This chapter describes how our politicians have allowed the generation of private currencies. These private currencies have displaced the official, public forms of currency as the national currency of America. The private currencies (e.g., checks) are more expensive to produce and use than dollars. This shortcoming is compounded by the private issuers exacting a virtual tax on the private currencies to the detriment of the nation. These direct and indirect shortcomings of private currency would not exist except for the failure of politicians to modernize the public currency so as to keep up with a changing world.

Currency Defined

Before instances of private currency with private taxation are discussed, the question of "What is currency?" must be answered. The simplest answer is that currency is the legal tender issued by a government. Wrong. A government does not determine what a currency is. This has been shown with Continental dollars during the American Revolution, the assignments in the French Revolution, and the poor zloty in 1980s Poland.

In the case of these legal tenders, each lost their current usefulness in the transaction of goods and services between producers. Therein lies the functional definition of what composes a currency. It has less to do with what the government issues than with what the people will currently accept, trade, or barter for their goods or services. Concisely stated, a currency is the common, intermediate product by which producers exchange their time in the form of goods or services. The currency of a nation can be public or private or both.

In Poland the official public currency was shunned in preference for a myriad of private currencies (e.g., alcohol and tobacco). The Polish people would not accept the official currency. For an excellent description of how people "decertify" a currency, see "Poles Survive Collapse Of Currency by Using Own System of Barter." A subheading of this article describes an insightful relationship that underlies why official currencies are often rejected: "Shoppers Wait in Long Lines For Unneeded Articles To Trade for Necessities." Implicit in this statement is a reason for inflation throughout most of history: shortages of essential products, production, and producers. An earlier Journal account described the imbalance Polish production: "Poland is beset by acute shortages of food, especially meat...." What has happened in Poland, has also happened in Egypt, Greece and Rome, as well as in the less commonly known Sumerian, Assyrian, Persian, and Chinese empires. In Poland, top policy-makers imbalance the economy by spurring less essential production at the expense of essential goods and services. As a result, the nonessential but more abundant articles were used in bartering for the necessities that were in short supply. In America, top policy-makers in control of the public and private currencies are directing these currencies away from essential production into less essential activity--increasing the production and circulation of scribbled-on paper products (stocks, bonds, and loans).

On paper, a government can only offer a potential currency to the people. Whether or not the people accept the currency depends on the production policies of the government. If governmental policies are increasingly counterproductive with inflationary price rises due to shortages, people start saving the products as a preferable form of currency. While money will lose value and be increasingly rejected, the actual products will increase in relative worth.

Why will the products increase in value? Because of the unavoidable shortages that will be generated by the same policies responsible for present shortages. This is what has happened to Poland and is going to happen to every country, including the U.S. The question is when.

One of the counterproductive policies of American politicians is the toleration of private currencies. To quote Irving Kristol, a regular contributor to the Wall Street Journal, "the creation of money is not quite the exclusive prerogative of government, as our textbooks so clearly misinform us." Private currencies compete with and replace the official currency.

The private currencies arose to fill a void created by outdated public currencies. The void was a matter of security in transacting one's goods or services. The matter of security in exchanging goods and services through symbolic paper products (dollars, checks, credit card receipts) is discussed below. However, the cost of this additional security through private currencies is not without an excessive national cost.

Compare the one-time use of private currencies like checks and credit card slips with a currency that can be used numerous times and does not require special processing each time it is used. Banks exact a service charge on these private forms of currency. The fee is nothing more than a tax for using their privately issued and controlled currencies. Recognize that this is private taxation on the de facto national currency. These fees could be an alternative source of tax revenue for funding public services instead of record bank income and new bank branches.

New Money


Checks are a form of private currency. The amount of total national lifehours consumed in the production and use of these private currencies is great. Checks are used frequently when producers exchange their goods or services: "Americans write more than 37 billion checks a year, or 140 million checks every business day."

As a form of currency, checks are more expensive than dollars. They are used only one time and cost more to produce and process than dollar bills.

Dollar bills cost about two cents and last one to two years. The higher denominations cost about the same but last longer because they are used less frequently. All the public currencies are used numerous times to facilitate the transaction of goods and services between producers. Checks, on the other hand, directly cost the user such as a service charge of ten cents and a monthly fee. Unlike dollar currencies, checks are used only once and must consume more human time to be processed.

