The Three Biggest Lies the Government Is Telling You
by Charles Goyette: I
Wouldn’t Hire Ron Paul…
lies are legion.
many are its lies, that narrowing them down to three of the most
important is a demanding task. But our current crisis has been chiefly
enabled by monetary policy, fiscal policy, and the global military
empire. So I have chosen to focus on lies about each: the Federal
Reserve, the orchestrator of monetary policy; the U.S. budget, the
accounting of government fiscal policy; and a few of the Empire’s
war lies. I am sharing just a smattering of this astonishing record
of duplicity in these areas, for life is short, or at least far
too short to recount all of the state’s lies about each.
#1: The Federal Reserve Is a Bank
everything the government says about banking is a lie. Central banks
are not banks. The Federal Reserve, the central bank of the United
States, is not a bank.
A bank is a
company in the free economy that competes with other banks offering
willing customers a safe place to make deposits and earn an interest
rate return, while also competing to offer loans from those deposits
to willing borrowers.
are government-created bureaucracies that do nothing of the sort.
Reserve is typical of central banks. It is not a free market institution
in which people willingly make deposits. Instead, it wields monopoly
power over actual banks. In place of managing deposits and loans
of its own, it creates money out of nothing by a variety of means
including debt monetization, in which it buys government debt by
simply creating a credit in the account of a commercial bank with
nothing more than a booking entry. This is an act made possible
only by the state’s grant of a legal monopoly empowering the central
bank to do what, if done by a private bank, would be a crime called
thus have the ability to unilaterally boom and bust their economies
at will. And they have done so throughout their history, either
to the benefit of the commercial bank cartels, in response to political
pressure, or because of outright economic ineptitude .
Lew Rockwell.com about the myth that the Federal Reserve is a "bank,"
and independent, finance professor Michael Rozeff describes a central
bank as a government’s "fiat money bureau." "It is
held up by the force of government law and power. It is imposed
on the public."
of them as actual banks produces confusion in which central banks
are said to earn "profits." For example, a January, 2012
Federal Reserve press release reporting its "earnings,"
announced $76.9 billion in 2011 net income. This was described in
the New York Times and the Financial Times as the
Fed’s "profits," just as though it were the annual report
of any commercial bank’s profits.
Yet in what
sense does the Fed show a "profit" or have "earnings"?
It is as inappropriate as describing the collections of the Internal
Revenue Service as "profits."
Where are these
Federal Reserve "profits" derived? They are the result
of printing new dollars to buy assets; that is, they are the result
of diluting the purchasing power of every dollar you or anyone else
has. It is not any different than a dairy watering down 100 gallons
of milk to sell 110 gallons. It is fraud. But it is a fraud legalized
by act of Congress.
But the Federal
Reserve is not alone. Another non-bank is the World Bank which loans
money to governments and government enterprises. The World Bank
has been a useful place to pasture failed U.S. government warmongers
like the disastrous Vietnam War Secretary of Defense Robert Strange
McNamara and Iraq war co-author Paul Wolfowitz. Both were named
World Bank presidents even as their deadly wars raged on.
The World Bank
gets almost all of its money by way of the International Bank for
Reconstruction and Development (IBRD),( also not a bank), which
gets its money from taxes, the largest share coming from the American
people. The IBRD also sells World Bank bonds, but they too are guaranteed
dollars go to other multi-national organizations such as the Asian
Development Bank, the African Development Bank and the Inter-American
None of which
#2: War Lies
and politicians lies incessantly about war. They lie about the cause
of war. They lie about the threat of war. They lie about the cost
of war. And they lie about their lies about war.
lie relentlessly about war. Just in the last fifty years the people
have been lied to about U.S. government wars from Vietnam to Iraq.
The Gulf of
Tonkin incident, a purported attack on U.S. ships by North Vietnam
off its coast, was used by President Johnson (an "unprovoked"
attack he told the nation) to win legislative authority, the Gulf
of Tonkin Resolution, for a war in Vietnam. But it was an incident
that did not happen and Johnson knew it even as he escalated Vietnam
into the full-blown blood bath it became. "Hell," he told
his secretary of state just a few days after the resolution passed,
"those dumb, stupid sailors were just shooting at flying fish!"
