"Paper money has had the effect in your state that it will ever have, to ruin commerce, oppress the honest, and open the door to every species of fraud and injustice."
by:
George Washington
(1732-1799) Founding Father, 1st US President, 'Father of the Country'
Source:
in letter to J. Bowen, Rhode Island, Jan. 9, 1787
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Reader comments about this quote:
So why did Washington then establish a National Bank? Hamilton behind the scenes pulling the strings.
 -- Ben, Orem, UT     
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    So what? Paper money must be a wonderful thing. I can think of no country in the world that it is not used. Washington may have been correct for his time. With ever increasing technologies counterfeiting has been substantially eliminated.
     -- Waffler, Smith     
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    A truth proven over and over again. Waffler, "So What?"????? The world's economy is in the toilet and you think that is a wonderful thing. Commerce has been ruined, the honest have been oppressed and can't be found in government, and every species of fraud and injustice has an open door to all levels of government and commerce and you think that is a wonderful thing. I guess your "so what on every species of fraud and injustice" perspective pretty much sums up your comments to date.
     -- Mike, Norwalk     
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    "I can think of no country in the world that it, [fiat currency], is not used." That, my socialist friend, is Gresham's law hard at work.
     -- Bryan Morton, Stuart, Florida     
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     -- Anon      
    What do I think? I agree with God. "...gold...is good." Gen 2:12 And again "And a final word to you arrogant rich: Take some lessons in lament. You'll need buckets for the tears when the crash comes upon you. Your money is corrupt and your fine clothes stink. Your greedy luxuries are a cancer in your gut, destroying your life from within. You thought you were piling up wealth. What you've piled up is judgment. All the workers you've exploited and cheated cry out for judgment. The groans of the workers you used and abused are a roar in the ears of the Master Avenger. You've looted the earth and lived it up. But all you'll have to show for it is a fatter than usual corpse. In fact, what you've done is condemn and murder perfectly good persons, who stand there and take it. James 5:1-6 (from THE MESSAGE: The Bible in Contemporary Language © 2002 by Eugene H. Peterson. All rights reserved.)
     -- RobertCoss.com, Rio Rancho     
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    Waffler, are you joking ? Counterfeiting is alive and well, it's done daily at the US Mint. When citizens print bogus money they go to jail, when the government does it, it's just fine.
     -- jim k, austin     
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    Washington wasn't referring to 'illegal' counterfeiting. It is true that the Continental was easily counterfeited, but that was a small fraction of the problem. The Continental was printed to finance the revolution and the majority of the inflation at the behest of the Continental Congress. Hyper-inflation caused a devaluation of the Continental to the point where "not worth a Continental" was a common phrase and troops paid in the script were using it to line their boots. Rhode Island inflated the currency at the highest rate and was hardest hit by the effect. By the end of 1781, $16,800 of the paper money would purchase only $100 in specie.
     -- Bryan Morton, Stuart, Florida     
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    Mike your remarks sound like they could have been written in any period of history, I think of the fall of Athens or the French Revoulution. Nothing is new under the sun. You panic guys are always available for a laugh. Last year it was panic at $140 a barrel oil, so now Diesel is down to $2.00. We should still look for alternatives but lets get off the panic kick. Inflation if you have not heard is a relatively good thing. Deflation is worse. Any economist will tell you that a 2-4% rate of price inflation is normal and healthy. Last night it was reported that retail sales were up in January and Car Sales were the best in almost a year. (This is for Archer: Archer when the government spends money it does not run the printing presses to do it. If they could do that then why is it said that the government is in debt for $10 trillion. Read this over and over again until you get it, the government has borrowed the mony thus it is in debt, if it could print or counterfeit it then would not be in debt. You have been called a genius, but can you not understand this simple fact.)
