Dear Congressman

Briefly, because the world economy is in contraction there is no net capital formation, and there will be none for the foreseeable future. Every dollar that is to be spent on bailouts and stimulus for some elusive, and probably illusory, future economic benefit must be raised in the capital markets in the present. Because there is no net capital formation, each new dollar of Treasury debt requires the liquidation of other financial assets, particularly common stocks.

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This vicious cycle must be stopped, or we will bring on the very catastrophe the government is seeking to avert. Adding more debt now only adds more fuel to the deflationary fire, and will very soon cause the government to face the conundrum of printing money to avert financial collapse and in so doing, risking a sudden rupture of confidence that could lead to monetary collapse and a crisis of confidence for the US government itself.