(Week 7 - Tuesday, Sept. 9)
The nominating conventions are over, we know who the candidates are, and now there begins a two-month media blitz in which they will make their best pitch as to why we should elect them. If the past is any indication, I expect to hear strident rhetoric about how we as a nation need to "balance the budget," "live within our means," "practice fiscal discipline," "pay off our debt" and otherwise run America more "like a business." After all, say even consummate insiders running for re-election, the problem in Washington is that all these politicians, lobbyists and bureaucrats have for the most part never run a "business," and so have no feel for the sort of sensibilities and skills it would take to "balance the budget" for the nation as a whole.
This is, in my view, a fundamental mischaracterization of the nation's chronic problem with "debt." The United States is ideally not a business. Rather, it is a sovereign nation within which businesses operate. To facilitate the people's commerce within its boundaries, it has the power to issue a public money supply, without cost. Businesses need a source of income to offset expenditures, but the nation, as a sovereign economic entity that can create its own money, does not.
Unfortunately, the sovereign power to create the people's own money (the most essential element of the commons) has been abdicated to an extra-national (outside national control) banking cartel. The net effect of this abdication is that the sovereign socio/political/economic nation we call the United States has, in effect, been transformed into a "business" in the portfolio of an extra-national financial order.
Our elected representatives, who hold the trust to safeguard the people's monetary prerogative, have (with the people's negligent acquiescence, if the full truth be told) abandoned their responsibility to "coin Money (and) regulate the Value thereof", and have instead set up a scheme (the Federal Reserve System) whereby the only source the American people have from which to drawn the currency they need to conduct their commerce is to "borrow" it at "interest" from private banks.
There are millions of businesses that exist within this economy, and they each have their respective revenue flows, but as a whole combined enterprise the American economy (let us call it "Enterprise U.S.A.")has only one source of operating funds, and that is the money supply it borrows from the Federal Reserve System. "Enterprise U.S.A." always owes more to the banks than is in the money supply due to the "compounding-interest" fee attached to all bank loans. It follows, then, that "Enterprise U.S.A." is always obliged to go further into "debt" in order to meet its expenses. In essence, it is living by borrowing.
Any financial enterprise that cannot stay in business except by continually borrowing more money to finance its operations is by definition in a state of bankruptcy. "Enterprise U.S.A." (the American economy as a whole when seen as a "business," because it has given up its power to create its own money) is, therefore, in a state of bankruptcy. This is not a play on words. It is economic actuality. Our economic life has been transformed from the free and lawful expression of a sovereign people, into a "business" which is perpetually beholden to its creditors.
There is a sort of perverse "Golden Rule" that is bandied about in the back corridors of power. It says, "He who has the Gold rules." A more relevant version is, "He who is the creditor rules the debtor." The people of the United States have allowed their country to be transformed into a "debtor" nation that, to a large extent, no longer governs itself.
The complete set of columns from this series is posted at the following websites: