THE LIBERTARIAN ENTERPRISE
Number 159, February 4, 2002
See Ted Run! Run Ted, Run!
It's About the Money, Stupid!
by Patrick K Martin
Exclusive to TLE
Recently there has been a great deal of interest in wether the 16th amendment was legally ratified or not. Congress even agreed to have a meeting on this issue, after a tax protester began a hunger strike over it. Now (SURPRISE), the meeting has been called off, because the 'tax honesty' movement was suggesting that people not file Federal tax returns until after the meeting. This was all the excuse, the politburo ... I mean Congress, needed to cancel the meeting. I am amazed by the gullibility of some people (although I shouldn't be). Does anyone here honestly believe that the Fed's are going to stand up and declare that the income tax is illegal and unconstitutional? Raise your hand. Do you realize that declaring the 16th Amendment would require that every single penny, which has EVER been paid in income tax would have to be refunded? Even if we, as a nation, agreed to forgo repayment, the entire tax structure would have to be rebuilt.
Imagine what would happen to the bond market, if investors suddenly found out that the government bonds were no longer backed by the guaranteed ability to steal YOUR money to repay them? What if the Federal Reserve (which is a private corporation, made up of the biggest banks in America) decided to foreclose? Do you think we could just ignore them? Every nation on earth would switch to the Euro, or some other currency, because the dollar is no longer redeemable. Don't think that could happen? Well I suggest you guess again.
Do you know how U.S. money operates? It's very simple, The government goes to the Federal Reserve and says, "We need one Trillion (1000 Million) dollars" or whatever amount they want. The FED makes a note in their ledger and says "OK, go print 250 Billion, and your line of credit is 750 Billion, and you pay 3% interest." That's it, in a nut shell. A few key-presses and the U.S. has a Trillion dollars to pour down a rathole, neat huh? The money our government prints or otherwise uses, are debt instruments which the banks have agreed to redeem, that's all. Every dollar in your pocket is part of a mortgage on future production. The banks, in turn, depend on our interest payments to pay their debts and keep their doors open. The banks themselves have almost no assets, at least compared to the vast sums that they 'lend' the government.
I know, I know, your thinking that this cannot possibly be right. If the banks have no assets, how can they lend anything to anybody? After all, I can't lend people money that I don't have, the whole thing makes no logical sense! Well congratulations, you now know the dirty little secret that the government does not want you to know. The Federal Reserve system is a lie. The monetary system is a FRAUD. The government and the banks are engaging in a conspiracy to steal YOUR LABOR!
Money, wether Dollars, Euro's, Yen, Pounds, or Marks, is LABOR. It is a means of exchanging your labor for the labor of someone else, that's all, nothing else. Money, of itself, has no objective value. It is the hours and minutes and days of your life transformed into an easily traded form. Money is just a way of simplifying barter. You give your labor to someone who needs it, and you get something to trade to the guy who has something YOU need. This is where our problem originates. You see, the government and the bankers know this, but most people do not. The majority of people think of money as some sort of magic talisman, a Ju-Ju which is provided by the wizards of Washington, which can be transformed into goods and services. The government, in the form of their propaganda mills (you know, the one's we laughingly refer to as schools), has spent a deal of time and effort supporting the notion that the magic of green ink and a bureaucrat's smile, transforms simple paper into wealth. Because, if you know the truth, you are liable to pay more attention to what is done with it. Hell, you might even decide that the guy stealing your car is not simply taking a 'Material Object' which can be replaced, but rather the hundreds, perhaps thousands of hours of you life that you have spent LABORING for it, which cannot. Good Lord, you might shoot somebody over something like that!
Now sure, if you make money out of Gold or Silver, the metal has value to the person who uses it for some purpose, but what good is Gold to a man who is starving? What good is Silver to a man who needs a Heart Bypass? Currency made of Gold and Silver has some value, simply because many people do use it, so it cannot be devalued below a certain point. Paper money backed by Gold and/or Silver, allows people to purchase at a fixed rate, thus it retains a certain fixed value (unless they print more bills than they have metal to back it up). Federal Reserve notes, on the other hand, have value because, and only because, banks have agreed to redeem them, and that value is not fixed. If the banks were to stop redeeming them, they would be worth NOTHING! They are just paper, an IOU if you will, they only have value IF the banks say so, and for only as much as the banks say. The Banks could decide tomorrow that they will only redeem dollars at 1% of current value (say 1 dollar equals 1.19 Yen or 1/85th of a Euro) AND WE COULD DO NOTHING! Oh sure, the government could seize the banks. However, since the banks have no value, except their ability to redeem dollars and loan money to others, and few hard assets, seizure means nothing. Additionally, the other banks around the world would not accept deposits, withdrawals, loan, bonds, debit's, or other obligations to, or from, U.S. banks, which would make Federal Reserve notes worthless anyway. Thus, the banks have the whip hand, they can crush our entire economy, while we can do nothing about it. The United States government knows this, and frankly, they support it because this system allows the government to steal from its citizens much more easily. They barrow, we pay, it's as simple as that. The banks give them money, to use as they please (money which is never expected to be repaid) and the banks get value, in the form of our labor, when the government taxes us and pays them their interest.
The government produces nothing! Let me repeat that, THE GOVERNMENT PRODUCES NOTHING! Your labor, and the labor of others, produces things which the government then claims to provide for you. Some people dispute this, they claim that the government provides services, which we as citizens must pay for, well what are these services? Defense? Defense is provided by those citizens who volunteer to be trained to fight and die for you and your fellow citizens, with equipment purchased with our labor. Law Enforcement, welfare, highways, everything the government supposedly PROVIDES for us, are in fact provided by US, by you, me, and 280 MILLION other American citizens. The government just claims the credit for it because we allow them to organize these activities for us, a job I might add, which they do with less than optimum efficiency in most cases.
The crux of the problem with our economy, is that people do not understand these facts. People do not know what money is, or how our system operates. They think that government magically causes the things we see them doing to happen, and all we have to do is hand over bits of paper (which they printed anyway) and Presto! We are safe, secure, and cared for. It is this perception which lies at the heart of our problems. It is this perception which we must fight. It is this perception which allows us to be enslaved by the forces of government. We will only be free when we have destroyed this idea, and the great unwashed masses know the truth. Until then, our masters will continue to do as they please and we will all continue to pay for them, with our blood, sweat, and tears.