There is no better alternative for society than debt free currency

Cons substantive contention is that debt free currency leads to inflation. The over supply of printed currency, counterfeiting, currency speculation, and the private lender's mismanagement of the fractional reserve system also contribute to inflation. We have empirical data on all of these contributors. The primary culprits generating and exacerbating inflation are those who speculate in currency.1 When a nation's debt burden is so high it can no longer service the debt, speculators hasten to bring down currency values.2 In the U.S., the Legal Tender Law of 1862 ushered in Greenbacks. They were legal tender and interest free and did not add to the national debt. Congress authorized only $450 million, of which fifty million replaced Treasury notes outstanding. The limitation on issue was Congress's way to control inflation and devaluation. Bankers did not mobilize against the new law which suspended convertibility of paper money created by the private banks into species. They had to wait until the beneficial effects of the new currency rescued their own positions in gold and brought the nation through the war. The suspension and banker's non-reaction to it showed that metallic backing of bank notes was a fiction - a fraud. For every dollar of credit lent, the banks were holding less than ten cents in gold. In effect, system wide, the debtors had not been loaned metal, but paper. Those banks pressing legal claims to have their paper redeemed with gold were all denied by the Supreme Court. The Greenback lost substantial value during the Civil War, since bills of credit were still redeemable in gold and Greenbacks were new to lenders and borrowers alike. However, by the mid-1870's Greenbacks were redeemable one-to-one with gold.3 Comparing a wartime inflation under a government run money system (Civil War) to wartime inflation under a private banker run system (WW1), Civil War historian J. G. Randall wrote: " The threat of inflation was more effectively curbed during the Civil War than during the First World War. Indeed as John K. Galbraith has observed, 'it is remarkable that without rationing, price controls, or central banking, Chase (Treasury Secretary under Lincoln) could have managed the federal economy so well during the Civil War.'"4 The confederacy had no limitation on the issuance of its currency, they had no central bank, and the currency was not legal tender; it was only redeemable for species two years after issue. Inflation was rampant and by the end of the war..."...$1 in a confederate note had depreciated from $.90 in gold to $.017 in gold by 1865, and by 1866 Confederate notes were worthless.5 Lerner's estimates depreciation are now considered high. Since the South supported free market-mercantilism it eschewed regulation of and impediments to the operation thereof. There were 38 private banks in the south during the Civil war and each had it's own currency and interest rates and while they were competitive among banks they were in no way designed to stabilize the supply of Confederate currency or specialized notes. Added to this profligate dispensation of legal tender was the rampant counterfeiting of all Confederate paper currencies. hence rampant inflation. Greenbacks could not be counterfeited because of special ink, paper and design. Today we have a system of public sanctioning of private control of currency. In return for that privilege "...we now have 99 percent of the U.S. money supply owed back to private lenders at interest. The result is a growing federal debt, on which the interest burden alone will soon be more than the taxpayers can afford to pay. The debt is impossible to repay in the pre-Copernican world in which money is created as a debt to private banks....we have allowed our money to rotate in the firmament around an elite class of financiers, when it should be rotating around the collective body of the people...interest free."6 There are a number of major modern economies where money creation aids new industries, social welfare, and does not only benefit the profit motives of lenders. Japan, Malaysia, China, India are but a few. Government creation of money and debt allows many of these countries to forgive internal debt but honor foreign debt. These are defacto debt free currency systems. The Japanese economic model that evolved in the twentieth century has been called a "state-guided market system." The state determines the priorities and commissions the work, then hires the private enterprise to carry it out. The model overcame the defects of the communist system, which put ownership and control in the hands of the state. Chalmers Johnson, President of the Japan Policy Research Institute, wrote in 1989 that the closest thing to the Japanese model in the U.S. is the military/industrial complex. The government determines the programs and hires private companies to implement them. The U.S. military/industrial complex is a form of state-sponsored capitalism that produces one of the most lucrative and successful industries in the country.7 The Japanese model was, by the end of the 1980's, regarded as the leading economic and banking power in the world. That model also proved successful for the "Tiger" economies--South Korea, Malaysia , etc. State guided capitalism provided for the general welfare without destroying capitalist incentive. High economic growth, rising social security, and universal education in a market economy - it was the sort of "Common Wealth" America's Founding Fathers had endorsed. But the model represented a major threat to the international bankers' system of debt-based money and IMF loans. To diffuse this threat, the Bank of Japan was pressured by Washington to take measures that would increase the yen's value against the dollar and reduce Japan's trade surplus with the U.S. The surplus was being used to fund social and economic development in Japan and in developing Asian countries.8 By 1987, the Bank of Japan (pressured by Washington) had cut interest rates to a low of 2.5 percent. The result was a flood of "cheap" money that was turned into quick gains on the rising Tokyo stock market, producing an enormous stock market bubble.9 Engdhal writes: "No sooner did Tokyo act to cool down the speculative fever, than the major Wall Street investment banks, led by Morgan Stanley and Salomon Bros. began using exotic derivatives to short the Japanese market. Within months Japanese stocks had lost nearly $5 trillion in paper value.10 In sum we cannot have in the same fiscal year, under the current system of borrowing at interest: national health care reform, rehabilitation of our infrastructure, free, private and public universal education, a modern fully resourced military, and fully funded research on cancer, heart disease, autism, etc. All of these "needs" can only be funded through existing public, state and local institutions with national, debt free currency issued by the Federal Government as provided for in the Constitution. (1. See, "The Web of Debt", p. 245) (2. Stephen Zarlenga, "The Lost Science of Money" The Mythology Of Money - The Story of Power. American Monetary Institute Charitable Trust, 2002) (3. E. G. Spauldinng, "A Resource of War", (repr.., CN:Greenwood, 1971), p.37. (4. J. G. Randall, "The Civil War and Reconstruction, edit. D. David, (Boston: Heath & Co. 1937, 2nd edition 1961), pp.3-11. (5. "E M. Lerner, in Milton Freidman's "Studies in the Quantity theory of Money, (Uiv. Chicago Press, 1956). (6. Ellen H. Brown, "The Web of Debt", Third Millennium Press, Baton Rouge, Louisiana, 2007.) (7. Chalmers Johnson, "How America's Crony Capitalists Ruined their Rivals," Los Angeles Times (May 7, 1999). (8 Ibid) (9.Ellen H. Brown, The Web of Debt, p253). (10. William Engdahl, "A Century of War" (New York: Paul & Co. 1993), page 229.