Why Monetary Reform?

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Bill Still's picture
Bill Still
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Why Monetary Reform?

Conservatives sometimes suspect that monetary reform is just another redistribution scheme?

Not at all. Monetary reform does not redistribute the output of our incentive-driven system. It merely removes the major killer to incentive driven competition -- a monopoly on money itself.

What's the key element of that monopoly? The National Debt. Here's a real news flash -- governments don't have to borrow! Government debt is the secret poison -- the hidden corrosion -- of the incentive-driven system -- the system that must be preserved at all costs if the American experiment in governance by self-determination is to survive to see its tricentennial.

Laissez faire capitalism is the optimal economic system to maximize both innovative productivity and class mobility. If you work hard, you can improve your family’s lot in life – incentives. Where it goes astray is when politicians want to borrow some extra money so they can spend more than the national income. It doesn't matter if you champion gold money, bi-metalism, or greenbacks. It doesn't matter if you end the Fed or fix the Fed. If you allow a National Debt, you've done NOTHING! 

Redistribution schemes -- the political "isms" -- don't work -- have never worked. As the great British historian, Nesta Webster wrote:

"...ownership of property ... is not peculiar to the human race. The bird has its nest, the dog has its bone that it will savagely defend... if everything were divided up today all would be unequal again tomorrow. One man would fritter away his share, another would double it by turning it to good account, the practical and energetic would soon be more prosperous than the idler or the wastrel. The parable of the ten talents perfectly illustrates the differing capacity of men to deal with money."

In addition, monetary reform answers Jefferson’s main complaint about the U.S. Constitution:

“I wish it were possible to obtain a single amendment to our Constitution…. Taking from the federal government the power of borrowing.”

And speaking of the Constitution, read Article 1 Section 8: "Congress shall have the power to borrow money... [and] regulate the Value thereof...." How can they control the value when they have ceded that control to a private money monopoly -- one over which the have absolutely no control?

In the very next line of Section 8 it even talks about counterfeiting: ""To provide for the Punishment of counterfeiting the Securities and current Coin of the United States...." 

Don't you think that investment banks creating money at ratios of at 53 times more money than they actually have qualifies as counterfeiting under the law? It certainly would if you or I did it! 

Removing the government’s ability to borrow is the single most crucial element of monetary reform. In the coming fiscal year, the US government will spend north of $700 billion on interest payments -- mostly to the big money center banks in New York, London, and China. That’s an astounding 10% of ALL WAGES paid to everyone in the United States and a whopping 25% of all disposable spending by all Americans. Yet we argue whether or not to fund NASA to the tune of $14 billion.

So what could we do if we weren’t spending $700 billion every year on interest payments on the National Debt? Well, guess what the total receipts from federal income taxes are? $1,100 billion! In fact, all discretionary spending available to Congress is only $500 billion.

Now that's just the spending by the feds. Then there are the states. Think of the effects of removing all interest payments on bonded indebtedness from all state budgets? It would free up huge amounts of money for use by the general public.

The result: the crushing debt loads that are killing our economy would no longer be payments to the big money center banks, ultimately shouldered by taxpayers. That money would be returned to the public as wealth.

So, monetary reform is not redistribution of wealth, it’s nothing less than the prevention of national theft in the first place.

presidentbyamendment's picture
presidentbyamendment
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Re: Why Monetary Reform?

The monetary reform I propose at

presidentbyamendment.com/issues/money.html

ENDS the redistribution of wealth, via inflation, i.e. "monetization" or "seignorage",

from the populace to the Federal Reserve Banks.

See my post of a moment or two ago to see how at least some of what is probably my

language is in the bill waddling around the banking committee at the moment.

 

The US monetary system, being an accident of the former metallic standard system, is what

computer programmers call a "kludge". Like Windows(TM). It kinda works. Usually.

My favorite bit of current monetary system law is the clause that says you can take

Federal Reserve Notes to the Treasury in DC and echange them for "lawful money".   Kludge.

RH

presidentbyamendment.com

DrKrbyLuv's picture
DrKrbyLuv
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Posts: 1995
Re: Why Monetary Reform?

Hello Bill!

It's an honor to have an accomplished monetary expert visit this forum (Mr. Still stars in the Money Masters).

