One significant challenge faced by the United States Secretary of the Treasury is the obligation to endorse the Federal Reserve’s legal tender notes with their signature. This public display actively represents an inherent flaw: the Secretary’s signature serves as a personal acknowledgment of an unconstitutional monetary system.
According to Article I, Section 8 of the U.S. Constitution, it is Congress—and not the Federal Reserve—that is tasked with coining money and regulating its value. Furthermore, Article I, Section 10 explicitly states that currency must be minted from gold and silver, prohibiting bills of credit such as paper legal tender notes.
Paper dollars could be deemed illegal for two reasons. First, they are issued by the Federal Reserve. Second, they constitute bills of credit devoid of any connection to gold or silver.
What’s happening here? Isn’t the U.S. Constitution intended to be the highest legal authority in the nation?
It seems far-fetched. Many are aware that the Constitution has been reduced to a historical relic. Does this concern you?
It certainly concerns us. We recognize the serious implications of the Constitution’s deterioration, yet the ongoing realities of its weakened state cannot be ignored.
Additionally, the paper dollar faces numerous issues beyond its illegality; its fundamental payment characteristics are questionable.
Illegal Restrictions on Illegal Money
Several years ago, JP Morgan Chase ceased accepting cash for credit card and mortgage payments. Now, Visa is incentivizing merchants to stop accepting cash altogether, offering upgrades to their payment systems in exchange for this switch.
Are these actions by JP Morgan Chase and participating merchants also unlawful? As long as paper dollars state: “This note is legal tender for all debts, public and private,” it seems so.
We see no indication that prohibits certain parties from accepting cash payments. Therefore, it appears that illegal restrictions are being imposed on illegal money. But perhaps we’re out of touch; after all, we still mow our own lawns and settle our utility bills with handwritten checks.
The crux of the issue is that illegal money breeds a multitude of complications. Furthermore, the current Treasury Secretary, Steven Mnuchin, is grappling with these challenges and more each day.
Simply put, today’s money is born from debt; it is created or borrowed into existence. The economy has adapted to this debt-based currency, facilitating transactions across the board, from private to public ventures. Even debt is settled through debt.
The economic model has evolved to rely heavily on a continually expanding money supply, which is directly tied to rising debt levels. Just a momentary halt in this expansion could trigger chaos—debts could sour, leading to widespread bankruptcies as individuals and enterprises find themselves lacking fresh debt to meet older obligations.
Congress’s Radical Plan to End Illegal Money
Moreover, debt-driven currency has resulted in escalating government debt. A significant portion of the welfare-warfare state now depends on this system, meaning even slight cuts in deficit spending can have catastrophic effects on the economy.
Indeed, the role of Treasury Secretary Mnuchin is hardly enviable. He must ensure the economy continues to function smoothly while distributing the government’s illegal currency. However, this necessitates accumulating even more national debt.
Currently, the national debt is nearing its limit. Unless Congress raises the debt ceiling, Mnuchin may run out of new debt to cover governmental responsibilities by September.
What’s the issue? Congress has raised the debt ceiling 78 times over the past 57 years. Surely, they can do it again?
Yes, but until recently, raising the ceiling was almost a formality. Now, as the national debt has surged from under $6 trillion at the dawn of the millennium to nearly $20 trillion today, the conversations around the debt ceiling have become highly charged in Congress. Any agreement to elevate the ceiling is now often accompanied by negotiations for budget adjustments, including superficial spending cuts aimed at appeasing their constituents.
No one genuinely believes that the Treasury will default on its obligations. After much arguing and complaining, a last-minute deal will likely be struck—just as it has before.
However, given the legislative gridlock over issues like the repeal and replacement of Obamacare, expectations are uncertain. Might Congress unwittingly do the public a favor by failing to raise the debt ceiling?
Could Congress stumble upon a more radical solution to terminate the government’s illegal money?
Only by chance.
Sincerely,
MN Gordon
for Economic Prism
Return from Congress’s Radical Plan to End Illegal Money to Economic Prism