In addition, the processing of checks is unknowingly paid for by the check user through taxes; it cost the government approximately $1 billion a year to process the checks of private financial concerns. Banks not only effectively tax those who use their private forms of currencies, but also are subsidised by tax dollars for check processing.

There are simple reasons why people began using checks instead of the official public currencies. All these reasons can be subsume under the general category of people not wanting their production time or wealth stolen from them; people want the maximum amount of security when exchanging their time in the form of goods or services. Because checks allow a greater specificity in earmarking one's dollars for certain people or products, the risk of losing one's wealth (time) by theft is reduced compared with using only dollars. In these days and times, if everyone started to carry only dollars, a lot of people would be robbed of their hard earnings which are synonymous with the extent of their work time. Whether recognized in these terms or not, checks evolved as a form of insurance.

Unfortunately, various fees associated with the use of checks amount to a slow theft of time. The pennies, nickels and dimes add up to a lot of lost time for the nation as a whole. All such fees are a form of private taxation on the private currencies that have become the function, national currencies of America. These charges or taxes are going into new banking facilities instead of public facilities, which would not occur if the system governing the use of the official currency were reformed. Any reform has to take into account the reasons behind checks: checks are more specific than dollars as to who owns the wealth (time) that is symbolised in the numbers written or printed on the paper.

Personal checks can lose their insured effectiveness when the check writer is not known by the check receiver. Because so many people have had their time stolen through bad checks, personal checks are frequently deemed too great a risk to accept as currency. In response to this problem, banks created special kinds of checks and alternatives.

One example of a special check is a traveler's check. The following quotation on traveler's checks supports the contention that checks are a form of cash and that their reason for being is the greater degree of security than plain public dollars: "The checks are insured against loss or theft, and the bank believes that they will soon be as popular as cash." One bank (Bank of America) goes so far as to call their traveler's checks "World Money."

If these two references from private institutions are not enough to convince the reader that traveler's checks are a form of money, consider the action of the final legal arbitrator on what is money: "The Fed revised the money-supply measure known as M1-B to include traveler's checks issued by nonbank companies." This security of private currency, not provided thus far for our public currency, is not without an inflationary price: private taxation. The banks set their fees at will and whim without any regulation.

The reason for the popularity of traveler's checks (and their plastic counterparts, credit cards) is that no one involved in a product transaction wants to carry wealth (production time) in an unsecured, nonspecific form. Dollars are very unspecific; they are payable to any bearer on demand.

Traveler's checks have gained popularity because they are backed up by a bigger, better known resource than the average citizen. The same goes for credit cards when compared to personal checks. On the average, a person accepting a traveler's check or credit card is more likely to get his money than if he accepts a personal check. However, banks are not altogether happy with credit cards because schemes for misusing credit cards are increasing, as is individual irresponsible use.

The advent of traveler's checks and credit cards underscores the need for a secured currency, private or public. A secured currency insures those who use it against some form of theft. This principle--secured wealth--must be observed when establishing a modern, public currency. This principle also underlies the rationale behind many complex forms of currency which people acquire not for immediate use, but for use in the far future.

One example of a long-term, complex currency is the bond:

"Private Bonds are the Equivalent of Cash"

Many bonds, such as tax-exempt issues of cities, counties and other local authorities, are the equivalent of cash. Anyone can cash in the coupons as they come due, or sell the bond through a broker, with no need to prove ownership.

Bonds are a form of currency, like checks, in which people attempt to secure their excess production time. The difference is the immediacy of liquidity. With simple checks, the time frame is short; with bonds, a much longer period elapses before the currency is exchanged for other products. However, dollars, checks and bonds are no different in terms of being intermediate products through which producers store and transact their time: they are all forms of currency, public and private. One variation is the average time that each is held; another variation is who benefits from the taxes levied on their use.

Given the definition of currency as the common, intermediate product through which people exchange their time, it is important to realize that any product can serve as a currency. Furthermore, the actions of people and not their government ultimately determine what is used as a national currency.

Fundamentally, all currencies are merely products. This is true of not only dollars, checks, and bonds, but of many other complex forms of currency: certificates of deposit, commercial paper, bankers' acceptances, stocks, and loans. All are intermediate products by which people attempt to conserve and secure their wealth in time against loss. In addition, it must be recognized that all these particular products are symbols of wealth not the substance of wealth.

