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The U.S. Constitution and Money Part 13 Reconstruction of America's Constitutional Systems of Money and Banking

The U.S. Constitution and Money Part 13 Reconstruction of America's Constitutional Systems of Money and Banking

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Published by michael s rozeff
This article concludes the summary of Edwin Vieira Jr.'s Pieces of Eight. It spells out the specific changes that will restore a constitutional money and a constitutional banking system. It explains why this should be done and how it is feasible. It provides an idea of what will happen and what to expect as it is being done. The article also explains some of Vieira's thoughts on the political issues involved in reform and his idea of making officeholders subject to absolute liability. My postscript places the Constitution and money issue into a broader Misesian-Hayekian framework.
This article concludes the summary of Edwin Vieira Jr.'s Pieces of Eight. It spells out the specific changes that will restore a constitutional money and a constitutional banking system. It explains why this should be done and how it is feasible. It provides an idea of what will happen and what to expect as it is being done. The article also explains some of Vieira's thoughts on the political issues involved in reform and his idea of making officeholders subject to absolute liability. My postscript places the Constitution and money issue into a broader Misesian-Hayekian framework.

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Published by: michael s rozeff on Jun 02, 2010
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07/27/2013

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These five parts are Congress, the President, the Judiciary, the several States, and WE
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THE PEOPLE.
The U.S. Constitution and Money Part 13: Reconstruction of America’sConstitutional Systems of Money and Banking
 by Michael S. Rozeff 
Introduction
Book 4 of 
 Pieces of Eight 
consists of two chapters on reform. Chapter One tells us practical and
legal 
steps, recommendations, that will reform America’s money and its banking and make themconstitutional. Each step follows logically from the previous analysis in the book. It adds up to a program for monetary and banking reform. Vieira ruminates on various aspects of reform inChapter Two. He tells us why the country’s money and banking have reached the presentcondition, where the country is headed if the money and banking system remains in place, and (p.1588) “whether a practical legal means to transform it exists.” Much of this chapter is aboutwhich of the five parts of America’s federal government (p. 1607) “should be the locus of reform.” His answer is WE THE PEOPLE.
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Many of Vieira’s essaysare collected here. A number of these concern monetary matters andmonetary reform, such ashere,here,here,here, a 7-part essayhere, and recent essayshere,here, andhere. Vieira wrote these starting in 2005, so they are up to date. They will help anyoneunderstand his work better. They too provide a picture of his program. The first few essays in his7-part series summarize many of his recommendations.
Why Change?
Before launching into this exposition of what a constitutional money system looks like, let’sunderstand why it should be done. There are transition costs, but the costs of keeping the existingunconstitutional system in place are immensely higher than any transition costs. The benefits of asolid and constitutional system are a significant improvement in our lives and those of our children, and the avoidance of some very bad outcomes. If we do not reform the money system,change will come anyway from other directions, because the established system is increasinglyfalling apart and requiring larger and larger measures to keep it going, which measuresthemselves are having and will have larger and larger negative effects on the system’sfunctioning and the welfare of those living under it.A variety of future scenarios is possible, some of them beneficial, many of them devastating. It’sin our interest to create the future rather than let it happen to us.Why change? It will be a
better 
system for most Americans. The value of the dollar won’t be inthe hands of a select group of central bankers who do what they please behind closed doors. Thegovernment won’t have a ready source of newly-created money that it can borrow and spend,creating endless boondoggles and more taxes on Americans.
 
