According to Senator Judd Gregg (R-N.H.), the United States is on its way to becoming a “banana republic” within 10 years.

Wikipedia defines a banana republic as “a country that is politically unstable, dependent on limited agriculture (e.g., bananas), and ruled by a small, self-elected, wealthy and corrupt elite.” Such nations have “a small, leisurely class on the top, and a large, poorly educated and poorly paid working class of peons, though it might have the (fake) trappings of modernity (such as styling itself as a republic with a president, etc.).”

A banana republic “typically has large wealth inequities, poor infrastructure, poor schools, a ‘backward’ economy, low capital spending, reliance on foreign capital and money printing, budget deficits, and a weakening currency. Banana republics are typically also highly prone to revolutions and coups.”

Sen. Gregg used the term yesterday to warn about this country’s fiscal situation, singling out federal spending on the “cash for clunkers” program, which offers $4,500 in federal dollars to those who will trade in old cars for newer, fuel-efficient models. Gregg observed that this program just adds to the sum total of escalating federal spending. Gregg stated, “I just can’t understand why we would set up a program that says, ‘We’re going to give you $4,500,’ and then give the bill to your children.”

He is right, but unfortunately, “cash for clunkers” barely scratches the surface.

Jim Panyard, retired president and CEO of the Pennsylvania Manufacturers Association, recently collected the following data.

As of June 2009, 155 million people are laboring in a shrinking private sector, earning average annual per capita incomes of $39,751 and average household incomes of $50,740. Obviously, there are far more people below those averages than there are above them.

They are supporting themselves while also supporting 22.5 million local, state, and federal employees. The average federal employee will be paid $75,419 this year. Panyard observed that in his home state of Pennsylvania, the average state employee will make $68,000 this year.

Those working are also supporting: 3.9 million welfare recipients; 46.5 million Social Security recipients (a number that will rise steadily as baby boomers retire and begin collecting); 14.7 million Americans drawing unemployment benefits; 47 million Medicaid and 42 million Medicare recipients; the Afghanistan and Iraq Wars; and the other programs that federal, state, and local governments arrogate for themselves, even if the private sector could do it more efficiently.

These numbers suggest very strongly that we have a system that cannot take on much more without collapsing under the weight of its own commitments. Government has only three options: (1) raise taxes, which would be politically suicidal as it would amount to the biggest tax increase ever; (2) print more dollars and eventually risk a hyperinflationary spiral; or (3) borrow from overseas investors who are already uneasy with the falling value of our currency.

Currently, the United States is pursuing a combination of the second and third options. Neither is sustainable in the long run; any of these courses of actions risks precipitating a crisis situation that would prompt crisis measures from those pulling the levers of government and banking. The latter would indeed finish transforming our one-time constitutional republic into a banana republic, as what is left of our middle class is destroyed and the super-elite consolidates its power.

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still free said:

	Thanks, Senator Gregg For having the guts to "tell it like it is" ... all so ugly, but all so true. We must turn the ship around.
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August 05, 2009
Votes: +13

Flu-Bird said:

	NAU Why else are they allowing all these illegal aliens in its all part of the sinister NORTH AMERICAN UNION(NAU)and the evil CFR
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August 05, 2009
Votes: +3

David Klepinger said:

Take back our government, starting with the tax code! There is only one reason we are in this situation, and that's because we, the American people, allow the federal government to seize more and more power from the states. It's time to take back our government, and one very good way to do that is to replace the income tax with a progressive national retail sales tax. Your member of congress may not like the idea, and neither will the lobbyists that trade votes for support, the kind of support that strengthens the elite class noted above. Come and join us at www.fairtax.org.

