Solving the Economic Crisis, Revised

Why doesn¡¦t Congress do something about the ¡§Economic Crisis¡¨ that we are experiencing? You may think that we have economic problems but they are not yet a ¡§Crisis.¡¨ Oh Contraire! Our economic problems have become so severe that they are a crisis. The reason Congress doesn¡¦t do something is that they are so ignorant that they don¡¦t know what is causing the crisis and don¡¦t have a clue what to do about it. The ¡§Economic Stimulus Package¡¨ will actually aggravate the crisis. Giving out more money, printing more money, causes the value of our currency to shrink. That is what is causing the crisis. It has been sinking for thirty some years now, since Congress ¡§Floated¡¨ the dollar. It started when we started printing currency that has no backing and gave it to the "Federal Reserve Banks."

Congress is full of hypocrites. They all took an oath, a sacred promise to God, a solemn promise to the people of the United States to ¡§Support and Defend¡¨ our Constitution but they have participated in the violation of it for nearly a hundred years, maybe longer. Article I, Section 8 reads:

¡§The Congress shall have power to¡K.. coin money, regulate the Value thereof¡K..¡¨

Article I, Section 10 reads:

¡§No State shall¡K..; coin Money¡K..; make anything but gold and silver Coin a Tender in Payment of Debts;¡K..¡¨

It is clear from the preceding two provisions of our Constitution that the intent was that only gold and silver coins, or, at least, notes (certificates) backed by gold and/or silver would be used as currency in this country.

When Congress ¡§Floated¡¨ our currency, they violated the preceding provisions of our Constitution, and it began sinking. The value of a constitutional dollar, a dollar made of silver, has remained constant, the value of the silver content has remained constant. An ounce of silver is still worth an ounce of silver while the value of the dollar has shrunk from .7736 of an ounce of silver to approximately .056 of an ounce of silver. What that means is that before our currency was floated it took nearly $1.30 to buy an ounce of silver. As of the writing of this essay, it takes nearly $18.00. ¡§Value¡¨ and ¡§Cost¡¨ are two different things. In other words, the ¡§Cost¡¨ of silver has increased nearly 1,400 percent while the ¡§Value¡¨ has remained relatively constant.

About six months ago at an estate sale there was some silver for sale. They were selling it in lots for approximately $10.00 an ounce. I offered $8.00 an ounce for it all and we settled at $9.00 an ounce. I paid for it in ¡§Federal Reserve Notes.¡¨ The ¡§Cost¡¨ of silver has nearly doubled since I bought it as a hedge against the shrinking value of the dollar. As an investment, NOT BAD!

The unconstitutional Federal Reserve Note is collapsing so fast that ¡§prices¡¨ are increasing virtually on a daily basis. The price of fuel is the prime example. There is always a lag between the increase in the price of fuel and the increase in the price of goods that are delivered to us so we can expect more increases in the prices of virtually everything we buy. Congress could take steps to prevent the complete collapse of our currency but, like Nero, they are fiddling while the nation burns. They could live up to their oath. I expect them to do what they have been doing, nothing constructive. There is only one member of Congress that I know of who lives up to his oath, Dr. Ron Paul, district 14 of Texas Representative and candidate for president. The Republicans who voted in the primaries have rejected him in favor of one of the hypocrites from the Senate. The Democrats will choose between two other hypocrites from the Senate.

So, what should be done? Nothing will be done if Congress doesn¡¦t follow a plan. The crisis will not be solved in a day. I have a plan that I believe will work. I invite your comments and if you think you have a better plan, please show it to me and Congress.

My plan involves legislation that will solve the crisis spanning years, perhaps as many as ten years. I¡¦ll outline the steps in the legislation. Hopefully the economy won¡¦t completely collapse, as I expect to happen sometime soon, before the plan can be carried out. If our sinking currency goes completely under and hits bottom, becomes worthless, the consequences will be something like the president declaring martial law and the Constitutional Republic, which has become a Democratic Dictatorship recently, will immediately become a Military Dictatorship. A Democratic Dictatorship like we have now is bad enough. A Military Dictatorship would be the much worst.