I don't think it is an exaggeration to say that monetary reform is the issue of our age.  Our current debt based system must be replaced if we and future generations are ever to enjoy freedom and prosperity.  To quote you (paraphrased) "monetary reform is a human rights issue." 

We are enslaved by debt that can only grow, it can never be repaid.  In an earlier post on this forum, I think I prove this empirically:

"Our total money supply (M3) is around $15 trillion while our national and private debt total around $55 trillion.  How do we pay an existing $55 trillion in debt with a total of $15 trillion?  We are short $40 trillion, where will that money come from?

In our debt based monetary system there is only one way to add money and that is through new debt.  Eventually, the $40 trillion must be borrowed. If the money is borrowed, it will add new debt of over $40 trillion (principal + interest).  The debt can only grow, it can never be repaid as the gap between money and debt will continue to increase.

The two economic theories will try to explain away this reality by claiming that the velocity of money can be increased so that a given amount of money can be used for more transactions.  This is true when we spend money but it is not true when we repay debt.  When debt is repaid it is extinguished, that is that the money ceases to exist which means that money can only be used to repay principal debt once.  Most of the interest debt returns to circulation but never the less, the gap between money and debt will still increase since only the principal is created through new debt which brings new interest. 

The specie of money doesn’t matter.  If our money were backed by gold, the gold would simply be transferred to those who collect the interest.  We saw this in 1933 when the gold standard collapsed and we lost most of our gold."  Link to my entire post

You mentioned that "In the coming fiscal year, the US government will spend north of $700 billion on interest payments -- mostly to the big money center banks in New York, London, and China."  The current average interest rate for our national debt is just over 3%.  This is well below the past 40 year average which is over 7%.  As we roll the debt over, we will eventually see the rate increase.  The $700 billion may quickly become $1.2 trillion.

Thank you for all your hard work, please continue to champion monetary reform.  You're a true American hero.

Larry Larkin

Bill Still's picture
Bill Still
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Posts: 2
Re: Why Monetary Reform?

Excuse me, but to say the current system is "an accident of the former metallic standard system" is wrong.

It is a deliberately complex contrivance of the banking system. It has nothing to do with freedom and has everything to do with consolidation of wealth and power.

You also mention the oft-recited and rarely correct term "lawful money." I'd be interested if you would please define this "lawful money" in terms of the U.S. Constitution.

JAG's picture
JAG
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Posts: 2492
Re: Why Monetary Reform?

Hi Bill, Welcome to the community!

I have a question concerning a quote attributed to you by Nate (link): 

“It’s not what backs the money, it’s who controls the quantity,”

I am intrigued by this distinction, the "who" is indeed the problem. Is there a way to design a monetary system where the "who" that issues the money is the people of the nation itself, and not the government or private bank(s)? "Who" can we trust to issue money?

Thanks for your time and your very valuable work.

Jeff

PS: Any chance of getting "The Secret of Oz" available on iTunes?

Damnthematrix's picture
Damnthematrix
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Posts: 3998
Re: Why Monetary Reform?

I wonder what would be your chances of contesting your mortgage in a Court of Law on the grounds the banks lent you counterfeit money.....

Mike

kemosavvy's picture
kemosavvy
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Posts: 254
Re: Why Monetary Reform?

Mr. Still, it is an honor to have you on this site, you are a valuable edition to this community.

The question I have is how do the investment banks create 53 times more money than they have out of nothing? Don't they borrow to get this money? This would mean the traditional banks are creating this money not the investment banks.

I don't want to hijack the discussion from monetary reform, but I thought that you might enlighten me while you are here...

Steve

presidentbyamendment's picture
presidentbyamendment
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Posts: 64
Re: Why Monetary Reform?

"lawful money" is from existing federal law. Ask a Treasury official what exchanging Federal Reserve Notes for lawful money means.

The senselessness of it is my point, and evidence of it being a big ad-hoc mess converted from a silver standard.

The ability of the Fed to arbitrarily increase it's capital is a loophole, an accident, and Congress is in the process

of closing that loophole at my urging. Why is a hobo writing US monetary policy? Because I know what I'm talking about.

 

Does Marc Faber know about this?

 

 

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