Debt-Free United States Notes Were Once Issued Under
JFK And The U.S. Government Still Has The Power To Issue Debt-Free Money
By
Michael, on December 19th, 2011 
Most
Americans have no idea that the U.S. government once issued debt-free money
directly into circulation. America once thrived under a debt-free
monetary system, and we can do it again. The truth is that the United
States is a sovereign nation and it does not need to borrow money from
anyone. Back in the days of JFK, Federal Reserve Notes were not the only
currency in circulation. Under JFK (at at various other times), a limited
number of debt-free United States Notes were issued by the U.S. Treasury and
spent by the U.S. government without any new debt being created. In fact,
each bill said "United States Note" right at the top.
Unfortunately, United States Notes are not being issued today. If you
stop right now and pull a dollar out of your wallet, what does it say right at
the top? It says "Federal Reserve Note". Normally, the
way our current system works is that whenever more Federal Reserve Notes are
created more debt is also created. This debt-based monetary system is
systematically destroying the wealth of this nation. But it does not have
to be this way. The truth is that the U.S. government still has the power
under the U.S. Constitution to issue debt-free money, and we need to educate
the American people about this.
Posted below are pictures of the
front and the back of a United States Note printed in 1963 while JFK was
president....
Notice that there is a red seal
instead of a green seal on the front, and it says "United States
Note" rather than "Federal Reserve Note".
According to Wikipedia, United
States Notes were issued directly into circulation by the U.S. Treasury and
they were first used during the Civil War....
They were originally issued directly
into circulation by the U.S. Treasury to pay expenses incurred by the Union
during the American Civil War. Over the next century, the legislation governing
these notes was modified many times and numerous versions have been issued by
the Treasury.
So why are we using debt-based
Federal Reserve Notes today instead of debt-free United States Notes?
It seems rather stupid, doesn't it?
Well, that is what Thomas Edison
thought too.
Thomas Edison was once quoted in the
New York Times as saying the following....
That is to say, under the old way
any time we wish to add to the national wealth we are compelled to add to the
national debt.
Now, that is what Henry Ford wants
to prevent. He thinks it is stupid, and so do I, that for the loan of $30,000,000
of their own money the people of the United States should be compelled to pay
$66,000,000 — that is what it amounts to, with interest. People who will not
turn a shovelful of dirt nor contribute a pound of material will collect more
money from the United States than will the people who supply the material and
do the work. That is the terrible thing about interest. In all our great bond
issues the interest is always greater than the principal. All of the great
public works cost more than twice the actual cost, on that account. Under the
present system of doing business we simply add 120 to 150 per cent, to the
stated cost.
But here is the point: If our nation
can issue a dollar bond, it can issue a dollar bill. The element that makes the
bond good makes the bill good.
Our current debt-based monetary
system was devised by greedy bankers that wanted to make huge profits by
creating money out of thin air and lending it to the U.S. government at
interest.
Sadly, the vast majority of the
American people have no idea how money is actually created in this nation.
In a previous article about money and debt, I
explained how more government debt is created whenever the U.S. government puts
more money into circulation....
When the government wants more
money, the U.S. government swaps U.S. Treasury bonds for "Federal Reserve
notes", thus creating more government debt. Usually the money isn't
even printed up - most of the time it is just electronically credited to the
government. The Federal Reserve creates these "Federal Reserve
notes" out of thin air. These Federal Reserve notes are backed by
nothing and have no intrinsic value of their own.
When each new Federal Reserve Note
is created, the interest owed by the federal government on that new Federal
Reserve Note is not also created at the same time.
So the amount of government debt
that is created actually exceeds the amount of money that is created.
Isn't that a stupid system?
The U.S. Constitution says that the
federal government is the one that should actually be issuing our money.
In particular, according to Article
I, Section 8 of the U.S. Constitution, it is the U.S. Congress that
has been given the responsibility to "coin Money, regulate the Value
thereof, and of foreign Coin, and fix the Standard of Weights and
Measures".
So why is a private central banking
cartel issuing our money?
As is the case with so many other
issues, we desperately need to get back to the way the U.S. Constitution says
that we should be doing things.
The debt-based Federal Reserve
system is literally stealing the future from our children and our
grandchildren.
Back in 1910, a couple years prior
to the passage of the Federal Reserve Act, the national debt was only about $2.6 billion.
A little over 100 years later, our
national debt is now more than 5000 times larger.
So why don't we just admit that this
system simply does not work?
Our current debt-based monetary
system also requires very high personal income taxes to pay for it.
