Friday, January 1, 2016

James Corbett on Noam Chomsky: Academic Gatekeeper

Corbett is incorrect in suggesting that when the Federal Reserve prints money for the government it pockets the interest paid by the government on the money thus created.

In fact, what happens is this. When the Treasury needs to raise cash other than through taxation, it issues interest bearing bonds to the Federal Reserve, which then deposits the face value in cash in the Government's account. This is so-called "ink money": money conjured out of thin air, not money owned by the Fed.

The bonds thus acquired by the Fed are either then sold on to the public, in which case the cash proceeds are used to wipe the "ink money" off the Fed's books, while interest is paid by the treasury to the holders of its paper; or the bonds are retained by the Fed. In the latter case, interest is paid to the privately owned Federal Reserve, but at the end of each year the Fed refunds to the Treasury the income thus received less its own operating expenses. Thus there is no inappropriate payment to the Federal Reserve for its role in the money printing process.

What is culpable, on the part of the US Government, not the Federal Reserve, is the resort to inflationary finance on a gigantic scale to fund budget deficits, the burden to be paid by the public — especially the little people with cash saving yielding virtually zero interest — by way of the inflation tax. This, however, Chomsky sees as quite a natural normal thing, which on the present scale, it certainly is not. Rather it is a desperate measure to counteract the unending depression induced by the drive for globalization, which entails off-shoring of a large proportion of American manufacturing and services jobs to cheap labor jurisdictions with minimal environmental protection, workplace health and safety standards and low taxes. But Chomsky is oblivious to all this, apparently. A more intelligent observer of the American political scene, Paul Craig Roberts, explains the ongoing process of American self-destruction that has been concealed by the resort to inflationary finance, and hyper-indebtedness.

As for the Kennedy assassination and 9/11, Corbett correctly draws attention to Chomsky's contempt for those who draw attention to significant evidence and make reasonable arguments that call in question the official accounts of these events: accounts that so well serves the interests of the elite.

Why, one wonders, such passion about issues Chomsky is unprepared to discuss? Very odd.

CanSpeccy: Pursuing Truth on the Kennedy Assassinations

CanSpeccy: George de Mohrenschildt, George H.W. Bush, Lee Harvey Oswald and the Assassination of JFK Why Three Kennedys Were Assassinated

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