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Jul
05

a reader writes:

The Federal Reserve must be abolished.
It is no accident that WWI, the creation of the Federal Reserve Bank, and the initiation of the Federal Income Tax all occurred at about the same time.
WWI was expensive. The creation of the privately owned Federal Reserve Bank allowed the government to borrow money. To pay the interest on the debt, the U.S. government had to initiate the income tax.
If the United States were to use publicly issued currency rather than Federal Reserve Notes (dollars), there would be no debt and no income tax. California may hit on this solution if its government issued IOU’s are allowed to trade on the open market. If I owe state sales tax, I could purchase the California IOU from a neighbor and give the state its IOU back. Eventually the dollar in the middle of the transaction could be eliminated, and the people of California could simply trade in IOU’s.
Under the current system, the Congress has given up this responsibility as it is delineated in the constitution to be the sole issuer of currency, preferring to borrow from the private sector at interest.
The Federal Reserve system is a destructive beast. The founders of the U.S. knew the danger of central banks, having lived under the tyranny of the Bank of England. It is unfortunate that the provisions of the U.S. constitution that prohibit a central bank are ignored.