by Bill Parks

Created on: March 01, 2009

As William Jennings Bryant said, "We have got to take the bankers out of government." Until you do, America is at risk. Government in general and congress in particular is responsible for America's money. Congress, not the bankers, has the power of the purse, and the responsibility of using it. When congress abdicated its authority to issue the nation's money supply, they set the stage for today's financial crisis.

Three entities issue America's money supply: the US Treasury Department, the Federal Reserve and commercial banks.

Currently, the only money that congress orders the treasury Department to issue is in the form of coins. Their value is about $36.4 Billion, according to the government's September 2008 Currency and Coin Report. In $50 + trillion money supply coins make up just 0.07%.

Using US government bond as backing, the Federal reserve issues all our paper money in the form of Federal Reserve notes. Their value totals $989 billion, making up 1.87% of the money supply.

The remaining $98.06% of the money supply, created by banks and bankers plus the 1.87 % created by the Federal Reserve is created with credit, issued as debt in the form of loans and bonds that must be repaid with interest. Because interest must be paid on outstanding debt, there is always more debt in the economy than money. Banks must issue enough new debt each year to at least cover the interest charged. In our $50 trillion economy banks must create at least $3.0 trillion just to pay the interest. This new debt expands the total debt in the same way as an ordinary pyramid scheme grows. These schemes have mathematical limits that eventually result in their collapse.

Congress must do several things to remedy our situation:

Using its sovereign authority to issue the nation's money supply, the government must issue all US money.

Resolving the national debt can be done by simply substituting US government currency for US government bonds. The congressional authority used to issue interest-bearing bonds can be equally used to issue debt free US currency. Because bond and currency are both forms of money, currency can be substituted for bonds without rasing taxes, depriving bond holders of the value of their assets or creating inflation.

If the government issued and substituted currency for bond does, the total value of money in circulation would not change. For example, if someone has a $20,000 portfolio containing $10,000 in stocks and $10,000 in government bonds, and the government exchanges

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