Will Congress Ever Solve Our Economic Problems? – Professional Tax Services

Last month, we discussed the failure of the Federal Reserve to provide American citizens with a stable currency. Since the Federal Reserve Act was enacted in 1913, Americans have suffered through a devastating depression and several recessions, including the banking crisis of 2008. In addition, inflation since the Fed began operating has been so prevalent that what you could purchase for one dollar in 1913 today would require you to pay $31.35.
Article One Section Eight of the US Constitution grants Congress the privilege “to coin money, (and) regulate the value thereof…” However, in 1913, Congress outsourced this privilege to private bankers. Rather than our government creating our currency debt-free, what it can’t pay for through taxation, our government borrows primarily through member banks of the Federal Reserve, as well as foreign institutions, and must pay compound interest, thus creating a national debt. When the government borrows money, banks create the money out of nothing through a digital computer entry. If a $1 billion loan was made to our government, an additional $1 billion would be added to the money supply. When the government redeposits that money, through fractional reserve banking, that bank can legally lend out at least 10 times the amount of the deposit despite not having cash reserves to back the loans. This decreases the purchasing power of the dollar and results in inflation. The same scenario applies to both business and consumer loans.
Why would the government borrow money and pay compound interest when it can create our money interest and debt-free? If the Treasury did so, we could eliminate the entire national debt. This borrowing is plummeting our standard of living while the largest stockholders of the big banks enjoy massive profits. Restoring the money supply to Congress and keeping the amount of money in circulation stable would reduce taxation and could result in unprecedented prosperity. If our government did this, our government would have the financial resources to rebuild our infrastructure and clean up the environment, thus potentially improving the health of American citizens.
A Proposed Solution
Bill Still, a monetary reformist, author, and documentary producer, with the assistance of the late economist Milton Friedman, a former Nobel Prize winner for economics, proposed a monetary reform act in 1995. Had members of Congress had the opportunity to read this and then pass it and had it signed by our president, today we could be enjoying continuous prosperity. Next month, we will highlight the key points of their proposed legislation.
If you have questions about how to lower your taxes and increase your level of prosperity despite our nation’s financial woes, contact us.
Professional Tax Services is a locally owned provider serving over 3,500 local residents and businesses. For more information, call 661-259-1967 or visit www.scvprotaxservices.com.