Interesting Fact
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Interesting Question
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1. On September 7, 1787 the U.S. Constitution
granted Congress the power to coin (issue) money.
The Federal Reserve is not mentioned anywhere in
the Constitution.
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1. Does the United States Congress still have the
power to coin money?
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2. In 1835, President Andrew Jackson paid off the
national debt.
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2. If the United States was debt free in 1835, why do
we have a 9.5 trillion dollar debt today?
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3. In 1862, President Abraham Lincoln issued
449,338,902 dollars worth of legal tender United
States Notes (Greenbacks). This was debt free
money unlike the debt based Federal Reserve Notes
that are in circulation today.
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3. What happened to the 449,338,902 dollars worth
of United States Notes that Abraham Lincoln
issued in 1862? This money was in circulation in the
economy until 1994. How was it possible for this
money to simply vanish and be replaced with Federal
Reserve Notes?
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4. The Federal Reserve and the powers that it has
are unconstitutional. It is ironic that the Federal
Reserve is located on Constitution Avenue in
Washington, DC.
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4. Could the United States Congress (in 1913) legally
give its constitutionally mandated power to the
Federal Reserve without a Constitutional
amendment?
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5. The Federal Reserve was created in 1913 to
maintain a stable currency and prevent financial
panics, economic recessions and depressions.
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5. Why did the Federal Reserve cause the Great
Depression by contracting the money supply by 1/3
from 1929 to 1933? Why does the vast majority of
economists, politicians and pundits blame
“protectionism” (the Smoot-Hawley Tariff Act) for the
Great Depression and ignore the Federal Reserve’s
money contraction?
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6. In 2000, the Federal Reserve injected billions of
dollars into the economy (with no hyperinflation) to
protect the economy from possible Y2K problems.
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6. Why didn’t Congress inject debt free United States
Notes into the economy in 2000? This would have
set a precedent that could have drastically reduced
or even eliminated our national debt.
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7. In 2008, the Federal Reserve injected 160 billion
dollars of debt based Federal Reserve Notes into the
economy as an “economic stimulus package.” This
was done at a time when the national debt was 9.5
trillion dollars. This money was obtained by either
raiding the Treasury of badly needed tax revenue or
selling Treasury bonds and thus increasing the
national debt by 160 billion dollars plus the interest.
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7. In 2008, why didn’t Congress issue 160 billion
dollars worth of debt free United States Notes as an
economic stimulus Package?
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8. There is talk in Congress of a second economic
stimulus package.
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8. What would prevent Congress from putting the
money of a second economic stimulus package into
the economy in the form of debt free United States
Notes? Nothing.
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9. Today (9-15-2008) the economy and the nation
continue to suffer through a “credit crunch”. A credit
crunch is a situation where banks significantly reduce
the amount of money that they will loan and this
causes an economic downturn. A curious aspect of
this credit crunch is that “there is plenty of private
sector money (capital) sitting on the sidelines.” You
might say that the Great Depression was a credit
crunch on steroids.
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9. Today, just as was the case during the Great
Depression, a simple solution was and is available to
get the economy back on track: issue United States
Notes into the economy in what ever amount is be
necessary. The question is, why wasn’t this done in
1929 and why isn’t it done today?
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10. The federal government can make loans to the
private sector economy with U.S. Notes as Abraham
Lincoln recommended. This would create a public
sector banking bureaucracy. This would be far more
efficient, cost effective and stable than our current
financial services “industry” which is actually an
unstable private sector bureaucracy.
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10. If Abraham Lincoln recommended government
issued credit for the private sector economy, how did
we get stuck with the unstable existing financial
services “industry” that currently is in a severe
crisis? Thanks to Phil Gramm, John McCain’s
economic advisor, our deregulated, globalized
financial services “industry” is threatening the health
of our economy and sucking money out of the
pockets of the taxpayers for bailouts. Why are we, in
the words of one financial expert, flirting with
“financial Armageddon”?
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11. The national debt has exploded to 9.5 trillion
dollars.
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11. When our elected politicians saw that our
national debt was growing exponentially, why did they
continue to borrow money from the private sector?
All politicians swear an oath to protect and defend
the Constitution. Can we assume that at some point
they would actually read the Constitution? When
they came to Article One, Section 8, Paragraph 5,
did they not understand the words? Why did they
continue to borrow money and stick us with this
enormous debt when this was unnecessary? By
saddling the American people with an enormous,
unnecessary national debt, did the members of
Congress violate their oath to “promote the general
Welfare” of the American people as mandated by the
United States Constitution?
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12. The current (9-24 2008) financial crisis is the
number one topic of discussion in the country.
Unfortunately, the important questions rarely if ever
get asked. And the people who should be answering
those questions rarely if ever volunteer the answers.
We are told the financial markets are “clogged up.”
We are told it will take three quarters of a trillion
dollars of taxpayers money to “calm the jittery
financial markets.”
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12. Exactly why are the financial markets “clogged
up”? Why can’t we have a detailed explanation of
why markets are clogged up? Clogged up means
financial institutions won’t loan money even though
they “have trillions of dollars sitting on the sidelines.”
Why do we have to borrow three quarters of a trillion
dollars from the Chinese to “restore confidence” to
the “jittery financial markets” and then hand the bill to
the taxpayers ?
Why doesn’t Congress, to get much needed money
into the economy, issue debt free United States
Notes and make that legal tender money available
for student loans, car loans, mortgages and business
loans? The government could set up loan offices for
this purpose. The Federal Reserve, instead of
selling government debt, would be the agency that
would loan debt free U.S. Notes to the banks. The
banks would pay interest to the Treasury for the use
of the money.
But what about all those home buyers who are facing
foreclosure? There is a simple answer: The
government takes over the mortgages and the debt
is repaid to the treasury and the money can used for
social security, Medicare, infrastructure or other
good purposes. The borrower will pay a small
charge for the administration of the brand new
government mortgage system.
But the talk show hosts and the business press will
complain: What do we do with all those “complex,
innovative derivatives”? What do we do with those
financial “products” that nobody will touch? What do
we do with all that “toxic mortgage paper”? That is
something that should be settled between the people
who sold those “complex, innovative products” and
the people who took the risk and bought them. The
taxpayers shouldn’t be involved.
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