The US will not default on August 2.

thebigsd said:

First and foremost, I apologize if I offended you, I was not intending to be rude or arrogant. Don't assume that I was being such. I did contribute in the second part of my post where I asked how you thought the elimination of the 14th amendment would play out. I meant it as a thought exercise, simply because so many court rulings are based off the 14th amendment. Would those laws become invalid? Which parts in particular do you think should be repealed?

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Debt from the war paved the way for modern monetary policy. Fiat money being accepted as real money is a huge portion of that. I think it would help to invalidate the laws requiring fiat money being good for "all debts public and private", with emphasis on the private part. I highly doubt such an amendment would pass; however if enough support could be given to such an effort we might get some other amendment that would stop the printing presses. As it is I think we've seen that control over inflation is too much power for the federal government; they can tax money in your bank account and under your mattress with it and without any chance of someone not paying the tax.

Daylen said:

Debt from the war paved the way for modern monetary policy. Fiat money being accepted as real money is a huge portion of that. I think it would help to invalidate the laws requiring fiat money being good for "all debts public and private", with emphasis on the private part. I highly doubt such an amendment would pass; however if enough support could be given to such an effort we might get some other amendment that would stop the printing presses. As it is I think we've seen that control over inflation is too much power for the federal government; they can tax money in your bank account and under your mattress with it and without any chance of someone not paying the tax.

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I think the easiest bill to get passed (and which I believe was reintroduced again this year) is to simply get rid of the taxes on gold and silver (some silver doesn't have tax already like coins and rounds) and once again giving them legal tender status. This way you wouldn't have to try to pass a hard to swallow bill that gets rid of the fiat currency. Instead you have a competing currencey and we can let the market decide. I'll take the gold please!

Brass Magnet said:

I think the easiest bill to get passed (and which I believe was reintroduced again this year) is to simply get rid of the taxes on gold and silver (some silver doesn't have tax already like coins and rounds) and once again giving them legal tender status. This way you wouldn't have to try to pass a hard to swallow bill that gets rid of the fiat currency. Instead you have a competing currencey and we can let the market decide. I'll take the gold please!

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That is along the lines, of which I was referring; though I'm not sure what taxes you are talking about on gold and silver.

Daylen said:

That is along the lines, of which I was referring; though I'm not sure what taxes you are talking about on gold and silver.

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I know in some states you have to pay sales tax on gold or silver bullion.

Also, you may have to pay capital gains when you sell your gold and silver. I don't know the tax law on this; just speculating. God, could you imagine the headaches just trying to keep track of the transactions in order to pay such a tax? "Lets see, I paid $845 for that Krugerrand. And, bought a $900 refrigerator with it, and got $500 change, so my capital gain was $555. But, do I pay the capital gain tax on the refrigator amount or the whole thing, because really, the cash is just going to depreciate again. Or, maybe I could buy a few $5 Gold Eagles with the $400 change, in effect rolling over the $555. Hmmmm. How do I count this? And, why won't IRS let me deduct inflation from my so-called gain?"

Gunslinger said:

Or US Notes.

A United States Note, also known as a Legal Tender Note, is a type of paper money that was issued from 1862 to 1971 in the U.S. Having been current for over 100 years, they were issued for longer than any other form of U.S. paper money. They were known popularly as "greenbacks" in their heyday, a name inherited from the Demand Notes that they replaced in 1862. They were called United States Notes by the First Legal Tender Act, which authorized them as a form of fiat currency, but because their value derives from their status as legal tender they bear the inscription "This Note is a Legal Tender" and are often called Legal Tender Notes.

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IIRC, they were also payable upon demand with the metal of their face value ... gold and silver?

http://www.john-f-kennedy.net/executiveorder11110.htm

I hope this explained what I was posting early

okboomer said:

IIRC, they were also payable upon demand with the metal of their face value ... gold and silver?

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Yes, that is correct. Both Federal Reserve Notes and U.S. Notes were redeemable in silver. The Government (Unlawfully imo) stopped redeeming them in 1967.

If the debt ceiling is not raised and the administration decides to falsely claim we must default on the debt, will most people fall for it and demand a raise in the debt ceiling or will they finally see through the political lies and call "shenanigans!"?

END_THE_FED said:

Yes, that is correct. Both Federal Reserve Notes and U.S. Notes were redeemable in silver. The Government (Unlawfully imo) stopped redeeming them in 1967.

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Hee, hee, hee. We won't even mention that the government was unlawfully printing them in the first place. The constitution is clear, the fedgov has only the authority to coin money. Money being synomymous with coin at that time. Not a "note".

The Framers, being not very far removed from the revolution, well remembered the disaster of the paper "continental", which through steady printing in volume depreciated to near worthlessness, giving rise to the phrase "not worth a continental."

Citizen said:

Hee, hee, hee. We won't even mention that the government was unlawfully printing them in the first place. The constitution is clear, the fedgov has only the authority to coin money. Money being synomymous with coin at that time. Not a "note".

The Framers, being not very far removed from the revolution, well remembered the disaster of the paper "continental", which through steady printing in volume depreciated to near worthlessness, giving rise to the phrase "not worth a continental."

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Very true, but I was trying to not get too far into it. It is probably a topic for another thread.

END_THE_FED said:

Yes, that is correct. Both Federal Reserve Notes and U.S. Notes were redeemable in silver. The Government (Unlawfully imo) stopped redeeming them in 1967.

