The call for mandatory savings accounts that appeared in the Obama administration's fiscal 2009 budget submitted in February is repeated in the Obama plan for Financial Regulatory Reform submitted in June.

As proposed, it would become mandatory for all employers in business for two years and with 10 or more employees to establish IRA accounts for their workers. While a default payroll deduction of 3 percent is being tossed about by those negotiating the details in Washington, the wording in the Obama reform plan (.pdf) holds out the hope that employees might still end up having the choice to opt out of actually contributing to the IRA account that employers would be forced to open on their behalf:

Under the “Automatic IRA” plan, employers in business for at least two years that have 10 or more employees would be required to offer an automatic IRA option (with opt-out), under which regular payroll-deduction contributions would be made to an IRA. Employers would not have to choose or arrange default investments. Instead, a low-cost, standard type of default investment and a handful of standard, low-cost investment alternatives would be prescribed by statute or regulation.

Time will tell if the bracketed "opt-out" survives the intial legislative process or the certain to follow revisions to any instigating law but, note that, in any case, where the employees' "savings" goes will be "prescibed by statute or regulation." Since transparency is the rage in government circles these days, let's point out what is patently transparent in that clause; The same Goldman Sachs and friends crowd that is running this administration, like the ones preceeding it, are setting up a new payroll tax on wage earners to prop up their financial scams on Wall Street.

Of course, proponents of this plan will argue that this is not a tax, "It is a retirement savings account owned by the worker." (Insert chuckle here) Unfortunately, this is the same argument made by those who pushed for the establishment of the Social Security system, which everyone now admits is just another payroll tax — a payroll tax that common wage earners endure while those making income from investments avail themselves of the myriad of tax loopholes they have provided for themselves.

Oh! But, this time will be different. Rather than going into an off the books government trust fund account, the worker's savings, in an account that really does have their name on it, will be carefully invested into "safe" stocks and bonds by highly regulated firms operating under strict new global financial standards. Hmm. This could be a tough sell to those with new 101K's that used to be 401K's and are now more than a little suspicious that the same people that abused old regulations are going to make things better by creating new regulations for themselves.

And that brings us to what is really going on here. The "Automatic IRA" plan is nothing more than a scheme by the Goldman and friends financial syndicate to create an artificial demand for their dodgy wares. They have run out of willing suckers, so now, by law, they must create unwilling ones.

The bankster syndicate that has been managing (i.e. manipulating) existing IRA's, 401K's and government pension plans has got a massive hole to plug in their confidence game/Ponzi scheme. More more and more people are waking up to what has been going on and are now running for the exits. To offset this drain on the system, the Automatic IRA plan would suck up the "savings" of current wage earners to maintain and inflate the prices of select stocks and bonds. This will allow current pensioners to continue to recieve checks from pension accounts that otherwise would be evaporating from want of fresh money from fresh marks.

Don't let yourself become a money spigot for Wall Street to tap. If its mandatory, it's a tax. Tell your representative that you don't support mandatory IRA accounts. Better yet, tell your employer first and then tell your representative together.

There can be no open free-market in bond and equity markets if players are forced into the game. The government should not be in the business of creating investment demand with mandatory IRA accounts — whether contributions remain voluntary or not.

Related Story: "Democrat" 401K Confiscation Proposal is "Republican" Mandatory Savings Plan

Sidebar for anti-war types who voted for Obama: In case you missed it, the fiscal 2009 budget submitted by the Obama Administration also includes "placeholder" amounts of an additional $75.5 billion in 2009 and $130 billion in 2010 for our wars in Iraq and Afghanistan. Hope all you want, but the rules of math have not changed — 130 is still a much bigger number than 75.5 and 2010 does come after 2009 on the calendar.

"The irony is that the VAT is probably the ideal tax from a conservative point of view," effused Bruce Bartlett recently in a Forbes magazine article subtitled, "A money machine that conservatives shouldn't oppose."

Bruce Bartlett, who got his start in adult life under the tutelage of Pearl Harbor researcher and Austrian economist Percy Greaves as well as doing a brief stint in Ron Paul's congressional office in 1976, should have turned out better. Having been a cheerleader in support of the need for a pre-emptive invasion of Iraq by the United States, then complaining he didn't like the massive increase in government growth and spending that was concomitant with it, he is now out promoting a value added tax (VAT) to help pay for the whole mess that is our current federal government.

To clarify Mr. Bartlett's opinion, that would be the neo-conservative point of view. The point of view that understands that you can't have big wars without big governments. This was the point of view recognized clearly by the founder of The John Birch Society, Robert Welch, when he wrote in the founding Blue Book for the Society, "you will find that it is the huge quantity of government which, more than anything else, makes these tremendously destructive wars not only possible, but unavoidable."

Not surprisingly, the fat cats who are living large off our endless War on Terror are more than happy to pay people like Mr. Bartlett to suggest a "money machine" to underwrite the costs of their "war machine" that has become our government.

