Volume 7, Issue 1  -  March 1, 2001

The Vice-President's Message

By Merle Willard

The following article was written in January of 1991 shortly after Mr. Willard was named Vice-President of NORM

How do I tell the NORM story so that it will be heeded? It has been told so many times. I'll tell the truth as I know it. We can't hear the truth too much. Facts do not cease to exist just because they're ignored. What I say may leave room for argument or discussion. If it doesn't I'll feel that I have missed something.

Stay with me as I bring you this story of the slow death of America's freedoms and the many debts compiled by our government, its private citizens, and businesses. Never in the history of the world has any country and its people owed so much money with so little means for repaying the lenders. I'll mention some of the happenings that brought us to this place in history. I want also to give some formulas taken from history which may still have time to save us from our awful fate.

Our ancestors came to this country to get away from the ills that are plaguing us this day-no jobs, high taxes, low wages, too much government, too many unneeded laws, high interest rates, low raw material prices, a corrupt court system and eventually no freedom of movement or religion. Our ancestors carved this great nation out of a wilderness, handed it to us on a "silver platter," so to speak, and we let it slip away. God has to been very angry with most of us for letting this happen. "If my people, which are called by my name, shall humble themselves and pray and see my face, and turn from their wicked ways, then will I hear from heaven, and will forgive their sin, and will heal their land,"-II Chronicles 7;14.

The greatest period of prosperity in my time, 1945-1952, was brought about by men like Carl Wilken, industrial engineer Charles B. Ray and Dr. John Lee Coulter, when they convinced the 48 secretaries and commissioners of agriculture in a meeting, that we couldn't win World War II or pay for the war without a fair price for agriculture and other raw materials. This parity was brought about by Congress and we had one of the best periods of prosperity in modern times. The Steagall Amendment to the War Stabilizations Act (WWII) gave us the money to win the war and had the tax base been right, we would have paid for the war and not owed one dime when it was over. The Steagall Amendment for Agriculture was taken away in 1952 and we've been going down hill financially ever since.

The Committee for Economic Development flexed its muscles at this time and convinced our government there were too many assets in agriculture, chiefly human resources. Over 7.4 million of these human resources, farmers and farm workers, have been eliminated, as have several million farms in the last 38 years. As a consequence, the people as well as the nation are in worse shape financially and morally than at any time in history.

I was at a meeting in Springfield, Illinois in 1959 when Carl Wilken, speaking to farmers, relayed the following message. If the government doesn't restore parity to agriculture, the debt will double every ten years and by 1980 we will have a debt explosion, high interest, many farm foreclosures, bank failures, giant corporate mergers and we will become a debtor nation. Furthermore, when the government can no longer service its debt, the nation will go into bankruptcy and finally receivership, probably emerging with a dictator form of government. Thus it would seem to me, we are arriving on schedule with Carl Wilken's prediction.

To make matters worse, the last eight presidents have followed the same policies; low farm prices, low wages, too many exports (especially of raw materials), too many imports of finished products, export of a good many of our industries, exportation of all the jobs going with those industries in return for cheap labor from around the world. Consequently, we're lowering our raw material prices, wages and our standard of the world. In doing this we have become a debtor nation. Is this what we want? I this what our ancestors worked for? I think not.

"Single acts of tyranny may be ascribed to the accidental opinion of the day, but a series of oppressions, begun at a distinguished period, and pursued unalterable through every change of ministers, plainly proves deliberate systematical plan of reducing us to slavery."-Thomas Jefferson. This statement is just as true today as when it was first made.

World Order

We come now to partake of what President Bush refers to as the New World Order. In my judgment this simply means one world economy along with one world government. It's kind of like the song Love and Marriage, you cant have one without the other, or vice versa. The GATT agreement being discussed by a lot of nations-if brought about and implemented to the fullest-is one of the big steps toward a world economy and world government.

We've gone about lowering our raw material prices, selling them all over the world at half price or less, under the guise of free trade, with no tariffs to protect our domestic market. Any red blooded American should know there is no free trade left in this world. Trade is all controlled by corporations in their own divested interest and for no one else. The nations of the world should be enacting "fair trade" policies among themselves instead of letting corporations direct so called free trade. By continuing with the free trade policy for 38 years, we have become a debtor nation.

Our raw materials being sold at half price or less for the past 38 years has resulted in public debt increasing to over $3 to $3.5 trillion, our private debt approximately 9 trillion, and some say an off-budget provable debt (that isn't counted) of over $10 trillion. Is it any wonder we are in trouble? There have been thousands of farm bankruptcies and more to come. The Farm Credit System bail

out is not over. Many rural businesses and towns have gone out of existence. There is a merging of rural banks all over the land. Savings and Loan banks are in real trouble, to be salvaged by government, perhaps. Big banks are now starting to crumble along with FDIC, having to be bailed out by taxpayers. Following this will be insurance companies and pension money.

How long can this continue? Nobody really knows. Under President Reagan we were selling $9 billion in Treasury bonds every Monday morning. We are now selling $22 billion in Treasury bonds every Monday. When that amount increases to $30 billion and some Monday we can't sell enough bonds to finance the country, the game will be over for all to see. Some will never admit that low raw material prices had anything to do with the death of America.

There are some cures for our economic ills. Here are some historical facts proving that an economic formula is available and has been available for the last 38 years. Congress has been presented with this formula, but hasn't seen fit to implement it since 1952. This tells me we need to elect some new Congressmen.

