Wednesday, November 29, 2017

Debt-Free United States Notes were Once Issued Under JFK

Debt-Free United States Notes Were Once Issued Under JFK And The U.S. Government Still Has The Power To Issue Debt-Free Money

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.

18 comments:

  1. Great "catch and pass", Jim; thank you! Michael is "right on the money" that the national debt is a tragic-comic and unnecessary condition created by our empire.

    I teach AP Economics, and have zero refutation of these facts from colleagues for ten years, as well as two professional academic conferences hosted by the Claremont Colleges. To see Jim and I walk you through our condition: http://jamesfetzer.blogspot.com/2017/08/carl-herman-history-of-rogue-state_15.html

    ReplyDelete
    Replies
    1. So High School Economics. Okay, that's still a good thing. Do you then see the problem with "When existing money is destroyed"? The physical bill is destroyed, money cannot be destroyed.

      Best regards,

      E. Mealy El

      Delete
  2. Money, it's a crime
    Share it fairly but don't take a slice of my pie
    Money, so they say
    Is the root of all evil today
    But if you ask for a rise
    It's no surprise that they're giving none away
    Away away away

    ReplyDelete
  3. The most claps in one minute is 1,020 and was achieved by Eli Bishop (USA), at Studio A- EPD studio at the Berklee College of Music in Boston, Massachusetts, USA, on 5 May 2014.

    http://www.guinnessworldrecords.com/world-records/most-claps-in-a-minute

    So that's 17 claps per second or only 170 claps for the approximate time it took the 110 floors of each World Trade Center Tower to turn into dust in mid air. (Which, by the way, is a World record!)

    ReplyDelete
  4. On a different tack, because I don't know where and how else to ask you, what do you make of Alex Jones apparently insisting people died in the 'Las Vegas Massacre' and that the Saudis were involved? -- HW

    ReplyDelete
    Replies
    1. He was told to say that.

      Don't trust him.

      Delete
  5. "Rothschild Trillions Quantified"

    "The World's Richest Man Hoax"

    Both posted at SGTreport.com > all of the US $20 Trillion debt is owed to the banking crime syndicate with $200 Trillion in assets. It is past time to foreclose on these bandits.

    ReplyDelete
  6. "Most Americans have no idea" that gasbags who peddle articles like this one, never studied and know nothing about the story of greenbacks, federal reserve, banking.

    "Back in the day of JFK" US notes were printed not because of saint Jack, but because of the law of May 31, 1878, which enacted that 300some million US notes shall be maintained in existence. Saint Jack did sign a law (June 30, 1961) which modified that act:---

    "And provided further, That in the event of any determination by the Secretary of the Treasury under section 6 of the Old Series Currency Adjustment Act that an amount of said notes has been destroyed or irretrievably lost and so will never be presented for redemption, the amount of said notes required to be kept in circulation shall be reduced by the amount so determined."

    but that was about Jack's involvement. Did he even know what he signed ?

    William Clinton idolized saint Jack, and when he became president he, too, signed an act modifying the law of May 31, 1878: "The Secretary shall not be required to reissue United States currency notes upon redemption."

    Meaning: ~$330million greenbacks exist(as the law requires) but are sitting in the vault of the Treasury (as the law requires).

    ===========================

    Wikipedia is not something anyone should rely on for information regarding the financing of civil war (but how could a Snyder know that ?)

    The U.S. notes issued in 1862-63 were promises to pay dollar which at the time was a coin with 412.5 grains silver in it. In 1917 national currency banks (now members of the federal reserve system) presented $170million greenbacks to the Treasury and received gold for them. The greenbacks were supported by $500million bonds which paid 6% gold interest. Add to this the human and monetary cost of the war then say how good and debt and interest free the U.S. notes were.
    ===========

    The Snyder obviously does not understand what Ford and Edison were talking about. What Ford had in mind were notes that would be retired from the proceeds of the power generating plant; not printing-press money promoted by these deformators.
    Gold and silver coins are debt-free and interest-free, but none of the monetary gasbags mentions it.

