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Memories of the 28th Century

Rule of Law

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I have already written about the lack of care in using laws and the constitution as the bases for governmental action, but something has to be done about it, one way or another.

It bothers me that the federal government has taken over some of the powers of the states, even though the feds are explicitly forbidden from assuming any powers that have not been granted to it. We just have to look at the federal departments to see this. Department of Education, Department of Health & Human Services, Department of Homeland Security, Department of Housing & Urban Development are the only departments that clearly are not part of the purview of the federal government; although Homeland security might come under securing domestic tranquility.

I will not list all o the agencies, but you can consult the list on this page. There are some agencies that are federal, while others not. There are several that should have been put under the Post Office, but the Post Office is no longer a federal department, even though there are many agencies involved in communications.

Some of the things the feds are meddling in would be better off without their attention, and the tax dollars that would be saved could be better spent elsewhere. If we put those savings together with the savings from cutting the Defense Department down to size, then the states could easily raise taxes to do useful things like housing the homeless and hiring people to watch and care for the mentally ill.

But there is one area where the feds operate outside of the constraints of the Constitution that needs attention, and that is the creation of currency. The Constitution requires that money be only specie, but the U.S. hasnít followed that for more than a hundred years. Some will claim that there isnít enough gold in the world to fill the needs of the U.S., but that ignores inflated nature of the U.S. dollar and why that has been so inflated. The news doesnít often discuss the matter, but the U.S. makes a large part of the money required to run it by playing the bond markets. To make more money from the bonds that the Treasury sells, the Federal Reserve System inflates the dollar at an average rate of a little over three percent per annum. That allows the Treasury to pay off bonds with dollars that have lost about half of their value, so, in effect, the Treasury made a fifty percent profit on the bonds.

Getting the U.S. out of that game would require changing the store of value backing the currency. I think that most people in the banking and investment field today would say that it would be impossible to straighten it out, and they may be right. I think it could be done, but it would involve revaluing major assets, and it probably would cause a depression. Redefining the value of money has been done before, and over the long run it is advantageous. Italy did that, when its Scala Mobile was ended.

It appears that the creators of cryptocurrencies are trying to replace some of the features of currency with their things, and they are successful to a limited degree. As far as they go, crypto-currencies provide a store of value, and they can be used in some transactions, but they lack the size and breadth to fully replace major currencies.

This blog is getting away from the rule of law, but the management of the currency and of commerce are very important, and the currency has been largely ignored for a long time, except as a way to make money from repaying bonds. And the possibility of mining an asteroid that has gold and platinum than Earth would make the problem of having adequate currency a thing of the past (Psyche 16). It is impossible to determine the net effect of that asteroid on the worldís economy, but it might allow the U.S.A. to use lawful currency again. Using a metal that has been used as currency for millennia would be better than using the crypto-currencies; al though it would bankrupt the people behind those. Making a suggestion to Mr. Musk might result in something being done.

Changing the source of wealth might allow other things to be done that would get the government back in balance.

Updated 11-21-2021 at 03:25 PM by PeterL