About Money


In the News:

Yellen Cites Benefits to Running Economy Hot for Some Time

Federal Reserve Chairwoman Janet Yellen offered an argument for running the U.S. economy hot for a period to ensure moribund growth doesn’t become an entrenched feature of the U.S. business landscape.

Revving up economic growth in the short run could encourage businesses to invest more in capital equipment, something that would have lasting benefits for the economy and encourage future growth. A fast-growing economy also could encourage individuals who have stopped looking for work to start looking again, expanding the labor force, national income and growth prospects. Moreover, running the economy hot could encourage higher levels of research and development and increase incentives for new business formations.

Economic theory holds that weak demand can become a self-perpetuating problem for an economy. When businesses don’t invest and consumers don’t spend, it drives down the productive capacity of the economy and the pool of available labor, begetting still-slower growth. The idea is called hysteresis in economic circles. Weak demand begets weak supply, something Ms. Yellen said–with some careful hedges–might be reversed if demand is boosted.

WSJ 10/14/16




There are some serious misconceptions about money that effect our economic and political thoughts.

  • Money is not wealth, it is something that can be converted to wealth.
  • Fiat money is not made of paper, it is pure thought.
  • The purpose of taxes is NOT to balance the budget, it is to control outcomes.
  • The government does not spend ‘tax payer’ money.  If it did it would not be able to run a deficit.
  • Fiat money is better than gold because it can limit booms and busts.
  • Deflation is bad because it leads to hording money and recessions.
  • There are 12 Basic Ways to get money and working for it is only one them.  (Think about it and read further)


About Money

Land has always been a source of wealth that will provide lasting sustenance.  Ambitious people have struggled to acquire a small piece of land, worked that land and invested the profits of that work in more land.   Great fortunes were built that sustained large families using this principle.

Money is just like land and in some ways is superior to it.  It will produce more money if properly maintained and invested.  At first the ‘acreage’ and resultant benefits are small.  But as more land or money is secured, the benefits grow exponentially.

Selling and or money for temporary comfort dooms one to poverty.

Many people use the money they work for as fast (or even faster) as it accumulates.  They work for someone who pays them a salary and they spend it all for necessities and comforts, living from paycheck to paycheck.  They never accumulate the money that can make them free from toil and independent of “the man.”

If you want to be free you should acquire as much as possible as soon as possible.  It should be hoarded and protected from erosion.  It should be put to production so it makes a profit.  The profit should be used to acquire more and not be spent on unnecessary luxury.  It should be respected for the wealth that it can produce.   Everyone who follows this can eventually be wealthy and free.

For a free citizen, entrepreneur, politician and highly-informed voter, understanding money is ultimately important.  Money is our economic ocean subjecting us all to financial tides, waves, currents, storms and calms.  If you want to be as free as possible you need to learn about wealth (including money), how to make it and how to protect it.

Every time you spend money you are spending your future.

Copyright 2016 by NotesOnMoney
Updated 10/15/16


Money is not wealth

Wealth is desired or needed “material possessions and resources”.  Examples of real wealth are food, shelter, clothing, transportation, entertainment, labor services.  The value of wealth depends on human desire and need. In times of crisis food is worth more than gold, water more than food, air worth more than water.

Wealth (not money) comes from the earth. Wealth is collected and produced by human action.

People create wealth from natural resources for selfish reasons; to use it for themselves and family, to trade it for other things they want or need and to store for future use and security.

Money is something that can be converted into wealth. All money including gold, may lose its value of conversion in times of crisis.

“Money is a guarantee that we may have what we want in the future. Though we need nothing at the moment, it insures the possibility of satisfying a new desire when it arises.” – Aristotle

Understand that money is a guarantee, a promise, an idea.  It made of thought and it is not material.


What money is and how it is created

Before money was invented people used a system of barter, trading material goods and services for things they wanted.  There are  two problems with the barter system; you may have to take something in trade that you don’t want and you may have to take something that will not last such as livestock, fruit or grain.  Small communities have experimented with going back to barter but it does not last long.

Money was invented to make it easy to conduct trade and store real or potential wealth. Material things have been used as money; salt, shells, pretty stones, tobacco, skins, livestock and metal. When money was first invented, the people created it and put it in circulation themselves. The stuff that was accepted as money had intrinsic value; it was useful in itself as well as in trade.

