Saturday, December 1, 2007

Commentary: War Funding

Peace advocates report that war funding is being enmeshed in (held
hostage to) funding for domestic programs. However, with a federal debt
now over $9 trillion, federal deficit spending, especially the large
amounts for war, will result in more home foreclosures sooner rather than
later.

Economy is complex, but in broad outline, we see that government borrows
money by selling bonds and banks redeem those bonds. The Federal Reserve
- either by numbers in books or by printing of currency - creates money
to cover that redemption. Lowering interest rates facilitates that flush
of money. Because the government produces no goods of value, the excess
of money over goods cheapens the dollar. That inflation brings price
hikes, including hikes in interest rates on variable rate mortgages.


War spending is impoverishing most people. Suggested message: DELETE WAR
FUNDING FROM THE DOMESTIC APPROPRIATIONS BILL.

- Jean G. Braun

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