Pay Your Taxes With Sticks

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JAG's picture
JAG
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Pay Your Taxes With Sticks

                  The Tally Stick System of Monetary Reform

I was watching Bill Still's "The Money Masters" again last night, and I was amazed to learn that King Henry I of England (1100 AD) employed the use of tally sticks as currency in an effort to usurp power away from the central bank of his day. He declared these sticks as the only accepted payment for the King's taxes, and thus they were accepted as currency by the population and competed against the manipulated currency of the central bank. This form of fiat money, lasted for 726 years!

The following is an excerpt from the Money Masters video. The section describing the Tally Stick System begins at the 1:35 mark in the video.

Recently, Dr. Martenson stated that he believes that an alternate currency is what is needed in our country. Based on this one historical example, I whole heartedly agree. I used to believe that our money needed to have intrinsic value, like gold or silver, but the only value that it really needs to be assigned to it, is the ability to pay taxes with it.

How simple is that? End the Fed with a stick and take back our country by paying taxes!

If you haven't watched the Money Master's video, I highly recommend that you do so. Its over 3 hours long. but there is a wealth of information in it. This is my second viewing of it and I have learned a great deal.

You can watch the whole thing here, or download the video here for your ipod and listen to it in your car if you so desire.

All the best...Jeff

strabes's picture
strabes
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Re: Pay Your Taxes With Sticks

agreed...despite the bad acting/graphics/production, Money Masters is a requirement to watch for anyone who considers him/herself a citizen.  if you don't understand money and its history, you're not a citizen but a subject.

agreed on the motive behind the king's stick method as well--eliminate the power of the bankers.  THAT IS THE KEY to any new currency standard. unfortunately we're being shoved down the IMF SDR route which only empowers the bankers even more.  gold/silver money isn't a solution either because, as a commodity, it creates the greed and desire to hoard that generated the banking industry in the first place.  the stick method makes money what it should be--just a unit of measurement and medium of exchange.  asset-based money like that proposed by the MTA adds the other purpose of money--store of value--because if it's an asset it really is value instead of our debt-based money today which has no value unless others have an obligation to pay other liabilities.  

what I don't get is why the kings didn't just take the bankers out, literally.  Putin has done this...impressive.  why not kings?  as a supposed democracy we don't have the power to do it, but kings could do whatever they wanted.  my guess is the bankers learned from King Henry's stick episode the need to gain leverage over kings, so they built networks of agents that infiltrated the king's ranks or were somehow able to threaten him, his family, the stability of the throne, etc just like they've done in the US.  

 

DrKrbyLuv's picture
DrKrbyLuv
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Re: Pay Your Taxes With Sticks

Hello,

Jeff, thanks for bringing this up.  I agree "tally sticks" or something comparable is the best way to go.  In Bill Still's next film, he goes on to explain that  the English prospered under tally sticks with no national debt and low taxes.  They contracted the Bank of England to impose a debt based system like ours and within 75 years, the payments on the national debt consumed 75% of the annual budget. 

Larry

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Re: Pay Your Taxes With Sticks

I agree with all of your criticisms of the current debt based monetary system.  It is unsustainable by design and inherently unfair.  What I fail to understand is why many people think that a non-debt based government fiat currency would solve all the current problems.   A non-debt based fiat currency similar to Lincoln's "Greenbacks" may be an improvement over the current central banking system, but it seems to me that such a system would still suffer from many of the same problems as the current system.

The problems I can think of off hand are ...

1)  Wouldn't we be just trading the current central bank for congress?  I guess at least congress is elected but I would think we barely have any control over congress as it is now.  Can you imagine how little control we would have if they could create money out of thin air to keep getting reelected?

2) I am not buying that this system would not end in hyperinflation in a short period of time.  As horrible as debt based money is, at least it has some deflationary properties.  By constantly increasing base money, I don't see how this can not be inflationary.

3) One of the four properties of money is a store of value.  How can such a fiat system be a store of value?

4) I fear that the price of money would not be set by the market and therefore would have distortionary effects of the economy.  This would be no worse than the current system, just not a great improvement.