    ======================
    Out of the 7,700 U.S. banks 2,900 are members of the Federal Reserve System. These 2,900 banks are the owners of the Federal Reserve. Everyone of these 2,900 banks is a publically traded joint-stock company, the list of shareholder can be obtained if someone would be willing to do the meticulous work.
    Pension funds of government employees and union employees hold, on average, 20% of outstanding bank shares; meaning, they own more bank shares than all the Rothschilds put together. Mr. Fetzer gets a pension cheque every month from his teacher federation. That cheque derives from bank profits, interest on goverment bonds, and wall street speculation.

    More than half of the shares of J.P. Morgan, Golman Sachs (neither of the members of Fed) held by pension funds..............
    ===========================

    "To coin money" cannot mean to coin paper ! To everyone who signed and voted for that document "to coin" meant forming gold/silver/copper into a round piece. And the exact same people also signed the first law regarding coinage (april 2, 1792) which stipulated that the dollar, the unit of account, is a coin containing 371.25 grains of silver.

    =======================
    The U.S. government does not have to borrow from anyone; it borrows because it wants to spend more than it receives. If we cut down the size and expenditures of the government where it was when Kennedy showed in power; or if we cut down the size and expenditures of the government to where it was when Lincoln was president ($5 per man-woman-child); we could be out of debt in short time.

    ReplyDelete
    Replies
    1. name789 is the gasbag. I teach AP Macroeconomics and have received zero refutation from ~2,000 colleagues, and those of us presenting at international academic conferences have also received no refutation that monetary reform and public banking end the national debt, and are valued at about a million dollars per average US household.

      Documentation: http://www.washingtonsblog.com/2017/09/labor-day-2017-american-workers-looted-01-lying-war-criminals-6-5-trillion-lost-dept-defense-political-leaders-corporate-media-withhold-1000.html

      And again, to see Jim and I walk you through these reforms: http://jamesfetzer.blogspot.com/2017/08/carl-herman-history-of-rogue-state_15.html

      Delete
    2. 2000 collegues who know as little (nothing) about the subject as you do. On washingtonblog I pointed out how you have to lie and fabricate to underpin your false premise; and received zero refutation from you, and and zero support for your falsehood-based ideas.
      From day one monetary deformators had to rely on fabrication and falsehoods. James Garfield noted in 1876 that deformators fabricate and construct:
      http://www.yamaguchy.com/library/uregina/garfield68.html

      Delete
    3. I trust the public interested to do their own research decide for themselves. Do you?

      Please document what lie you allege I make.

      Thanks for the essays by Garfield. A summary of the first, written at the age of just 37:
      1. Europe has a history of monetary incompetence resulting in poverty connected to starvation, and severely effected by militarism for empires.
      2. Garfield denounces fiat currency in the US from the Revolution, but ignorant that the British counterfeited the US paper money to cause the inflation.
      3. Garfield seems to recognize the value of money is connected to its supply, but seems to cannot distinguish between bank-issued paper currency versus a federally-controlled supply. Any clarification on this?
      4. Garfield's solution for a control of money supply is gold-backed currency.

      In contrast, those of us working for monetary reform and public banking on those four points:
      1. Yes: poverty and looting (financial and imperial-military of natural and human resources) is connected to what is used for money, and who has authority to create it.
      2. The supply of money is key. Connecting supply to a commodity such as gold is a dangerous element added into the equation, and allows manipulation of the supply/value.
      3. Bank-issued credit is what we use for money, and the cause of only and always increasing total debt because “credit” is negative numbers added forever.
      4. Our solution is controlling the supply of money by controlling its supply, not tying the value of money to the value of another commodity.

      But again, I’ll let the public interested to know determine what and who is “gasbagging.”