People often forget that currency is merely a symbol, and waste a lot of energy generating more symbolic products instead of producing actual, substantive wealth. This happened in Poland and is happening in America. Privately, bankers and brokers are working to multiply the production of their symbolic products at the expense of more basic production. The inevitable consequence is the imbalancing of a system of production away from its essential foundations. Collapse will occur.

Financiers will not stop the public's overwhelming use of private currencies. Not only do these necronomists make money on each transaction but also they take advantage of disparities in relative values between these private currencies to gain income by their mere manipulation. These necrotic manipulations must be stopped, or they will stop the system.

Barter "Credit Units"

The following quotation on bartering and "credit units" was used previously. It shows how private currencies can come into existence and provides a rationale for exacting a product transaction tax on all private forms of currency.

"Reinvent Money, and the IRS is likely to tag it as income"

Barter clubs whose members swap goods and services without money are becoming popular. One type doesn't use direct trades; it credits or debits members' accounts with "credit unit," each worth $1 of the normal retail price ....

If the government can tax these new private forms of currency, then they should tax all the old, existing ones.

Everyone who produces a product, whether new or old, symbolic or actual, should pay their fair share. Presently, Americans engaged in the production and manipulation of scribbled-on paper products (soaps) do not pay taxes each time that they transact their products. The lack of fair taxation on all paper products indicates a degree of blindness or hypocrisy in those necronomists who champion money as the key product in an economy: the monetarists.

Monetarists argue that money should be treated like any other product when it comes to interchanges. They argue that no fixed rates of exchanges should be established; instead, the value of money should be established in the marketplace. Auction money off, they say, and let people bid on it like any other product. Do the monetarists also argue that the dealers in private currency should be taxed each time that they transact their scribbled-on paper products? No.

Failure to support taxation on all transactions, whether they involve public or private currencies, is one reason that monetarism fails. A more basic reason is that monetarism actively encourages the divorce of currency from its namesake (time). Floating rates of currency preclude any stable bond between time and the symbols of time and are, in fact, one cause of inflation.

Stocks, bonds, and loans are nothing but products of human production. Their transaction should be taxed like all other product transactions ... at the minimum. These scribbled-on paper products benefit from the stability of America but their transactions do not contribute a fair share through proper taxation. With a four percent interest spread, bankers derive more income per dollar of transaction than do manufacturing concerns, yet bankers pay little or no taxes. Is it any wonder that banks boomed while manufacturing is crashed? It is easy for an industry or individual to get rich when they don't carry their fair share of taxation.

Privatization of Currency

America will have to choose between continuing on the path toward a private currency system, or returning to a truly viable public currency with taxation of the remaining private currencies.

Few people recognize that this choice exists and, of those who do, few are voting in favor of the public well-being. Some people have been extremely vocal about the elimination of public currencies. Says a former vice president of Paine Webber, "The [gold] commission does not have on its agenda the most fundamental issue, whether the government should be in the money business at all." He later states that the gold commission "should be discussing how to get the government out of the money business completely."

The present government may not be ideal in managing the supply of common, intermediate products, but would the total "privatization" of currency be any better? Will our banks provide a cheaper, better currency? Or will they use their increased monopoly on the national currency to price-gouge the people who use it? The answer to these questions can be found in the recently evolved debit card, in high interest rates, in segmentation, and in bigger interest spreads.

Banks have grown tired of losing money on some credit cards because of sophisticated theft rings. The banking alternative is the debit card which is a plastic synthesis of both the traveler's check and the credit card. Like the traveler's check, no more money can be received than is put in by the bearer. Like the credit card, it is portable and allows various charges instead of fixed amounts like traveler's checks. How do banks use this new form of money?

The issuers like debit cards because they are cheaper to service than checking accounts; more important, merchants must pay a share of the sale proceeds (usually about 2% but sometimes higher) to the card issuer whenever a card is used.

The reader should be wise enough to recognize that the merchant does not really pay the 2% service charge, he simply passes it on to the consumer.

Debit cards are a classic case of a new time-saving innovation being used within a monopolistic setting to price-gouge the consumer. By their own admission, a debit card is "cheaper to service." Do they pass these savings on? No, instead the bankers raise the cost. A service charge of 2% on every transaction far exceeds a small, flat fee per check.

