Yet another response to Karl Denninger and his defense of the Kucinich bill.
Karl's latest response to me titled 'Arkady: Read the damn Constitution' is another attempt by Karl Denninger to defend the absurd (Kucinich bill) while demonstrating to the world that he and only he has read the Constitution and understands it properly. Karl, we know you are a bright guy and are quite capable, yet when you belittle others and flaunt your impeccable intelligence you exhibit signs of insecurity.
I would simply like to cover two critical points here. First, anyone supporting this bill and claiming to be part of the Tea Party is doing the Tea Party movement a great disservice, Karl should either disassociate himself from the Tea Party or take back his support for the bill. Secondly, the matter of this bill's Constitutionality specifically as it pertains to the issuance of fiat money is turning into a joke.
Karl's view:
Yet Karl is trying to convince me and our readers, that the term 'regulate the Value thereof' implies fiat? We know for a fact that the Founding Fathers specifically mandated the States to use gold/silver, were keenly aware that foreign coin consisted of gold/silver and yet decided to stick a clause that allowed them to make coin out of any metal? Either the Founding Fathers were insane or Karl has taken the interpretation of the Constitution to suit his belief in fiat.
Nobody in their right mind would read "To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;" and in conjunction with Section 10 assume that the Framers allowed for useless metallic coins with no value. Nobody.
The Framers were against fiat currency and James Madison stated so in Federalist 44:
One can really not get any clearer than this and the "father" of the Constitution states it blatantly. His view along with the majority of the Framers was simple; paper money was flawed and evil. He even explained the regulation part of the clause - the regulation of the alloy. The most likely explanation to those words is simply the regulation of some specific precious compound (gold/silver) and determining the value of the coin based on the content. Nothing more. Yet Karl previously insisted:
To suggest Madison's issue was strictly with paper and not valueless money is intellectual dishonesty. Similarly to suggest that the Framers were upset with paper money having no real value, but were perfectly content with random pieces of metal serving as money is simply laughable. Who other than ardent believers in fiat can accept this outlandish interpretation?
Karl, can you just admit that the Constitution and the discussions during it's ratification were AGAINST fiat, not for it.
Which of course brings us to the final point. You believe in fiat money. You believe it can work. No wonder you are playing with semantics and trying to extract from the Constitution what is not actually there. To believe in 2010 that fiat works is the same as believing Communism can work. Yet you go a step further, don't you? You started off your response to me by admitting that the Kucinich bill is bad and the system he proposes is bad, you just believe it is not AS BAD as what we have today.
In fact handing over the power of money to the State makes you a Chartalist. Not only are you content with paper money you actually want the Government to play the central role in the process thus imbuing paper with value because we are "allowed" to pay our taxes with it. This is a system that is actually more perverse and more awful than what we have today, a statement I do not make easily. You, Bill Still and Ellen Brown are all pushing for the exact same agenda, sovereign currency, despite the historical failures of such a system. Whether we look at the Assignat, the Continental or the first German Mark - the story is the same. No Government can ever be trusted to control the money supply because every Government will print. No Government should be given such a supreme authority because it means financial servitude.
We may be in danger of this with the Federal Reserve, but at the very least we have the knowledge that the greedy "banksters" as awful as they are, have an incentive for self preservation. This self preservation at least provides some assurance that Ben Bernanke will not compromise our reserve standing and will not destroy the dollar to the point of making himself irrelevant. With the Kucinich bill and your Utopian notion of state run money we have no such convictions. This is not an endorsement of today's banking cartel, but a repudiation of Congress and their inability to look out for our self interest. Indeed, the primary premise behind what Kucinich is attempting to accomplish is not monetary stability (even if he claims so), but to utilize the printing press for his economic agenda. An agenda that can be described as Keynesianism hopped up on crack-cocaine. A system where Government intervention is no longer capped by the mounting debt, no longer capped by soon to be bone crushing debt service, but only restrained by grandiose ambitions of individual Congressmen and the innate ability to create money!
This bill fails not only on Constitutional grounds, despite your semantic games, but on all moral and ethical grounds as well.
You see Karl, not only are doing the Tea Party a disservice by endorsing this bill, but by endorsing an inferior solution to a vexing problem you are thereby eliminating the opportunity to discuss REAL reform. Yet real reform is actually quite simple, because the problem is quite simple.
The problem: Monopoly on money via the Federal Reserve. You can certainly admit to that much.