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August 09, 2009 | url
Votes: +49

Felix Bearden said:

David is Right, But... Having supported the NRST/FairTax for over 25 years, I would like to see the FairTax implemented. The FairTax has all of the advantages that would turn our economy around should it be adopted. Now, I am concerned that we are headed for a national emergency that will require the government to adopt the NRST in order to survive. (By the way, David, I wouldn't characterise the FairTax as "Progressive") My concern is that the Fed is printing un-backed money to satisfy the out-of-control spending of the congress. The logical conclusion is that the Fed will start printing money to pay our debts like we tried in the 1930s. Once it is obvious what we are doing, the fluctuation of the dollar with respect to other currencies will confirm that the United States is a "banana" republic. We may want to consider tying the dollar to something of value rather than the hot-air balloon of "change".

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August 09, 2009 | url
Votes: +19

Lawrence Klepinger said:

Look a Little Deeper then What's on the Surface Yes, the monetary situation is of immediate concern, but dig a little deeper and you might see the reason why. We are heading in the exact same direction as we were in the 1930s. Afghanistan - and all out war. There are now 70,000 troops in that country, with another 150,000 slated for departure in the next 18 months. Funny, but the "news media" is eerily silent on this subject. Once the STATISTICAL unemployment rate hits 15%, people will be more inclined to "enlist" in the military. What better way to build up an "all-volunteer" fighting force, and then put them to work in Afghanistan - and then Pakistan. Does this sound "too far out?" I don't think so. There is still a lot of controversy about whether FDR was aware of the attack on Pearl Harbor, or not. Are we setting ourselves up for World War III? I hope not. But remember one fact. Every MALE in America, once he attains the age of 18, is STILL required, by law, to register with the Selective Service Board. If you don't believe me, you can pick up the form at your local United States Post Office. The monetary debt that America is piling up will disappear once war is declared. It happened in the 1930s and it will happen again in very short order. But don't be too concerned with the money problem. Be more worried about waving good-bye to our children - and grandchildren - as they are marched off to war to fight for the elite class that now controls America - and the better part of the globe. Napoleon once opined that, "A bayonet is a weapon with a worker at both ends." What better way to cull the population of the "unwashed" masses. History doesn't repeat itself. People do.

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August 09, 2009
Votes: +5

David Klepinger said:

Why the FairTax is progressive Thank you, Felix, for your input. The reason that the FairTax should be characterized as progressive is that if it is implemented as written, that is, complete with a pre-bate, it cannot be characterized as regressive in nature. With all families being compensated for the tax burden related to spending up to the poverty level, the effective tax rate increases as spending increases. This is the nature of a progressive tax.

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August 09, 2009 | url
Votes: +23

capo said:

	We are an empire now One thing a banana republic does not have is soldiers and military outposts in over 100 foreign countries and across the seven seas. The 50 states of America are indeed moving quickly to banana status. However, the backing we get from our satraps and those working under them is keeping the show on the road for now...
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August 10, 2009
Votes: +0

Felix Bearden said:

More on my parenthetical comment. Sorry David, I am probably over-sensitive to the word progressive, "a political and social term that refers to ideologies and movements favoring or advocating changes or reform, usually in a statist or egalitarian direction for economic policies (government management)", than your meaning, "a progressive tax, where the tax rate increases as the amount subject to taxation increases". I prefer the term "proportional" and in my discussions handle the pre-bate differently. I was there (involved in NRST) when the pre-bate was introduced and its effect is to make the result over the full range of taxpayers only slightly "progressive" mathematically as compared with the FairTax/NRST without the pre-bate. As I recall, the primary purpose of the pre-bate was to remove the tax burden from all families below the poverty level. That it makes the FairTax/NRST slightly progressive was adopted to counter arguments that the FairTax/NRST is regressive. Since one of the objectives of the FairTax-NRST is to encourage investment, my hope is that it results in a more proportional than the current "progressive" code. Investment is what we need to create jobs! Not a "progressive" tax code.

