its origin and structurally, public debt is not the same as private
debt. Although formal “lenders” and “borrowers”
are to be found in both cases, where public debt is concerned the actual
borrowers are never also the primary payors. Although the people’s
purported “representatives” arrange the loans, they pledge
their constituents’ assets as collateral. Here lies the fatal
defect in the Hamiltonian “funding” system: Because
the individuals who borrow are different individuals from those who
will ultimately be forced to pay, the interests of the borrowers, as
well as of the lenders, can (and usually do) become so disconnected
from the interests of the payors that the borrowers collude with the
lenders at the expense of the payors.
that point, the “funding” system becomes an exceedingly
dangerous combination amongst rogue public officials and financial speculators
against the general public, for at least two reasons:
First, it is a combination especially easy to contrive and
manage. On the one hand, the “representatives” can be
cöopted or captured by the lenders and the well organized and
funded special-interest groups allied with them. On the other hand,
many among the affected population can exert no countervailing political
influence—indeed, can have no way of knowing, let alone doing
anything, about what is being imposed upon them—because they
are either in their minorities or not even in existence at all when
are incurred the debts for the repayment of which they will eventually
be held liable.
Second, it is a combination especially prone and likely to
get out of hand, because of the synergistic interaction among human
avarice, ambition, and the appetite for abusive powers.
On the one hand,
the lenders are intent upon securing for themselves a stream of income
guaranteed by “the full faith and credit” of the government—which
means, in actuality, the government’s ability and willingness
to apply unlimited force to the people in order to extract from them
the wherewithal to pay the debt. For that reason, the lenders will
promote expansion of the government’s power to tax and otherwise
loot the citizenry. As a practical matter, the lenders “invest”
in the metastasis of the apparatus of governmental coercion. In addition,
the lenders “invest” in the metastasis of governmental
powers across the board, so as to create new excuses for the government
to spend and therefore to borrow.
Thus, on the side of the lenders, the Hamiltonian “funding”
system is a formula for ever-expanding statism.
So, too, on the
side of the public officials who incur the debts. Rogue officials
favor ever-increasing public debt as a means to increase governmental
spending, which rationalizes ever-increasing governmental power. The
larger and more powerful the government, the more secure their political
careers, and the greater the authority, personal prestige, and financial
benefits that accrue to them.
Worse yet, in
the process of incurring public debt, the lenders often effectively
sit on both sides of the bargaining table. Of course, on one side,
the lenders represent themselves. But, on the other side, the public
officials represent the lenders, too, because the lenders either secure
the election of those officials through campaign-contributions or
capture them later on through lobbying and other forms of behind-the-scenes
influence. No one at the table stands up for Mr. and Mrs.
America and their children, who will be made to foot the bill.
the borrower is always the servant of the lender, once the public
debt has grown sufficiently large that public finance has degenerated
effectively into a Ponzi scheme, the lenders hold even honest public
officials hostage. Just as with the dope-fiend who is always dependent
upon his next fix, public officials must enter into more and ever
more loans—constantly raising “the debt ceiling”
of their addiction—or the government will collapse in financial
ruin. So, just as with the dope-fiend who steals from his family and
friends in order to support his habit and to avoid having to “go
cold turkey”, public officials will impose any financial burden
on the masses in order to salvage their own careers.
is no answer to these objections to posit the possibility that a significant
proportion of the general public may, directly or indirectly, hold some
large part of the public debt.
as this proportion of the public always exists in the present, not the
future, its mere size does not obviate—but in fact on that score
may exacerbate—the intergenerational conflict inherent in public
debt. Second, no reason exists why a significant proportion
of the public—even comprising a majority—cannot constitute
a “faction” inimical to the common good.
in America, this process has progressed to the point at which the interests
of the borrowers and the lenders have become, not simply adverse, but
even aggressively antagonistic, to the interests of the payors. The
speculators in New York City and their political puppets in Washington,
D.C., are arrayed against the vast mass of Americans, both present and
future, in a conflict that is not amenable to compromise.
question is, “Can common Americans prevail?”
has become somewhat trite to point out that the Chinese ideograph for
“crisis” includes the ideas “danger” and “opportunity”.
