Most Americans have no idea that the U.S. government once issued debt-free money directly into circulation. America once thrived under a debt-free monetary system, and we can do it again. The truth is that the United States is a sovereign nation and it does not need to borrow money from anyone. Back in the days of JFK, Federal Reserve Notes were not the only currency in circulation. Under JFK (at at various other times), a limited number of debt-free United States Notes were issued by the U.S. Treasury and spent by the U.S. government without any new debt being created. In fact, each bill said “United States Note” right at the top. Unfortunately, United States Notes are not being issued today. If you stop right now and pull a dollar out of your wallet, what does it say right at the top? It says “Federal Reserve Note”. Normally, the way our current system works is that whenever more Federal Reserve Notes are created more debt is also created. This debt-based monetary system is systematically destroying the wealth of this nation. But it does not have to be this way. The truth is that the U.S. government still has the power under the U.S. Constitution to issue debt-free money, and we need to educate the American people about this.
Posted below are pictures of the front and the back of a United States Note printed in 1963 while JFK was president….
Notice that there is a red seal instead of a green seal on the front, and it says “United States Note” rather than “Federal Reserve Note”.
According to Wikipedia, United States Notes were issued directly into circulation by the U.S. Treasury and they were first used during the Civil War….
They were originally issued directly into circulation by the U.S. Treasury to pay expenses incurred by the Union during the American Civil War. Over the next century, the legislation governing these notes was modified many times and numerous versions have been issued by the Treasury.
So why are we using debt-based Federal Reserve Notes today instead of debt-free United States Notes?
It seems rather stupid, doesn’t it?
Well, that is what Thomas Edison thought too.
Thomas Edison was once quoted in the New York Times as saying the following….
That is to say, under the old way any time we wish to add to the national wealth we are compelled to add to the national debt.
Now, that is what Henry Ford wants to prevent. He thinks it is stupid, and so do I, that for the loan of $30,000,000 of their own money the people of the United States should be compelled to pay $66,000,000 — that is what it amounts to, with interest. People who will not turn a shovelful of dirt nor contribute a pound of material will collect more money from the United States than will the people who supply the material and do the work. That is the terrible thing about interest. In all our great bond issues the interest is always greater than the principal. All of the great public works cost more than twice the actual cost, on that account. Under the present system of doing business we simply add 120 to 150 per cent, to the stated cost.
But here is the point: If our nation can issue a dollar bond, it can issue a dollar bill. The element that makes the bond good makes the bill good.
Our current debt-based monetary system was devised by greedy bankers that wanted to make huge profits by creating money out of thin air and lending it to the U.S. government at interest.
Sadly, the vast majority of the American people have no idea how money is actually created in this nation.
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.
When each new Federal Reserve Note is created, the interest owed by the federal government on that new Federal Reserve Note is not also created at the same time.
So the amount of government debt that is created actually exceeds the amount of money that is created.
Isn’t that a stupid system?
The U.S. Constitution says that the federal government is the one that should actually 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”.
So why is a private central banking cartel issuing our money?
As is the case with so many other issues, we desperately need to get back to the way the U.S. Constitution says that we should be doing things.
The debt-based Federal Reserve system is literally stealing the future from our children and our grandchildren.
Back in 1910, a couple years prior to the passage of the Federal Reserve Act, the national debt was only about $2.6 billion.
A little over 100 years later, our national debt is now more than 5000 times larger.
So why don’t we just admit that this system simply does not work?
Our current debt-based monetary system also requires very high personal income taxes to pay for it.
In fact, it is no accident that the personal income tax was introduced at about the same time that the Federal Reserve system originally came into existence.
Our children, our grandchildren and many generations after that are facing a lifetime of debt slavery because of us.
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.
Neither the Republicans or the Democrats are proposing any solutions to this problem. Rather, both parties are only trying to slow down the rate at which we are going into even more debt.
But the truth is that the federal government does not have to go into a single penny of additional debt.
How could this be?
It is not too complicated.
If Congress took back the power over our currency and started issuing debt-free money a lot of our problems could be fixed.
A basic plan would look something like this….
#1) The U.S. Congress votes to take back all of the functions that it has delegated to the Federal Reserve and begins to issue debt-free United States Notes. These United States Notes would have the exact same value as existing Federal Reserve Notes, and over time all existing Federal Reserve Notes would be taken out of circulation.
#2) The U.S. Congress nationalizes all debt held by the Federal Reserve. That would instantly reduce the national debt by 1.6 trillion dollars. In fact, there are a few members of Congress that have already proposed this.
#3) A Constitutional amendment is passed limiting future U.S. government deficits to a reasonable percentage of GDP. Any future deficits would not be funded by borrowing. Rather, future deficits would be funded by newly created United States Notes. Therefore, the federal government would never again accumulate another penny of debt.
And it would be important to inject new money into the economy from time to time. When existing money is destroyed or when the population grows it is important to inject a certain amount of new money into the system in order to avoid deflation.
#4) The existing national debt would be very slowly paid off with newly created United States Notes. The U.S. government spent over 454 billion dollars on interest on the national debt during fiscal year 2011, and over time this expense would go to zero.
If the national debt is paid off slowly enough, it would not create too much inflation. I believe that it could be paid off gradually over 50 years without shocking the economy too much.
There are some that would object to any measure that would ever cause a small amount of inflation, but my contention is that we have created a $15 trillion dollar debt mess for future generations, and it would be absolutely criminal to pass that legacy on to them.
We created this mess, and it is our responsibility to clean it up.
While there is certainly a danger that we would have a limited amount of inflation under a debt-free monetary system such as the one described above, 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 strict monetary discipline under a debt-free monetary system, but it would be hard to do worse than the Federal Reserve has already been doing.
And Congress could always slow down inflation using other methods. For example, raising the reserve requirements for banks (which should be done anyway) would help keep inflation in check.
If the above proposals were adopted, the end result would be something that we could all live with. The Federal Reserve system would be abolished, the national debt burden on future generations would be wiped out, the economy would not have to go through a devastating economic collapse that could last a decade or longer, and we could eventually make a fairly smooth transition to “hard money” if we wanted to after the national debt is gone.
Is there any other proposal out there that does all of those things?
There are many out there that would dispute some of the points above, and debate is good. By engaging in debate, we can hopefully help educate the American people about the nature of money.
The key is to get rid of our current debt-based Federal Reserve Notes and replace them with debt-free United States Notes.
The American people need to understand that it is a lie that the U.S. government “must” borrow money from somebody else.
When the U.S. government borrows money, it slowly transfers wealth from the American people to those that lent it.
At this point, we have created a financial nightmare for future generations that is unlike anything the world has ever seen before. We owe it to future generations to eliminate the debt problem without destroying the United States economy. Adopting debt-free money would allow us to do that.
But sadly, neither political party is even talking about debt-free money. In fact, most of the politicians in both political parties probably do not even know what debt-free money is.
So we need to get the American people educated about these things. Because if we stay on the course that we are currently on, an economic collapse is inevitable.
No, the headline is not a misprint. 
33 Strange Facts About America That Most Americans Would Be Shocked To Learn
#1 The amount of cement that China used from 2011 to 2013 was greater than the total amount of cement that the United States used during the entire 20th century.
#2 In more than half of all U.S. states, the highest paid public employee in the state is a football coach.
#3 It costs the U.S. government 1.8 cents to mint a penny and 9.4 cents to mint a nickel.
#4 Almost half of all Americans (47 percent) do not put a single penny out of their paychecks into savings.
#5 In 2014, police in the United States killed 1,100 people. During that same year, police in Canada killed 14 people, police in China killed 12 people and police in Germany didn’t kill anyone at all.
#6 The state of Alaska is 429 times larger than the state of Rhode Island is. But Rhode Island has a significantly larger population than Alaska does.
#7 Alaska has a longer coastline than all of the other 49 U.S. states put together.
#8 The city of Juneau, Alaska is about 3,000 square miles in size. It is actually larger than the entire state of Delaware.
#9 When LBJ’s “War on Poverty” began, less than 10 percent of all U.S. children were growing up in single parent households. Today, that number has skyrocketed to 33 percent.
#10 In 1950, less than 5 percent of all babies in America were born to unmarried parents. Today, that number is over 40 percent.
#11 The poverty rate for households that are led by a married couple is 6.8 percent. For households that are led by a female single parent, the poverty rate is 37.1 percent.
#12 In 2013, women earned 60 percent of all bachelor’s degrees that were awarded that year in the United States.
#13 According to the CDC, 34.6 percent of all men in the U.S. are obese at this point.
#14 The average supermarket in the United States wastes about 3,000 pounds of food each year.
#15 Right now, more than 200 million people around the planet are officially considered to be unemployed. Meanwhile, approximately 20 percent of the garbage that goes into our landfills is food.
#16 There is a city in Bangladesh called Dhaka where workers are paid just one dollar for every 1,000 bricks that they carry. Meanwhile, the “inactivity rate” for men in their prime working years in the United States is hovering near record high levels.
#17 According to one recent survey, 81 percent of Russians now have a negative view of the United States. That is much higher than at the end of the Cold War era.
#18 Montana has three times as many cows as it does people.
#19 The grizzly bear is the official state animal of California. But no grizzly bears have been seen there since 1922.
#20 One recent survey discovered that “a steady job” is the number one thing that American women are looking for in a husband, and another survey discovered that 75 percent of women would have a serious problem dating an unemployed man.
#21 According to a study conducted by economist Carl Benedikt Frey and engineer Michael Osborne, 47 percent of the jobs in the United States could soon be lost to computers, robots and other forms of technology.
#22 The only place in the United States where coffee is grown commercially is in Hawaii.
#23 The original name of the city of Atlanta was “Terminus“.
#24 The state with the most millionaires per capita is Maryland.
#25 There are more than 4 million adult websites on the Internet, and they get more traffic than Netflix, Amazon and Twitter combined.
#26 86 percent of men include “having children” in their definition of success. For women, that number is only 73 percent.
#27 One survey of 50-year-old men in the U.S. found that only 12 percent of them said that they were “very happy”.
#28 The United States has 845 motor vehicles for every 1,000 people. Japan only has 593 for every 1,000 people, and Germany only has 540 for every 1,000 people.
#29 The average American spends more than 10 hours a day using an electronic device.
#30 48 percent of all Americans do not have any emergency supplies in their homes whatsoever.
#31 There are three towns in the United States that have the name “Santa Claus“.
#32 There is actually a town in Michigan called “Hell“.
#33 There are 60,000 miles of blood vessels in your body. If they were stretched out in a single line, they could go around the planet more than twice.