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August 11, 2009 | url
Votes: +6

Felix Bearden said:

But...About the nits! However, are we not picking nits here? David's original point "Take back our government, starting with the tax code!" is what is important. If we do that, we can realize the benefits of the FairTax. Hopefully, we have time to reverse the current trend. Note that even the shortfall of revenues in 2008 and 2009 to the Federal Government would be ameliorated by the FairTax. What better way to use stimulus money than in starting up the FairTax pre-bate checks instead of bailing out or taking over failing companies, giving bonuses to managers who haven't performed, money to banks to continue making bad real estate loans, and government jobs to people who don't pay their taxes? (Another note: Under the FairTax, it would be more difficult to avoid paying their taxes) Aside from the immediate financial benefits to our citizens, how many entrepreneurs would be encouraged to start businesses if they knew that they would not be burdened with FICA, Corporate Income Tax, and accounting for all of their employees income and taxes, that their employees could be paid 100% for their services rather than withholding FICA, and Income tax?

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August 11, 2009 | url
Votes: +15

Bacsi said:

Taxes: Cut to the Chase The Federal Government has no Constitutional authority to levy personal income taxes. If you wish to "Take back our government, starting with the tax code!" then you remove what was illegally implemented in the first place. Don't waste time trying to make what is illegal a little more palatable to those it has been forced on - it's too little too late. In any case your priorities are wrong as the tax code is the least of our worries right now as we stand on the edge of civil war.

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August 12, 2009
Votes: -3

Fascism can still be defeated., Lowly rated comment [Show]

Dan Tolleson said:

The FairTax bill fails to abolish the Federal Reserve The Federal Reserve must be abolished in order to stop the debasement of our currency. Congress must, once again, exercise its enumerated power "To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures" (Article II, Section . Congress used to exercise this enumerated power to coin money and regulate its value (the U.S. Mint would simply assay the purity of the metal and standardize the weight and value of coins) in the early days of our constitutional republic, and the result was economic prosperity that the world had never seen. However, in 1913, certain politicians and bankers cut a deal to create the Federal Reserve, which would, in time, be legally allowed to print paper money with no precious metal backing at all, so that the politicians would have more money to spend WITHOUT raising taxes, and the bankers would profit from the interest generated by the fiat money they printed. If we fail to abolish the Federal Reserve soon, we will learn, through first-hand experience, what hyperinflation is really like. The proposed FairTax bill would merely replace the federal income tax with a graduated federal sales tax on retail purchases. The FairTax bill would do absolutely NOTHING about the Federal Reserve, which could and would continue debasing the currency at will. You see, David and Felix, the federal government doesn't have to raise income tax rates -- or, if the FairTax were to pass, the sales tax rate -- for the Federal Reserve to print more money out of thin air. So, my fellow citizens -- Let's get our priorities straight: First, the Federal Reserve must be abolished to stop the debasement of our currency. Then, we can deliberate on how to tax ourselves.

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August 14, 2009
Votes: +1

Dan Tolleson said:

HOW to abolish the Federal Reserve? HOW do we abolish the Federal Reserve? In "The Creature from Jekyll Island," pages 574 through 577, G. Edward Griffin provides a 16-point plan to abolish the Federal Reserve, re-introduce real dollars backed with silver (a standard used by Congress early in our history, when our economy was still free of currency debasement), reduce the size and scope of government, and restore our national independence. This 16-point plan is THE permanent solution to our economic woes, and the only way forward to economic prosperity and national independence. If you do nothing else, copy those pages from his book, read, and become familiar with them. Then, pick up the phone and call your federal legislators. If they won't listen, then find a candidate who will. Or -- if you can -- run for office yourself! As the Fed continues to inflate our currency ever more rapidly, the time remaining for action to save our country -- before it's too late to avoid hyperinflation -- can be measured in months. Please get busy on this -- now. Permission granted to forward this message (except for the minor error in the first half of this two-part message: "Article I, Section 8") to any and all American citizens.