Lying is so
intrinsic to the nature of government, that even the truth about
old lies is concealed to protect new lies. In 2001, a National Security
Agency study found that officials had actually doctored documents
in covering up the truth about the Tonkin Gulf incident, the bogus
war pretext that led to the needless deaths of millions of human
beings. But the new report of that old cover-up was itself delayed
for years for fear that it’s release would cast doubt on the intelligence
that the Bush administrations was using to justify an invasion of
In the case
of the Iraq war, not only did defense Secretary Donald Rumsfeld
lie about knowing where the non-existent weapons of mass destruction
were in Iraq ("We know where they are. They're in the area
around Tikrit and Baghdad and east, west, south and north somewhat."),
in a later exchange with my friend former CIA senior analyst Ray
McGovern, Rumsfeld even denied he had made such a claim.
Dick Cheney said of the mythical WMDs in August of 2002, "there
is no doubt that Saddam Hussein now has weapons of mass destruction."
"We know for a fact," said White House Press Secretary Ari Fleischer
in January of 2003, "that there are weapons there." "We know that
Saddam Hussein is determined to keep his weapons of mass destruction,"
said Colin Powell in February of 2003, "is determined to make more."
can be counted on to lie about the costs of war. Lawrence Lindsey,
a Bush administration economist, was fired for suggesting in advance
that the Iraq war would cost $100 billion to $200 billion. Although
estimates in the trillions of dollars would have been closer, Rumsfeld
called Lindsey’s estimate "baloney."
tries to conceal spending by keeping it off the budget books with
supplementary, appropriations and emergency measures. It even spreads
war costs off of the defense department budget and into the budget
of other departments such as state and energy.
I have written
more about government’s war lies in my new book Red
and Blue and Broke All Over: Restoring America’s Free Economy,
but must finish the point here with a reminder of the government’s
lies about the case of Jessica Lynch, and about the way the government
lied about the killing of Pat Tillman and even lied about lying
about its lies about his death.
was a 19-year-old clerk when her company was ambushed in Iraq after
taking a wrong turn. She suffered injuries when her Humvee overturned
and was taken by Iraqi soldiers to a nearby hospital. Although she
suffered injuries when her Humvee overturned, "U.S. officials"
reported that Lynch had gone down fighting and had been both shot
and stabbed in action, and later even slapped around as he was interrogated
on her hospital bed.
The truth is
she had no such wounds. She had never fired her weapon, and, by
her own account, was well cared for in the Iraqi hospital. Although
the Iraqi doctor who had cared for her tried himself to turn her
over to the Americans, the Pentagon, with a propaganda campaign
in mind and camera’s rolling, staged a dramatic raid from helicopters
to "rescue" Lynch. The video was edited up in no time
and released by a Pentagon anxious to have a heroic feel-good war
narrative to relate. But of course the Pentagon refused a request
to release the full video of the "rescue" to clear up
discrepancies in its account.
While the Pentagon
is perfectly capable of lying on its own initiative, members of
congress pressured the Pentagon to award Lynch the Medal of Honor,
even before an investigation was complete, saying it would be "good
for women in the military."
killed in action in Afghanistan, was posthumously awarded the Silver
Star, a combat honor given for valor in action against an enemy.
But there was no encounter with the enemy. Tillman was shot to death
by his fellow soldiers. This was carefully concealed with fraudulent
accounts of the incident.
prints were all over the cover-up about Tillman’s death. General
John Abizaid approved the Silver Star despite knowing within days
of Tillman’s death that he had been shot by "friendly fire."
Lieutenant General Stanley McChrystal cited Tillman for actions
"in the line of devastating enemy fire,"
but the very next day sent a confidential memo about the fratricide
to senior government officials including Abizaid warning them to
protect themselves and President Bush from embarrassment in the
family charged the military with repeatedly lying to them about
his death and about its investigation, as it delayed accounts of
his friendly fire death until after a nationally televised memorial
service orchestrated by the Bush administration. By one account,
his fellow soldiers were even told to lie to the family at Tillman’s
enlistment in the army after the 9/11 attacks was a national sensation.
A good looking NFL player, Tillman gave up a multi-million dollar
football career to join up. Thanks to his popularity, he was like
a recruiting poster for the military. His father claimed that it
was this usefulness to the military that helped drive the cover-up.