If the debt ceiling is not raised and the administration decides to falsely claim we must default on the debt, will most people fall for it and demand a raise in the debt ceiling or will they finally see through the political lies and call "shenanigans!"?

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Silver Certificates were redeemable in silver; Fed Reserve notes only have the full faith and credit of the US backing them. Therein lies the problem.
US Notes were fiat money, as well. However, the Feds established they would be tradeable for "lawful currency" at any time. This led to confusion and was one of the reasons they stopped making them. There was no "lawful money" after roosevelt ****** with gold in the '30s. Silver was never a legal currency backing paper money except in Silver Certificates. They would give you silver coins if you traded them in. Gold Certificates were redeemable in gold. That's why fdr killed them.

Gunslinger said:

Silver Certificates were redeemable in silver; Fed Reserve notes only have the full faith and credit of the US backing them. Therein lies the problem.
US Notes were fiat money, as well. However, the Feds established they would be tradeable for "lawful currency" at any time. This led to confusion and was one of the reasons they stopped making them. There was no "lawful money" after roosevelt ****** with gold in the '30s. Silver was never a legal currency backing paper money except in Silver Certificates. They would give you silver coins if you traded them in. Gold Certificates were redeemable in gold. That's why fdr killed them.

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I am not aware of any law that reads "lawful currency" I am aware of some that say "lawful money".

U.S. Notes and Federal Reserve Notes were redeemable in silver dollars. The silver dollar is the dollar of our Constitution. Up until 1967 you could take any piece of paper currency in circulation and redeem it for its face value in "Dollars" (silver). At that time U.S. notes, Federal Reserve Notes, and other paper currency had a statement that read " will pay to the bearer on demand..... " and then the amount of the note in dollars. The dollar it was talking about was silver. The "Dollar" is actually a unit of measure for an amount of silver. More specifically it is 371.25 grains of fine silver in the form of a coin containing 90% silver and 10% alloy.


That being said this is off topic for this thread. Our monetary history is a very interesting and important topic. If you want to continue this discussion I would be happy to do so in pm or in another thread.

My favorite guy on capitol hill brings up another interesting question today. How about we just don't increase spending instead of making non-existant cuts from the CBO baseline?

http://www.youtube.com/watch?v=swbs35Z1d7g&feature=feedu

Schlitz said:

I say let it default. Maybe the pain is what Americans need to wake up.

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Careful what you wish for, because you might get it - along with a whole other bunch of worms once that can is opened. Politically, I say, let us default, it will hurt both parties, but will cut the Republicans real deep. Republicans are cutting off their nose to spite their face (tea party), by all means, take the political establishment down. I should remind you though that those tea party politicians are part of the establishment, and if you think for one second they are not all about the money you are not acknowledging the nature of politics, and why some individuals are inclined to be a politician, POWER.

Beretta92FSLady said:

Careful what you wish for, because you might get it - along with a whole other bunch of worms once that can is opened. Politically, I say, let us default, it will hurt both parties, but will cut the Republicans real deep. Republicans are cutting off their nose to spite their face (tea party), by all means, take the political establishment down. I should remind you though that those tea party politicians are part of the establishment, and if you think for one second they are not all about the money you are not acknowledging the nature of politics, and why some individuals are inclined to be a politician, POWER.

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I'll bite.
The RepubliCRATS are equally at fault. Republicans will naturally think that it is hurting the Democrats more and the Democrats vise-versa; when in reality they all look like complete idiots. As far as compromise, the far left wing of the Democratic party is just as much to blame as the far right wing of the Republican party. When comparing the Senate bill to the House bill it's readily apparant. The Senate bill goes after cuts in farm subsidies but hardly any in student loans and less in medicare than the House bill. The House bill goes after cuts in student loans more, has a little more cuts in medicare, and doesn't include farm subsidies. So far, just the usual ideological differences. One want's welfare for students, the other for farmers. The money is a bit different but nothing they wouldn't usually compromise over.

The biggest difference which is mostly about politics on both sides of the aisle is that the House bill increases the debt limit over a shorter term. 34 of the last 44 debt ceiling increases were for less than a year, so this is nothing out of the ordinary. However; Obama and his don't want to support it because they will have to defend futher revenue increases or debt ceiling increases during an election year. That only shows that they know raising taxes and incurring debt is unpopular. If it's made a subject in the election year the Republicans will have a better chance of winning. If it wasn't going to fall on an election year Obama wouldn't have minded.

As far as the constitutional amendment; I honestly don't see why many of the Democrats are against it. That's an unpopular stance among the majority of voters. Therefore, I'm not sure if this isn't all about the previous difference.

The president is arguably the one who is ultimately at fault. He has used this more for political posturing and fear mongering when he should have been leading. If he'd have pulled a Clinton this would have all gone away. I would have expected the fear mongering and posturing to come from both houses of congress but usually the president is the one who brings it together. Boehner walked out of the original negotiations because of a last minute revenue increase demanded by the far left whom Obama caved to. So, it may be the Tea Party holding it up now but it was the other side of the paradigm that held it up to begin with.

In the end everyone is at fault and it's disingenuous to call either of these plans a cut. It's like when you buy a pair of shoes on sale and even though you wouldn't have normally bought them and exclaim that you saved money. It's complete and utter B.S. They are just debating about how much to INCREASE spending.

Score so far?
Dems zero
Reps zero