Submitted by Goldbug, Jan 15, 2008 00:55

When in the Carter Administration, Robert Rubin advocated putting the entire national debt of the United States in short-term notes in order to reduce the size of the deficit. This was especially important as Carter's appointees to the Federal Reserve Board had been printing money nearly as madly as Weimar Germany, and interest rates were skyrocketing. President Reagan came into office when the prime interest rate was over 21%, and the entire national debt was coming due during his first term.

Treasury Secretary Regan and others had a great deal of very expensive work to do to get us out from that mess, and it involved not only slashing the size of the federal workforce (no other president has done that since post-WWII, no matter what some claim), but also re-negotiating federal contracts because his tax cuts and monetary policy ended the hyperinflation. But the painful part was changing federal notes and short-term bonds into responsible debt instruments. With interest rates so high, taxpayers had to pay a high price to correct the results of Carter's and Rubin's political chicanery. Yet do you hear about that in the laughable claims about deficits under Reagan? Of course not.

Rubin did the same thing as Treasury Sec'y under Clinton, and Bush had to correct that fraud. And fraud it is. Money supply increases in double-digits every single year, reported as economic growth. We've had to pay for that in the declining dollar, and the stock collapse and now housing. It's not clear that Bush or Sec'y Paulson are fully aware of what happened, but the Fed has certainly been less expansionist during this presidency. We'll see how it all works out, but the media coverage is typically exactly the opposite of the truth.

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