The Beginning Of The End
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14 Reasons Why We Should Nationalize The Federal Reserve

One of the most important steps that we could take to bring prosperity back to America would be to nationalize the Federal Reserve.  Doing so would allow the federal government to quit borrowing money, dramatically reduce taxes and eventually pay off the entire U.S. national debt.  Instead of inheriting the largest debt in the history of the world, future generations would actually have a chance at economic prosperity because they would not be forced to pay off the horrific debt of previous generations.  The Federal Reserve is a perpetual debt machine, it has almost completely destroyed the value of the U.S. dollar and it has an absolutely nightmarish track record of incompetence.  There are no good reasons to keep the status quo.  Our current debt-based monetary system will inevitably lead to a complete and total economic collapse.  We desperately need to make a change while we still can.  As you will see below, there are a ton of good reasons why we should nationalize the Federal Reserve.

Right now, most Americans believe that the Federal Reserve is actually an agency of the federal government.  But that is simply not the case.  The truth is that the Federal Reserve is about as "federal" as Federal Express is.

The Federal Reserve openly admits as much.  For example, in defending itself against a Bloomberg request for information under the Freedom of Information Act, the Federal Reserve stated in court that it was "not an agency" of the U.S. government and therefore not subject to the Freedom of Information Act.

So who owns the Federal Reserve?

As the Federal Reserve's own website describes, it is the member banks that own it....

The twelve regional Federal Reserve Banks, which were established by Congress as the operating arms of the nation's central banking system, are organized much like private corporations--possibly leading to some confusion about "ownership." For example, the Reserve Banks issue shares of stock to member banks. However, owning Reserve Bank stock is quite different from owning stock in a private company. The Reserve Banks are not operated for profit, and ownership of a certain amount of stock is, by law, a condition of membership in the System. The stock may not be sold, traded, or pledged as security for a loan; dividends are, by law, 6 percent per year.

The debt-based monetary system established by the Federal Reserve has greatly enriched the big banks and the people that own them.  This has been at the expense of the American people.

A private central bank should not issue our currency, set interest rates and run our economy.  Rather, we need to return control over the currency to the American people where it belongs.

The following are 14 reasons why we should nationalize the Federal Reserve....

#1 The U.S. Constitution says that the federal government is the one that should be issuing our money.

In particular, according to Article I, Section 8 of the U.S. Constitution, it is the U.S. Congress that has been given the responsibility to "coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures".

#2 Our current debt-based monetary system is a perpetual debt machine.  It is absolutely imperative that we nationalize the Federal Reserve and begin to issue debt-free money.

In a previous article about money and debt, I explained how more government debt is created whenever the U.S. government puts more money into circulation....

When the government wants more money, the U.S. government swaps U.S. Treasury bonds for "Federal Reserve notes", thus creating more government debt.  Usually the money isn't even printed up - most of the time it is just electronically credited to the government.  The Federal Reserve creates these "Federal Reserve notes" out of thin air.  These Federal Reserve notes are backed by nothing and have no intrinsic value of their own.

This process creates a huge problem.  When each new dollar is created, the interest owed by the federal government on that new dollar is not also created at the same time.

Therefore, more debt is actually created than the amount of money that the federal government receives from the Federal Reserve.

This is a Ponzi scheme that is designed to drain wealth from the American people and transfer it to the banking system.

This is why I call the Federal Reserve system a perpetual debt machine.  Today, the U.S. national debt is more than 5,000 times larger than it was 100 years ago.

Back in 1910, prior to the passage of the Federal Reserve Act, the national debt was only about $2.6 billion.

By going to a system of debt-free money, the U.S. government would never have to borrow a single dollar ever again.

#3 Our current debt-based monetary system requires very high personal income taxes to pay for it.  It is no accident that the personal income tax was introduced at about the same time that the Federal Reserve system came into existence.

If we nationalized the Federal Reserve and capped federal government spending at a reasonable percentage of GDP, it would be entirely possible to massively cut taxes and still keep our promises regarding Social Security and other important social programs at the same time.

I believe that eventually the entire personal income tax system could be completely wiped out and the IRS could be totally shut down.  This would save our economy billions upon billions of dollars in income tax compliance costs.

However, as an initial first step, I believe that we should eliminate all payroll taxes, all "self-employment taxes" and all taxes on the first $100,000 earned by every American.

This would provide much needed relief to the millions of poor and middle income families that have been hurt so badly by this economic downturn.

Also, I believe that we could instantly reduce the corporate tax rate to levels that would be competitive with the rest of the world, while closing corporate tax loopholes at the same time.  This would remove the temptation for companies to leave the United States in order to escape our brutally high corporate tax rates.

Yes, the proposals above would definitely cut taxes.

So where would we make up the difference?