"They purposely interfered with the investigation, they covered
it up. I think they thought they could control it, and they realized
that their recruiting efforts were going to go to hell in a handbasket
if the truth about his death got out. They blew up their poster
the original cover-up, in which his comrades even burned the evidence
of his body armor and uniform, was itself covered up. Lt. Gen. Philip
Kensinger was censured by the army for lying to investigators about
Tillman’s death. Pat’s mother, Mary Tillman, said that Kensinger
was just a scapegoat. "There are a lot of people who played
a role in this and they are getting off without any punishment."
She singled out Lt. Gen. Stanley McChrystal and Gen. John Abizaid
not only lies about war, it routinely lies about its lies about
#3: The Real U.S. Debt
This may be
the most brazen and transparent lie of all, the one about the U.S.
national debt, now over $15 trillion dollars. It is a number that
hides the severity of our situation.
acts as though that is the real debt of the nation. Politicians
posture for weeks at a time about it, devoting long debates to raising
the ceiling on this visible portion of the national debt.
And yet the
real federal debt is much, much larger and like an iceberg below
the water line, most of it is hidden out of sight. And like the
Titanic, Republicans and Democrats have the country headed for a
tragic collision with economic reality.
Each year the
federal government makes new promises and takes on trillions in
new financial obligations that do not show up in the visible, official
national debt. The persistent growth of these hidden debts each
year far outpaces the increases in the visible debt. In 2010 for
example, the visible federal debt grew by an astonishing $1.5 trillion.
But the hidden debt – out of sight and without debate – grew by
more than $5 trillion!
When a private
business takes on an obligation to pay something, it is required
to report it as a liability. It shows up on the books. Not so for
the state. This allows politicians to blithely make promises without
adequate revenue to pay for them. It is easy to understand why this
practice should persist. Giving things to constituents feels good.
Making them pay for those things causes politicians to suffer pain.
Like most living creatures, politicians like to feel good and avoid
pain. So when they add to the obligations of the state, when politicians
make commitments for the future or promise entitlements like Social
Security and Medicare to win re-election, the means to pay are often
inadequate. But there is no such thing as a free lunch, which is
to say, that the cost will have to be borne eventually by somebody.
For the time being though, the preferred political expediency is
keeping the costs, the liabilities, off the books.
are the difference between a program’s projected costs and its projected
revenues, both valued in today’s dollars.
Social Security both have promised benefits that outrace revenue
streams. They are the largest components of the government’s unfunded
liabilities, the hidden debt of the nation. But there are other
federal retirement programs with not merely inadequate funding like
Medicare and Social Security, but with no revenue streams of their
own at all. Among them are retirement programs for military and
2011, USA Today analyzed dozens of overlapping programs for
retired federal workers. It reported that despite the existing debt
crisis, Congress continues to add to the promised benefits, so that
retirement programs now have a $5.7 trillion unfunded liability.
sums up its report on the retirement programs this way:
are legally required to put money into pension funds to match
retirement promises. Private pensions have $2.3 trillion in stocks,
bonds, real estate and other assets. State and local governments
have $3 trillion in retirement funds.
government has nothing set aside.
The total unfunded
liabilities of the U.S. government have been calculated with a number
of present value and discount models. Results of the shortfall from
these methods range from about $70 trillion to $120 trillion dollars.
For a family of four this represents a liability between $900,000
and $1.5 million. (You can follow the debt as it adds up at www.USdebt.org.)
What does the
state say about its unfunded liabilities? Here’s a response from
the Congressional Budget Office, which answers, "… no government
obligation can be truly considered ‘unfunded’ because of the U.S.
government's sovereign power to tax – which is the ultimate resource
to meet its obligations."
That is utter
hooey. It conjures up an absurdity in which the government could
meet its obligation by sending you a Social Security check, even
as it raises a tax to take 100 percent of everything you get from
Social Security. The reason that is an absurdity is that it is a
two-step process to do what the government will do in just one step.
By means either overt (legislative act) or covert (currency destruction),
it will unilaterally reduce its "obligation," leaving
millions of people betrayed.
is the government. And it lies about its obligations.
Just like it
lies about everything else.
© 2012 Charles Goyette
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