For the past three weeks, we have discussed the questions Sens. Elizabeth Warren and Bernie Sanders intend to ask the next nominee for Federal Reserve chairman.
The conversation has been a bit “out there,” in that the discussion has been about big banking and doesn’t seem to be about life right here in little old Fairfield. This point was brought home to me last Tuesday by an old friend who stopped me in the Home Depot to complain about our sluggish economy and, for some reason, he was especially upset about the retirement plans of our local government workers.
“Vallejo went bankrupt because of that,” he informed me. “Ok, I get that,” I replied, “but the $2 trillion we just gave to the bankers would have paid for all levels of government workers’ retirement plans, throughout the United States, without any employee contributions, for the next hundred years.”
I’ll admit that I just pulled that factoid out of my Arsenal of Spurious Statistics, but it just might be true. The fact of the matter is, $2 trillion has an awful lot of zeros. That amount of money puts into perspective the petty political problems usually discussed here in the Daily Republic, on talk radio, on TV and in Congress. They are minor irritants compared to the most basic financial dysfunction we are suffering from in America: debt money.
It seems we delight in complaining about the buzzing of flies, circling above our mortal wounds.
Our national currency is based on debt because every penny in circulation is loaned to us by bankers, rather than being issued, debt-free, by our Treasury Department. Usually, this system works just fine. Day to day, we labor at our jobs, make money, buy a home, raise our families and grow ever older. But, every 20 or 30 years, there seems to be some banking crisis that contracts our available money supply and completely guts our nation’s economy.
It happened in 1837, 1857, 1873, 1893, 1907, 1920, the entire 1930s, the 1980s and in 2008.
Whole generations of Americans have worked hard their entire lives, only to have some far-removed, ethereal banking problem wipe them out. Lifetimes of labor are erased in the blink of an eye as homes and businesses are boarded up and property is returned to the bank to be recycled for the next generation of bankers to sell to the next generation of workers.
Along with violent money supply fluctuations, having our national currency loaned to us by bankers creates our national debt. While politicians continually argue about our national debt, they never mention that if we didn’t have to borrow every penny of our currency, we wouldn’t have that debt in the first place.
How many political discussions have you heard mention that it is actually impossible to pay off our national debt? Or, if we tried to pay it down, that our nation’s money supply would contract and America’s economy would spiral downward into a depression? How many times have you heard anybody suggest that it’s probably a bad idea to borrow every penny we have in circulation or that our U.S. Treasury should instead issue our nation’s money, debt-free? We taxpayers pay hundreds of billions of dollars in interest on our nation’s money every single year and those wasted tax dollars purchase us absolutely nothing.
When I first started writing this column for the Daily Republic two years ago, I didn’t know how much time I had to talk to you, so the first thing I wrote about was the most important problem we Americans faced: debt money. It’s time we revisited that story.
Mike Kirchubel grew up in Fairfield and is the author of “Vile Acts of Evil – Banking in America.” He can be reached at email@example.com.