On October 1st, the federal government shut down as a direct result of Congress failing to approve a Continuing Resolution to fund the government, or, more accurately, as a result of 535 career politicians and 1 community organizer failing to agree on how to spend money that the United States doesn’t have in the first place.
The visible effects of this supposed shutdown have, thus far, been hardly different from business as usual. While many “non essential” federal workers have been furloughed, the House has approved a bill to provide those “non essential” federal workers with back pay once the government is “reopened” – or in other words, has given them a paid vacation. One wonders why, if these federal employees are non essential, they are employed by the federal government in the first place, at an annual cost ranging into the billions. Senators, Representatives, and the President will continue to receive paychecks, despite the very real threat that disabled veterans will not. We have continued to conduct domestic spying operations and foreign military operations, rolled out a multi-trillion dollar federally mandated health care bill, and have seen Congress and the President continue their meaningless game of jockeying for political position and engaging in a media offensive aimed primarily at garnering votes for the 2014 midterms.
Did you know that U.S. banks have more than 1.8 trillion dollars parked at the Federal Reserve and that the Fed is actually paying them not to lend that money to us? We were always told that the goal of quantitative easing was to “help the economy”, but the truth is that the vast majority of the money that the Fed has created through quantitative easing has not even gotten into the system. Instead, most of it is sitting at the Fed slowly earning interest for the bankers. Back in October 2008, just as the last financial crisis was starting, Federal Reserve Chairman Ben Bernanke announced that the Federal Reserve would start paying interest on the reserves that banks keep at the Fed. This caused an absolute explosion in the size of these reserves. Back in 2008, U.S. banks had less than 2 billion dollars of excess reserves parked at the Fed. Today, they have more than 1.8 trillion. In less than five years, the pile of excess reserves has gotten nearly 1,000 times larger. This is utter insanity, and it will have very serious consequences down the road.