We, as Americans, purchase goods and services with small, rectangular pieces of paper made from linen and cotton, and to a lesser degree with coins made with copper, zinc and nickel. Without backing from the Federal Reserve our money isn’t worth more than the low-value material it is minted or printed on.
This type of currency is known as a “fiat” money, or cash simply given a value by government. Now, after the Senate advanced the negotiated $835 billion stimulus bill on Monday with a 61-36 vote (a final signature from President Barack Obama rapidly approaching), the dollar, which has no intrinsic value whatsoever, is taking yet another step towards becoming the world’s toilet paper.
Not too long ago our money was backed by more than a government order. Prior to 1971, if you were not a United States citizen but happened to own an American dollar, you could exchange your dollar bill for American gold. (At the time, U.S. citizens could not legally own gold). Unfortunately, after the U.S. Government printed billions upon billions of dollars to pay for the Vietnam War, foreign countries holding American dollars became weary of the resulting currency inflation and began to exchange their dollars for gold. Finally, on August 15, 1971, President Richard Nixon announced on prime time television the U.S. dollar could no longer be converted into gold. There simply wasn’t enough to back the paper money that was printed.
Four decades later, the U.S. Government is still asking permission to print and spend money we don’t have, and now America’s habitual spend-and-consume policies have come to bite us where it hurts most – in our pocketbooks.
And now the piper must be paid. How can our nation live beyond its means for over three decades and not reap consequences?
By drafting this latest stimulus bill, preceded by the $700 billion bank bailout, our government sets a poor example, printing its way out of yet another mess and overlooking the fact the collapse of a financial institution, however large, will pale in comparison to our dollar’s collapse.
With President Obama’s oval office chair barley warm, our House and Senate have been hurried towards an $835 billion decision with little time for debate, given the looming “economic crisis,” as though a downturn some trace all the way back to the dot-com bust of the late 1990’s must be addressed overnight.
True, some money must be spent to get us out of this recession, but do you want the government, that inefficient blob that absorbs billions of dollars in operational costs, in charge of the spending? Wouldn’t you rather spend that money yourself, so maybe we could return to a true supply and demand market, one not fictionalized by the intervention of Big Brother?
Heard rumblings about the “Amero,” a currency similar in concept to the Euro? So-called conspiracy theorists believe the Amero will emerge following collapse of the U.S. dollar and subsequent unification of the United States, Canada and Mexico into the North American Union, or NAU.
It’s easy to call conspiracy theorists whackos, but our government’s utter recklessness, its bonzo spending at present, almost makes the theories believable. The inflation that may come as politicians spend big and easy could destroy our money system, making the dollars we hold worth a pittance.
Maybe an Amero is farfetched, but there is nothing hard to grasp about our present danger: our government’s charge-it-if-you-don’t-have-it philosophy. Sooner or later, somebody’s got to pay.
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