One hour and fifty-six minutes. That’s all it takes to understand what’s happening to our country and how to fix it.
You haven’t the time, you say? Too busy with tweets and twitters? Getting carpel tunnel syndrome just deleting all the news, views and boos that fill your email inbox every day?
So was I until this came along. It’s a documentary about money. Historical, factual, thoughtful and extremely rational.
I suppose one reason I was so impressed with Bill Still’s wonderful video is that he says some things I have believed in my gut for a long time.
Article 1, Section 8 of the U.S. Constitution gives the Congress the power to borrow money, to coin money and to regulate the value thereof.
I never could figure out why it would ever be necessary to borrow money if you have the power to coin money.
Thomas Jefferson said that if there was one amendment to the constitution that he could write it would be that the United States government is prohibited from borrowing money.
The national debt is now over 15 trillion dollars. We borrow more money to pay the interest on the national debt. Then, we borrow money to run the government.
Makes no sense.
We mint coins and we issue them. We pay no interest on the coins we issue. Why should we pay interest on paper money? We print the bills and sell them to the Fed for pennies on the dollar. Then we borrow it back, pay interest on the face value and give the money we borrowed away. Or spend it.
Makes no sense.
They tell us that the more we borrow, the more money there is in circulation. The ten dollar bill in your wallet says that it is a Federal Reserve note. A note is nothing but an I.O.U. And if you take your note to the Federal Reserve and tell them you have come to collect on the I.O.U., what will they give you? Two fives, ten ones, maybe. More notes. More I.O.U.s.
Makes no sense.
Ron Paul crusades against the Federal Reserve. He wants them audited. He wants them abolished. Like many conservatives, Paul favors returning to the gold standard. The Wizard of Oz video argues that the gold standard is an invitation to manipulation by those who accumulate gold.
In finance, the golden rule is: he who has the gold makes the rules. That’s what has happened in the past.
But the argument against fiat money is also supported by history. If there is no limit to the amount of money that can be printed except the will power of public officials, those officials will sooner or later give in to the temptation to turn the crank enthusiastically until the currency isn’t worth the paper it’s printed on.
There is a third way. The constitution which empowers our government to coin money should also empower it to issue certificates of legal tender – greenbacks, if you will – in an amount not to exceed a certain multiple of the population as determined by the most recent census.
Money is, after all, just a medium of exchange. The more people there are, the more money is needed. Increasing the money supply to serve a larger population is not inflationary.
The constitution should prohibit borrowing for any purpose, but when Congress declares war, it should be able to increase the greenback ceiling, temporarily.
I’m sure there is much more to be said about this by people more knowledgeable about finance than I, but I submit that the time has come for all concerned citizens to discuss, debate and decide what must be done before we experience the modern version of Greek tragedy.