So, what is the VAT? In simplest terms, it is a tax on all human action. Under a VAT regime, every economic transaction is taxed by the central government. Sell a bushel of wheat to the miller, the miller pays a tax. Sell a bag of flour to the baker, the baker pays a tax. Sell a loaf of bread to a consumer, the consumer pays a tax. Take Leonard Read's I Pencil essay and assess a central government tax on each step of the production process and you'll get the idea.

To make the system supposedly desirable, each person in the chain (except the final consumer) can claim a credit for the taxes he paid that were passed on to him. Thus, the ultimate tax paid by any one producer is only on the "value added" that producer put into the product he passed up the chain. That this tax scheme was birthed in Germany during the interwar period that eventually created the war machine of the National Socialists (Nazis) is not insignificant.

Also not insignificant is how a VAT can be used as a weapon to create economic union. Mr. Bartlett himself details how the VAT was used to integrate the economies of the European Union:

In the 1960s, Europe began the process of full economic and political integration. One problem that quickly developed was how to prevent domestic sales taxes from creating a cascading effect--goods could be much more heavily taxed depending only on how many countries they passed through. This was considered a serious barrier to free trade. At this point, the VAT's system of having an invoice trail was very attractive because it meant that the tax could be rebated at the border on exports. Consequently, goods would bear only the tax imposed in the country of final sale. Eventually, all members of the European Union were required to have a VAT.

Note that Bartlett admits that the process of full economic and political integration in Europe began in the 1960's. Of course, that would have been news to the people of the various European Common Market countries, who where assured at the time (just as we are today concerning free trade agreements like NAFTA) that the process was only about creating economic prosperity.

That "the tax could be rebated at the border on exports" is an additional key attribute of a VAT. Under the General Agreements on Tariffs and Trade (GATT) that became the United Nation's World Trade Organization (WTO), a VAT rebate at the border to domestic producers who export is not considered a government subsidy. That the United States government has continued to accept this scheme as valid is likely the single largest cause of de-industrializing the country.

With typical VAT's running around 17 percent, a producer in a VAT country can get a $17 dollar home government sponsored kickback for every $100 of product it exports. Thus, the producer has the competitive option to charge only $83 to an importer in another country. If an importing country like the U.S. imposes low or no tariffs on the VAT country based producer's product, the importer immediately has a $17 dollar advantage over any domestic supplier producing similar items.



The advantage the producer in the VAT country enjoys also applies to competition in his home market. In a typical case, imports coming into the VAT country are charged a 17 percent entry VAT (tariff). This arrangement means that a producer in a non-VAT country like the U.S. would have $17 added on to his cost structure for every $100 of product shipped into the VAT country without enjoying any offsetting government kickback in his home country. Thus, because of the U.S. accepting the WTO accredited VAT scheme, a U.S. producer is typically set up at a $17 disadvantage in both his home market and his export markets. He gets hit both ways for a total 34 percent disadvantage against his VAT enriched competitors.


Of course, some producers in the U.S. have been able to finagle their own tax kickbacks with the US government, but the majority of these involve credits and loan guarantees for moving their production offshore into countries operating under a VAT regime. Nonetheless, it is a bit late in the game to suggest that the real solution to our production problems in the United States is to finally get in the game with a VAT like all the other socialist/fascist economies around the rest of the world. This is especially because the VAT being proposed for the United States is not for the purpose of supporting productive industry but instead it is for the purpose of continuing the expansion of unproductive government.


The argument for a VAT that Mr. Bartlett and others are promoting boils down to this: All resistance is futile. Leviathan must be fed with ever increasing amounts of value sucked from all human action. The money machine that is the VAT is necessary. Get used to worldwide socialism. It's time the United States formally join the party.

Of course, The John Birch Society has always disagreed with such defeatist logic. Promoting a VAT to "tax consumption" and "level the playing field" for what is left of U.S. manufactures not controlled by the federal government or creditors is not an acceptable option for those who cherish freedom.

The first and foremost solution to our country's financial problems is to shrink federal spending. We don't need a new VAT tax scheme to increase the government's take from all of us. We need less government. Bringing our soldiers home from the bases and outposts of empire around the world is a good first start.

The other thing that must be done is to terminate our trade policy of domestic de-industrialization and international integration. The theory of competitive advantage only works in a world where governments are not engaged in the manipulation and destruction of free markets.

To re-establish a vibrant economy in the United States, we should terminate our membership in the WTO and UN and we should abolish the income tax. We need simply return to a federal (not imperial) government of a size that can be afforded by the application of import tariffs as originally designed in the Constitution of the United States.

A single improvement over our original hotly contested tariff system would be that the tariff should be a flat percentage on all goods and services regardless of their source of origin. This is the kind of level, not preferential, playing field that we should be trying to establish. We only need raise enough of an income stream to support a basic level of government to protect us from our enemies. A ten percent tariff or something less than the ancient tithe of the Bible would be a good standard to benchmark off of.

