Bill Still, the intellectual backdrop to the Dennis Kucinich 'End the Fed' bill?

In the previous post I presented the latest bill proposed by Dennis Kucinich and why America's Left is just as interested in removing the Federal Reserve as is the Constitutionalist minority. Incidentally there recently has been some talk of a speech by a one named Bill Still.  His speech can be found here.

He presents the problem in today's global economic hardship as stemming from our money supply.  True. He further goes on to say that fractional lending and Federal borrowing is causing financial slavery.  Also true. What is his solution?  To allow sovereign nations to control the money supply by themselves through creation of money.  This is the intellectual and philosophical backdrop of Dennis Kucinich and his latest bill.

Bill Still cites an interesting example, which he refers to as "tally sticks".  Once upon a time the King decided to use tally sticks as a form of currency in order to solve the pesky problem of the money supply growing rapidly and then contracting causing recessions.   This is the example you need to pay attention in order to understand that Bill Still is a false prophet and a Statist.  

You see, tally sticks have already been presented as a "solution" to money by Ellen Brown.  Ellen Brown and Bill Still come from the exact same world and have incredibly skewed renditions of history.  Brown has a website and a book called the Web of Debt, where she bemoans are current system and calls for a return to sovereign money.  She uses tally sticks as an example.  She also uses Greenbacks as an example of a workable currency, America's first fiat currency introduced during Lincoln (not counting the failed Continental Currency) - of course Ellen conveniently ignores the fact that the Greenback was rejected by the market because prices nominated in Greenbacks skyrocketed.     Further yet, Ellen Brown is often cited by the proponents of Modern Monetary System on the website Pragmatic Capitalism.  MMT is a confusing hodgepodge of nonsense that essentially suggests debt is the measure of wealth.  Yeah, you read that correctly.  They also argue that money only has value because the Government says so and they say so because you can pay taxes with that money.  So if Government X suddenly creates Money Y and Money Y can be used to pay taxes, then Money Y has value.  Riiiight.  The basis behind MMT, Ellen Brown and Bill Still is called Chartalism.

Chartalism, not to be confused with Charlatism (although the similarity is quite apt) is the idea of 'ticket' money, as Charta is Latin for ticket.  Chartalism has been around for hundreds of years and can actually be found in the works of John Maynard Keynes who backed the idea of state create money.  Why?  Because with Chartalism, money's value is derived solely from the State and this puts the State in the center of all economic life.  It is central planning at it's finest because the State then has the power to control the money supply!  As Bill Still says in his speech it does away with debt entirely, because the State can just create money when it sees fit.  This debases the value of the money thus making everyone poorer, but at least there is no debt to pay.   

Fortunately for me, a lot of the legwork has already been done.  Gary North discovered Ellen Brown and her book quite some time ago and was correctly appalled by what he read.  Her sense of history and her proposal are the antithesis of anyone who believes in freedom, liberty and sound money.  Gary called Brown a Greenbacker and debunks her book piece by piece.  It is an excellent read as it exposes not only Brown's lack of history, but the flawed concept of Chartalism and State run paper money.   Mind you, Mises and other Austrians have been battling Chartalists as early as 1920s, where the believers of state run money referred to Austrians as Metallists in a way to disparage and label those that espouse sound money.  

Personally, I am shocked this debate even exists because there is no debate here.  

On one side you have a group of people that believe money has one function and one function only, medium of exchange and therefore this medium of exchange must have value.  Therefore if money is to have value it must be a commodity, which is why sound money is sometimes referred to as commodity money.  This is why historically commodities of tangible worth have been used as money.  The only difference between money and other commodities and in fact THE difference is that unlike other commodities, nobody wants this commodity to grow in size.  Everyone wants more cattle, more salt, more grain, more iron and more goods in this world, because everyone's life improves.  Nobody wants more money in this world because it means we are all poorer.  So far this is very logical.  Therefore the argument that we cannot get back to gold due to it's limited size is a bogus argument, it's not even an argument, but a defense!  Whatever the current amount of gold exists is fine, it can be 1 ton or 1 million tons, because the price going forward will remain stable and in fact will drop as more goods appear on the market.  This is a very good thing!  This is logical. 

On the other side you have a group of people that dislike the idea of money with value.  Why?  Either because the supply is limited or because history has shown that people use the commodity money as a base and then create "fake" money on top of it.  For example America's gold standard is an example, where gold supplies remained in a bank, but papers representing the gold were circulated as money.  Would you be surprised to learn that this paper multiplied faster than the existing gold and caused runaway prices followed by recessions as concerned citizens came in to cash these increasingly worthless pieces of paper?  Yet this group blames the bankers and the private markets for causing these recessions, not the worthless pieces of paper that were supposed to represent real money!  This is illogical and yet Ellen Brown wrote an entire book about it.  Their proposal is to instead allow the State to create money at will.  Yet where is the value?  Perhaps if we can assume that once the State creates this supply, this will be the supply forever - but ask yourself, do you believe for a second that a State with the power to create money will keep the supply static? It is illogical, they will never do it.  In fact every single fiat currency has failed in the course of human history due to this very fact.  

Governments can never stop printing money.  Why would you?   If you had a machine to make Gold coins, would you ever stop making gold coins?  I would never stop, I will get up at 9am and make gold coins until 5pm, in fact I might even clock in some overtime.  Bill Still in his example of the tally sticks, forgot to mention that the money supply that shrunk in England and caused a recession was due to the paper representing the gold supply that shrunk, not the actual gold coins!  It is easy to lend out pieces of paper, it is much harder to lend out actual tangible money and the sudden shock to lending does not happen when the lending is legitimate and not fueled by cheap paper.  If that sounds like today's Federal Reserve and centrally planned interest rates - then you are right.   

What we are seeing here is a classic case of identifying the problem, but completely misdiagnosing the cause. 

So ask yourself this.  Do you believe that money as a commodity should have inherent value or do you believe that money should only exist because the Government decrees it to be so.   Which one passes the logic test and which one fails miserably?  The latter is what is espoused by Kucinich, Bill Still, Ellen Brown and many others.  More tragically liberty minded people who are supporting Ron Paul for president are falling victim to what Bill Still is preaching and alarm bells should be going off when Statists like Kucinich present solutions that seem to gain favor from so called Tea Party activists.  Either they are not really Tea Party activists or there is a significant misunderstanding going on.