Congress’s Radical Plan to End Illegal Money
The comments above & below is an edited and abridged synopsis of an article by M.N. Gordon
Paper dollars are illegal money on two counts. First, they’re issued by the Fed. Second, they’re bills of credit with no ties to gold or silver. Of course, the dollar has other problems besides the major technicality of being illegal.
Several years ago JP Morgan Chase stopped accepting cash as payment for credit cards and mortgages. Now VISA says it will upgrade a merchant’s payment system and, in return, they will no longer accept cash payments from customers.
There’s nothing that disclaims parties from accepting cash payments, so illegal restrictions are being placed on illegal money. At least, that’s how it seems.
Today’s money is created from debt; it’s borrowed into existence. Over time, the economy has adjusted to debt-based money. Business transactions are made with it. Private and public buying and selling is conducted with it. All commerce is now settled with debt payments. Even debt is paid with debt.
The economy has also adjusted to an ever-increasing money supply that’s contingent upon ever-increasing levels of debt. Just a brief pause in the expansion of the money supply and the whole thing falls apart. Debts quickly fall into arrears and businesses and individuals go bankrupt as they run out of new debt to pay their old debts.
Debt-based money has also given way to ever-expanding government debt, and large components of the welfare-warfare state have become dependent upon it. Small reductions in deficit spending lead to large consequences for the economy.
The Treasury Secretary keeps the economy running by increasing the national debt, but it is nearing the debt ceiling. The Treasury Secretary will run out of the new debt he needs to pay the government’s obligations sometime in September if Congress doesn’t raise the debt ceiling.
Congress can do that, but because the national debt has increased from under $6 trillion in 2000 to nearly $20 trillion today, it has become highly politicized. Agreements to increase the debt ceiling must be met with other budget changes, including faux spending cuts, so that representatives can look good to their constituents.
No one really believes that the Treasury will default on its debt, but given the quagmire Congress has made of its Obamacare repeal and replace efforts, you never know.