Metals like copper, gold and silver eventually became universally accepted as money because they were rare, easy to store and transport and long lasting.  Precious metal was sometimes deposited with metal smiths in exchang for printed leather and paper certificates that were promises to return the metal. These certificates became trusted, accepted and traded just like the metal that they represented.

Governments took the responsibility of storing metals and the power of providing money in order to standardize, regulate and control the supply.  Gold and silver certificates were issued and freely exchanged for actual metal thereby establishing trust in these instruments.

Silver Certificate


Issuers of these certificates discovered that it wasn’t necessary to have enough metal to back up all of the certificates because most people did not redeemed their paper. This made it possible to issue more certificates than there was metal to back it.

By the 1950s most Americans knew that there was not enough metal in the Treasury to back up all of the paper money and they were not bothered about it. Eisenhower did away with the premise of backing the paper promises with metal thereby changing the certificates from promises to deliver metal into fiat money, notes which are promises to pay nothing.

Each printed US fiat dollar has the statement “THIS NOTE IS LEGAL TENDER FOR ALL DEBTS PUBLIC AND PRIVATE”. This money has value because of universal acceptance and the fact that it is illegal not to accept it in trade.

Today it is not even necessary have printed paper to represent money. Money has become pure numbers. Since numbers are only thought, money has become pure thought.

When a talk show host screams “We don’t have any money!” he is mistaken.  When he cries that we can’t afford any more debt he ignores the fact that ALL of our money is debt.  Look at your money.  Every printed dollar is a “note”; “a paper acknowledging a debt and promising payment.”  Payment of what?  Nothing.

Since money is nothing but thought, the federal government has an infinite supply.  Money can be created and destroyed by collective thinking.

This is not true for state and local governments. States and individuals are not allowed to make money so unlike the federal government, they have a limited supply.  (California tried to get around this by issuing IOUs)  The states are beholden to the federal government for their supply of money.

Want to know more?  Look here:  www.nubank.com/gold/invest-in-gold.pdf

What money does

Money facilitates trading of wealth and storing wealth potential.  It greases the economic skids, expediting trade and providing a somewhat secure way of storing potential wealth (monetary savings). The availability of money in a society determines people’s ability to buy wealth. Being able to buy wealth increases the production of wealth. In a free society, if someone wants something and can buy it, someone will make it. People will produce more wealth than they can use if they can easily store the excess as money. The result is that an excess of wealth is created which becomes available for everyone.

If people do not have money, they cannot purchase the things they need or want even if these things are abundant.  That statement seems obvious on its face but it has supports the idea money supply effects trade.  During the Great Depression food was abundant but people nearly starved due to a tight money supply.

The Federal Reserve

The Fed acts as the central bank for the United States overseeing the money supply. The Fed operates under a dual directive from Congress to maintain a low rate of inflation and maximum employment.

Central banks operating independent from governments are not new. Historically central banks have been kept at arm’s length from government because if kings, politicians or government officials control money, conflicts of interest tend to warp the system. The Fed is technically not part of the government (similar to Postal Service) but the government directs it. It is hoped that the motives of the 12 Fed directors and chairman are pure and they will act in ways to protect the currency and economy from wild swings and not be overly influenced by politics.

The most recent example of politicians influencing the economy was when banks were, for social engineering reasons, forced to make loans to people that had no hope of repaying them. This resulted in a housing boom followed by an economic bust that nearly ruined the world currencies. To stop the resultant panic, the Fed stepped up and provided money (liquidity) while everyone was hoarding their cash.

Some people resent and distrust the power held by the Fed but cannot offer a better alternative. Heaven help us if control of the money is taken over by Congress! At least the Fed is run by professional economists not glad-handing politicians.

