Chapter 3 Federal Debt We are told by the federal government that income taxes are needed to provide services to United States Citizens, like building roads and bridges, and sending checks to those who are on social security, and giving money, food stamps and medical care to those who are on welfare. If that is true, and we are lead to believe that income taxes pay for those services exclusively, then why does the federal government borrow $2 trillion a year to run the federal government? And why does the federal government demand that your employer withhold those income taxes and social security taxes from your paycheck? Income taxes are not needed by the federal government at all. But, the federal government's IRS collected $900 billion in income taxes in 1996 that will never pay off the national debt in full because the federal government cannot afford to pay all of the principal and interest on the $5.5 trillion national debt all at once. In fact, the IRS in Fiscal Year 1996, collected approximately $1.5 trillion, processed more than 200 million tax returns, handled approximately 2 billion documents and assisted more than 118 million taxpayers. Do you want more money? Help me to Abolish Income Taxes! That's right! Help me to Abolish Income Taxes and you will have more money ! If you want more money, please read on ! I started a political party to Abolish Income Taxes. By joining "The Philoeconopolist Party" and electing 290 new members to the U.S. House of Representatives and electing 67 new members to the U.S. Senate for the purpose of passing new tax legislation with a required 2/3rds vote in both the House and the Senate to Abolish Income Taxes, we will be doing ourselves and our Country a big favor. We can do it !!! Because of the income tax, the rich get richer, and the poor get poorer. Americans are collateral for the $5.5 trillion debt the federal government owes. How can Americans be held collateral? The federal government does not depend on income taxes for support !!!!! The federal government's Bureau of the Public Debt (BPD) borrows $2 trillion a year to operate the Federal Government and to account for the resulting debt by selling Treasury bills, notes, and bonds to foreign investors, corporations, banks, State and local governments, and private individuals. The BPD pays interest to investors, and, when the time comes to pay back the loans, the BPD redeems investors' securities. Every time the BPD borrows or pays back money, it affects the outstanding debt of the United States. For 84 years our Congress has taxed us directly and the Public Debt has increased as a result. Our Debt! The federal government has spent our tax dollars without any accountability and will continue to do so until Congress votes to Abolish Income Taxes. Federal government direct taxation of the citizens of the several States MUST be abolished! Who is the government indebted to? 1995 Debt held by the Public $3.7 Trillion $1,683,500,000,000 Corp., finan. inst., and other 45.5% $858,400,000,000 Foreign Investors 23.2% $429,200,000,000 State and local governments 11.6% $377,400,000,000 Federal Reserve Banks 10.2% $351,500,000,000 Private Individuals 9.5% Debt held by the government $1.4 Trillion (I wonder what this is used for?) GROSS DEBT $5.2 TRILLION !!!!! To service foreign-owned debt, the U.S. government must send interest payments abroad, which adds to the income of citizens of other countries rather than U.S. citizens. The reality of the whole matter of the national debt is - there is no national debt at all. In fact, the federal government's budget states that the combined wealth of the federal government and Citizens is $55 trillion. Since we as U.S. Citizens are the government, OUR national debt is only $5.5 trillion. With national assets of $55 trillion, and a national debt of only $5.5 trillion, we as Citizens of the United States have a net worth of $49.5 trillion! And yet, the federal government sent 6,798 American taxpayers to prison during the last 3 years because those Americans tried to defeat the income tax individually. Those Americans failed because they took the wrong approach to solving their income tax problems. What we must do to defeat or get rid of income taxes is to go to the source of the problem - the U.S. Congress. We must vote into Congress 290 U.S. Representatives and 67 U.S. Senators who will vote to Abolish Income Taxes. The Public Debt and the Deficit are NOT the real economic factors that Congress leads you to believe are the two economic factors that affect our economy the most. The Public Debt and the Deficit are two important factors, but not the most important. Why does Congress allow deductions and exemptions on tax returns when all tax money is needed by the federal government? It doesn't make any sense, unless Congress is hiding something from American taxpayers. As long as the federal government can confuse you, the income tax will remain in place. The federal government wants to keep track of you via withholding and the tax return. Why does Congress allow wealthy people to hide their money in Foundations and give them a tax break to boot? I think that the wealthy people are the ones that buy Treasury securities and this is the