Well, the U.S. Constitution provides one clue.  According to Article I, Section 8 of the U.S. Constitution, the U.S. Congress has the right to impose "duties, imposts and excises" on goods sold in this country.

For way too long, big corporations have been taking advantage of sweatshops in the third world.  For way too long, other nations have used predatory trade practices to take unfair advantage of us.  For way too long, we have allowed nations with horrific human rights records to ship their goods into our country for free.

Well, we need to bring that to an end.  By raising tariffs we would raise money for the federal government and we could potentially start to reverse the flow of jobs and businesses that have been leaving this country.

Access to the U.S. market is a privilege, not a right.  High tariffs would be imposed on goods from any country that allows slave labor wages to be paid.  Very high tariffs would be imposed on goods from any country that is using predatory trade practices against us.  Extremely high tariffs would be imposed on any nation that does not respect basic human rights.

However, please keep in mind that none of this would work if we did not nationalize the Federal Reserve.  The tax cuts proposed above would be suicidal under our current debt-based monetary system.  But if we nationalize the Fed, we really could do this.  It may sound crazy, but it really would work.

#4 If we nationalize the Federal Reserve, there would be no more budget deficits.  If the federal government was a bit short one year, it would just print up a little bit of extra money in order to make up the difference.

It would also be very important to cap federal government spending as a percentage of GDP so that we don't have crazy Congress critters creating a lot of inflation by spending us into oblivion.

Just because we would be adopting a debt-free monetary system does not mean that we could throw spending discipline out the window.  Rather, it would actually become more important than ever.

#5 If we nationalize the Federal Reserve, we would instantly reduce the national debt by 1.6 trillion dollars.  That is the amount that is currently on the balance sheet of the Federal Reserve.  The Federal Reserve just created this money out of thin air anyway, so it was never their money to begin with.  Some members of Congress have already proposed cancelling the debt held by the Federal Reserve, and it is a great idea.

#6 If we nationalize the Federal Reserve, we could eventually get rid of the entire national debt.

Under our current system, the U.S. national debt will never, ever be paid off.  We are 15 trillion dollars in debt, and at this point we add more than a trillion dollars to that number every year.

As I have written about previously, if the federal government began right at this moment to repay the U.S. national debt at a rate of one dollar per second, it would take over 440,000 years to pay off the national debt.

But under our current system we are not paying it off.  Rather we keep piling up more debt at an astounding pace.

In a system of debt-free money, there would be no more budget deficits, and we could actually start slowly paying off the national debt with newly issued "United States money".

This would have to be done very slowly so as to not shock the financial system, but it could be done.  As U.S. debt becomes due, a small percentage of it could be retired each year.

It is entirely conceivable that within 30 to 40 years we could pay it off entirely without causing tremendous damage to the financial system.

#7 If we nationalize the Federal Reserve, we will eventually totally eliminate the interest on the national debt.  Most Americans don't understand this, but each year we spend hundreds of billions of dollars just on interest on the national debt.  For example, the U.S. government spent over 454 billion dollars on interest on the national debt during fiscal year 2011.

Under a debt-free monetary system, that number would eventually go to zero.  That would save the federal government a ton of money.

#8 While there is certainly a danger that we would have inflation under a debt-free monetary system, the reality is that we are absolutely guaranteed inflation under the Federal Reserve system.

Most Americans believe that inflation is a fact of life, but the sad truth is that the United States has only had a major, ongoing problem with inflation since the Federal Reserve was created back in 1913.

If you do not believe this, just check out this chart.

Sadly, the U.S. dollar has lost well over 95 percent of its value since the Federal Reserve was created.

So, yes, there would be a need for monetary discipline under a debt-free monetary system, but it would be hard to do worse than the Federal Reserve has already been doing.

#9 If we nationalize the Federal Reserve, we would eliminate all of the financial bubbles that the Federal Reserve has been creating.

For example, there would not have been such a bad housing crash if the Federal Reserve had not created such perfect conditions for a housing bubble in the first place.

We should eliminate the Federal Reserve and allow the market to set interest rates.  Having a central authority that sets interest rates is just simply wrong and it creates all sorts of problems.

#10 The Federal Reserve has not been doing a good job.

In case anyone has not noticed, Federal Reserve Chairman Ben Bernanke has a very long track record of incompetence.  Nearly every major judgment that he has made since taking over that position has been dead wrong.

We are always told that we need someone to run the economy and that the Fed is there to keep depressions from happening.

Well, the truth is that the Fed actually greatly contributed to the Great Depression and it was at least partly responsible for the financial crash of 2008.

Now we are right on the verge of yet another massive financial implosion.

If someone keeps wrecking your car, you don't let them keep driving it, do you?

#11 If we nationalize the Federal Reserve, we could potentially transition to "sound money" at some point.

