The Nail In Our Economic Coffin

Tagged as: bubble crisis economy financial
Neighbourhoods: states united

We Americans commonly refer to our system of government as a "great experiment," but we rarely look at our economic system in the same light.

Over 200 years ago, Alexander Hamilton, our first Secretary of the Treasury, put the first nail in our economic coffin when he set forth a plan to remove the rightful power from Congress to issues our nation's currency. After a battle that would split Washington's administration into factions and lead to the creation of the first political parties, Hamilton's financial package triumphed. The dividing argument over privatizing our banking system continues to this day.

With the creation and arguable failure of two Federally chartered banking corporations in the early 1800's and finally, the creation of the third national bank (the Federal Reserve) formed in response to the Bank Panic of 1907, Americans felt a brief respite from the near clockwork cycle of "boom and bust" that plagues our nation's financial history. Some would argue that the Fed actually helped end the 20-year boom-bust cycle repeatedly experienced by Americans following the Panics of 1819, 1837, 1857, 1873, 1893, 1907, and 1929. Others argue that the Fed has merely interrupted the standard cycle and postponed the inexorable bust for as much as 75 years creating perhaps the largest global credit bubble in recorded financial history... the mother of all bubbles.

As we see with other credit related panics, the fallout and real world consequences can be extraordinarily long lasting. The THIRD great depression of the United States, following the 1929 stock market crash, lasted for over 12 years, 20 million Americans would find themselves unemployed and 9,000 banks would eventually fail. The SECOND great depression of the United States would take place in 1837 and last over 6 years as unemployment would skyrocket to a staggering 33%. The FIRST great depression of the United States would take place in the year 1819 and last for over 4 years as unemployment reached an unimaginable 70% in cities like Philadelphia.

The driving force behind each one of these boom-bust cycles can be described in three words... "too much credit." Regardless of the items of speculation - land, banks, real estate, stocks, railroads, or technology - the temptation posed by boundless and seemingly endless credit overwhelms our good judgment. It allows speculators to wage enormous bets on everything from flipping houses to gambling in derivatives - all without even using their own money. When they bet and win they keep their gains. When they bet and lose Congress forces U.S. taxpayers to bail them out. What a racket.

If there's so much profit to be made from the issuance of credit, no wonder it ended up in the hands of a private banking corporation. It was a heist. The funniest aspect to the whole matter is that 200 years have passed and we still haven't discovered that the horse is missing from the barn.

Congress had the responsibility to coin and regulate money, which would have guaranteed the kind of constitutional oversight necessary when dealing with money combined with the inescapable human facet of greed. Instead, the very first Congress delegated their responsibility to private banking corporations setting up a hierarchy of wealthy and elite businessmen who still have their hands on the biggest piece of the American pie to this day.

Shouldn't the people of the United States own and benefit from the creation of money and credit derived from the use of their very own currency... the dollar? The answer is, of course we should. We don't need to nationalize the banking system; we simply need to make it constitutional again.

How would you like to cut your tax burden in half or more? Then take the enormous money-generating machine that is the Federal Reserve and put it in the hands of We The People. Since WE are the true owners of this corporation, the good ole U.S. of A., then they should pay us dividends based upon their massive global profits made on our behalf.

If any of this makes sense to you, then you're ten steps ahead of the guy beside you.

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William Lewis

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