Congress should control money supply

Published 10:05 am Friday, December 17, 2010

Gregory Soderberg, Austin

Letter to the editor

Our rising debts and increasing bankruptcies are the result of Congress unconstitutionally allowing the banking system to create all of our money as interest bearing debts. This has forced Americans to borrow from the banking system to have any money.

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Under this system, only the principal of the loan can be created. There is no way to create the money needed to pay the interest. Time and interest on the principal makes the debt grow. Therefore the debt is always greater than the money supply. There is no way to lower the debt without destroying some of the money supply. If only one-eighth of the debt was repaid, the total money supply would be destroyed. The only way to keep this debt money system functioning is to keep putting Americans deeper into debt. Eventually, the process becomes unworkable as society, mortgaged to the hilt, can no longer afford to borrow. This is where we are now.

Banks can make Americans feel prosperous by making it easy to get loans. We saw that with the housing bubble. Banks can cause recessions by making loans hard to get, thereby making it impossible to give citizens the increase in the money supply needed for all borrowers to get their hands on the money to pay interest on their loans. When lots of people can’t get their hands on money to pay the interest, foreclosures pick up, as we can clearly see in the current recession.

Thomas Jefferson, as he got older, began to understand what was going to happen to America. He stated, “If the American People ever allow the banks to control the issuance of their currency first by inflation and then by deflation, the banks and the corporations that will grow up around them will deprive the people of all property until their children will wake up homeless on the continent their fathers occupied.  The issuing power of money should be taken from the banks and restored to Congress and the people to whom it belongs.”

The Congress should issue the money free of debt and spend it into circulation as a final payment to build and upgrade our infrastructure system in lieu of taxation or bonding.