There is great debate about this of course.  But it is a debate that we need to have.

But before we go to "hard money" we need to do something about this horrific debt that we have piled up for future generations first.  We simply cannot lock this debt in and expect them to pay for our mistakes.

We made this mess, so we need to clean it up.

Going to a debt-free monetary system would allow us to do that.

#12 If we nationalize the Federal Reserve, our local banks will have much more freedom.  Most Americans simply do not understand just how much power the Federal Reserve actually has over our local banks.

For example, just last year Federal Reserve officials walked into one bank in Oklahoma and demanded that they take down all the Bible verses and all the Christmas buttons that the bank had been displaying.

#13 If we nationalize the Federal Reserve, we won't have trillions of dollars of secret loans being made to big financial institutions on Wall Street and in foreign countries.

Most Americans don't realize this, but the Federal Reserve made $16.1 trillion in secret loans to their friends during the last financial crisis.

Meanwhile, hundreds of small banks were left out in the cold and the American people got no help.

This is rampant corruption and it needs to be stopped.

#14 The Federal Reserve needs to be nationalized because it is an unelected, unaccountable "fourth branch of government" that has gotten completely and totally out of control.  Even some members of Congress are now openly complaining about how much power the Fed has.  For example, Ron Paul told MSNBC last year that he believes that the Federal Reserve is now more powerful than Congress.....

"The regulations should be on the Federal Reserve. We should have transparency of the Federal Reserve. They can create trillions of dollars to bail out their friends, and we don’t even have any transparency of this. They’re more powerful than the Congress."

To learn much more about the Federal Reserve and how it is destroying prosperity in America, there is a great animated documentary on YouTube entitled "The American Dream" that you can watch right here.

It is absolutely imperative that the American people get educated about the Federal Reserve and about why a debt-based monetary system is bad for us.

In 1922, Henry Ford wrote the following....

"The people must be helped to think naturally about money. They must be told what it is, and what makes it money, and what are the possible tricks of the present system which put nations and peoples under control of the few."

The U.S. government does not need to go into debt to anyone.

The U.S. government is a sovereign nation.

So why in the world are we 15 trillion dollars in debt?

We have allowed ourselves to become willingly enslaved.

In the book of Proverbs, it tells us the following....

The rich ruleth over the poor, and the borrower is servant to the lender.

By allowing ourselves to become enslaved to debt, we have become the servants of the international banking system.

Our founding fathers attempted to warn us about this.

For example, Thomas Jefferson strongly believed that when the federal government borrows money in one generation which must be paid back by future generations it is equivalent to stealing....

And I sincerely believe, with you, that banking establishments are more dangerous than standing armies; and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale.

Not only that, Thomas Jefferson also once stated that if he could add just one more amendment to the U.S. Constitution it would be a ban on all government borrowing....

I wish it were possible to obtain a single amendment to our Constitution. I would be willing to depend on that alone for the reduction of the administration of our government to the genuine principles of its Constitution; I mean an additional article, taking from the federal government the power of borrowing.

If we had implemented that advice, how much better off would we be today?

We can still do this.

We can take back control of our financial system.

We can nationalize the Federal Reserve.

We can dramatically cut taxes and eventually shut down the IRS.

We can give our children and grandchildren a future that is debt free.

We can escape the tyranny of the international bankers.

The choice, America, is up to you.

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  • Peter J. Nickitas

    This column should have discussion of HR 2990, the NEED Act, which proposes issuance of U.S. Money, backed by the full, faith and credit of the United States (not FRN’s), make the Fed an agent of the Treasury, and prohibit fractional reserve banking.

    Money issuance must have a direct relationship to energy in a system. The energy may include petroleum, natural gas, solar, and nuclear energy inputs, as well as growing crops. Even Rep. Ron Paul calls for a link between the dollar and a basket that includes gold, oil, and food commodities. Every dollar is a claim on future energy expenditures, be it an hour of labor or a kilocalorie of burning petrol.

    Historically, currency as a function of prescribed masses of gold or silver serves the purpose of establishment of a floor for commodities, particularly foodstuffs. Thus, the perception of currency as a mass of gold or silver is misplaced.

    Money does not exist in nature, but by human-made law. When banisters make the money and laws, the rest of us suffer. When the people control the issuance and distribution of money, things work. Just as manure piled up in one place stinks, manure spread properly across acres of farms helps many crops grow.

    Change the way money works, or nothing will change.