But that observation still has merit.
this juncture, the “opportunity” is for Americans to realize
that Hamilton’s system has not worked, and can never be made
to work, and therefore must be replaced—immediately, if not
sooner. The present situation provides Americans with the best chance
they have ever had to kill two vultures with one stone: first,
the link between excessive governmental debt and excessive governmental
power; second, debt-currency, fractional-reserve central banking,
and the integration of bank and state, without which the present gigantic
Ponzi-pyramid of supposed public debt could never have been erected.
“danger” is that while Americans are mulling over what do
to about this situation, the rogue politicians and crowd of bankers
and financial speculators that pull their strings will betray this country
once again—and in their expectation finally and decisively—by
the tottering Federal Reserve System through the banking cartel’s
integration into a supra-national central bank capable of emitting
a supra-national currency,
closely followed by
America’s National debt with loans made and payable in the new
currency—complete, of course, with severe “conditionalities”
that will set in stone the pyramid of perpetual public debt with the
cement of the people’s permanent penury.
describe this as a “decisive” betrayal, because the Forces
of Darkness expect that, once a supra-national central bank
and fiat currency have been set into operation, and this country’s
crushing load of National debt has been tied to that new régime,
Americans will be unable to do anything—economically, politically,
or legally—about it for generations, if ever. For the borrower
is servant to the lender; and if the debt can never be paid off, the
servitude can never be ended. After all, what have Americans been able
to do about the depredations of the Federal Reserve System in the nearly
one hundred years since its illegitimate birth in 1913? From the collapse
of the economy in 1932 and the seizure of the people’s gold in
1933-1934, to the palpably criminal “bail outs” and “quantitative
easings” of the present day, no crime has been too outrageous
for the banking and financial racketeers to commit—yet next
to nothing has been done about any of them. So, if a domestic
central bank has proven to be largely immune from popular control, how
much more immune will a supra-national central
this immunity will have the most serious of consequences. For, just
as the erection of the Federal Reserve System effectively transferred
supreme domestic governmental power to bankers and financial
speculators, so that Congress has become shamelessly subservient to
them, so will the establishment of a supra-national central
bank effectively transfer America’s very national sovereignty
to that cabal, so that Congress will become, not merely impotent, but
completely irrelevant to the scheme of financial control that will be
fastened on the American people. This is a scheme, not simply
for violating the Constitution of the United States, but beyond that
for overthrowing the Declaration of Independence.
the main thing is to recognize that, at base, America is confronted,
not with a merely economic problem, but with a profoundly political
and legal problem. If the latter is not solved in time,
will eventuate in catastrophe.
Americans must decide once and for all who is in control of
the government of the United States—WE THE PEOPLE, or the bankers,
the financial speculators allied with them, and their lap-dog political
front-men. And once the proper order of precedence has been established,
Americans must determine to use the Constitution and laws
 to separate
the Treasury from financial speculators to the greatest degree possible,
 to separate
bank from state finally and absolutely.
I have already dealt with the second of these in my address “Cross
of Gold”, presented to this assembly at its October meeting in
2010 (and available in full on NewsWithViews), I shall focus only on
the first of these goals.
might Americans go about separating the Treasury from financial speculation
to the greatest degree possible?
believe that the best way to proceed is for WE THE PEOPLE to act through
their States, as economic, political, and especially legal vehicles
for “change we can believe in”.
The first step in this corrective process must be to prevent the present
problem from becoming any more serious, by imposing strict limitations
on public indebtedness in the future.
saddle future generations of Americans with a staggering load of public
debt is more than just financially imprudent or even morally problematic.
