With talk of another government shutdown, there are many who are becoming frantic.
How will we buy our food, pay the rent, pay the mortgage, pay for our cars, pay for our education and more if the government shuts down…
Wrong question. Wrong premise.
Ron Paul recently commented in one of his podcasts the USA went bankrupt back in 1971. I can hear America saying “Nineteen Seventy One, you say. Ron, that statement makes you seem like you and President Biden need to take up residence in the same facility.”
But hear him out.
Ron’s point was the government got off the gold standard in its entirety in 1971.
In 1933, under and Executive Order, FDR made owning gold illegal. Why did he do this? For years, I have been hearing various remarks on why he did this. But here’s the explanation that makes the most sense of any I have heard.
Americans were taking their paper money to banks and exchanging it for gold (which was legal at the time). However, the government was running out of gold (in a large part, due to the Federal Reserve’s fractional reserve policy). In other words, Americans taking gold out of the banks was, in effect, a run on the Federal Reserve System.
Without the Federal Reserve System, the government would be found to be defrauding the people by debasing the currency. Per the Coinage Act of 1792, any person found guilty of doing so could be sentenced to death.
Rather than this taking place, thus limiting several politicians careers, the government made it illegal to own gold. As a result, they could spend without consequence.
In 1971, the ability to spend without consequence came to a head as the USA could no longer pay for its debts with ‘real money’ (i.e. gold and silver). So they disbanded the requirement to do so.
This is why the question of how to pay for things should the government shut down is meaningless. Put in the most direct terms, the USA has no money.
“That cannot be true”, you say. Look at all the things I buy with the paper money in my wallet and my credit cards.
Actually, it isn’t money.
I realized after I heard Ron Paul state this I have never been paid for my work as I have always received Federal Reserve notes.
Notes are not money. A bank note is not money. A bank note is a promise to pay.
All I have received since I began my paper route in seventh grade is a promise to pay. All we’ve been trading each other for decades is a promise to pay.
That’s why all the assets in the United States, both public and private, do not equal the total amount of liabilities (and equity). There’s over a 300% imbalance between the assets and the liabilities and equity. In basic terms, we’ve borrowed all of our assets 3 times over.
So when you ask how can I pay for things if the government shuts down, it never will be paid for. There will simply be another IOU handed over to the Federal Reserve, compliments of the US government.
Every time we have a major bank correction, such as 2001, 2008 and 2020, the Federal Reserve works with the government to kick the fiscal day of reckoning down the road, making the next bank correction a bigger mess than the current one.
THIS is how free and wealthy nations turn into poor and enslaved countries.
Can this be fixed? Ron Paul suggests having a gold based currency compete with Federal Reserve notes. When you purchase something, the clerk behind the counter asks “Would you like your change in gold and silver, or in Federal Reserve notes” and let the marketplace decide what monetary system they prefer.
There are less pleasant ways to fix the economy and make the country strong again.
Unfortunately, the people In Washington, your State Capitol and even your county commissioners LOVE their fake bucks and the power they wield with them. And, more likely than not, they will not make the fiscal responsible nor morally correct decisions that must be made to save the country from economic collapse and the chaos that follows.
Since your government officials and workers refuse to live by timeless economic principles, it behooves you to learn how YOU can prosper in a socialist society, as this is what your leaders are herding you toward. My book, Prospering in a Socialist Society, does just that – including providing some specific examples of individuals who did so.
My book is located at https://TedLeithart.com/prospering-in-a-socialist-society/
Do the sane thing NOW. Go to my website…
