice for all of us.”
Pain and sacrifice for all
“Everyone’s going to have to give a little bit,” said Chip DiPaula, former chief of staff for Republican Gov. Bob Ehrlich.
“This is really the seminal issue of our day,” said Tom McMillen, who left Congress 20 years ago when Democrats and Republicans “worked better together than they do today.” Back then the national debt was 65% of GDP (Gross Domestic Product), and now it is heading toward 100% of the output of goods and services, said the former Democratic congressman.
The group is not offering any specific proposals for a solution, but it was founded by Democrat Erskine Bowles and Republican Alan Simpson, who co-chaired President Obama’s National Commission on Fiscal Responsibility and Reform. The commission did present a detailed plan for tax reform and budget cuts.
Fix the Debt nationally is chaired by former Republican Sen. Judd Gregg of New Hampshire and former Pennsylvania Gov. Ed Rendell.
There are now Fix the Debt chapters in 15 states including Ohio, Florida, Maine, Georgia, Pennsylvania, New Hampshire, Colorado and Tennessee.
“We’re not presenting any answers,” Enright said, but seeking “a collective will to come to a solution.”
“What we’re talking about is a compromise,” said DiPaula. “It’s going to be a collective solution.”
Impact on contractors
If Congress and the president do not agree to a solution by the end of the year, all the Bush tax cuts will expire and large cuts in spending will go into effect, particularly affecting the defense budget and contractors.
“I won’t have to close my doors” as a federal IT contractor, Benoit said, but “I know many in my business that will.”
In an interview, Benoit said he knows smaller contractors who are “walking around ignorant” about the potential impact of the budget cuts. He said most federal contracts have a provision for “termination for convenience” that would allow the government to stop contracts all together or renegotiate them on more favorable terms.
Other members
Other members of Fix the Debt Maryland are Anirban Basu, chairman & CEO Sage Policy Group; Sean Creamer, chief operating officer and executive vice president of Arbitron Inc.; Richard Cross, former speechwriter for Gov. Bob Ehrlich and columnist; Michael Cryor, public relations consultant and former Maryland Democratic Party chairman; Lin Eagan, owner, Lakeview Title Company; Donald Fry, president & CEO of the Greater Baltimore Committee; Wayne Gilchrest, former Republican member of U.S. House of Representatives.
Mary Kane, 2010 Republican nominee for lieutenant governor and former Maryland Secretary of State; Martin Knott, president of Knott Mechanical and chairman, Maryland Economic Development Corporation; Timothy Maloney, attorney and former Member Maryland House of Delegates; Bruce Poole, former majority leader, Maryland House of Delegates; Nicolas Ramos, owner, Arcos Restaurant and CEO, Casas Y Comunidad; Martin Richardson, part-owner, Verde Group; Paul Sheehy, director, Sheehy Auto Stores; Jim Smith, former Baltimore County Executive; Ben Wu, vice chair, US-Asia Institute and former assistant secretary, U.S. Department of Commerce.
Unfortunately most of the points in this article show little very little evidence that people understand the Federal Reserve monetary and banking system.
Listed in the business section of the phone book along with Federal Express, The Federal Reserve system is a privately owned entity, consisting of the central bank in Washington, D.C., the twelve regional reserve banks, all commercial banks with federal charters and some state banks that opted to buy stock in a regional reserve bank. The system is based on the British banking model, using fractional reserve lending it creates 99.92% of our money as debt. With the exception of coins, every dollar in circulation has been borrowed into existence, and will be destroyed as the loan is repaid.
If all debt were paid, the U.S. would have only $40 billion in government minted coins as currency. This dynamic equilibrium could operate on the delicate balance between borrowing and repayment of loans, but interest complicates the picture, turning a would-be equation into a mathematical inequality.
The Federal reserve is based on the British monetary and banking system that creates money as debt. It uses bank credit to supply money as the principal of loans. Creating only the principal of loans, but no money to pay the interest, the loan contracts are impossible to fulfill. So new loans must be made to pay the interest on old loans, and then more loans must be made to pay interest on the interest, compounding debt. The total debt in the economy must double every twenty years to provide a circulating currency.
For example, currently the total debt is about $57 trillion with an annual interest payment of $3.66 trillion. In ten years the interest payments will consume $36.6 trillion and in two decades it will require $73.2 trillion – that is $16.2 trillion more than presently exists.
This banking system exhibits the basic operating plan of a standard Ponzi scheme, one using debt in place of investment.
Solving the debt crisis means abandoning the Federal Reserve banking and monetary system, prohibiting fractional reserve lending as a form of counterfeiting, and replacing Federal reserve currency with American currency issued directly by the U.S. Congress.
As Governor O’Malley knows, 90% of democrats and 80% of all voters say they want wealth inequity reversed and they want corporate accountability as pertains to Rule of Law. These are the top issues for voters in his own party. Not just a majority…..not a supermajority…..but overwhelming consensus. This leads to my point…..why do these pols who think they can take stands that work against their constituents in favor of wealth run as democrats?
How do you reverse wealth inequity? You bring back trillions of dollars in corporate fraud in the defense, health care, and financial industries….enough to pay the entire $14 trillion debt with no taxpayer money involved. You hire millions of unemployed so it is a job creating stimulus and you reinstate Rule of Law in America. There is no downside to that and it meets the priorities of the democratic voters. So, let the Bush Tax cuts end for all and then come back to reinstate middle-class breaks and you have a plan to end the debt in a decade.
Why does O’Malley insist on compromise from a middle/lower class that was shattered by this massive fraud that brought economic collapse? He is a Third Way Reagan Liberal who works for wealth and corporations, or as we say profits over people.