At some point, it becomes positively illegal. The only time the Constitution
expressly addresses the concerns of the future is when it declares WE
THE PEOPLE’S intent “to * * * secure the Blessings of Liberty
to ourselves and our Posterity”.
Now, generally, a servant is subject to the control of his master. Therefore,
relative to his master, the servant is deprived of liberty. Specifically,
“the borrower is servant to the lender”—his servitude
proportional to the degree of his indebtedness. So, if “our Posterity”
are cast in the rôle of involuntary “borrowers” of
sums so huge that repayment is impossible, they are thereby consigned
to the permanent status of “servants”—and worse than
even indentured servants, because they never agreed to their servitude—and
in that thralldom are not “secure[d]” in “the Blessings
of Liberty”, but instead are stripped of them.
is contrary to the explicit purpose of the Constitution “to *
* * establish Justice” as a permanent condition.
For “our Posterity” will have had no notice of, will have
been afforded no hearing as to, will have taken no other part in, and
certainly will never have given their permission for, the transactions
that incurred the supposed public debt for the repayment of which they
will be taxed or otherwise mulct. It will have been physically impossible
for those of “our Posterity” who were not even alive at
the time to be observers of, let alone parties to, these transactions.
Therefore, imposing a liability upon them to pay off these debts—ultimately
to be enforced through taxation imposed at the point of bayonets—amounts
to the quintessential case of “taxation without representation”.
to the NewsWithViews Daily News Alerts!
is bootless to contend that “our Posterity” will have been
“virtually represented” by the past and present
generations of Americans. Historically, this apology is lame. America’s
Founders were “virtually represented” by members of Parliament
who were actually their contemporaries—and nonetheless they rejected
such “representation” as insufficient, if not fraudulent.
Indeed, “imposing Taxes on us without our Consent” in the
present was one of the “Facts submitted to a candid world”
which the Declaration of Independent set out as evidence that “[t]he
history of the present King of Great Britain is a history of repeated
injuries and usurpations, all having in direct object the establishment
of an absolute Tyranny”. One wonders how “imposing Debts
on us without our Consent”, on an intergenerational basis, could
sound any less in usurpation and tyranny. For part three click below.
here for part -----> 1, 2,
© 2012 Edwin Vieira, Jr.
- All Rights Reserved
Commentaries on the Laws of England (Philadelphia, Pennsylvania:
Robert Bell, American Edition, 4 Volumes & Appendix, 1771-1773),
Volume 1, at 325-328.
Claude G. Bowers, Jefferson and Hamilton: The Struggle for
Democracy in America (Cambridge, Massachusetts: The Riverside Press,
1925), at 45 (footnotes omitted).
Letter to John Taylor, Monticello, 28 May 1816, in The Works of
Thomas Jefferson, Paul Leicester Ford, Editor (New York, New York:
G.P. Putnam’s Sons, Federal Edition, 12 Volumes, 1904-1905), Volume
11, at 533.
A frugal government is the financial speculators’ worst nightmare,
because then they would have to invest in private enterprises that,
lacking the ability to coerce customers into buying their products,
See 31 U.S.C. § 3102(b). And many investment funds open to the
public maintain public debt as significant parts of their portfolios.
See The Federalist No. 10 (James Madison) (emphasis supplied): “By
a faction I understand a number of citizens, whether amounting to a
majority or a minority of the whole, who are united and actuated by
some common impulse of passion, or of interest, adverse to the rights
of other citizens, or to the permanent and aggregate interests of the
This is a plan on which the Forces of Darkness have long cogitated.
See, e.g., the detailed charts between pages 150 and 151 in Hans Heymann,
Plan for Permanent Peace (New York, New York: Harper & Brothers
See, e.g., the “conditionality”—or, perhaps more descriptive,
the dictate—the EU and the IMF have imposed on Ireland, commanding
the Irish government to extract a new property tax from homeowners within
the next year. [Link]
U.S. Const. preamble (emphasis supplied).
U.S. Const. preamble.
