The Lost Art of Capital Budgeting
LaRouche: Deficits as Capital Gains: How to Capitalize a Recovery,
…”Viewing our nation’s economy, hypothetically, as one giant nation-state economic enterprise, about half of the annual product of this enterprise should be invested in capital and related expenditures for the creation and maintenance of investments in long-term physical improvements of the total economy. This would include a broad definition of what is termed “infrastructure,” as well as other key areas related to energy, water, transportation, etc. It would also mean supporting and promoting similar long-term investment among suitable private entrepreneurs. All of these would be long-term investments of about a 25-year duration.
The intention is to reverse the post-1968 affliction of the “services economy” and to begin to rebuild actual physical productivity.
However, there is no way that this approach can be accomplished either through the current budget process, or under the present speculative financial practices imposed by the Federal Reserve. The only pathway that will work is through Hamiltonian methods of National Banking and Public Credit…
These initiatives will be made possible through the issuance of new U.S. Treasury Notes, to be placed on deposit in the National Bank. In essence, this will define the Nation’s “Capital Budget.”
The issuance of large amounts of new U.S. Treasury Notes—as was the case with the Greenbacks—will represent new government debt, but it is debt of a different sort. Long-term capital investments are not to be confused with annual costs. As long as the debt has the effect of generating leaps in the nation’s productivity and provided that payment is not postponed to a point beyond the physical life of the capital investment, the debt will be easily managed and eventually retired.
Other measures toward recovery must also be taken. The ruthless re-imposition of Glass-Steagall will end much of the destructive financial practices of the last 30 years, and lead to a restoration of sound commercial banking.”
…”Money only exists, legitimately, as a creation and a responsibility of the sovereign nation-state republic. However, that function of government is, itself, accountable to the people as a whole [not the financial oligarchy]. The people’s elected representatives are, in turn, bound by the supreme Constitutional principle of the promotion of the General Welfare of all present generations and their posterity….”
View the full development of these ideas by clicking here- The mind-boggling Incompetence of the Debt Ceiling debate: If a Default scares you, what about a Depression?
As we enter a rapid and accelerating financial disintegration, we citizens must equip ourselves, as developed in the above article, to confidently reassert our sovereign economic right to control our own destiny and secure the future for our posterity.
“A sudden, relatively convulsive reorganization of the world’s finances, monetary systems and trade-relations, is the only hope to be seen among those nations which prefer that their nations survive.”
—Lyndon LaRouche