  • Peter J. Nickitas

    “Banksters”, not “banisters”

  • http://spin_169@hotmail.com john

    charge the federal reserve bank , with crimes against the people. unlawfully collecting taxes of the the people( taxing labor, where they should only be taxing the corp.) how many people have they destroyed , put out into the streets, taken their properties ( farms, housing and freedom.). arrest them take all that they have. put them into the streets. confiscate all that have from committing crime. (drug dealers lose everything house ,money,cars and so on. for committing crimes).
    take them over, just as they have taken over the good old u.s.a

  • timothy price

    The Federal Reserve was created as a monopoly cabal of banks by a compromised Congress. Congress needed unlimited funds in order to finance wars to enhance their corporate war industry. The clandestine, unholy alliance between the Fed and Congress is a corrupt system for war profiteering.
    If the Congress cannot get instant credit form foreign banksters, but must rely upon taxes to support wars, then wars would stop, or be much less likely to occur. That would break the cookie jar for the Congress.
    Congress will never repeal the Federal Reserve Act. The people could through referendum or Constitutional Amendment.

  • Peter Litwin

    We can all piss and moan on the blogaspere all day long about the evils of the Fed, but nothing will ever change until we exercise our democratic rights and repeal Bank Acts 1, 2, 3 established in 1913.

  • The true

    Too much bla, bla, bla, bla but I see no body doing anything.
    We are all the one’s to get the blame, as a generation we haven’t done *************.
    Let’s face it, we are the shame of america.

  • Tim Gard

    It is time to close the fed and state governments down and re establish the American Constitution returning the guidance of the country to the towns where the people live as it was before WW1 and how it was meant to be. This is our only hope of holding on to any remnants of freedom. Not painless, but possible. Home rule as it was meant to be …

  • fiona

    This sounds too good to be true…but sad thing is would it be possible for us to eliminate Fed? When some of leaders take an initiative to get rid of Fed…they got killed..Remember President Lincon & Kennedy?

  • WARD

    Did you really mean to say “not”?
    This process creates a huge problem. When each new dollar is created, the interest owed by the federal government on that new dollar is not also created at the same time.

    • http://www.skepticink.com/tippling Bryant Cody Rudisill

      Absolutely; because when a dollar is created, the money to pay off the interest on that dollar is not also created. Meaning, we become further and further indebted with each new dollar note we borrow from the Feds.

  • Edward Bowles

    If every home owner in the US sold their home and gave the Government the money it would
    not pay off the national debt?We have been exposed to some of the most powerful Propaganda to control of the mind and opinion ever seen on earth. This propaganda comes in many forms, misinformation,
    disinformation, half-truths and deception. This propaganda comes through our mass media of radio, Television, Internet and Print News.
    Our Federal Government is a government of propaganda, and it’s aimed is to gain supreme
    control of our nation and destroy the power invested in WE THE PEOPLE which is guaranteed by our Constitution.
    Many people think this effort by the Federal Government started with the Obama
    administration which is not true. He is only one of many and is the end of a chain since the creation of our Constitution.
    Our Constitution was and is intended to act as a check against attempts by the executive branch to usurp power. Our Constitution is the longest-lasting
    standing written Constitution in the world, however it was written in broad form and it allows our courts legislators and adversative’s to make
    interpretations that are contrary to its original intent. It is simple words that have guaranteed our rights and liberties.
    We often misuse or misinterpret these words, to the point that we don’t understand their meaning anymore. This comes from the common occurrence of the political realm. Politicians love to attach arbitrary meaning to words and spout them repeatedly until that their meaning is accepted as definition.
    They’ve thrown the word “Democracy” around
    so much that we actually believe in it. America was not, and was never founded on democracy. We have a representative form of government which is a
    Republic. We now have a mission to spread “Democracy” around the world at the point of a gun that wedon’t even practice.

    Look at its one of the biggest violation of many in our history that is destroying our country.

    December 23,
    1913, our congress gave the bankers a Christmas gift of a life time. Congress passed the Federal Reserve Act, which officially took the power to create the
    money from the United States and turned it over to private Bankers, who called themselves the Federal Reserve Corporation. Notice the word “Federal” used in their name.
    Most American believe that the Federal
    Reserve is a government agency because the word “Federal” and this is exactly what the Bankers wanted, knowing the ignorance among the population of the time.

    The banking and currency reform plan approved by President Wilson in 1913 was sponsored by the chairmen of the House and Senate Banking and Currency committees, Representative Carter Glass, a Democrat of Virginia and Senator Robert Latham Owen, a Democrat of Oklahoma. After realizing what impact this bill would have on the country President Wilson and lamented and wrote the following: “

    I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and allour activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated Governments, in the civilized world and no longer a Government by free opinion, no longer a
    Government by conviction and the vote of the majority, but a Government by the opinion and duress of a small group of dominant men”.

    What he is saying, I had no intentions to ruin
    our country, and I did it ignorantly.

  • George

    The people controlling the media and education systems seem to be in collusion with the same people who control the federal reserve. Educating enough of the public to lead to a tipping point is the challenge.

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