One should be hesitant when hearing that bankers need added charges to cover "higher costs." What is the source of these higher costs? A greed to exceed the previous level of record income and executive bonuses? The higher costs are not coming from the lower end of the pay scale where banks have been consistently noted for minimal wage compensation. Debit cards are not the only way that bankers have inflationarily increased their charges for the same old services. Consider the actions of the Citibank during the 1980s:

The banking giant is taking care of its customers in other ways, too. In January, the yearly charge for small safe-deposit box doubled to $30 [100%]. Next month, the yearly credit-card fee will rise to $20 from $15 [33%]. In March, too, owners of Citibank savings accounts will have to keep at least $500 in their accounts to duck a $1.50 monthly charge. Now they must keep only $100 on account to avoid a 75-cent charge [100%].

The percent figures in brackets indicate how much bankers have inflated their charges for providing the same services as they did before. Citibank is not the only bank price-gouging as a result of their shared monopoly on the nation's money supply: "It's much the same elsewhere in banking: charging more for less." That statement is a clear-cut example of the prime source of inflationary suffering: inflationary price-gouging, more money but less production.

The source of inflation is not those union members who have had to strike because of inflationary losses. Bankers have not had to strike a single day for their inflated incomes. As long as most Americans think that the unions are the cause of the inflationary spiral, the real culprits will escape attention and correction. The sources of inflationary losses and suffering are not in the hands of those who must strike because of inflation. Inflation is nurtured in the hearts of greedy people who never have to strike because of their monopolies.

Now, you may say that you'd rather pay cash than use a debit card. Recognize that banks have rationalized the outlawing of walk-ups to their drive-ups because of potential customer harm. Don't be surprised if bankers outlaw cash payments because cash attracts robbers that could harm other customers who use debit cards. Keep in mind which section of the economy keeps arguing for a "cashless" economy: the bankers.

The currency trend in America has been away from public currencies to private currencies. This privatization process has amounted to private price-gouging of the consumer through the charges, fees, and taxes which the banking community jointly enact upon the people of America. If currency is to be taxed, let the taxes serve the public who uses the currency. Otherwise, people will be increasingly price-gouged. Eventually, their right to use the common currency will be denied, however, as the section on segmentation shows. Private nationalization should stop. This attack on the privatization and private taxation of currency is not a call for dismantling the financial system.

Privatizing Currency

A collection of people needs a common, intermediate product by which to exchange their goods and services, that is, to exchange their production time. For this intermediate product to be lasting, it must be kept constant and current in human time. A society needs a stable currency to consistently measure what one's time, good, or service is currently worth. Without a constant currency, theft of time can occur. The disparity between the stated time value of a currency and its actual value in time opens avenues for inflationary "killings."

Part of ensuring a stable currency is preventing the cost of the currency from rising. As with production of any good or service, the cost of a currency must be measured in human time if the figures are to have any meaning. The direct cost of a currency is the simplest cost to assess. As noted earlier, a dollar bill costs only two cents to produce and can be used many times, but a check usually costs the consumer more and is used only once. The simple direct cost of dollars is much lower than checks.

Indirect Costs

The indirect costs of a currency are more difficult to calculate; however, neither public nor private currencies are free of them. Our present system of public currency consists of unsecured dollars that are easy to use ... and steal. As long as such a risk exists with our public form of currency, America cannot simply outlaw checks and other forms of private currency.

However, the indirect costs of private currencies are also high and far more numerous. As noted earlier, fees, service charges and other private taxes steal people's time at a slow but steady rate. Another indirect cost of private currency is questionable lending policies by the banks. When banks lend to speculators instead of investors, condo converters instead of home builders, the funds that would otherwise be available for increased production are diverted.

A third indirect cost of private currencies is the cost to the taxpayer for the Federal Reserve's toleration of check floating.

Float arises in the Fed's check-clearing operations, when the system credits one bank's account for a check drawn on another bank before it debits the other bank's account. In the interim, both banks have use of the funds. In effect, the Fed is extending an interest-free loan to one of the two banks.

Fed economists estimate that, given an average federal funds rate of 11.2% last year, the Fed could have earned $650 million from float.

Compared with the $650 million value of float last year, check-collection services by the Fed were valued at $272 million.

