(Week 5 - Tuesday Aug. 26)
In yesterday's column I defined "national debt" as any monetary "indebtedness" that is taken on by the society or nation as a whole, and I then listed four ways in which this "debt" manifests. The issue of "national debt" suggests a series of questions, which can be stated in a fivefold manner:
(1) – What causes a "national debt" to arise?
(2) – To whom is this "national debt" owed?
(3) – Is the "national debt" a real debt?
(4) – Can the "national debt" ever be "repaid?"
(5) – What is the solution to the "national debt?"
For this column let us focus on point #1 - What causes a "national debt" to arise? (1) – A "national debt" arises when an elite private group (or person) manages to usurp the power of the sovereign to create, issue and control a nation's money. In earlier periods of history this power was usually vested in a monarch, czar, emperor, dictator, or other authoritarian ruler. The American experiment represented something new in that sovereignty was deemed to reside in the people themselves, and exercised through their elected representatives within the rule of democratically determined law.
Since the beginning of civilization there have always been private parties (as opposed to rulers or executors of the political life) who have sought to co-opt society's money power, because in doing so they could effectively gain control over the whole nation. Indeed, in important ways it was better than ruling a nation in an overt political sense. The "money-lenders" got to skim-off the cream of the wealth of the country, while pulling the strings of power and staying safely in the shadows. The monarchs and politicians, on the other hand, were obliged to endure all the exposure, risk and abuse of being in public office.
Much could be said about the human motivations that cause people to seek such an extremely advantaged position in society (some would say, a stranglehold over it), but whatever the case, it is sufficient for now to state that whenever a person or group is successful in capturing the power over a country's money, it has gained effective control over the nation itself. That is what Mayer Amschel Rothschild (founder of the Rothschild banking dynasty) meant when he said, "Give me control of a nation's money and I care not who makes the laws."
Once the control over a nation's money has been handed to private persons, a "national debt" will arise, virtually as night follows day. This is because they will invariably use their power to supply the nation they purport to serve with money on such terms that, not only individuals, but the society as a whole will become, and remain, perpetually in their "debt."
This is not necessarily a simple case of avarice. Those with control over money may believe that they have been handed this privilege for good reason, or even as a sacred trust (and many have articulated a case for their view). The way this has unfolded in human history is extremely complex, and we should not be too quick to judge issues of motivation. Nonetheless as a practical matter, private money goes hand-in-hand with "public debt."
In the American experience, the crucial power of sovereignty (the power to create, issue and regulate money), has been abdicated by the elected representatives of the people in favor of a private banking cartel that issues the nation's money supply through a form of "private-bank-loan" (actually private-money-creation) transaction, by which a compounding "interest" fee that realistically cannot be paid is attached.
Therefore, this nation has a "national debt." It is a straightforward matter of cause and effect.
The complete set of columns from this series is posted at the following websites: