[Congressional Record Volume 166, Number 218 (Monday, December 21, 2020)]
[Extensions of Remarks]
[Pages E1197-E1198]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




         THE 2020 CHRISTMAS TREE BILL: ``MONEY VERSUS WEALTH''

                                 ______
                                 

                           HON. MARCY KAPTUR

                                of ohio

                    in the house of representatives

                       Monday, December 21, 2020

  Ms. KAPTUR. Madam Speaker, Americans should wonder why Pennsylvania 
Senator Pat Toomey--a Harvard educated, former Wall Street foreign 
currency swap trader--held up this relief bill so necessary to help 
people in our pandemic-plagued nation. He was wrong to hold up the 
bill, but he is right on putting a spotlight on the Federal Reserve. 
Bottom line: How will our nation pay the $2 trillion bill for this 
necessary relief to the American people, and our escalating debt? 
First, let me begin with this basic lesson President Franklin 
Roosevelt's generation taught mine: There is a difference between 
``money'' and ``wealth.'' Senator Toomey appears to be concerned about 
America's deteriorating financial position. So am I.
  Wealth = tangible assets that produce real products (agricultural 
land, a factory, a donut shop, a forest, etc. . . . real products. 
Money is but an ephemeral accounting transaction. As Congress debates 
this $2 trillion-dollar vital bill, of one thing we can be certain: it 
is not paid for. The U.S. has gone from the world's largest creditor 
(+$360 billion) in 1980, to its largest debtor (-$97 trillion) in 2019. 
The percent of household debt equals 68 percent of the GDP, an 
astounding figure--($14.35 trillion of a GDP of $21.16 trillion). The 
Federal Reserve soon will gather its member banks to figure out how to 
finance this debt. The money to pay for it will be borrowed as onerous 
taxation at this time would harm the recovery. But the American people 
will have to pay back lenders for years to come, including increasing 
payments to foreign creditors that are financing America--China, Japan, 
and Brazil, among others. Senator Toomey is shining a laser beam on the 
Fed as it will be the supreme negotiator in these ``money'' 
transactions that will impact our nation's future ``wealth''. Our 
nation has been accumulating more and more debt and not been paying 
down principal for a very long time due to wars, huge tax cuts to the 
wealthy, and a haughty attitude among some that the U.S. is 
invulnerable to the selling off of productive assets. During the 
1990's, to ease the interest payments on our accumulating U.S. debt, 
the U.S. financial system was turned inside out to inflate and leverage 
globally Americans' wealth in the housing sector. Wall Street, with

[[Page E1198]]

the Fed looking on, ushered in the horrific 2008 housing crisis with 
millions of transactions that failed. Individual American families are 
still recovering from that hard body blow to their real wealth achieved 
through home ownership, their primary source of savings. Yes, Wall 
Street feverishly booked paper money losses while big securities firms 
ate one another, leaving about 4 giant firms that now transact the 
majority of money trades in our country. Incidentally, their CEO's took 
away more money and bonuses than before the crash. They transferred 
their losses to homeowners in every hamlet in our nation as well as 
booked losses to many lenders that had less money power.
  Senator Pat Toomey is a former Wall Street refugee as the bank at 
which he worked was gobbled up by Germany's Deutche Bank. He holds a 
rigid fealty to free markets as a Club for Growth endorsed Senator. He 
and I hold vastly differing views about many issues, but we come from 
manufacturing states deeply harmed by the current Wall Street-Fed 
economic model, where every real asset is disposable. We both share a 
deep concern about rising U.S. debt levels and the role of the Federal 
Reserve as an agent of national decline. He has focused on America's 
terrible ``money vs. wealth'' predicament whether one chooses to listen 
to him or not. Our nation's capital markets are now dependent on 
foreign investment to prop them up. Our nation is not financially 
independent. The question is which sector of our economy will next fall 
victim to Wall Street's financial roulette with the Federal Reserve's 
acquiescence--will the wealth of our states and municipalities be 
compromised or emptied out as was our housing sector? That is a deep 
concern in view of what Wall Street orchestrated as the housing bubble 
burst.
  For foreign investors buying U.S. debt, U.S. taxpayers annually now 
shell out over $130 billion annually in interest payments to China, 
Japan, and Brazil to name three. Since the 1980's the share of foreign 
ownership of US debt has risen from less than 4 percent to well over 40 
percent. This is an astounding indictment on our unfortunate inability 
to live within our means. Frankly, to be a strong and independent 
nation, with wealth creation here at home, these are bills we should 
aim to pay ourselves. That requires real leadership.
  The Fed's Chair, an unelected position, is now the second most 
important office in Washington, DC. 99 percent of the public doesn't 
think much about the Fed. But it becomes the key lynchpin in the 
ability of our nation to float economically. Its growing, subterranean 
financial control over daily life can come at a terrible price. The 
Fed's money and debt penchant for our nation is like consuming a tad of 
arsenic at a time. Rather, to reverse the cycle of middle-class 
downward mobility, America needs real wealth creation at home, not just 
money supply manipulation again. For example, why shouldn't seniors be 
able to earn fair interest again on their accumulated savings? They 
loan their precious dollars to banks and are paid nothing in return. 
The aspiring generation should not have to be pawned through heavy 
education debt loads from which the financial sector benefits. If 
Congress fails to pay attention, real assets of local municipalities 
and states could well be leveraged by the Fed to pay more American 
interest to foreign bond holders. Heedless borrowing continues to fund 
America's inability to grow the real economy here at home. The 
significant diminishment of manufacturing as a robust sector of our 
economy that creates broad economic uplift of the middle class cannot 
be matched by the ``financial services'' sector nor the new ``tech 
industry'' which produce very lopsided economies, with a few very rich 
but many more poor.
  Record credit card debt and the indebting of the aspiring 
generation--all are signs of a creeping financialization of our society 
that takes power and control away from ordinary citizens. Is it any 
wonder Americans are in backlash mode? The amount of interest taxpayers 
are paying foreign creditors has been on an ascending curve since the 
l980s. It cannot continue if our nation is to remain free. With this 
``debt bomb'' hanging over our heads, in the future any bill Congress 
passes must protect the real value of our municipal and state assets--
water and sewage systems, bus systems, parks, hospitals and 
universities, roads, equipment, etc. They should not be leveraged 
through international borrowing that requires growing interest payments 
over time that in tum indebts our communities in perpetuity as has 
occurred already with student debt loans and the housing melt down.
  A truly strong America requires we look ourselves in the mirror and 
design a ``Build Back Better Recovery'' that is not financialized but 
is truly ``made in America'', not borrowed. The American people deserve 
no less for what they have been enduring during this Pandemic and with 
the accelerating economic washout of the middle class since the 1980's. 
There is a huge difference between money and wealth.

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