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by Ron Ewart, ©2010

Is a complete economic collapse inevitable?

(Nov. 26, 2010) — In several of our previous articles we have issued the following admonition: “YOUR MONEY IS GOVERNMENT’S MAJOR POWER OVER YOU:  The first power that government has over you is YOUR perception that YOUR money is their money.  The second power that government has over you is by using the money they take from you by force of law, against you.  The third power that government has over you is that you will religiously obey their laws.”

“Only when the people realize that their tax money is being used to environmentally enslave them; only when the people realize that their tax money is being used to “feed” a growing population of other people dipping their bills in the government “pig trough” and those “takers” voting for those very same politicians that take our tax money by force to keep the “trough” full; only when the people realize that their tax money is being spent to brainwash and indoctrinate their school and college-age children in the ways of socialism, multiculturalism, radical environmentalism, collectivism and one-world-government; only when the people realize that their government is using their tax money to merge America into the one-world-order; only when the people realize that the only way to stop this attempted conquest of American freedom and sovereignty is to resist government, en masse, in every legal way possible.  Only then will we reclaim our freedom.”

Another Failing Government Program which could trigger further economic collapse:

The U. S. Department of Education (ED) is “buying off” the American public education system with your tax money.  Here is the ED’s mission statement:

ED’s mission is to promote student achievement and preparation for global competitiveness by fostering educational excellence and ensuring equal access. ED’s 4,200 employees and $63.7 billion budget are dedicated to:

  • Establishing policies on federal financial aid for education, and distributing as well as monitoring those funds.
  • Collecting data on America’s schools and disseminating research.
  • Focusing national attention on key educational issues.
  • Prohibiting discrimination and ensuring equal access to education.

Au contraire!  Student achievement, educational excellence, equal access and global competitiveness my aunt Fanny!  Their mission is to completely take over public education in America and “shape” it into their distorted vision of equality and fairness with one goal in mind ….. to brainwash and indoctrinate our children into mindless robots that will be good, loyal and docile members of the collective and will vote for liberals of any stripe.  The Department is loaded with so-called psychological experts, educated idiots and career bureaucrats that have a lot of money to spend and by God they are going to spend it, even if no substantial benefits are realized.

The proposed 2011 budget of $63.7 billion is a 31% increase from the 2010 budget, as requested by Obama.  Talk about run-away spending, this is just another prime example.  What the ED does with this money is telling indeed. From their own website budget page, here are some line items from the 2011 budget summary that SHOULD curl your hair:

  1. $1.35 billion for additional Race to the Top awards
  2. $500 million to continue the new Investing in Innovation (i3) program
  3. $900 million for a reauthorized School Turnaround Grants program,
  4. $405 million for Teacher and Leader Pathways
  5. $1.0 billion for Effective Teaching and Learning for a Complete Education
  6. $490 million for Expanding Educational Options
  7. $450 million for a reauthorized Assessing Achievement authority
  8. $210 million to expand the Promise Neighborhoods initiative
  9. $410 million for a new Successful, Safe, and Healthy Students authority
  10. $7.5 billion over 10 years to expand income-based repayment options
  11. $1 Billion ESEA Contingent Reserve
  12. Pending Student Aid and Fiscal Responsibility Act (SAFRA) (This is where the U. S. Government nationalized the student loan program)

There are even more line items with more billions and we could go on, but it gets boring and as Glenn Beck says, “blood will start to shoot out of your eyes” if we provided any more.  This is no little, benign government agency. What it boils down to is the complete nationalization of the American public education system, and it has been in the works since 1980, if not longer.  Like all government bureaucracies, their budget and number of employees grows exponentially every year.   It aids and abets an increase in union power with teachers and nationalizes the public education curriculum.  Local control is gone, dead, “fini” and centralized; top-down power is set in stone, which is exactly what those on the socialist side of government want.

A couple of presidents and those on the Republican side of the aisle have tried to “kill” the Department of Education, but never had enough Democrat votes to do it.  Democrats like big government.  The bigger the better.

But what worries us the most, besides the massive government spending on an unconstitutional government agency, is the “Student Aid and Fiscal Responsibility Act” (SAFRA) which was just recently passed by the Congress and signed into law by Obama.

So we will start with an analogy.

