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OpEdNews Op Eds    H1'ed 10/18/13

Debt No More! How Obama can defeat Austerity Thugs by Using the Constitution and Debt-Free Money

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At the height of the Civil War, when the NY banks wanted 24-36% interest on loans to the U.S. Government, president Lincoln, and the then Treasury Secretary Salmon P. Chase, created United States Notes, directly from Treasury, debt-free, with (after the first year) no redemption in species (gold) but simply as money.  The principal need not be repaid, and never specifically has been, despite a SCOTUS 8-1(!) ruling in 1884 in Julliard v. Greenman that this was only allowable under the "borrowing clause" of the constitution.

The White House has refused to consider progressive reform such as Dennis Kucinch's N.E.E.D. Act (HR2990), which would return America to its longest-lasting currency, the United States Note, despite having a Transportation Secretary, Ray LaHood, who is a Republican, who called for that very thing in a more modest infrastructure-financing bill (HR1452) as a Congressman in 1999 and again in 2003-2004. 

This is an even better option than the TDC because it shows ANY kind of money, coin, paper, and even electronic, can be "coined" to pay for those things Congress has already mandated.  The Treasury's Report on the Debt (http://www.treasurydirect.gov/ govt/reports/pd/mspd/2010/ opdm092010.pdf  page 11) forbids U.S. Notes from being counted toward, or being used to pay toward, the debt. 

Other Debt (in millions):

Not Subject to the Statutory Debt Limit:

United States Notes................................................................ 239

National and Federal Reserve Bank Notes assumed by the United States on deposit of lawful money for their retirement ......................................................65

Silver Certificates (Act of June 24, 1967)....................................172

Other..................................................................................... 11

Total Not Subject to the Statutory Debt Limit............................. 488

Subject to the Statutory Debt Limit:

Mortgage Guaranty Insurance Company Tax and Loss Bonds....... 215

Other................................................................................... 637

Total Subject to the Statutory Debt Limit...................................852

Total Other Debt..................................................................1,340

Fine.  Let this questionable law stand.  Use the authority to spend the Treasury account in Federal Reserve Dollars toward the debt, while using U.S. Notes to pay for everything else that there is insufficient funds in FRNs to pay for.  This will make it clearer than anything where and how money is actually created.

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Scott Baker is a Managing Editor & The Economics Editor at Opednews, and a blogger for Huffington Post, Daily Kos, and Global Economic Intersection.

His anthology of updated Opednews articles "America is Not Broke" was published by Tayen Lane Publishing (March, 2015) and may be found here:
http://www.americaisnotbroke.net/

Scott is a former President of Common Ground-NYC (http://commongroundnyc.org/), a Geoist/Georgist activist group. He has written dozens of articles for (more...)
 

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