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Solving the Bankruptcy Crisis One State at a Time

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July 1, 2012 in Economics

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As the nations of the world are being bankrupted by the world-wide debt-money system, the states have the power to protect themselves from bankruptcy by issuing their own local currency. Properly done, it is legal.

 

By Richard Walbaum

The bankrupting of all the countries of the world, and the states of the United States, is a result of a mathematically fraudulent debt-money banking and monetary system (see here). If your state is bankrupt or on the verge, I have a solution for the state. It would be unwise to wait for a federal solution where there is no change in sight.

 It is possible for state chartered banks to issue bank notes in dollars as was done in the 1800s. The legality depends on the interpretation of Sec. 10 Clause 1 of the U.S. Constitution which forbids a state from emitting bills of credit (meaning paper money).

 The Supreme Court explained in Briscoe v. Bank of Kentucky,[1] that while a state was forbidden from emitting bills of credit, a state bank could do what was forbidden to the state.[2] This means that a state can circulate money if it uses a bank to do it, but the federal government put a tax on the practice making it unprofitable to do.

 What I propose is to create a currency that would be just another version of the numerous local currencies in circulation throughout the U.S. that would circulate in the state only. It would not be in dollars, so should the dollar die (it now appears doomed), an independent currency will survive. It would be an answer to the debt-money currencies bankrupting the world.

 Here are some of the features:

1) Its value would be by fiat (which means by decree), and not backed by any commodity, not redeemable in anything, not a note so it wouldn’t be taxable.[3] Its value would be secured by the state accepting it in payment of taxes, and its scarcity. The only limit on the quantity would be the requirement, by law, that it maintain its value.

2) The currency would not be a note, i.e., not a promise to pay, but a token or commodity like a wooden nickel or art on canvas except difficult to counterfeit, issued by treasury banks to make loans to the community and circulate as money.

3) The state would levy a tax upon its treasury banks who would create the money to pay the tax. The state would spend that money into circulation for its budgetary needs. Treasury banks would loan the currency into circulation as business and home loans (administrative fees for a $50,000 house may bring the cost to $60,000 over 30 years, not the common $200,000); and excess currency would be removed from circulation by excise taxes, fees, fines, and repayment of loans plus interest issued by treasury banks. Interest from all the business and home loans of the state would go to the treasury, not bankers, to the benefit of the community.

4) Control of the quantity in circulation would be independent of demand. All demands for loans would be accommodated at the same low interest rate (say 3%), securing a natural full employment, and money supply controls would be in the background, invisible, not felt by the community, not regulated by controlling the cost of loans, so there would be no business cycle.

5) The currency would float against the dollar, i.e., its value in dollars would change from time to time to maintain its value as the dollar lost its value.

6) Treasury banks would not pay interest on savings; making money without producing anything for it should be prohibited.

You can see this is an unusual approach. A state, by divesting itself of the burden of debt-based dollars and becoming self-reliant on its own currency, would experience prosperity.

To learn how to design a monetary system capable of supporting unbridled prosperity and heaven on earth, see this video. Don’t skip the charts in Part 2. Also see my book Designed for Plunder. At the federal level, Senator Kucinich has introduced The Monetary Reform Bill, HR 2990 to replace our debt-money system with a fiat debt-free currency. See http://www.monetary.org.

See my other articles.

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Richard Walbaum, the author of The LAWFUL Remedy to Tyranny and Designed for Plunder, promotes the restoration of righteousness through natural law. Find Richard at www.NaturalLawRemedy.com; follow him @legaltender9.

Footnotes

[1] 36 US 257, 320 (1837).

[2] See here for an article why this decision was absurd.

[3] There would be no tax on the currency, but you would still have to pay taxes as usual, as if you were using dollars.

 

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