Pay, or Take?

November 6, 2001

Ciprofloxacin is said to be the best antibiotic for the treatment of anthrax. I am not in a position to deny this, but because anthrax-especially the deadly pneumonic version-is so rare, I wonder how this discovery was made. I suppose our germ warfare experts did some in vitro tests when developing the high grade military anthrax which has now found itself in enemy hands, perhaps because we gave it to them before they were regarded as enemies.

In any rate, the government has decided to buy a lot of cipro, primarily to protect itself. (You and I are on our own!) When you stop to think about it, this is very strange. Why buy? Why not simply take? Doesn't government often take what it wants, such as our incomes? And doesn't it want the cipro at the lowest possible price?

Well, what about eminent domain, which government uses to seize what it believes to be in the 'public interest?" Surely, Uncle can declare maintaining of the health of our leaders to be in the highest public interest, and thus seize cipro under eminent domain.

Unfortunately, cipro is manufactured by a German firm, so eminent domain might be difficult, at least until the drug hits our shores. And there is, admittedly, abundant precedent for the government purchasing what it wants: battleships, airplanes, soup, galoshes, etc. All it needs to purchase these things-or cipro--is money. Well then, why not purchase the money itself, or what passes for it?

It's no secret that it costs only a few cents to produce a federal reserve note, regardless of denomination. Let's say that the cost is three cents per bill. (In fact, it makes no difference, as long as you can pay for the bills with additional bills) Ordinarily, of course, only the Fed purchases money, and it purchases it from---Uncle Sam, who prints it! We are entitled to wonder why a firm which produces a product that it can exchange for 100 cents worth of merchandize (or 100 dollars worth!) would sell it for three cents. The only reasonable conclusion is that Uncle Sam takes his orders from the Fed, not the other way around. FDR was clearly right when he pointed out that banking interests have owned the U.S. government since the days of Andrew Jackson. So for my plan to succeed, the government would have to stiffen its backbone, and stand up to the bankers. The Fed's going to have to sell some of it back!

It is thanks to federal legislation that the Fed exists at all. The same government which established the Fed can abolish it. Admittedly, the Fed allows the government to "borrow" with no consideration of repayment, which would be impossible anyway; but by the same token, this is only permitted because the government shuts its eyes to the unconstitutionality of the whole scheme. If this were pointed out to the appropriate Fed officials, they might agree to sell Uncle some "dollars" for six cents per bill, thus giving them about a 100% (instead of the usual infinite) profit. This wouldn't actually cost the government anything, for it could merely order a few extra bills with which to pay for the others. The Fed, in turn, could use its "profit" to order a bunch of new 100 dollar bills from the Bureau of Engraving and Printing. (And each 100 dollar bill could purchase 3300 more!) Everybody wins!

Well, not everybody. Having found it just as easy, or even easier, to inflate directly rather than paying the Fed to do it, there'd be no limit to what the government could finance by directly purchasing money instead of borrowing it, or confiscating it from citizens. Prices would explode, savings would be destroyed, and human misery increased faster and deeper than by the present method. Maybe some might say that this is the price of security, but a cursory glance at history will show that governments have never been able to provide security for their people, and perhaps have not even been interested in trying. Furthermore, the idea that the government is anxious to save money is itself farcical. If so, it would buy other antibiotics not still protected by patent laws, such as doxycycline or penicillin. There's a silver lining to every dark cloud, and for the government, the dark cloud of terrorism has a wonderful silver lining: the opportunity to spend billions of dollars in a twinkling, with little objection from anyone, to provide "security" and an end to the "terrorist threat," although how you can tell the threat is over is beyond me.

What if, since this is a fairy tale, we still had legitimate, constitutional, money, not printed, but coined? Would Uncle have enough of this genuine money to buy millions of pills of cipro? Probably not. (Why should the government have a huge stockpile of money, anyway?) But would it need it? Would terrorism be necessary or possible with sound money? Osama bin Laden, who is uncritically accepted as the architect of our present problems, hates us because we have soldiers stationed in Saudi Arabia (and in about 100 other countries), because we are inordinately generous to Israel, and because our embargo and attacks upon Iraq have killed hundreds of thousands there, all to no purpose except, perhaps, the protection of oil interests, such as those who plan a pipeline across Afghanistan, once it is "pacified" under a friendly (i.e., bought-off) government. But none of this could have been accomplished without the printing press, even a press restrained by the ploy of lending the scrip into circulation instead of simply spending it. And because all of these things---bombs, airplanes, missiles, soldiers, etc.,---were "paid" for with "notes" which promise nothing, and deliver what they promise, it was all obtained free, just as surely (though not as obviously) as if it were simply seized. The producers were given monopoly money, with which they have played the buy/sell game enthusiastically, and will continue to do so until that day when they realize that it IS monopoly money. Soon!

When that happens there will be a worldwide epidemic of suffering, confusion, and helplessness that would make anthrax look like the sniffles.Fiat is incompatible with freedom and prosperity.

China is poised to become world's biggest gold consumer.

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