In effect, this tolerance of check floating forces the American taxpayer to subsidize banks, i.e., private currencies.

This subsidizing of private currencies does not occur only with check floating. Analogous to the interest-free loans that the Fed lends to banks are the low-interest loans given through the "discount window." The discount window is where banks borrow freshly printed money at a rate below the prime.

The subsidizing of private currency is also evident when smaller banks "borrow from the Fed at 13% and relend the money to the larger banks at 20% or more through the federal funds market." The most disgusting example of the Fed subsidizing bank income by a low prime is when banks borrow money at 13% and use it to buy 17% Treasury bills, a "can't lose" proposition with a guaranteed inflationary return. Isn't it amazing that one branch of government guarantees bankers a 4% gain if they borrow money from another branch of government at 13%!

Banks may not be legally tied together. However, their use of common networks, markets, and "federal funds" make them an effective oligopoly. Banks want to maximize their income on each product transaction. That they are price-gouging does not faze them, for they will retort that one doesn't have to use their services.

For a society, the unbridled taxation of a private currency results in the destabilization of the society. As banks are able to increase their fees on currencies they control, they imbalance the economy. This imbalance occurs by draining funds from the businesses that create the substance of wealth and by draining human resources away from actual production. These charges are more closely examined in the following sections.

High Interest Rates

Recognize that a loan service charge, which a bank always tries to maximize, is a tax based on their control of private currencies. As noted before, what counts for banks is not only the spread, but the height of the loan rate. Banks make more money with a 13% to 17% spread on savings and loan interest rates than they do with a 2% to 6% spread.

Empirical substantiation for this conclusion may be found by considering two consecutive peaks of high interest rates and bank earnings (1978-80).

Are banks making a killing on those record loan rates? They insist not, point out they are paying record funds to make loans.

Still, the net income of banks in the last half of 1979 was 20.7 percent higher than it was in the comparable period of 1978 [Carter's last recession].

High and volatile interest rates are not very helpful to most businesses, but many banks seem to make out just fine when money is expensive. That is one interpretation of the industry's impressive third-quarter earnings reports [Reagan's first recession].

Given these factual reports, should one seriously listen to financiers who argue for total privatization of money? As the privatization of currency increases, higher interest rates will occur; banks make more money on high interest rates as is shown by simple mathematics and media reports. In early 1982, the prime in Brazil was at record levels (50%) and so was bank income, and the economy has been nose-diving ever since. So much for private control of currency. High interest rates are clearly another indirect cost of a private currency system.

Segmentation: Insensitive Currency Privateers

The privatization of currency is replete with evidence that the trend is not beneficial for Americans as a whole. Certain actions indicate that the currency is being increasingly controlled by private, despotic hierarchies. These despotic organizations are insensitive to the average person, in deed and words. The following citings list the exclusion of Americans from using the most common form of private currency.

The $50.6 billion Morgan Guaranty Trust Co. did not abandon its retail clients completely; it simply instituted a $60 monthly fee on checking accounts with balances of less than $5,000, a quick way of brushing aside all but the well off.

"More Banks Target Services for Rich Subsidizes with Charges on Others"

Banks all over the country are pursuing a marketing strategy known as "segmentation." In its crudest application, segmentation involves figuring who the richest and biggest customers are, showering them with favors, freebies and other inducements to open or increase their accounts and, if necessary, as it often is, raising rates and fees of the less-affluent to pay for it all.

Recall how Citibank justified its increased minimum charges on the basis of higher operating costs. Were these cost merely the decadence of capitalism for a fewer few: "showering them with ...."?

In its essential application, segmentation is nothing more than forcing those who benefit least to pay the share of those who benefit the most. Segmentation, possible through taxation of private currencies, is an extension of the principle of self-destructively escaping one's cost of economic stability. Segmentation, like any form of organized or isolated tax avoidance, is a form of theft, decapitalism, or capitalism for a fewer few.

The words of a controller of private currencies are offered to show how insensitive privatization can be:

"We've closed hundreds of accounts because people didn't want to pay the charge," says a bank executive. "But I don't regret it. I did the right thing."

The "right thing" for whom? Yet another indirect cost of private currency seems to be insensitive currency controllers. (By the way, segmentation has a familiar ring; is reminiscent of segregation, its intellectual ancestor.)

