Obama's Case for Raising Debt Limit Built on Lies
(The New American) -- by Chip Wood --
...The spending champ got two facts wrong in a single sentence. Here’s what he said: “Everybody acknowledged that we have to get this done before the hard deadline of August 2nd, to make sure America does not default for the first time on its obligations.”
The last part of that statement is just flat-out wrong. It is not true that the United States has never defaulted on its debt. Actually, as anyone familiar with our financial history knows, the government has officially defaulted on its obligations at least twice. And it continues to do so today.
During the Civil War, the Union issued a flood of paper money to help pay its bills. The Treasury promised to convert these “greenbacks,” as the currency was called, into gold at war’s end. However (surprise, surprise), the government reneged on this promise. In fact, it passed something called the Legal Tender Act, requiring people to accept greenbacks at face value. It revoked a promise that holders could exchange them for gold-backed Treasury bonds.
The scheme worked so well that Franklin Roosevelt did even more 70 years later. FDR made the ownership of gold illegal in the U.S. in 1933. Citizens were ordered to surrender any gold coins they owned. At the same time, the promise on our currency that it was “in gold coin payable to the bearer on demand” was repudiated. Gold certificates could be exchanged solely for more paper. It was one of the biggest thefts from its citizens our government ever perpetrated ... until now.
Despite the worries of some of our more alarmed contemporaries, gold confiscation is unlikely to happen again in this country. For one reason, the government doesn’t need to seize our gold to create a mountain of new money. Since there is not a single gram of gold backing any of our currency, there is simply no limit on the amount of fiat currency the Federal Reserve can create.
The process isn’t new. Famed British economist (and big-government enthusiast) John Maynard Keynes understood it very well when he wrote, “By a continuing process of inflation, government can confiscate, secretly and unobserved, an important part of the wealth of their citizens.”
If the government promises you a dollar, it should pay you a dollar, right? But under the tax-and-tax, spend-and-spend policies of the past 50 years, the “dollar” Uncle Sam pays you isn’t worth 100 cents. Its purchasing power has fallen so far since FDR’s day that it takes 10 or 20 “dollars” to purchase what a dollar used to buy.
This steady and deliberate inflation of our currency is the most deceptive, most deadly and most despicable form of devaluation.
So don’t tell me the U.S. has never and will never default on our debt, Mr. President. It’s simply not true...
Senator Pat Toomey (R-Pa.) has stated emphatically: “If Congress refuses to raise the debt ceiling, the federal government will still have far more than enough money to fully service our debt.” So he’s proposed a new law that would require the Treasury to make interest payments on our debt its first priority.
Voilà! With one simple piece of legislation, the problem is solved. So let us hear no more about the United States not paying its debts.
As I said above, the single most important decision Congress will make this year is whether to raise the debt ceiling. I hope you will insist that your Congressman toes the line here. If the House won’t give in, we will win this battle. And you’d better believe all the big-spenders in Washington know this.
That’s why they’re getting so frantic...MORE...LINK