T HE U.S. CONGRESS HAS ONCE AGAIN
eased itself out of the annual budget crisis by raising the
Debt ceiling. This means that the U.S. Treasury Department must print more
interest-bearing bonds to borrow more credit-money from the privately-owned
Federal Reserve Bank, in order to finance the expensive operations of the
Federal Government.
Despite much hoopla and Demo-Repub pie-throwing that highlighted the supposed
"differences" between the two major capitalist parties, the Republican-controlled
Congress raised the Debt-ceiling while imposing a "balanced budget"
in seven years upon the Democrat Clinton. This was to avert a more serious
crisis; however the ultimate crisis can only be postponed.
In case you have not noticed, this crisis keeps returning every year, and
every year the Debt spirals upward because the problem is inherent within
the System itself. The present government of the United States is a bankrupt
entity and no amount of borrowing or raising the Debt-ceiling up to the
stars can hide that fact or prevent the inevitable breakdown. The real question
is: What can the people do when the ultimate budget-crisis occurs? The question
itself may reveal a certain degree of political naivete, I know. It is very
probable that the people, as a whole, can effect no positive changes in
the System or alter the agenda that the capitalist class, and the international
bankers and cartelists have already planned.
But we may be very sure that the capitalists have an agenda, as well as
a game-plan, and that they have already studied the problem of the Crisis
of Capitalism for years. Once upon a time, the people in America were able
to effect at least temporary changes. Back in the 1930s and '40s, during
the period of the Popular Front, historians and academics in the United
States devoted themselves to studying the causes of the American Revolution
and to vindicating it from a Marxist perspective. By all accounts, there
were genuine economic reasons for the colonists to rebel from Mother England.
From the standpoint of an Institutional analysis, also, there were key institutions
located in the City of London that exerted an oppressive influence upon
the inhabitants of the Colonies in North America. These institutions, which
included the Bank of England, the Board of Trade, the Crown itself, and
the British East India Company, were analyzed in detail by Marxist academics
in the 30s. (*Several articles to this effect are included in the chapbook
The Causes of the American Revolution in the series Problems in American
Civilization, published by D.C. Heath and Company, Boston, 1950.)
Today, many of the wires of the global capitalist system are still pulled
from across the Atlantic. Much of the pull for Debt-collection originates
in Europe, as well, since many of the bond-holders (stockholders in the
banks holding the interest-bearing bonds which comprise the "debt")
reside there. Today however, the institutional apparatus for the economic
rendering of America's internal economy in the service of Debt-collection
is far more entrenched, and the oppression itself far more internalized
than it ever was during the time that America was an overt colony of Britain,
oppressed by bad king George. Today, the institutions that directly oppress
the American people fiscally are located in New York City and Washington,
D.C.-in particular, the Federal Reserve Bank and its collection-agency,
the Internal Revenue Service. It is important to remember that the money
taken in annually by the IRS only services the interest on the National
Debt. Today, if you get audited by the IRS, you are made to feel that it
is your personal failure, that you have failed your lawful duty to pay your
reasonable share of taxes, that you personally, have sinned and fallen short
of the American Dream.
Seen in this light, the song and dance that the Demo-Repubs do every year
is ludicrous and hypocritical. Democrats pose as "friends of the people"
and oppose the further slashing of social programs by the Republicans, who
pose as "fiscal conservatives." Meanwhile, the Democrats mortgage
the future to the bond-holding class through Keynesian deficit-financing
in order to retain the last vestiges of the false specie of New Deal "socialism."
The Republicans, in turn, serve the interests of the bond-holding class,
who must receive their pound of flesh out of the budget and whose interest-payments
must be delivered on time, no matter how many people starve, go without
medical care, go without decent educations, and are ultimately sent to prisons
or work-camps because the policy-makers see no other future for them. So
much for "taxes"!
This vicious strong-arm, debt-collection austerity is erroneously marketed
to the American people as "The Republican Revolution." It is a
far cry from the Republicanism of Abraham Lincoln, who during the Civil
War authorized the issuance of 440 million dollars' worth of Debt-free Fiat
currency backed neither by Gold nor by Bonds, but by the credit and faith
of the collective People of the United States. In March of 1884, the U.S.
Supreme Court, in spite of heavy pressure to the contrary from Wall Street,
ruled that these Notes, popularly termed "Lincoln Greenbacks,"
could lawfully be issued and re-issued by the Treasury Department under
a broad interpretation of Article I, Section 8, Clause 5, of the Constitution.
In part the confusion over this issue began back in 1787 when the founding
fathers met in Philadelphia to draft the Constitution. They decided, quite
deliberately, to abridge the Articles of Confederation (written in 1777)
and deny to both the Federal Government and to the various States the power
to emit "bills of credit" (paper currency), powers which were
formerly vested in both the State and Federal governments under the Articles
of Confederation. This was perhaps the most important single deed of the
Convention. Both John Fiske in The Critical Period in American History,
and Charles Beard in An Economic Interpretation of The American Constitution
, address this issue-from different sides of the coin, so to speak. The
Continental Congress of 1777 had been a revolutionary body. In a certain
sense, the Constitutional Convention of 1787 was a counter-revolution.
Thomas Jefferson was not present at the Constitutional Convention because
he was the Ambassador to France at the time. Jefferson held a fundamentally
different conception of the ideal Commonwealth and the Treasury thereof
than his noted adversary Hamilton, whose policies prevailed both at the
Convention and in the administration under Washington. In 1791, the year
that also witnessed the birth of the bond-market on Wall Street, Hamilton,
as Secretary of the Treasury, created the first privately-owned Central
Bank, the Bank of the United States. Jefferson wrote late in life that his
deepest regret about the Constitution was that Article I, Section 8, Clause
5, did not specifically empower the Federal Government to print paper currency
as money. Thomas Jefferson wrote: "The issuing power of money should
be taken from the banks and restored to Congress and the people to whom
it belongs. I sincerely believe the banking institutions are more dangerous
to liberty than standing armies."
Actually, the solution to the annual budget crisis is so simple that any
schoolchild could think of it. Indeed, many have. The solution is for both
the State and the Federal governments to be empowered to issue currency
and to write checks against no funds (cash on hand, or gold in the vault)
as they were empowered to do under the Articles of Confederation and as
the Federal Reserve banks are now empowered to do. There is no law that
states that the government must issue interest-bearing bonds to sell to
banks in order to borrow "credit-money" created by private banks.
According to the Supreme Court decision of March, 1884, the Federal Government
can issue debt-free currency.
It was the Federal Government, in the first place, that granted charters
to the commercial banks, allowing them to create Credit-Money by multiplying
their deposits. If banks are empowered by the government to create money,
then the power to create money originates in the collective power of the
people. The problem is that the people as a whole are collectively unconscious
of their power as a mass because they have been kept ignorant. The contradiction
is that this Congress, in the current Empire-phase of American developement,
has even less will than the Congress of 1791 to serve the real interests
of the people or to buck the bankers and capitalists who seem to hold the
real reins of power.
It is the energy and labor of the People, taxed by the State, that has fed
the leisure class, who for generations have lived off the interest generated
by the bonds which "back" the National Debt. Most people would
agree, if they understood the issue, that it is not fair for a class of
people who merely inherited the right stock in the right banks, to collect
this enormous expanding annual dividend from the midst of the Federal budget.
It is this Class, not the so-called "Welfare-cheaters" on the
bottom of the social pile, who constitute the greatest specie of leech upon
the body politic. And until more Americans wake up to this realization,
more Americans will continue to wake up homeless.
Mark Evans
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