Let’s say you are an investor and you invest a million dollars in a bank that grants loans to people for houses, cars and maybe even student loans.  The bank has a fiduciary relationship with you to properly manage and protect your investment …… doesn’t it?  In normal circumstances, yes.

But let’s just say that the bank managers are a bunch of liberal/progressives (many are) and they hate to see good people have financial difficulties.  From this irrationally compassionate perspective they start “forgiving” the borrowers of the bank’s (and your) money.  This “do-gooder” approach to lending eventually leads the bank having to file for bankruptcy.  Now if you are a secured investor, you might get some of your money back if the bank has any money after all of the assets are sold off, if it has any assets to sell.  Does any of this sound familiar?

Using this analogy, let’s compare it to the Community Reinvestment Act passed by Congress in 1977 under Public Law 95-128 and re-enforced by President Clinton in the 1990’s.  This act was another massive  theft of the public treasury by the liberal/progressive agenda to promise home loans to people who couldn’t afford to pay the loans back, mostly in big cities.  It was hugely successful; by that we mean that millions of loans were granted to unqualified buyers and the banks and Wall Street raked in huge fees and profits and made out like bandits.  Fannie Mae and Freddie Mac (corrupt quasi-government agencies) guaranteed the loans, which were backed up by the taxpayer’s wallet.  A large percentage of the loans went south and the subprime avalanche was triggered.  The resulting financial meltdown led to $700 billion in TARP funds that were used to bail out the banks, Wall Street and Fannie and Freddie and further led to Obama’s irresponsible $787 billion “Stimulus” bill and a whole host of other nationalizations and bailouts, all funded by the American taxpayer, to save us from impending financial doom, a man-made event lying at the doorstep of the Congress and the resident of the White House.

You may ask, what does the subprime meltdown have to do with the U. S. Department of Education?  The answer is a direct connection.

As many of us know, the government took over and is now going to administer the student loan program, ostensibly to save money because the bankers were getting rich off the program.  The new, government-administered student loan program falls under the purview of the Department of Education. So now, the U. S. Government is going to be in charge of “screening” (that’s a laugh) applicants for student loans, over 2.5 million of them, according to their projections.

Most of us know how bureaucratic programs work, especially federal programs.  First, a giant, expensive bureaucracy is formed to administer the student loans and staffed by thousands of high-paid government employees, with a multi-billion dollar federal budget to run it.  Second, there is massive waste, fraud and abuse.   Third, and it’s a given, government will start forgiving loans to people who can’t pay them back.  They always do.  They even forgive nations which can’t pay our loans back.   If you will agree that your taxes (a forced investment) are paying for the “forgiven” loans, can you not then see the connection between the one-million dollar investor to our fictitious bank that is “forgiving” loans to people who can’t, or won’t, pay them back?  You, the taxpayer, are the duped investor without a full disclosure from the government of the risks of your investment.  And to make matters worse, you were forced to invest (taxes). It wasn’t your choice to invest, whether you were aware of the risks or not.

It is plain to see that when (not if) government starts to forgive student loans to people who can’t pay them back (government is so magnanimous with our money), just as the government encouraged banks to provide home loans to people who couldn’t pay their home loans back, a similar scenario could be set up for another government-triggered financial collapse, leading America closer and closer to national bankruptcy, if it isn’t there already.

Now you would think that the Federal Government has a fiduciary obligation to manage your investment (tax money) carefully, but they don’t.  In fact, they waste billions, if not trillions, of your tax money with the “sweep” of their collective hands, or by passing negligent, if not unconstitutional, 2,500-page pieces of proposed legislation into law.  Examples abound!  (i.e., TARP, Stimulus, Obamacare, Medicare, Medicaid, Social Security, FDR’s New Deal, bank regulations, un-employment extensions, etc.  The list is almost endless.)

Here are the facts.  There is no constitutional provision that allows the federal government to establish a federal department of education.  There is no constitutional provision that allows the government to get into the student loan business.  They just unilaterally do it and they do it with your money, whether you like it or not.  And they do it to “buy” votes so that they can maintain their hold on perpetual political power.

For these and other reasons the U. S. Department of Education must be dissolved, all employees fired, all programs terminated, including the student loan program, and all leftover budgeted monies returned to the public treasury and then returned to the taxpayer in the form of reduced taxes.  Public education belongs in de-centralized, local hands, not in the hands of a hopelessly corrupt federal government with a devious, if not subversive, agenda.