From Farewell Lecture to World Bank1 by Herman E. Daly 1/14/94

“Under the National Bank Act (1864), the banking system was divided into three groups: central reserve city banks (the first was located in New York City; Chicago and Saint Louis were added in 1887), reserve city banks (in 16 other large cities), and country banks. All national banks were required to hold reserves, but country banks could hold a percentage of these deposits in reserve city banks. When country banks required additional reserves to meet their customer’s cash demands, they would call on reserve city banks, which would in turn demand funds from central reserve city banks. Any weak block in this pyramid could lead to the collapse of the entire system. Nowhere could additional liquidity be created, and suspension of specie (that is, gold coin) payment was the not infrequent consequence. Such banking crises occurred in 1873, 1883, 1893, and 1907. The panic of 1907 led to the formation (1908) of a bipartisan congressional body, the National Monetary Commission, whose report set the stage for the Federal Reserve Act (1913) and a decentralized, adaptable banking system. “

Gold Standard

The idea that returning to a gold standard would cure our economic problems is wrong. Inflation and deflation, booms and recessions occurred even when money was backed by gold. (  http://en.wikipedia.org/wiki/List_of_banking_crises  )  The difference now is that by controlling the supply of money the Fed can moderate the economic swings. Under a true gold standard, the swings would be influenced by the supply of gold (mining) and hoarding (deflation).

“…Some governments responded to the crises of the early 1930s by quickly abandoning the gold standard, while others chose to remain on gold despite adverse conditions. Countries that left gold were able to reflate their money supplies and price levels… countries remaining on gold were forced into further deflation. To an overwhelming degree, the evidence shows that countries that left the gold standard recovered from the Depression more quickly than countries that remained on gold. Indeed, no country exhibited significant economic recovery while remaining on the gold standard.”  –  Ben Bernanke “Essays on the Great Depression”

The whole world is now using fiat money. Forget the idea of ever going back to the gold standard.  If you don’t like fiat money, you can convert all of yours to silver and gold (by the way this is just about the only property you can truly own that the government can’t track…yet). Just try to buy a loaf of bread with a piece of silver.  There was a time in the US between the 1930s and 1970s when you could not even legally own gold bullion. Think about that freedom lovers!

The effects of the money supply

The supply of money determines how fast trade occurs and therefore the speed of the economy. The government and The Fed pushes money into the economy, making more of it, to help stimulate the economy. The money supply is held steady when the economy is running well, reduced when running too fast as in the “dot com” bubble and increased when things begin to slow down.

The people that control the supply of money strongly influence or control this economic activity sometimes with profound effects. The Great Depression was either intentionally or accidentally caused by the reversal of monetary policy from one of easy money to one of tight money. Before 1929 the Federal Reserve had a lose money policy, making money relatively easy to get. Changing the stock margin rule from 90% to 50% caused the 1929 stock market crash. Read more about buying on margin here: (http://en.wikipedia.org/wiki/Stock_market#Margin_buying )

After the crash, the money supply was made tightened even more and held tight!

Before the Depression, economic policy was for a Lassiez-faire free market.


The Depression was either intentionally created (likely) or the Fed was just stupid (unlikely). The Fed slowed the economy to the point where the people were desperate.

Whether caused by accident or intent the crisis was not wasted. The people were ready to welcome government involvement and control in the economy (Socialism) and give up Lassiez-faire capitalism (Individualism). People saw the government as their savior when the money supply was loosened. Government control began to replace market forces.

Federal Reserve Chairman Bernanke agrees that the Fed caused the Depression.
(http://www.worldnetdaily.com/index.php?fa=PAGE.view&pageId=59405 )

The Fed makes sure that unemployment doesn’t fall below around 4%. This results in a ready supply of labor preventing a rapid rise in the value of labor. The excuse to do this is that if unemployment falls too low, people can demand more money for their work, causing prices to rise and inflation.

Since there is no free market for labor because the government regulates the economy to assure there is always some unemployment, the government should take responsibility for those looking for work but temporarily unable to find it. The government should also set a minimum wage because under this artificial environment of assured unemployment, the value of labor would naturally be forced toward zero.

The nation’s supply of money is measured, tracked and increased or decreased according to the Federal Reserve’s judgment.

Controlling the money supply

The supply of federal money is controlled in four ways.

1. The government puts money into the economy by purchasing goods and services. Since the intent is to put money into circulation, it usually doesn’t matter if the government gets good value for its purchases. Hence we get $200 hammers, bridges to nowhere and inefficient government workers. Inefficiency is actually rewarded in government work because inefficiency moves money into the economy faster. Agencies even throw money away at the end of each fiscal year by buying goods and services that can be ‘justified’ but are often wasted. Companies that sell equipment like computers and software plan for this annual windfall that comes in August. In order to use all of the allotted money, government agencies build convoluted, bureaucratic and fractionalized organizations. These organizations compete for government money so they often will not cooperate with each other. The ‘empire building’ and mandated ‘make work’ can prevent real work from getting done. This inefficiency can be dangerous. Recent examples include: Failure to bring resources to help the victims of Katrina due to FEMA’s “poor model”; failure to respond to foreigners learning to fly but not land airliners because the FBI couldn’t talk to the CIA; failure to catch Madoff even when it was reported to the SEC for years that his hedge fund traded nothing. “Anything not worth doing is not worth doing well.”