     -- Waffler, Smith     
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    "Any economist will tell you that a 2-4% rate of price inflation is normal and healthy." Actually, that should read "Any Keynesian economist..." although the term is oxymoronic. And, when the government spends more than it taxes it actually does run the presses, that's where the figure for M3 comes from. The fact that they they then sell that debt to foreign governments is why it is also debt. Regardless of the prestidigitation involved, it is still the creation of money without the backing of productive wealth. I tried to find some information on the claim that "car sales were the best in almost a year", but even from resources as recent as 2/13/09 @ 4PM EST all have statements to this affect: "But the core problem they faced in December -- too few buyers -- has only worsened, making their prospects look even dimmer in coming months. U.S. auto sales plunged 37 percent in January to the slowest pace since 1982." Retail figures show a rise of 1% in January, the first rise in seven months. But that sales are down 9.7% compared to January 2007 levels. Fuel sales went up 3%, but it shouldn't take Albert Einstein to figure out the reason for that one. Yep, historically it's cyclical and mankind survives, but that's not much of a consolation to the generation that has to pick up the tab for the previous generation's excesses. In his classic 1946 book Economics in One Lesson -- an amazingly clear and eye-opening introduction to free-market economics -- Henry Hazlitt described the "one lesson" required for good economics: "The art of economics consists in looking not merely at the immediate but at the longer effect of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups." The basic message: think long-term. Most of today's economists have never learned Hazlitt's one lesson. Instead, they are followers of his more famous contemporary, John Maynard Keynes, whose philosophy was expressed in his famous quip that, "In the long run, we'll all be dead." Based on such shallow wisdom, today's economists feel free to ignore anything but the shortest of short-term consequences.
     -- Bryan Morton, Stuart, Florida     
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    Bryan if you own or have ever owned Government Bonds that is a debt owed to you. You really don't know anything about Government Debt do you. Have you never heard of the "rush to safety" when folks sell their stocks and buy US Bonds. Your 1% rise in auto sales best in 7 months was what I was referring to.
     -- Waffler, Smith     
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    After reading some of the stuff you write, Waffler, I'd have to advise you not to underestimate how much others know. For a while, I wasn't sure if you really believed the stuff you wrote, or you were really smarter than that and were just playing the antagonist. I'm well aware of the attributes of debt, public and private. I also know what happens when the debtor runs out of ways to pay. The good faith and credit of the US Federal Government is running out. When they tried to impose a protectionist tariff just a couple of weeks ago, China threatened to stop buying up our debt. It was sufficient to make the Fed gov back down. You need to consider what will happen when the value of our currency drops to the point where foreign governments are no longer willing to buy. China has already slowed its purchases. What's the next step? Declare national bankruptcy and renege on the debt? Give them California?
     -- Bryan Morton, Stuart, Florida     
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    Washington was right, and he trusted Hamilton because of his military service to the cause of the American Revolution. Hamilton was despised, though, by Adams, Jefferson, and a host of others, resulting in his death by duel. Waffler says, "Archer when the government spends money it does not run the printing presses to do it." Yes they do -- they print Treasury Bonds (promissory notes) with no backing and sell them at interest to anyone who dares to buy them -- the Fed will buy up whatever bonds no one else will buy with the Federal Reserve Notes they issue with no backing other than the govt's promises-to-pay. Waffler continues, "If they could do that then why is it said that the government is in debt for $10 trillion." Because the government IS in debt for $10 trillion -- they got there by printing Treasury Bonds which is a promise to pay the bearer X amount of 'dollars' (Federal Reserve Notes) at Z% interest. So yeah, the government is in debt because they have taken paper money/legal tender in exchange for a promise to pay back that legal tender plus interest. Waffler scolds us further, "Read this over and over again until you get it, the government has borrowed the mony thus it is in debt, if it could print or counterfeit it then would not be in debt." This makes me laugh because the government does indeed print Treasury Bonds and accepts Federal Reserve Notes (with no backing either). Yes, if the government actually printed up the nation's currency itself interest-free and spent it into circulation, yes, there would be no debt (but we would still have an inflationary currency and income taxes would only be necessary to keep certain classes down). And every president that has tried to bypass the private banking cartel to do this has been assassinated -- only Jefferson and Jackson successfully wrestled back control of the currency from the bankers to return us to sound monetary policy under a bimetal standard. Waffler says, "You have been called a genius, but can you not understand this simple fact." Yes, Waffler, and you have been called an ignoramous because you ignore these simple facts.
     -- E Archer, NYC     
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