Constitutional money is identified in the plain and unambiguous language of the U. S. Constitution itself. Article I, Section 8, clause 4 contains the following clause:
The Congress shall have power to coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures.
This means that the Congress, elected to represent the interests of the citizen, has the responsibility to regulate the value of our money. The value of money is regulated by how much or how little money is created. If too much money is created than the value and therefore the purchasing power of money goes down. If too little money is created than the value of money goes up, money becomes scarce, and bankruptcies and foreclosures ensue.
How should Congress decide how much or how little money should be created? The amount of money created by Congress should not exceed or be less than the Gross National Product of the nation. Money should be issued by Congress based on as close to an exact estimate as possible of what is needed for Americans to transact their business, accumulate and maintain savings, and obtain credit based upon clearly defined terms of credit-worthiness. Congress could issue this money interest-free.
Congress should be permitted this important function within certain laws and constitutional amendments including a balanced budget amendment, a line item veto, and laws that ban the creation of money above set limits. In times of war or national emergency, Congress could create or borrow money or raise taxes. If the money supply exceeded the GNP, immediate inflation would result and the Congress would be held accountable.
Other than coins in denomination of the Dollar, Congress does not presently issue our money or control its value. Instead, that responsibility has been vested in the unelected and unaccountable consortium of private banks and investors known as the Federal Reserve Bank. Our money is controlled by private bankers who issue it to Congress and charge our government interest for the privilege. The Federal Reserve Bank bailed out Fannie Mae and Freddie Mack and the Federal Reserve is presently bailing out European central banks.
Private bankers thus control our money and, by extension, private bankers control our property, our businesses, and our lives. This constitutes, in the real sense, “public ownership of the means of production” which is the definition of Socialism. This was why Karl Marx was in favor of the private central banking system. The private bankers have used their virtual monopoly powers to create money to cause booms and busts and property confiscations which have benefited themselves and their international elite friends and allies.
The Occupy Wall Street movement is right. 1% of people control the vast majority of the wealth of the world. That 1% is either apart of or allied with an international network of privately owned central banks that have caused crushing deficits in industrialized nations and debt in the third world. As Americans, we need to take back our money by demanding that our Congress re-assert its constitutional prerogative to issue currency and to end the practice of fractional reserve banking. Banks should be limited to issuing loans based on assets at hand as opposed to what they do now which is to create money out of thin air.
What would constitutional money mean to the economy and to working people? First and foremost, a dollar would be worth a dollar. The economy would be based upon savings and capital accumulation as opposed to what we have now which is a system based upon debt. This would mean that the purchasing power of the dollar would find its true value and this would improve the financial condition of all Americans including the most destitute. The government would carefully and gradually pay off the national debt with congressional currency so as to not cause inflation. Foreign debts could be paid off with specie, which is to say with gold, silver, and/or other agreed upon commodities. The massive bureaucracy, and the Welfare State, would be substantially curtailed as it would no longer be required.