The solution: Not to create another monopoly (Kucinich bill), but provide competition. Competition is the only way that we the people can take control back. Control of our money and control of our economy, away from a central monopolistic power. Maybe Karl's faith in the Government precludes him from believing that the market can actually work. Ron Paul proposed this idea already, called Competing Currencies and it is an elegant solution to our problem.
As a last point to mention, many people have correctly pointed out that our debt is killing us. Indeed our debt is indeed the focal issue, but to blame the banks and the Federal Reserve on our debt is asinine. This is the same as blaming a hospital for your sickness. We are in debt because we spend too much. We spend too much because Congress knows that it can borrow and tax. We spend because Congress thinks it knows better than us how to spend our money and because Congress built a giant voting bloc that votes itself freebies. Indeed, the entire Kucinich bill is a giant orgy of spending, but in his Marxist ways Kucinich bans private lending and replaces it with the ability to print money! Bye-bye debt, hello North Korea.
We need competing currencies that will bring down the Federal Reserve, we need to curtail spending significantly and we need to restrict the Government's ability to tax and borrow. This is what the Tea Party should represent.
I would simply like to cover two critical points here. First, anyone supporting this bill and claiming to be part of the Tea Party is doing the Tea Party movement a great disservice, Karl should either disassociate himself from the Tea Party or take back his support for the bill. Secondly, the matter of this bill's Constitutionality specifically as it pertains to the issuance of fiat money is turning into a joke.
Karl's view:
Nowhere in The Constitution, in point of fact, is a monetary standard - either fiat or metallic - defined for the Federal Government. The only definition given is for State-specific and issued currencies, which are forced to be convertible against a fixed, known thing.If it is not mentioned in the Constitution then it does not exist. The Constitution is a list of permissible actions by the Federal Government, not a list of prohibitions. Therefore what Congress can do is clearly specified in Section 8! In terms of money, it is allowed only to coin money and regulate this money, we can absolutely see that at the very least, the money is metallic. Unless of course you can coin money without using metal somehow, so your statement is just flat out wrong. This leaves us the matter of fiat.
Yet Karl is trying to convince me and our readers, that the term 'regulate the Value thereof' implies fiat? We know for a fact that the Founding Fathers specifically mandated the States to use gold/silver, were keenly aware that foreign coin consisted of gold/silver and yet decided to stick a clause that allowed them to make coin out of any metal? Either the Founding Fathers were insane or Karl has taken the interpretation of the Constitution to suit his belief in fiat.
Nobody in their right mind would read "To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;" and in conjunction with Section 10 assume that the Framers allowed for useless metallic coins with no value. Nobody.
The Framers were against fiat currency and James Madison stated so in Federalist 44:
"The extension of the prohibition to bills of credit must give pleasure to every citizen, in proportion to his love of justice and his knowledge of the true springs of public prosperity. The loss which America has sustained since the peace, from the pestilent effects of paper money on the necessary confidence between man and man, on the necessary confidence in the public councils, on the industry and morals of the people, and on the character of republican government, constitutes an enormous debt against the States chargeable with this unadvised measure, which must long remain unsatisfied;
The right of coining money, which is here taken from the States, was left in their hands by the Confederation, as a concurrent right with that of Congress, under an exception in favor of the exclusive right of Congress to regulate the alloy and value."
One can really not get any clearer than this and the "father" of the Constitution states it blatantly. His view along with the majority of the Framers was simple; paper money was flawed and evil. He even explained the regulation part of the clause - the regulation of the alloy. The most likely explanation to those words is simply the regulation of some specific precious compound (gold/silver) and determining the value of the coin based on the content. Nothing more. Yet Karl previously insisted:
Indeed, there is no difference between a SBA "Dollar" and one made of something that is flat, rectangular and quite flexible. Never mind that Webster defines "coin" as "something used as if it were money" - note carefully the word "something."
To suggest Madison's issue was strictly with paper and not valueless money is intellectual dishonesty. Similarly to suggest that the Framers were upset with paper money having no real value, but were perfectly content with random pieces of metal serving as money is simply laughable. Who other than ardent believers in fiat can accept this outlandish interpretation?
Karl, can you just admit that the Constitution and the discussions during it's ratification were AGAINST fiat, not for it.
Which of course brings us to the final point. You believe in fiat money. You believe it can work. No wonder you are playing with semantics and trying to extract from the Constitution what is not actually there. To believe in 2010 that fiat works is the same as believing Communism can work. Yet you go a step further, don't you? You started off your response to me by admitting that the Kucinich bill is bad and the system he proposes is bad, you just believe it is not AS BAD as what we have today.
