Columnists

Principles of Freedom – The Balance Sheet

Issue 34.17

There are basic principles regarding wealth and money. The Constitution gives to the government the right and responsibility “To coin money, regulate the value thereof, and of foreign coin, and fix the Standard of Weights and Measures;” and “to borrow money on the credit of the United States”.

In the real world, just printing money does not make a government or a country rich because all other countries can determine the value of that money in relationship to their own money. This became very apparent near the end of World War II and especially after Germany’s surrender as their government had printed billions of Reich-Marks to keep trying to pay their troops and purchase such things as oil, food and equipment. The problem was, no one felt that the German government could back the money they printed with anything of real value. The result was that ultra-inflation occurred. At the worst point, the money became essentially worthless as people would need a wheel-barrow full of it to purchase a loaf of bread and foreign nations would not take the Mark in exchange for anything of value. I recently purchased $15,000 of pre-revolution Iranian money for $20. This has happened to many governments as they print money without value or backing in real wealth.

What governments sometimes forget is that the value of currency and the wealth of a nation is based on creation of some type of value. The reason the American colonies became wealthy enough to fight a war with the most powerful nation on earth was their extremely ambitious efforts to create things. Whether it was growing food, growing tobacco or cotton, harvesting pelts or manufacturing all manner of items from the natural resources they harvested (wood, iron, gold, etc.), the various states were creating something of value. When they unified their efforts with the Declaration of Independence, they became a serious financial force in the world. Countries such as France were willing to take a chance on selling us arms and supporting our war effort – not only because they didn’t like the British much, but because they saw a good likelihood of getting their investments back with interest as we were producing real wealth.

Fast-forward 240 years and we have a different economy and a different banking system. The Federal Reserve (which is neither Federal or a Reserve and is owned by mostly foreign bankers) prints United States money and charges the government interest on using it. Much of the production we previously created through manufacturing and technology has been shipped overseas. Even our service oriented work which is a value as you repair or make more usable items that people buy, is now centered in foreign countries as anyone who has called for support on their computer can attest.

Our economy now is mostly based on sales of items produced elsewhere or in shuffling money around for other people and taking a percentage for the company or person doing the shuffling. That is illustrated in the Stock Market and in most investment and banking activities. These activities can create value if the money is used to create new and productive businesses, but is often used to simply leverage money that already exists and taking a part of it for doing so. This creates no real value, though it can make the manipulators wealthy at the expense of those who do not have the means to do the same things.

The result is, as a nation we are in debt to the tune of around $20 Trillion. Considering the population of the US, that is over $60,000 for every citizen of the United States. My family of 11 people (not counting grandkids and spouses of our children) share in about $700,000 of that debt. Some have suggested the government just write a check and eliminate the debt or just declare bankruptcy and ignore it. What they forget is that a significant percentage of that debt is to our own citizens through bonds, social security, medicare and retirement funds, not to mention what we owe our veterans. We can’t just write it off without severe damage to many people and without causing a form of the ultra-inflation we mentioned earlier. If we want to become once again a prosperous nation, we need to produce real value and real wealth again. I hope we wake up before it is too late.

Lynn West is a thinker, a teacher and a patriot. You can reach him through email at forgingthefuture2021@gmail.com or through this newspaper. Liberty is a state of being which must be continually created. These articles can help all of us discover the ways we can contribute to that outcome.

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