The answer in, it's most simplistic terms, is to stabilize the value of the dollar. At a news conference just yesterday President George W. Bush was asked what was causing the increase in the cost of gasoline and diesel fuel. His answer was that the rise in demand for oil worldwide is what is causing the increase in cost. He blamed Congress for not allowing drilling for oil in Anwar Province, Alaska. While I would agree that world demand is partly responsible for the increase in the price of oil, The sinking dollar is the primary cause. The price of a gallon of gasoline has increased from approximately $.25 a gallon fifty years ago to nearly $4.00 a gallon. That is an increase in cost of about 1,600 percent. Of course, we were on the gold (and silver) standard back then and the value of the dollar did fluctuate slightly, but it never sank at the rate it has recently during any recession nor, even, during "the Great Depression."

I have spent a great deal of time thinking and studying what to do about the sinking dollar and this is the best I could do, Don't criticize it unless you can come up with a better plan:

1. The first provision of the legislation would be to make it a felony crime, with a punishment of up to ten years to melt or otherwise purposefully damage U.S. gold or silver coins, nor to take more than $20.00 in gold and/or silver U.S. coins out of the country or one of our territories or possessions. Printed currency should obviously be exempt from this law. This provision should be implemented as soon as feasible. This will also prevent foreign interests from taking gold and silver coins out of the country.
2. Budget $25 billion ($25,000,000,000.00) per year for the next five years to be used to purchase gold and silver domestically or from foreign markets. Use a portion of the gold and silver, that is not already in U.S. coins, to mint U.S. coins with the content of the new gold and silver coins being the same as they were when the old gold and silver coins were minted.
3. As soon as feasible start selling the gold and silver coins being minted at the market gold and silver prices per ounce in ¡§Federal Reserve Notes." Note that foreign interests could buy the coins but could not remove them from the country as per step 2. They would be forced to either buy goods and services in the U.S. or deposit them in U.S. banks. This would help the ¡§Trade Deficit¡¨ which is part of what is causing the economic crisis.
4. After a period of three to five years, stop giving the currency that is being printed by the Treasury Department to the ¡§Federal Reserve Banks." The ¡§Federal Reserve¡¨ is robbing U.S. taxpayers and lining the pockets of bankers. ¡§Federal Reserve Banks" are privately owned, not part of the U.S. government. Naming something ¡§Federal¡¨ is a deceptive practice. The ¡§Federal Reserve Banks" are no more a part of the U.S. government than is ¡§Federal¡¨ Express Corporation. The ¡§Federal Reserve Banks" are NOT holding ¡§Reserves¡¨ making the name doubly deceptive. Historically ¡§Reserves¡¨ of gold and silver were held in ¡§Reserve¡¨ for the surrender of printed currency. The name "Federal Reserve Banks" should be changed to "Federally Subsidized Banks" if we are going to continue with our suicidal policy of making bankers wealthy at taxpayer's expense.
5. After a period of three to five years, stop printing ¡§Federal Reserve Notes¡¨ and begin printing notes (certificates) worth a dollar's content of silver and notes for five dollars or higher content of gold. Create U.S. owned reserve banks and place the gold and silver that was purchased by the money budgeted in Step 2 as a guarantee that U.S. currency has real value. The banks would do NO banking except to distribute currency to privately owned banks. The same percentage that the Federal Reserve Banks charge could be charged to the banks distributing the currency.
6. For a period of several years banks would need to adjust accounts so that the new U.S. currency would be substituted for the old Federal Reserve Note currency and to give time to businesses to adjust prices and wages and salaries to the new U.S. currency values. After a period of 10 years the ¡§Federal Reserve Notes¡¨ would be declared worthless so that if someone hasn¡¦t exchanged their ¡§Federal Reserve Notes¡¨ for the new U.S, currency by then they would loose it.

Of course there would be temporary economic problems while the conversion is being made but they would disappear as the conversion is being made. Better a few temporary problems than a complete collapse of our monetary system. As you might imagine, "Supply and Demand" would cause the "Value" of gold and silver to increase as the supply decreases, but the "Cost" would remain constant. What that translates into is that our currency would increase in value instead of sinking like it is now. As the "Value" of our currency increases from the low that it has now sunk to in the world market, we would regain our position as the richest nation in the world. Something has to be done instead of waiting around until martial law is declared and we devolve into a military dictatorship never to again see the liberty and wealth that the Constitution gave us in the past.

Pray tell me I¡¦m wrong, that Congress will do what is necessary to stabilize the value of our currency. If they don't, I am convinced that the coming economic collapse will cause conditions that will make the ¡¨Great Depression¡¨ look like a minor recession.