Imbalances Drain System of Production

A previous quotation cited how banks were logging record income even though the nation as a whole was in recession. An unavoidable consequence of banks prospering while the economy slides is an inflationary shift of production from substance to symbols. As bank incomes rise, they drain human resources, talent, and time that would otherwise improve or maintain production in other areas. If production falls in the basic industries, shortage inflation results.

Is bank income imbalancing the economy? Yes, for "Banks [are] Paying Bounties to Get Expert Help." This headline was reaffirmed by another economic finding that "banks, insurance companies, and other financial services are doing most of the executive hiring."

Opposite businesses that merely produce symbols of wealth are the industries which actually manufacture and create new wealth. How do bank earnings affect the shortage or surplus of new supplies?

"Heavy debt forces companies to earmark a greater share of profits for loan payments. That makes firms vulnerable to a cash squeeze if earnings falter. Over all, interest payments last year ate up 51 percent of before-tax corporate profits. In 1960s, interest took only 13 to 28 percent of profits."

These figures are a decade old, but viewed from our present recession, the situation has only worsened since the 1980s.

The rupture of America will be on the jagged peaks of record bank incomes (bank-ruptcy, if you will). For providing basically the same financial services that they did in 1975, the earnings of banks as part of the GNP had nearly doubled by 1982: 5.3% to 9.2%. Wouldn't America be better off with a financial system that did not price-gouge at will, and which consumed only 1% of our total lifehours instead of 9.2%?

The elimination of private currencies will require taxing the banks. This needed taxation is more than a choice of who should benefit from any charges on the use of a national currency. The issue now is how to eliminate the greedy, price-gouging action of the banks. These inflationary actions are not only resulting in record levels of income but they are killing America.

The basic choice is whether America or the banks should survive. Of course, the latter is not possible without the former, but try to tell that to a banker. The highest and unavoidable indirect cost of private currencies is an imbalancing and collapse of an economy, as the currency privateers look out for themselves instead of the nation.

Future Trend: More Stableflation

It is doubtful that a banker can be convinced that he is going to destroy himself once he has financially crippled America. Confident that his power will continue--he controls the money--he ignores the lesson of the truckers. Because bankers have not paid their share of funding the economic stability upon which they are immensely dependent, they will be the biggest losers when the collapse comes. Once enough people cannot afford or have no need for currency, checks, or loans, bankers will no longer be valuable. Look at all the nations that have recently suffered economic collapse because of inflationary banking practices and notice what happened to their bankers.

America does not have a national currency or financial system that is designed to promote national interest.  Both are currently geared toward fattening a fewer few.  this fattening process, which is exacerbated by economic instability, actually consumes the national economic body.  the income of banks is greater during periods of high interest rates and the accompanying economic instability.  What banker fail to realize is that American can survive without bankers but bankers cannot survive without America.

Resurrecting and Reforming Public Currency

If private taxation of our nation's currency is to stop, then our official public currencies must be reformed in the image of the more popular private currencies.  In fact, a public product that has the security of traveler's checks already exists--postal money orders.  While the present physical facilities could not handle a mass users' crush an upgrading in conjunction with certain organizational considerations could result in the elimination of all private currencies within a year's time.  The benefit of this would be an infusion of funds into government coffers that are presently showing up as part of record bank income.  The fees on postal money orders, in conjunction a reorganization of the facilities and handling processes, would not only wipe out any postal deficits, but also create surpluses for Social Security.

Eventually, and again using the postal network as the backbone, a NUSA organization would be established for a public debit card.  unlike the present private financial network which price-gouges currency users to provide fat bonuses for its despotic hierarchies, the NUSA organization would have little labor overhead.  between the use of postal money orders and a NUSA debit card, America could have a more efficient, sensitive financial system.  The efficiency would translate into a much lower national cost than that of the present system.  Would America be better off with a democratic financial system that consumed only 1/10 of the lifehours banker presently consume?

Enforcement:  Punitive Private Tax

The transition to a modern public currency would be stimulated by enactment of a lon-overdue product transaction tax.  All the scribbled-on paper products which banks transact have escaped taxation for too long.  Checks certificates of deposit, and loans are human products that benefit from America's economic stability, yet bankers have lobbied politicians for tax exemptions for these products.