5) How could we get to this system?  Please no off tangents about  the MTA, just serious discussion of how this could happen.  Do you think that TPTB would just sit back as this system was implemented?  How would TPTB react and how could they be kept from destroying the economy?

Although I am largely sympathetic to your cause, the thought of congress with unlimited control of the printing press does not give me a warm and fuzzy feeling.  At least we all can agree that the FED must go.

ps.  Don't forget that this Sunday 11/22/09 is END the FED day.  Please join the protests at your local FED branch!

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Re: Pay Your Taxes With Sticks
goes wrote:

What I fail to understand is why many people think that a non-debt based government fiat currency would solve all the current problems

eliminates the interest.  and starts the money as an asset instead of a liability...governments can engage in development without having the need to send the IRS goons after us to pay back bankers.

in response to your 5:

1 - yes, where the Constitution says it should be.  My guess is that crazy congressional spending comes from the fact that they can borrow for nothing, same way consumers borrowed for nothing to inflate all the bubbles today.  If they had to fund spending through taxes, spending would be severely curtailed.  Also if they had responsibility for the dollar, I don't think they'd be as risky as they are today.  There would have to be statutory requirements on the money creation process

2 - I don't buy this theory anymore, though it was the one I was taught as well.  I now think banks create inflation due to the interest...the mathematical requirement to increase money over time not due to production or anything else, but simply due to the need to pay bankers for their monopoly on money creation.

3 - how are your bank digits a store of value today?  they're sort of an electronic version of the measuring stick.  they're a store of value because they're the accepted method of payment.

4 - agreed.

5 - I doubt it is possible unless it starts at the state level and works up from there.  but since you've called MTA a tangent, I guess you're not interested in state-level innovation to kick this process off.  Yeah TPTB would fight it.  No doubt they'd use the standard techniques...war, fear, economic shocks. 

goes211's picture
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Re: Pay Your Taxes With Sticks

1 - yes, where the Constitution says it should be.  My guess is that crazy congressional spending comes from the fact that they can borrow for nothing, same way consumers borrowed for nothing to inflate all the bubbles today.  If they had to fund spending through taxes, spending would be severely curtailed.  Also if they had responsibility for the dollar, I don't think they'd be as risky as they are today.  There would have to be statutory requirements on the money creation process

I agree about the consitution but the constitution also talks about gold/silver as money.  If congress is constrained by some commodity money or some other method then I agree it could work.  I thought the whole point of most supporters of this currency is that the government could just spend it into existence.  I just have not known many government projects that spent money efficently and I would assume inefficency would be inflationary.

2 - I don't buy this theory anymore, though it was the one I was taught as well.  I now think banks create inflation due to the interest...the mathematical requirement to increase money over time not due to production or anything else, but simply due to the need to pay bankers for their monopoly on money creation.

I understand your claim that the need for interest causes inflation and it does make intuitive sense.  Can you try and explain why adding base money to the system would not be inflationary?

3 - how are your bank digits a store of value today?  they're sort of an electronic version of the measuring stick.  they're a store of value because they're the accepted method of payment.

Absolutely true.  Seems to me that there are only 2 ways money will ever be a good store of value.  One is if it is based upon a commodity.  In this case, the moneys value should never fall below its intrinsic value.  However both its intrinsic and monetary value can still vary.  Two is if money is very well managed as a means of exchange.  Managed money however will be susceptible to debasement.

5 - I doubt it is possible unless it starts at the state level and works up from there.  but since you've called MTA a tangent, I guess you're not interested in state-level innovation to kick this process off.  Yeah TPTB would fight it.  No doubt they'd use the standard techniques...war, fear, economic shocks.

I don't mind state level innovation.   What I mean by MTA being a tangent is that I don't want to start another MTA thread.  I am more interested in discussing the general concept behind it.  Why don't you think that state spending on infrastructure (or anything else) would not be inflationary?  Just pointing out that there is no interest cost is not enough.