U.S. Const. art. I, § 8, cl. 2.
See U.S. Const. art. V.
See U.S. Const. art. I, § 8, cl. 11.
See U.S. Const. art. I, § 8, cl. 18.
U.S. Const. art. I, § 8, cl. 2 (emphasis supplied).
Amend. XIV, § 4 (emphasis supplied).
See also 31 U.S.C. 3102(a) (emphasis supplied): “With the approval
of the President, the Secretary of the Treasury may borrow on the credit
of the United States Government amounts necessary for expenditures authorized
by law and may issue bonds of the Government for the amounts borrowed
* * * .”
See U.S. Const. art. VI, cl. 2.
Marbury v. Madison, 5 U.S. (1 Cranch) 137, 174 (1803). Accord, Knowlton
v. Moore, 178 U.S. 41, 87 (1900); Blake v. McClung, 172 U.S. 239, 261
See Bute v. Illinois, 333 U.S. 640, 653 (1948).
Norton v. Shelby County, 118 U.S. 425, 442 (1886).
U.S. Const. art. I, § 8, cl. 1.
U.S. Const. art. I, § 8, cl. 1.
U.S. Const. art. I, § 8, cl. 2.
U.S. Const. art. IV, § 3, cl. 2.
See the discussion of Hanauer v. Doane, 79 U.S. (12 Wallace) 342 (1871),
U.S. Const. art. I, § 8, cl. 1.
Compare U.S. Const. amend. XIV, § 4 with art. I, § 8, cl.
See U.S. Const. art. IV, § 3, cl. 2.
79 U.S. (12 Wallace) 342 (1871).
Id. (12 Wallace) at 345 (emphasis supplied).
Id. (12 Wallace) at 346, 347.
See U.S. Const. art. III, § 3, cl. 1 and Ex parte Bollman, 8 U.S.
(4 Cranch) 75, 126 (1807).
See 18 U.S.C. §§ 241 and 242.
See Flemming v. Nestor, 363 U.S. 603 (1960).
12 U.S.C. § 411.
An Act To provide for the establishment of Federal reserve banks, to
furnish an elastic currency, to afford means of rediscounting commercial
paper, to establish a more effective supervision of banking in the United
States, and for other purposes, Act of 23 December 1913, CHAP. 6, §
30, 38 Stat. 251, 275.
See, e.g., Thompson v. Butler, 95 U.S. 694 (1878).
What effectively amounts to a “dirt dollar” would hardly
be such an innovation as it sounds. After all, silver and gold are simply
specific components of “dirt” (that is, earth or ground),
that happen to exhibit greater purchasing powers, ounce for ounce, in
the marketplace than most other components, such as zinc, copper, lead,
or iron. Yet some components of dirt—such as platinum, palladium,
rhodium, and rubidium—are more valuable, ounce for ounce, than
either silver or gold. So (all constitutional objections aside) if a
refined “dirt dollar” of silver or gold is legitimate, no
principled objection to an unrefined “dirt dollar” should
U.S. Const. art. VI, § 3, cl. 2. and art. I, § 8, cl. 5, respectively.
E,g., 31 U.S.C. § 5118(b) declares that “[t]he United States
Government may not pay out any gold coin”. It does not say that
the government may not pay out aliquots of public land.
See Perry v. United States, 294 U.S. 330 (1935).
See U.S. Const. art. I, § 8, cl. 17. See generally Bill Howard
and Bill Redd, Statehood: The Territorial Imperative (Helper, Utah:
Bookcliff Publishing, 2005).
See U.S. Const. art. I, § 8, cl. 17.
See U.S. Const. art. I, § 8, cl. 1.
McCulloch v. Maryland, 17 U.S. (4 Wheaton) 316, 431 (1819).
See Hylton v. United States, 3 U.S. (3 Dallas) 171 (1796). See also
Billings v. United States, 232 U.S. 261 (1914).
See U.S. Const. art. I, § 8, cl. 1.