It will be a
workable
system. Sure, it’s different from what we are accustomed to, but metalmoney historically worked decently for hundreds of years, while government paper money hasoften run the economy into severe problems such as we are now experiencing. These problemsare predictably getting worse. They’re not going to go away. Our money and our banking needfundamental reformIt will be a
 progressive
system. Part of the reform is to open up the economy to monetaryinnovation. Right now, the government and banks are in cahoots with a single kind of credit and payments system. We’re not getting the innovation of which the market system is capable.It will be a
time-tested 
system. The framers of the Constitution chose a monetary framework  based on many years of economic experience and legal history of money. They didn’t go aboutthis in a haphazard way. The legislative histories of our present money system reveal thatCongress frequently made monetary changes in ignorance and haste. They made plenty of mistakes. History shows that the Supreme Court rubber stamped these mistakes, whileconcocting theories filled with holes.It will be a
trustworthy
system. People will know that their money is actually worth something inand of itself. They won’t be placing their misplaced trust in central bankers and governmentofficials who are not being held to keep their word. If the government can seize all the gold in thecountry, how can it be trusted? If the Federal Reserve can print up a trillion dollars and bail out agovernment-sponsored enterprise, how it can it be trusted to look after your interests?It will be a
lawful and legal 
system. Vieira is a firm constitutionalist who believes inconstitutionalism. He links constitutional law back to the natural law expressed in theDeclaration of Independence and to British common law. He considers the American people stilla people and still WE THE PEOPLE. The founding documents express the quintessentialAmerican idea or ideas. He believes that living up to their content is the best bet for preservingand extending those ideas, which are endangered in this land.It will be a
limited government 
system. One of the supports of big government is the existing fiatmoney central banking system. It helps support the American Empire and the welfare-warfareState. Without a central bank to support its borrowing, the government has to compete on anequal footing with other enterprises. This helps to restrain its size.It will be a
more stable
system. The fiat money central banking system is prone to speculative booms followed by depressions. Excessive debt buildup in the economy accompanies the boom.The levels of debt in the United States are so high that all sorts of defaults and/or currency and banking crises are occurring and will continue to occur. Gold and silver money avoid this problem because they are asset-money, not debt-money.It will be a
 fairer 
system. The currency ups and downs in the existing system invariably producewealth redistributions that are insidious and hard to identify by those whose wealth is beingextracted. Gold and silver money are much more fair in this respect, because they greatlymitigate inflation and deflation. Furthermore, their stability produces lower interest rates.
 
Financial reform also includes large problem areas that Vieira does not address. These
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include (1) laws for banks that properly treat their credit creation, default, insolvency, and bankruptcy, and (2) the many unconstitutional government loan and guarantee programs. Theseinclude Fannie Mae, the Federal Deposit Insurance Corporation, and the Pension BenefitGuaranty Corporation.It will be a more
 people-oriented 
system. The leaders of America installed the existing fiatmoney central banking system. They comprise the Establishment. Naturally, they constructed asystem that served their own ends and goals. Their goals were their own wealth, position, power,fame, and status, among other things. The people came second or third or last, if at all. Gold andsilver are the people’s money. The people control the money when the money is gold and silver,not the politicians, not the bankers, and not the intellectuals.
The General Goals
There are two general goals that Vieira outlines: change the money and disestablish the FederalReserve System.Constitutional reform of the money requires the government to change from paper money to goldand silver (specie). This precludes any issuance of United States Notes, with or without legaltender privileges. It precludes government issues of gold and silver coin certificates. It precludesextending legal tender privileges to any paper currency of any other governmental or privateentity. The Constitution disallows government issue of any form of fiat money and any form of government money based on promises. The Constitution disallows any debt-based or liability- based money. It allows only asset-money, specifically specie (gold and silver).Constitutional reform of the banking system requires the government to cut its ties with theFederal Reserve System. The government has to separate itself from this system in every way.
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On a scale of 1 to 10 where 1 is easy, this is a 3 or even a 2, if Congress wanted to do it.The obstacle is that Congress doesn’t want to do it. It isn’t even the faintest of glimmers in their Potomac-fevered brains. The government of 2009-2010 is moving in the opposite direction. It is building up the corporative-state system still further. The legislation now working its waythrough Congress, which is being sold as a “Financial Reform Bill” doesn’t reform the system. Itmaintains and augments it. Both the Senate and House versions
increase
the regulatory powers of the Federal Reserve.The corporative-state system of money and banking has failed America and Americans. It hasgreatly weakened the economy. It has thrown million of Americans out of work. UnlessAmericans understand how and why this system is harming them and actively thwart it and undoit, the inevitable direction it will take is what we are seeing – greater and greater centralizedcontrol and regimentation of Americans accompanied by less and less liberty and reducedstandards of living.

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