      Delete
    4. what zoomed right over your head is, you lied about James Garfield, Thomas Jefferson, Andrew Jackson, Peter Cooper, Benjamin Franklin. And you lied about having studied and knowing anything about the subject of money and banking.
      Just as James Garfield observed 150 years ago, ye deformators have to lie and fabricate to underpin your ignorance-based false premise, upon which ye build up theology

      now, for the first time in your life, read some facts on money and banking:
      http://name789.wordpress.com/

      Delete
  7. "Most Americans have no idea" that gasbags who peddle articles like this one, never studied and know nothing about the story of greenbacks, federal reserve, banking.

    "Back in the day of JFK" US notes were printed not because of saint Jack, but because of the law of May 31, 1878, which enacted that 300some million US notes shall be maintained in existence. Saint Jack did sign a law (June 30, 1961) which modified that act:---

    "And provided further, That in the event of any determination by the Secretary of the Treasury under section 6 of the Old Series Currency Adjustment Act that an amount of said notes has been destroyed or irretrievably lost and so will never be presented for redemption, the amount of said notes required to be kept in circulation shall be reduced by the amount so determined."

    but that was about Jack's involvement. Did he even know what he signed ?

    William Clinton idolized saint Jack, and when he became president he, too, signed an act modifying the law of May 31, 1878: "The Secretary shall not be required to reissue United States currency notes upon redemption."

    Meaning: ~$330million greenbacks exist(as the law requires) but are sitting in the vault of the Treasury (as the law requires).

    ===========================

    Wikipedia is not something anyone should rely on for information regarding the financing of civil war (but how could a Snyder know that ?)

    The U.S. notes issued in 1862-63 were promises to pay dollar which at the time was a coin with 412.5 grains silver in it. In 1917 national currency banks (now federal reserve banks) presented $170million greenbacks to the Treasury and received gold for them. The greenbacks were supported by $500million bonds which paid 6% gold interest. Add to this the human and monetary cost of the war then say how good and debt and interest free the U.S. notes were.
    ===========

    The Snyder obviously does not understand what Ford and Edison were talking about. What Ford had in mind were notes that would be retired from the proceeds of the power generating plant; not printing-press money promoted by these deformators.
    Gold and silver coins are debt-free and interest-free, but none of the monetary gasbags mentions it.

    ======================
    Out of the 7,700 U.S. banks 2,900 are members of the Federal Reserve System. These 2,900 banks are the owners of the Federal Reserve. Everyone of these 2,900 banks is a publically traded joint-stock company, the list of shareholder can be obtained if someone would be willing to do the meticulous work.
    Pension funds of government employees and union employees hold, on average, 20% of outstanding bank shares; meaning, they own more bank shares than all the Rothschilds put together. Mr. Fetzer gets a pension cheque every month from his teacher federation. That cheque derives from bank profits, interest on goverment bonds, and wall street speculation.

    More than half of the shares of J.P. Morgan, Golman Sachs (neither of them members of Fed) held by pension funds..............
    ===========================

    "To coin money" cannot mean to coin paper ! To everyone who signed and voted for that document "to coin" meant forming gold/silver/copper into a round piece. And the exact same people also signed the first law regarding coinage (april 2, 1792) which stipulated that the dollar, the unit of account, is a coin containing 371.25 grains of silver.

    =======================
    The U.S. government does not have to borrow from anyone; it borrows because it wants to spend more than it receives. If we cut down the size and expenditures of the government where it was when Kennedy showed in power; or if we cut down the size and expenditures of the government to where it was when Lincoln was president ($5 per man-woman-child); we could be out of debt in short time.




    ReplyDelete
  8. North Dakota State Bank
    Saves then Loans the Savings
    All other banks Loan without money in the vault through the Fed.

    A debt instrument always eventually needs a concept called forgiveness.

    Merry Christmas Jim

    ReplyDelete
  9. 'If Congress took back the power over our currency and started issuing debt-free money a lot of our problems could be fixed.'

    A popular campaign to realize these objectives appears to be underway:

    https://youtu.be/bNFGhE-xe1k?t=416

    ReplyDelete
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