Creating a VAT that institutionalizes government as a parasite upon all human action is not the road to freedom. At its best, to accept a VAT is to countenance the slavery of socialism and we don't need any more of that.

Though most did not recognize it, the statue honoring the president of the United States who "killed the bank" was a fitting centerpiece for the Tax Day Tea Party in Raleigh, North Carolina.

The radio station that provided the host for the event reported the crowd at 1000 people. However, at the height of the rally, there appeared to be at least twice that many gathered on the lawn of the state capitol.

Judging from both the signage and the crowd reaction to the various speakers, the gathered protesters were roughly split 50/50 between diehard GOP followers faithful to the likes of Newt Gingrich and real activists who know better.

With people and groups from various persuasions in attendance the only sustained chant that seemd to sweep the crowd was, "No more crap."  Richard Burr, the state's pro-amensty, pro-national service Republican senator, was not able to make the event but he did have a representative read a letter on his behalf that blamed things on the big spending Democrats. There was at most only muted applause for this effort punctuated by cat-calls of, "He voted for the bailout!"

B.J. Lawson, who shook up the state's Republican party by running for Congress as a dreaded Ron Paul Republican, made some of the most pertinent comments regarding how to take our country back from those in control of the money supply. Unfortunately, it was during his part of the program that four or five carloads of passionate Tea Party activists decided to show their support for the event by driving around the capitol square with their car horns jammed on, making it impossible for most of the crowd to hear Mr. Lawson.

The presence of GOP shock workers not withstanding, the event was still an encouragement for real activists in the freedom fight.  Amidst a crowd carrying End the FED, Don't Tread on Me and NO to Globalism signs, John Birch Society members easily passed on over 300 pieces of our literature to interested parties — young and old alike. With the same sort of popular uprising brewing that helped Andrew Jackson kill the bank, now is the time to organize with others and work to End the FED and Restore Sound Money. The insight of Jackson on this matter is well worth reading and sharing with your representative in Congress.

Note: Though Insiders and falsh hope operatives in the GOP like Gingich, Armey and Limbaugh are working to co-op the Tea Party movement, this popular uprising may just be beyond a scope they can deal with. Too much is becoming too obvious. As an example, though Bill LuMaye, the host and MC of the event, holds the time slot between Rush Limbaugh and Sean Hannity on the #1 talk radio station in Raleigh, he has made the 2008 Libertarian candidate for governor a regular guest on his show. And, it was only a fortnight ago, in advance of the G20 Summit, that he invited the State Coordinator of The John Birch Society on to his show to discuss what is happening with our dollar and the International Monetary Fund (IMF). There may be many challenges ahead, but it's hard not to come to the conclusion that at the moment anything is possible. Don't miss your chance to be part of the possible.

Both the International Monetary Fund (IMF), and Putin’s Kremlin are pushing for a new international currency.

The Kremlin is calling for a new “supranational reserved currency to be issued by international institutions as part of a reform of the global financial system.” The IMF stands at the ready to print a global super currency for what it terms “global quantitative easing.” Interesting how their pitches dovetail so nicely together.

Can you say "New World Order?"

The Kremlin wants the topic under discussion at the upcoming April 2 G20 meeting. Russia wants the entire financial system restructured to prevent future crises. In order to do this they wish to hold an international conference after the G20 meeting — thereby setting the parameters for a new  world financial system.

Kazakh President Nursultan Nazarbayev has already proposed a global currency called the "acmetal" — a ccombination of the words "acme" and "capital." Another financial plan of his would see the Eurasian Economic Community, a loose group of five Soviet republics including Kazakhstan and Russia, adopting a single noncash currency — the yevraz — to insulate itself from the global economic crisis. The noncash currency is touted as being safe in electronic transfers between “government agencies, legal persons and natural persons.”

Nazarbayev's idea was unsurprisingly seen by Columbia University’s Robert Mundell, the creator of the euro, as being filled with “great promise.” 

Suggested by billionaire George Soros and backed by U.S. Treasury adviser Ted Truman and Britain’s Chancellor of the Exchequer Alistair Darling, is the scheme to have the IMF issue hundreds of billions of dollars worth of so-called Special Drawing Rights. "The principle behind it is that everyone would get bonus dollars and instead of the Federal Reserve having to print them, everyone gets them,” said Simon Johnson, an ex-chief IMF economist.

Johnson acknowledges the scheme could go horribly wrong and instead create massive inflation. "The objective is to create a windfall of cash. However if everybody goes out and spends the money it could be very inflationary."

Now the UN is weighing in as well on this issue. A UN panel next week will be recommending that the dollar be ditched as the world's reserve currency. Currency specialist Avinash Persaud, a former JP Morgan currency chief says, "It is a good moment to move to a shared reserve currency." This will likely put further pressure on world leaders to agree to create a new world currency.

Any ideas as to whose likeness they might put on the face of the new currency? How about Putin and Soros — that might fulfill a dream of theirs. 

Personally, I’d put the Four Horsemen of the Apocalypse.