The product transaction tax on all bank products should be a multiple of the basic transaction tax for two reasons.  Foremost, a tax on private currency should be higher than the tax on public currencies, so that people will use the public currencies.  Use of public currencies will put money into public facilities instead of bank facilities.  Secondly, it si reasonable to tax the bankers retroactively for their many years of unfair tax exemptions.  A multiple product transaction tax will be just punishment for not only having escaped taxation but also for having received tax subsidies:  check floating, discount windows, etc.,

With a high product  transaction tax on private currencies, people will increasingly  use public currencies.  In time, all the private currencies will be eliminated and America will have an efficient, secure financial system providing a low cost currency.

If all scribbled on paper products are subjected to a product transaction tax, as they logically and rationally should be, a lot of people will be taxed for their fair share; these people are presently escaping their pragmatic share.  these sources of revenues will allow an overall reduction in the product transaction tax.  taxing the use of certain public and private currencies will cost every citizen a little more in direct costs.  However, the substantial indirect savings will more than make up for the money lost to taxed.  the average citizen's overall taxation will go down because people presently escaping taxation will be taxed every time they use the nation's currency (e.g., the underground economy).

New Revenues

the revenues generated by proper taxation of the national currency, both public and private, will be apportioned in a 50/50 manner from the bottom to the top.  Properly instituted without banker interference, many public units would suddenly have a surplus of funds (e.g., the postal system).  between currency reform and NUSA, the post office would become a major source of income for the government instead of a tax drain.

Parallel:  Highway Use Tax

The nation's currency can be compared to petroleum.  The nation needs both, and both are taxed by public and private policy-makers.  the government has a gasoline tax which is added to the basic production cost.  Similarly, the oil companies have a price-gouging tax which they add to the basic product cost.  However, in the case of currency, the government does not really tax these items at increasingly hight rates.

The futures condition of the nation's currency, if totally privatized, can be visualized by considering parallels in the taxed on petroleum products.  What would happen if the government stopped taxing gasoline and told the oil companies that they could have free rein in taxing oil.  Would the oil companies keep the roads in shape if they  were allowed to price-gouge without limit?  

When our lawmakers deregulate oil, they gave the oil companies free rein in charging as much (over production costs) as the oil companies could get.  In effect, increased private taxation on oil was allowed.  as noted earlier in quoting Jimmy Carter, the politicians justified the private tax (deregulation) as a means of getting revenue from the oil companies.  It would have been better if a direct public tax had been placed on oil production rather than taking only a portion of what the oil companies privately taxed the consumer.  

The ongoing record of the deregulated oil companies shows that their taxation of the current flow of oil does not maintain the infrastructures on which their revenue depend.  The megamergers and giant acquisitions of oil companies indicate that oil companies do not use their windfall gains to maintain the systems.  Furthermore, it tis reasonable to visualize the oil companies coming up with their own version of "segmentation."

If given total control of the oil taxation, oil companies probably would rationalize withholding driver's license from people that did not drive often enough, since such people would not ve generating enough revenues to cover the cost of keeping their license records on the books.  Imagine how suspect you would be if you had neither a checking account nor a driver's license because of privatization in currency and oil.  If you consider this scenario farfetched, consider the two following quotations.

Three big refiner, Phillips, Atlantic Richfield and Texaco, are cutting off gasoline supplies to several hundred retail outlets.  Decontrol freed the companies of the obligation to find other suppliers for the outlets before taking the action.

Exxon will freeze about $415 million of planned refinery investments by its Italian unit because of w"unfavorable government-controlled price condition."  The company said it also will cut back deliveries of refined products to Italy.

Texaco has not only started segmentation of its existing customers but also floated attempts to put a 2% service charge on the use of its credit cards, another instance of taxation of private currencies.

There is a disturbing sequel to Exxon not being content with its present record levels of income:  "An Italian-Iranian trade accord was being negotiated that would exchange technology for oil."  For every middle-roader graviating toward radical associations in th political world, A greedy decapitalism can probably be found economically pushing the former friend into the company of extremes.  Who or what lost China, Cuba, Iran, Nigeria, and el Salvador?  Corporate greed corrupting foreign policy in the name of the American people.