Never has the world witnessed such an asinine procedure: 240 million people blindly following a farm program of paying our farmers billions of dollars a year not to produce. With full production and a parity price, this would put money in the U.S. Treasury every year and not cost the taxpayers any money.

We have found-by searching out records during non parity years-that for every 1% agriculture is under-priced, you have 1% over-production because you have 1% under consumption. There will be 1% loss in factory production, 1% loss in national income. There will be 1% unemployment because you are short 1% of the new wealth to keep the people employed, unless they are employed with borrowed money. In other words, when you have 100% production times 50% price, you only have 50% of the new wealth to run the economy in a profitable manner. Thus, the government has to inject debt to keep the economy going. When you have 100% raw material production times 100% price, you have 100% of the new wealth to run the economy. This gives 80% of the wealth spendable each year and 20% for savings and purchase of capital goods.

Wilken's Findings

Wilken's findings from his 1929-1946 study was a basic ratio of $5 of national income for every $1 of total raw material income. This is convincing because of the fact he included the years of the worst depression and substantially all the years from the parity period 1942-1946. Then he made the observation that while farm raw materials comprise approximately 70% of the "total" raw materials used to operate the economy, then national income would have to be computed at seven times the value of farm raw material income, with only 70% of the total raw material production being included in the equation. However, the basic finding is that $1 of total raw material production (including the 70% which is agriculture) equated historically in a resulting $5 of national income, this on the average for 17 years which included the 1930s "bust" and the 1940s "boom."

In the annual cycle of producing all raw materials or new wealth, we now generate approximately $7 of national income for each $1 of raw materials. In the annual cycle of producing agricultural raw materials or new wealth, we now generate approximately $10 of national income for each $1 of raw materials. This is the turn of the dollar or creation of new wealth, providing raw materials are priced at parity with the average cost of all other goods and services. The change is due to population increase and improvement in technology.

The dollar worth of raw material is the starting point for the subsequent application of capital and labor to provide the value added in the industrial process. This value added produces the income and wages to consume the ultimate product which has grown from $7 to $10 in the nation's economy. Short term debts that have been created in the production and distribution process are self liquidating at the final sale, but the raw material dollar remains in the economy as a permanent capital asset forever. This meets the needs for spending media for a growing population and to provide the capital goods needed to employ and house new entrants into the nation's labor force. In a completed annual cycle of raw material production, the raw material dollar does not remain with the raw materials producer, but is divided up as a permanent savings between every individual, partnership or corporation that participates in the value added production and distribution process. Every active business entity must, by its nature, become a recipient of some portion in the increase in profits and savings generated by this process. It excludes no one and includes anyone who wants to participate, to whatever extent that participation is necessary and on an equitable basis.

The annual production of new wealth in the 1929-1946 period was approximately 20% of the total national income. It translated into an equal amount of permanent capital assets added to the total capital assets accumulated in previous years.

Approximately 80% of our annual spendable income is used as operating expenses to pay for consumers goods and services, which are completely consumed annually and must be replaced with new production.

The remaining 20% represents new capital, which was created by monetizing raw material production. It goes in to savings or capital investments in each annual cycle. It provides a permanent source of capital for repeated investments and repayment forever. It also provides for

ever-expanding "spending media" money to serve as a medium of exchange for an ever-increasing population in the United States. Without his annual injection of "new wealth" generated by raw materials produced at 100% of parity, we are forced to resort to ever-increasing public and private debt. Historically, unmanageable and uncontrolled debt increases have been destructive to every civilized economy in the world.

A use exceeding 20% of the national income, created by the creation of new wealth annually-in the creation of new public and private debt-will eventually become the source of inflation, cheaper dollars and/ or depression with repudiation of debt as a primary source of liquidation in an economy which fails to provide parity of income to raw materials producers.


The past record shows that we have liquidated debt by inflating the value of the dollar, thus easing debt repayment. On other occasions we have approved government policy which seemed to assure depression and financial bankruptcy as a method of reducing debt. Both methods are destructive to a par economy, and, in fact are produced by the very same elements that tend to destroy parity of income for all sectors of the economy.

A constantly increasing level of production of consumer goods and services is necessary to meet the growing needs of a constantly growing population. It is equally necessary to provide the income and profits to sustain a growing and a solvent national economy. We have no viable alternative.

The United Stated, as a result of its production from its natural resources can have whatever level of price and income that may be required to consume the annual products with absolutely no adverse economic effect on the American consumer. Quite to the contrary, it is in everyone's best interest to assure the fullest participation by every segment of society and every individual in society, with complete unselfishness. That is our vision of an effective par economy.

Imports should be paid for at a comparable price in balance with prices for exports, creating the money to pay for a comparable amount of exports. By placing tariffs on imports, you're just telling importers, bring the goods in at parity prices so they can't undersell our U.S. domestic prices.

Our first premise must be to maintain a solvent nation if we are to maintain a representative form of government and our personal freedom.

Income must be created by production multiplied by a parity price, rather than be borrowed from our capital resources, and thus be subject to repayment with interest added out of income generated in future years.

The cost of goods and services in the nation will determine a fair share of the national income to individual raw material producers.

The raw material income is the most important part of our economic equation and governs the balance of our economy. By monetizing raw materials "as though they were gold" we regulate the true purchasing power of the dollar. For each dollar that we lose in the way of farm income, our nation will lose approximately $10 of national income. When the ratio of all raw material is used, we will lose approximately $7 for each dollar in all raw material income.

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