DrKrbyLuv's picture
DrKrbyLuv
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Re: Pay Your Taxes With Sticks

One of the biggest and most dangerous money myths is that our "fiat" dollars (FRNs) are NOT backed by anything.  "Out of thin air" and other worn out cliches mislead people into believing that the money has no value.

Every dollar borrowed; and that's the only way we have to create new money, is backed by collateral in the form of bonds or private property and a promissory note.  In our system, the banks monetize debt because they have a monopoly to do so with interest charges applied.

For example, Pennsylvania's "turnpike" is outdated, in-efficient and unsafe and is in dire need of a major upgrade.  In order to "create" the money for the project, Pennsylvania must issue bonds and/or borrow the money from banks.  The project acts as it's own collateral just like a mortgage on a house.

The concept behind the MTA is to charter state banks to monetize wealth.  Under a system like the MTA, Pennsylvania could monetize the wealth of the project.  The production, labor, resources used along with the public benefit endow the project (money) with value. 

Pennsylvania could prepare design and specification documents and put the job out for bids as is currently done.  The big difference is that a state chartered bank(s) would be allowed to monetize the wealth instead of the debt.  Either way, the project is secured by collateral.  Participating banks would be compensated with profitable transaction fees.

If the wealth is monetized, there is no need for any debt repayment.  Nothing is owed since the money is already endowed with the value of the project and it's benefit for the people and commerce.

The program could also be used in the private sector.  For example, let's say Pennsylvania wants to reduce the energy used by buildings and homes by 50%.  State chartered banks could be used to provide 0% interest money for building and home owners to upgrade their insulation and mechanical systems.  Geothermal heat pumps for example may provide 250-450% efficiency compared with 80% in a conventional furnace.  The principal would have to be repaid in this example as the benefit accrues to the private owner.

Larry

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JAG
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Re: Pay Your Taxes With Sticks

Goes,

First let me say that your stated concerns are very much my own. The question of Who controls and issues money is critical. More specifically, how do we ensure that the entity that controls the quantity of money in our economy is truly aligned with the interests of the people? Thats a hard question to answer.

I'm starting to think that lesser of the two evils would be that the power of money creation was in the hands of an elected official (perhaps an elected Secretary of the Treasury) rather than in a private institution that people know next to nothing about. Or perhaps a mathematical algorithm should determine the general supply of money in the economy, providing that the economic data needed to feed the algorithm could be collected accurately.

What is really needed is complete transparency of the money creation process no matter who (or what) controls it. 

Some of your concerns are also addressed by Mr. Still:

(Edit: clarification)

DrKrbyLuv's picture
DrKrbyLuv
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Re: Pay Your Taxes With Sticks

I think this is an extremely important issue.  People need to better understand the mechanics of money.  In a free society, citizens have a responsibility to learn some basics in order to assure that their interests are served.  John Adams said "All the perplexities, confusion and distress in America arise not from defects in their Constitution or Confederation, nor from want of honor or virtue, so much as downright ignorance of the nature of coin, credit, and circulation."

Flawed belief systems (Austrian and Keynesian economics) have replaced any real fundamental understanding.  Neither addresses the most important issues.  For example, Congressman Wright Patman explained:

"Now, take the Panama Canal bonds. They amounted to a little less than $50,000,000 - $49,500,000. By the time they are paid the government will have paid $75,000,000 in interest in bonds of less than $50,000,000. So the government is paying out $125,000,000 to obtain the use of $49,500,000. That is the way it has worked all along...

Now, I believe the system should be changed. The Constitution of the United States does not give the banks the power to create money. The Constitution says that Congress shall have the power to create money, but now under our system we will sell bonds to commercial banks and obtain credit from those banks. We do not receive money for the bonds...

I believe the time will come when people will demand that this be changed. I believe the time will come in this country when they will actually blame you and me and everyone else connected with this Congress to sit idly by and permit such an idiotic system to continue."

Larry

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strabes
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Re: Pay Your Taxes With Sticks
Quote:

Can you try and explain why adding base money to the system would not be inflationary?

I think it would be if it wasn't somehow tied to production growth or some say population growth.    

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