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August 14, 2009
Votes: +3

Adam Yomtov said:

Volunteer New York State Director The FairTax has so many overwhelming positive benefits. Can you imagine freeing up the 7.6 billion hours in trying to comply with our federal income tax code? This translates into 3.8 million individuals working 40 hours a week, 52 weeks a year. Don’t you believe we can do something better with our time? Taxpayer Advocate Service — 2008 Annual Report to Congress — Volume One 3 The United States of America used to be in the late 1800’s, early 1900’s the manufacturing powerhouse of the world. Not anymore. Why? Because, our federal income tax code has created such a complicated environment to operate in, thus forcing manufacturing out of the US. The result is we have to borrow from foreign countries and also practice the absurdity of printing money because we don’t produce enough. How long do you believe the USA can survive operating on a house of cards? The difficulty of “transitioning” argument is bogus. Why? Each and every year we have to transition due to all of the changes in the tax code. There have been over 15,000 changes to the tax code since 1986. Transitioning to the FairTax is a Kindergarden task in comparison to what we currently have to deal with. Please www.fairtax.org for further info.

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August 18, 2009 | url
Votes: +14

Fred Yde said:

... We are already paying the FairTax. We're just collecting it inefficiently, and unfairly, with relative idiots holding the pursestrings of the country's treasury. People who will never understand what the Federal Reserve does, will eventually get what the FairTax brings them. I think Mr Tolleson's points are valid, except that once we get our treasury under control, the only people who will need the Federal Reserve will be the big bankers....oh, that's right! I forgot, those are the only people who "need" it now. As a country we do need the FairTax ...and we need it now!

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August 18, 2009
Votes: +12

Michael Kersh said:

FairTax debate Dan Tolleson should keep things in perspective. Tax Law has nothing to do with how currency is valued --- only how it is collected. We definitely must have the FairTax implemented in order to survive as a Nation of free people. What we do about the Fed banking system is another matter and we should deal with it as well. However, our immediate need is to replace the current IRS income tax system with the FairTax, post haste. I've enjoyed both David's and Felix's comments. Very educational. Would like to see us expand these discussions to wider audience exposure, such as Face Book. FairTax all the way. "If you want to remain in Slavery, support the Income Tax. If you want to break Free of Slavery, support the FairTax." Check it out. Volunteer at www.fairtax.org

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August 18, 2009
Votes: +12

FairTaxNation said:

	FairTax would return power back to the US citizen. Is Senator Gregg a cosponsor? I hope so because we need leaders who lead more than we need pols who preach.
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August 19, 2009 | url
Votes: +12

Dan Tolleson said:

One more time . . . Let me try again, for those of you who may not have read carefully what I said earlier: "The FairTax bill would do absolutely NOTHING about the Federal Reserve, which could and would continue debasing the currency at will." Furthermore, if we don't abolish the Federal Reserve soon, if we allow the Federal Reserve to continue to exercise the unconstitutional power to print increasingly worthless paper money until the economy is broken beyond repair -- we've lost our constitutional republic. Yes, we should also abolish the economically debilitating federal income tax. Yes, the FairTax, if passed, would provide many benefits -- although it would not quickly reduce the size of the federal government within its constitutional bounds. A return to a smaller, constitutional federal government supported by tariffs, as it was before 1913, would be even better. But -- if we don't abolish the Federal Reserve and return to a sound currency that can't be inflated -- we will quickly lose our liberty as hyperinflation finishes off what is left of the economic strength of this country. So, you should now be able to understand why I made this decisive point: "Let's get our priorities straight: First, the Federal Reserve must be abolished to stop the debasement of our currency. Then, we can deliberate on how to tax ourselves." Is the reason for the ordering of these two priorities clear now?

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August 19, 2009
Votes: +1

Phil Hoffman said:

... As preveously stated, we are printing money without value. Un fortunately we have been doing this since President Nixon ( I believe ) took us off the gold statdard. What we need is (1) INSTITUTE THE fair tax (2) GET RID OF THE FED ( THE CONSTITUTION STATES WHO CAN ISSUE COIN AND DETERMINE ITS VALUE , IT'S NOT THE FED) (3) Rid ourselves of the 16th and 17th ammendments to the constitution. and last but not least , follow the 10th and 14th ammendments to the Constitution of the UNITED STATES. Get Back on the gold standard and give the US dollar international value.

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August 20, 2009
Votes: +2