Lesson on Nobody's Slave

There's a major human lesson be learned from private taxation through price-gouging.  A destabilization sequence occurs every time price-gouging is tolerated by people individually or together.  whenever someone is allowed to price-gouge, they contribute to the imbalancing of the economy of which they are a part.  Price-gouging results in lost buying power for the consumer and results in unwarranted income for the gouger.

Simultaneous with this shift in buying power is a stifling of the common, basic industries and a boon in less essential business.  One can see this trend in the collapse of both public programs and the basic manufacturing industries as a result of private taxation of currency and crude.  The production imbalance can even be seen on the individual level:  "The American economy is in for some slow going, but sales of luxury items in high-quality shops are rolling right along.  What's going on?"  What's going on is the painful result of ignorant bliss.  Basic individuals and industries ignored the price-gougers lost their buying power, and now see their drained wealth stimulating takeovers and luxuries.

Today, thanks to the lack of an educating political leadership, American companies and personnel are building new public projects in oil-producing countries while American streets, sewers,and highways collapse.  Arabia grows while American Collapses.  the cost of tolerating price-gouging is future economic collapse.

What should the politician have done in the early 1970s with the first price rise?  They should have have matched it with a four-fold import tax.  There would never have been a second price rise.  America today would be paying only $3 or $4 a barrel for oil to foreign countries.  The lesson must not be lost.

Each day that a substantial oil import tax is not enacted is a day generating more future instability.  Each day of foreign taxation on America's energy use is a day that American's future if given to the foreigners to use as their future.  Better to curb consumption today than to allow the economic imbalance of price-gouging to eliminate all consumption.

When price-gouging taxation is enacted due to a monopoly, the best thing that a people can do is place an additional tax on the product to stymic consumption.  The additional revenue form taxing price-gouging should be offset by a reduction of taxes in areas where price -gouging is not occurring; thus, the average citizen does not end up with more taxes overall.  In response to a price-gouger's tax, people should initiate a parallel business to provide the good or service at a lower price.  The results would be that overall taxes will not have increased, price-gougers will be punished, and a lower product price achieved.

The lesson to be learned form the inevitable consequences of price-gouging is ventral to the proposed, specific tax reforms described in this book.  The lesson is also central to the call for a National Universal Service act as a way of organizing people to provide services that are presently subject to price-gouging.  Among NUSA's Organizational tasks are reform of America's need to reform our political system.  Without more control of the law-making process in this country, those who actually suffer form unsolved problems cannot hop to enact widespread reform in other areas.

Politicians are no different from bankers or oil companies, in that they price-gouge beyond the product worth of their services.  By overcharging they are able to bankroll laws to favor their continued existence through incumbency and seniority.  As their counterproductive, problem-ignoring actions continue, the people become more enslaved, not only to the problems but also to the belief that the politicians will solve the problems.

Intellectually, the ignorant citizen keeps buying the shabby, overpriced promises of corrupt and incompetent politicians.  Timistically, the same economic sequence ensues when people pay an inflated price for any product, including political promises:  The politicians' lifestyles boom in Washington while heartland America drains away.  This sequence of placing too much trust and faith in politicians is not without historical precedent:

It was during the inflation that the German forgot how to rely on themselves as individuals and learned to expect everything from 'politics', from the "state", from destiny.  They learned to look on life as a wild adventure, the outcome of which depended not on their own effort but on sinister, mysterious forces.  the millions who were robbed of their wages and savings became the "masses' with whom Dr. Goebbels was to operate.

There is nothing mysterious about the forces that rob people "of their wages and saving."  The force of legal and illegal inflationary gains cause the inflationary losses that drain wealth from the true creator.  Price-gouging is not new.

Just as many Americans have been priced out of using oil and loans, so are more Americans, being priced out of using the law process.  Just as increasing numbers of Americans would strangle a banker or oilman if caught in an alley, so are more and more Americans becoming disposed to strangling a politician.  When the day comes, the conceited, price-gouging politicians will have only themselves to when anger turns to violence against them and theirs.,

This day can be avoided.  For the politicians, they should take advantage of the NUSA Benefit and the Doubt.  For the American people, they should work to bring about daily democracy and pure capitalism.  Privatization of currency, energy, and policy-making should be replaced with control of , by, and for the people.

Warning: Anyone found stealing lifehours will be forever banned from participation in and rewards of Better Democracy and Capitalism.


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