way the federal government thanks these investors. If you are an employee, you earn wages. The IRS has told your employer to withhold income taxes from your paycheck. Your employer sends your hard-earned money directly to one of the 12 Federal Reserve Banks (FRB), (which are PRIVATE corporations and sometimes called the FED), 4 times a year. The IRS also deposits YOUR money into the FRB. The FRB is NOT a federal agency. In 1996, the Federal Reserve Bank of New York processed an average of nearly $1.6 trillion a day in funds and securities transfers. Aggregated to include all twelve Federal Reserve banks for the entire year, the Fed transferred approximately $418 trillion worth of funds and securities of which the Federal Reserve Bank of New York's portion was $279 trillion. The income of the FRB is derived primarily from the interest on U.S. government securities, fees for check clearing, fees for funds transfers, and fees for automated clearinghouse operations. After it pays its expenses, the FRB takes its 5% cut of the $418 trillion in funds and securities transfers, and deposits the remaining 95% into the U.S. Treasury. Why does the IRS deposit YOUR money directly into the FRB? Isn't the IRS one of the eleven components of the Department of the Treasury, just as the BPD is? YES. Our income taxes pay the INTEREST COSTS !!!!! The increasing interest costs of $355.7 billion overshadows the declining deficit of $22 billion by a margin of almost 11 to 1. Even if there was no deficit, the dollar amount of the gross debt of $5.5 trillion must be reduced to create a surplus to reduce the national debt, but that may not be possible because the interest costs are increasing. Interest costs will eventually be equal to the national receipts of $1.5 trillion in a few years. Interest costs MUST be curtailed by controlling federal spending, borrowing less and financing business startups with non-foreign money. 15 cents out of every federal budget dollar spent is used to pay interest on the debt rather than to finance other public priorities. The following report is the Financial Management Service's (FMS) "1997 Financial Report to the Citizens". Receipts, Spending and Annual Budget Deficit TOTAL SPENDING, 1997: $1.601 TRILLION Major Spending by Category Billion % Social Security $365.3 22.8 Other expenses 300.6 18.8 National defense 270.5 16.9 Interest* 244.0 15.2 Medicare 190.0 11.9 Unemployment, disability, and other income security payments 135.3 8.4 Medicaid 95.6 6.0 * Net "Interest" is the gross interest paid on the Public Debt less (1) interest received on investments of government accounts in federal securities, and (2) interest received on loans made by the government. TOTAL RECEIPTS, 1997: 1.579 TRILLION Receipts by Source Billion % Individual income taxes $737.5 46.7 Social insurance taxes & contributions 539.4 34.1 Corporate income taxes 182.3 11.5 Other receipts 62.9 3.9 Excise taxes 56.9 3.6 ACTUAL RESULTS COMPARED TO BUDGET 2/97 1997 In billions of dollars Budget Actual Total receipts $1,505 $1,579 Total spending 1,631 1,601 ----- ----- Total deficit $126 $22 ==== ==== The Public Debt and Deficit are Congressional Budget smokescreens promulgated by Congress and the Media to hide the REAL economic culprit -- INTEREST COSTS. What I want to know is where is $111.7 billion in interest payments going? 1997 Interest per BPD $355.7 billion 1997 Interest per FMS $244.0 billion ============= $111.7 billion Who is this going to? The only way to stop the spiraling interest costs is to Abolish Income Taxes which will result in an increase in a worker's take-home pay which will benefit the economy by increasing revenue. Who is the IRS collecting for? American taxpayers are not dumb. The IRS should be called the "Foreign Revenue Service". Who is the Federal Reserve Bank really owned by? Take a guess. Now you can see why Corporations control our Congress! Here's another question I have: The BPD borrows $2 trillion, and the IRS collects $1.5 trillion. Where does the remaining $500 billion go? BPD $2,000,000,000,000 IRS $1,500,000,000,000 ======================= $ 500,000,000,000 Where is this going to? My guess is that this money pays the redemption of securities. Actually, if you really think about it, the federal government is taking in: BPD $2,000,000,000,000 Treasury Securities sales IRS $1,500,000,000,000 IRS tax collections ======================= $3,500,000,000,000 TOTAL federal government income If people read Adam Smith's book - "Wealth of Nations", income taxes will disappear in America !!!!! Mr. Smith wrote - "The sole use of money is to circulate consumable goods". That is one secret Mr. Smith reveals in his classic book published in 1776. Unfortunately, most of the 36.5 million Americans who live in poverty today do not know that. When our Congress votes to Abolish Income Taxes, 10% to 15% of all individual's money problems will disappear overnight; 760,000 homeless men, women and children will be off the streets; and 36.5 million people will no longer be living in poverty. People will simply have more money to spend!!! BUT, those in poverty must be willing to start learning about money and taxation and start saving and investing a small portion of their income.