Finally, all current student loans should be monitored for compliance and aggressively prosecuted if the borrowers don’t pay.  There should be no more forgiveness of student loans.

If the Congress and whomever is in the White House will not scrap the Department of Education, then it is up to each of the states to nullify all directives and obligations, fiscal or otherwise, from them and refuse any monies from the student loan program.  One state (Texas) is making an attempt to do just that by introducing a “Motion to Nullify the Department of Education.”  A copy of the proposed Motion can be found here. If Texas is successful, other states might just follow suit, that is, if they aren’t thirsting after federal tax money because their own educaton budgets are busted by promises they couldn’t keep.

As long as the Federal Government (and even state governments) continue to initiate social programs for the sole purpose of buying votes and redistributing America’s wealth “from those with the greatest capability, to those with the greatest need”, (Karl Marx socialist doctrine) America will go the way of Europe and all other countries that have implemented a socialist government and failed miserably.  Riots and civil unrest will become commonplace in America as government’s promises are withdrawn because it ran out of “other people’s money” and inflation will consume the country as it did in the Weimar Republic, Argentina and Zimbabwe, for much the same reasons.  If you were a “willing” investor in this failed “Company” (and you aren’t because you had no choice) you would sell your stock immediately.  Ah, but you can’t sell your stock, can you?  The “Company” (The U. S. Government) is rapidly going bust and no one will buy what it has to offer because not only is its “product” defective, its “service” stinks, a sure recipe for fiscal failure and ultimate bankruptcy.

We maintain that it is well past time for us “stockholders” to change the chief executive and the “board of directors”.  As stockholders in this failing “Company”, we can do that, but we had better not wait too long or our delay will lead to a particularly nasty form of national hara-kiri where America is financially disemboweled by its own stupidity.  November 2nd, 2010 was a start, but we have a long way to go from there.


Ron Ewart is President of the National Association of Rural Landowners (NARLO)

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  1. Mr. Ewart — You are really too kind to the banksters and our congress critters. Together they colluded to defraud and steal from the American public under the guise of helping more people buy homes. Even under the CRA which lowered required down payments and otherwise eased lending standards, the new homeowners had to pay a mortgage insurance premium to protect against default. But it was the Gramm-Leach-Bliley Act, which gutted Glass-Stegall which allowed for massive fraud. Conventional wisdom says millions of homeowners lied on their loan apps, didn’t understand the loan terms, etc., and generally places full blame on the buyers… But who am I to believe? The homeowners screaming fraud as they wave their copy of the contract desperately trying to show the banksters have fraudulently changed the terms? Or the banksters who destroyed all the contracts and only have the forged docs they created from thin air (so-called robo-docs)??? Unfortunately, most have already lost their homes… and the rest are fighting a losing battle as most cannot afford legal representation, and even when homeowners manage to wage a defense, judges refuse to consider their evidence.

    The banksters and congress created this mess. They created the fake housing bubble, creating unsustainable (fraudulent) demand for an ever-increasing supply, based on fraudulent loans… and when the mess they created blew up in everyone’s faces, WE bailed THEM out. Between FHA, Fannie and Freddie, we now own the vast majority of all mortgages in the nation. Now it’s time to right the wrong.

    LET’S BAIL OURSELVES OUT with principal reductions for EVERYONE. If you owned a home before the market crashed in ’07/’08, you get a principal reduction to current market value. Interest rates on all loans are capped, effectively ending adjustable rate mortgages (which are still killing the housing market). If you still can’t afford to keep your home, you get a one-time relocation fee. If you own your home free-and-clear, then you get a one-time tax credit.

    With virtually all mortgages refinanced, the PROPER AND LEGAL paperwork can be recorded and maintained, and guarantee that all titles are clear once again — Foreclosure-gate fixed…. which leads to further investment in the market, creating healthy, appropriate home values.

    The economy would be greatly stimulated, giving everyone a little more pocket money, and returning their homes to an asset rather than an under-water liability…. it will also stop “strategic foreclosures,” where people buy a comparable home at its much reduced price and walk away from their underwater mortgage… and as people spend more, businesses make more and hire more employees, further stimulating the economy with producers and not users.

    And it would give EVERYONE a break in these tough times, as we taxpayers pay off all these bad mortgages congress and the banksters created, rather than letting the govt pick the winners and losers AGAIN.