HERBERT G PETERS
Andrew Jackson Democrat
Candidate for US Senate, California

WHY DEBT?

Constitution; Article 1, Section 8, Clause 2: The Congress shall have power to borrow Money on the credit of the United States;

The founders believe in borrowing money; as expressed.

Can their be a crime involved in borrowing?

The “banks work with a reserve;” generally the reserve requirement is 10%. The effect of the reserve is that the bank creates money in the process of making loans. As stated in the video, for each $100 deposited, $900 is created (or allowed to be created).

Inflating the money supply is “inflation.”

Increasing the supply of money in the bank loan process has been happening since our beginning as a nation.

Inflation can cause great hardship. Some people have wrongly been robbed of all their wealth because of bank runs.

Because of inflation - about every 5 years, there would be a financial panic. Sometimes inflation leads to a bank run when people become weary of one or more of the banks ability to repay deposits and they would line up to withdraw all the money from their account. The bank, after emptying their vaults would declare bankruptcy; costing most customers lost all of their deposits.

Caution, the general practice for banks is to loan out money so no bank can survive a run if all its customers call for their deposits.

The hope is that the economy will always grow, so it is reasonable to design the financial system so that prices are stable. Problem is, almost always money is created too fast and the monetary inflation exceeds the growth of goods and services. Raise the reserve and lower the inflation.

Nothing is perfect but, we could do better. In the 1930s the congress created the Federal Deposit Insurance Corporation (FDIC) that was meant to protect most bank deposits in the event of a bank run. This is an attempted protection from the bank run; not a fix of the problem.

The congress has the power to punish counterfeit; it could declare the spread sheet money created by the banks in the loan process counterfeit; that would end inflation.

Inflation is very bad for the people and very good for the government, so inflation stays. One example: a person buys a business that costs $10,000 in 1945 and the heir sells that business 60 years later for a million dollars. Capital gain tax costs the heir about $150,000 or 15 times the original business purchase price.

Inflation is also bad for the people because the value of their money gets weaker as time moves forward.

“Thou Shalt Not Steal!

Inflation is theft: legal theft. It is a cancer that should be named ‘governmentitis.’ It is a crime that robs the people. We must remove this cancer; I believe that the best way is to limit money growth to the growth rate of the economy.

WHY DOES GOVERNMENT HAVE DEBT?

Some of the people of the 13 Colonies wanted to become independent of their mother country, Britain. To prepare for war, they needed financing to arm themselves. Details.

After the war the Congress assumed all the debts of the war, the debt was first reported at about $75 million in 1791, fluctuated up and down to a high point of about $127 million (additional funds for war of 1812) and paid down to zero in 1835 during the Andrew Jackson administration.

GOVERNMENT ALSO PRINTED MONEY

Government Also Printed the Continental for the Revolutionary War Effort

In addition to the borrowed money the congress printed $242 million in paper money (with a promise of gold or silver backing)(but the promise of specie backing was a lie) and during the years of the war the value of the Continental drifted slowly almost to zero value.

The Civil War’s Greenback fared better than the Continental but it drooped in value too. (The greenback included the same note as our current money: This note is legal tender for all debts public and private).

The idea of money is that it represents value; the risk with paper is it is too easy to lie and say its backed when the resources are not available as claimed.

Money is a faith and trust issue.

Is paper money a crime?

Article 1, Section 8 grants power to the congress to coin money, regulate the value thereof.

Experience has shown that paper money backed by gold or silver works better than without the backing.

In my lifetime, the government has almost always cheated on the people. Since the beginning it has allowed inflation of the money supply, so the gold or silver backed money still reduces value with the inflation theft.

At about age twenty when I started to perceive the term inflation, I vaguely recall that the news media blamed inflation on business or labor.

The Congress is the only entity that controls inflation, and they also have the power to end inflation. The economy will work with a fixed amount of money, or a money supply that grows with the economy. For us the consumer money is a godsend vs. the bartering process.

Inflation beyond the economic growth is excessive and is theft and we must end it.

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