[quote]Zap Branigan wrote:
Wow you guys hate the Constitution.
Section 8. The Congress shall have power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States; but all duties, imposts and excises shall be uniform throughout the United States;
To borrow money on the credit of the United States;
To coin money, regulate the value thereof, and of foreign coin, and fix the standard of weights and measures;
To provide for the punishment of counterfeiting the securities and current coin of the United States;
To make all laws which shall be necessary and proper for carrying into execution the foregoing powers, and all other powers vested by this Constitution in the government of the United States, or in any department or officer thereof.
I don’t know if these particular measures make sense but it is certainly within the Constitution to regulate the value of money, and keep on eye on securities to make sure they are not being counterfeited (not just on paper).[/quote]
You are correct. The United States may issue coin, and no state may issue anything that circulates as legal tender. This leads to the question: why doesn’t the US Treasury Dept issue the money? They can’t because paper money can’t be issued by any governmental body.
Lincoln issued treasury paper as a wartime emergency, but that ended with the war.
The Fed is a private consortium of banks. They create money in exchange for debt (T bonds and bills). This allows Congress to spend wildly because there is no Constitutional amendment against debt. It was really a brilliant end run around the Constitution by Paul Warburg and company.
The guys who created the Fed had to meet in secrecy on Jekyll Island, Georgia because they feared lynch mobs, if word got out. Too bad it didn’t.