In fact, it is no accident that the
personal income tax was introduced at about the same time that the Federal
Reserve system originally came into existence.
Our children, our grandchildren and
many generations after that are facing a lifetime of debt slavery because of
us.
As I have written about previously, if the federal
government began right at this moment to repay the U.S. national debt at a rate
of one dollar per second, it would take over
440,000 years to pay off the national debt.
Neither the Republicans or the
Democrats are proposing any solutions to this problem. Rather, both
parties are only trying to slow down the rate at which we are going into even
more debt.
But the truth is that the federal
government does not have to go into a single penny of additional debt.
How could this be?
It is not too complicated.
If Congress took back the power over
our currency and started issuing debt-free money a lot of our problems could be
fixed.
A basic plan would look something
like this....
#1) The U.S. Congress votes to take back all of the functions
that it has delegated to the Federal Reserve and begins to issue debt-free
United States Notes. These United States Notes would have the exact same
value as existing Federal Reserve Notes, and over time all existing Federal
Reserve Notes would be taken out of circulation.
#2) The U.S. Congress nationalizes all debt
held by the Federal Reserve. That would instantly reduce the national
debt by 1.6
trillion dollars. In fact, there are a few members of Congress
that have already proposed this.
#3) A Constitutional amendment is passed limiting future U.S.
government deficits to a reasonable percentage of GDP. Any future
deficits would not be funded by borrowing. Rather, future deficits would
be funded by newly created United States Notes. Therefore, the federal
government would never again accumulate another penny of debt.
And it would be important to inject
new money into the economy from time to time. When existing money is
destroyed or when the population grows it is important to inject a certain
amount of new money into the system in order to avoid deflation.
#4) The existing national debt would be very slowly paid off
with newly created United States Notes. The U.S. government spent over
454 billion dollars on interest on the national debt during fiscal
year 2011, and over time this expense would go to zero.
If the national debt is paid off
slowly enough, it would not create too much inflation. I believe that it
could be paid off gradually over 50 years without shocking the economy too
much.
There are some that would object to
any measure that would ever cause a small amount of inflation, but my contention
is that we have created a $15 trillion dollar debt mess for future generations,
and it would be absolutely criminal to pass that legacy on to them.
We created this mess, and it is our
responsibility to clean it up.
While there is certainly a danger
that we would have a limited amount of inflation under a debt-free monetary
system such as the one described above, the reality is that we are absolutely
guaranteed inflation under the Federal Reserve system.
Most Americans believe that
inflation is a fact of life, but the sad truth is that the United States has
only had a major, ongoing problem with inflation since
the Federal Reserve was created back in 1913.
If you do not believe this, just
check out this chart.
Sadly, the U.S. dollar has lost well
over 95 percent of its value since the Federal Reserve was created.
So, yes, there would be a need for
strict monetary discipline under a debt-free monetary system, but it would be
hard to do worse than the Federal Reserve has already been doing.
And Congress could always slow down
inflation using other methods. For example, raising the reserve
requirements for banks (which should be done anyway) would help keep inflation
in check.
If the above proposals were adopted,
the end result would be something that we could all live with. The
Federal Reserve system would be abolished, the national debt burden on future
generations would be wiped out, the economy would not have to go through a
devastating economic collapse that could last a decade or longer, and we could
eventually make a fairly smooth transition to "hard money" if we
wanted to after the national debt is gone.
Is there any other proposal out
there that does all of those things?
There are many out there that would
dispute some of the points above, and debate is good. By engaging in
debate, we can hopefully help educate the American people about the nature of
money.
The key is to get rid of our current
debt-based Federal Reserve Notes and replace them with debt-free United States
Notes.
The American people need to
understand that it is a lie that the U.S. government "must" borrow
money from somebody else.
When the U.S. government borrows
money, it slowly transfers wealth from the American people to those that lent
it.
At this point, we have created a
financial nightmare for future generations that is unlike anything the world
has ever seen before. We owe it to future generations to eliminate the
debt problem without destroying the United States economy. Adopting
debt-free money would allow us to do that.
But sadly, neither political party
is even talking about debt-free money. In fact, most of the politicians
in both political parties probably do not even know what debt-free money is.
So we need to get the American
people educated about these things. Because if we stay on the course that
we are currently on, an economic collapse is inevitable.
- See more
at: http://theeconomiccollapseblog.com/archives/debt-free-united-states-notes-were-once-issued-under-jfk-and-the-u-s-government-still-has-the-power-to-issue-debt-free-money.#sthash.XsavG8ow.dpuf
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