If I'm destined to take it up the ass I'd like my butt-reaming right out in the open where I can see it coming, thank you very little. Not only does that give the market the chance to respond appropriately, it gives me the chance to do so as well - even if all I can do is find a stick for my teeth. If Congress is going to debase the currency I want them to be the only one who does it, I want it done in the open, and I want it instantly visible to everyone.How brave of you to publicly welcome sodomy! So your issue is not with fiat, your issue is with PRIVATE fiat. You believe that as long as Congress controls the money we are in safe hands, protected from the bankers and even if they steal and pillage from you, you are content with it because the bankers get the shaft. May I remind you, the entire point of the Tea Party is to take back power from the Federal Government and to restrict it's ability to control our lives, NOT to hand the Government more power!
In fact handing over the power of money to the State makes you a Chartalist. Not only are you content with paper money you actually want the Government to play the central role in the process thus imbuing paper with value because we are "allowed" to pay our taxes with it. This is a system that is actually more perverse and more awful than what we have today, a statement I do not make easily. You, Bill Still and Ellen Brown are all pushing for the exact same agenda, sovereign currency, despite the historical failures of such a system. Whether we look at the Assignat, the Continental or the first German Mark - the story is the same. No Government can ever be trusted to control the money supply because every Government will print. No Government should be given such a supreme authority because it means financial servitude.
We may be in danger of this with the Federal Reserve, but at the very least we have the knowledge that the greedy "banksters" as awful as they are, have an incentive for self preservation. This self preservation at least provides some assurance that Ben Bernanke will not compromise our reserve standing and will not destroy the dollar to the point of making himself irrelevant. With the Kucinich bill and your Utopian notion of state run money we have no such convictions. This is not an endorsement of today's banking cartel, but a repudiation of Congress and their inability to look out for our self interest. Indeed, the primary premise behind what Kucinich is attempting to accomplish is not monetary stability (even if he claims so), but to utilize the printing press for his economic agenda. An agenda that can be described as Keynesianism hopped up on crack-cocaine. A system where Government intervention is no longer capped by the mounting debt, no longer capped by soon to be bone crushing debt service, but only restrained by grandiose ambitions of individual Congressmen and the innate ability to create money!
This bill fails not only on Constitutional grounds, despite your semantic games, but on all moral and ethical grounds as well.
You see Karl, not only are doing the Tea Party a disservice by endorsing this bill, but by endorsing an inferior solution to a vexing problem you are thereby eliminating the opportunity to discuss REAL reform. Yet real reform is actually quite simple, because the problem is quite simple.
The problem: Monopoly on money via the Federal Reserve. You can certainly admit to that much.
The solution: Not to create another monopoly (Kucinich bill), but provide competition. Competition is the only way that we the people can take control back. Control of our money and control of our economy, away from a central monopolistic power. Maybe Karl's faith in the Government precludes him from believing that the market can actually work. Ron Paul proposed this idea already, called Competing Currencies and it is an elegant solution to our problem.
We should repeal legal tender laws and allow Americans to conduct transactions in constitutional money. Only gold and silver can constitutionally be legal tender, not paper money. Instead, it is illegal to conduct business using gold and silver instead of Federal Reserve notes. Simply legalizing the Constitution should be a no-brainer to anyone who took an oath of office. Consequently, private mints should be allowed to mint gold and silver coins.Because as you see, the solution is not MORE Government - and in the case of the Kucinich bill - a ton more, but less Government and more competition. Repealing the laws set forth by Congress that were instrumental in solidifying and creating the Federal Reserve monopoly we have now. The Federal Reserve Act was passed at the height of the Progressive era finally experiencing the Hamiltonian dream of a strong and robust central Government. While this may sound like a cliche, Government is the problem here.
As a last point to mention, many people have correctly pointed out that our debt is killing us. Indeed our debt is indeed the focal issue, but to blame the banks and the Federal Reserve on our debt is asinine. This is the same as blaming a hospital for your sickness. We are in debt because we spend too much. We spend too much because Congress knows that it can borrow and tax. We spend because Congress thinks it knows better than us how to spend our money and because Congress built a giant voting bloc that votes itself freebies. Indeed, the entire Kucinich bill is a giant orgy of spending, but in his Marxist ways Kucinich bans private lending and replaces it with the ability to print money! Bye-bye debt, hello North Korea.
We need competing currencies that will bring down the Federal Reserve, we need to curtail spending significantly and we need to restrict the Government's ability to tax and borrow. This is what the Tea Party should represent.
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