Wednesday, July 31, 2013

Abolish Taxes and the National Debt to Eliminate Budget Cuts?

I am reading about the history of money in the USA. Did you know there was a time when no citizens paid taxes? The USA created its own money, debt-free, to pay its bills and the government itself acted like a bank. It made loans to the people, and the interest on those loans was enough to operate the government, so there was no need for taxes.

Why do we pay taxes? It's because we, the people, have accepted debt and taxing as part of our lives. Find the words “Federal Reserve Note” on all your printed money; this note is a loan that must be paid back, plus interest, to the banks that own our currency debt. Our money itself is debt-based, not debt-free, and it's borrowed into existence through the central banking system.

Why do we have budget cuts? It's because the debt-based money we created required $359,796,008,919.49 in 2012—just to pay the interest on the debt-based money we created. We are trading the land of the free for the home of debt-slavery.

Just think about this. What would it be like to go back to creating debt-free money and abolish all our taxes?


James O'Gara said...


You've missed one important point in this bit of U.S. History. The reason people didn't pay income taxes was that the government made the bulk of it's money through import tariffs. It wasn't that it was creating money out of thin air.

This have a two-fold benefit. It funded the government, and it stimulated the manufacturing sector of the U.S. economy to the point it became the envy of other nations. It was even called "The American Way."

And all this happened because of Alexander Hamilton, his famous "Report on Manufactures" ( He was able convince politicians to follow it and it caused our economy to boom for well over a century and a half.

Coach Mack @ said...

Hey Thanks Jim!
It's nice to know that piece of history.

Just got a link to news that San Francisco setting up its own municipal "city" bank.

"The question today is whether cities and counties can afford not to set up their own municipal banks, both to protect their money from confiscation and to take advantage of the very low interest rates and other perks available exclusively to the banking club. A government that owns its own bank can keep the interest and reinvest it locally, resulting in government savings of an estimated 35% to 40% just in interest. Costs can be reduced, and taxes can be cut or services can be increased. Banking and credit can become public utilities, sustaining the local economy rather than mining it for private gain; and banks can again become safe places to store our money."