2. The government gives money away through welfare, grants, social security payments, retiree benefits, interest payments on bonds, foreign aide, etc.

3. Money is put into circulation by lending it to the people and businesses. Money is borrowed into existence through the fractional banking system. (http://en.wikipedia.org/wiki/Fractional_Banking )
Basically when money is borrowed from a bank, most of that money is created out of thought. That money is eventually deposited back into a/the bank and then can be lent out again. Through this multiple lending and depositing, a dollar deposited becomes many dollars. People wanting to borrow money drive this money creation. Their desire to borrow is influenced by economic forces, desires, fears and expectations.

Regulating reserve requirements and interest rates controls the level of lending.
That is, the Fed regulates how much money must be held “in reserve” or what percentage of deposits may be lent out. Say for every 100 dollars on deposit the bank may be allowed to lend out 80. Changing the reserve requirement accelerates or decelerates money creation. Changing the interest rate charged by the Fed also influences the demand. Right now the interest rate is near zero.

4. Money can be removed from the economy by taxation, and by limiting lending through raising interest (discount) rates, controlling consumer credit, raising reserve requirements and by buying and selling of US Treasury and Federal agency securities in the open market.

Uncontrolled money supply

Money is also created and destroyed outside the control of government by changes in the perception of value of wealth like homes, stocks, gold, etc. When the current price for an asset rises, everyone who owns similar assets thinks that they have more money. (Remember money is pure thought.) If a few people sell their assets and take that money they do indeed gather in the money. If too many people try to sell their asset, the value drops and the money everyone thought they had disappears to whence it came.


If too much money, controlled or uncontrolled, is infused into an economy the value of money drops, called inflation. Inflation is too much money is chasing too little wealth meaning it takes more money to buy the same wealth, the value of wealth appears to rise or the value of money drops.

Too much inflation is bad because the effect of the savings that some people rely on as potential wealth is disappearing. A little inflation is good because it encourages people to use their money to buy things instead of hoarding it.

A little inflation is good also because it slowly weakens the power of the rich and their children that are living only on their accumulated money, not producing any wealth. Rich families are effectively powerful aristocrats. Concentrating too much power in the hands of too few people is something that the American experiment has always fought against.

“You can have wealth concentrated in the hands of a few, or democracy, but you cannot have both.” — Supreme Court Justice Louis Brandeis

Deflation, the opposite of inflation, results from not enough money in circulation. Scarce money chasing an existing or increasing supply of wealth has the effect of making money more valuable. This makes the wealth appear to be getting cheaper.

Deflation is very bad because if people expect that their money will buy more tomorrow than it does today, they tend to hoard their money instead of trading it. This slows or stops trade and economies.

There is a lot of screaming right now about inflation because of government spending but the Nation is experiencing deflation (prices are getting cheaper). The rate of inflation/deflation is easily measured and is a driving force behind the Fed’s decisions about the control of the money supply.

The federal government does not ‘spend’ money

When you buy a coke, you pull a dollar from your limited supply, put it in the machine and as far as you are concerned, it is gone forever. If you want more dollars you have to go get some more. In reality, your ownership of the dollar and trading it away is only a small part of that dollar’s travels. The entity that sold you the coke now has the dollar and will spend it again. If it were not for taxes that dollar would circulate forever.

A government dollar is different. If the US government buys a coke, it immediately gets a portion of the money back through taxes. The fellow that sells you the coke pays income tax, social security tax, sales tax, employment tax, property tax, business tax, etc. out of that dollar. After the taxes are taken out there is only 30 to 60 cents left for the coke seller. When he buys something with what is left, the next fellow gets to pay another round of taxes. By the time the dollar passes through 2 or 4 hands, over 90% of the government dollar has been sent back to its source, the government.

So what the federal government is doing is NOT spending, it is circulating; giving out with one hand and taking it back with the other. The effect is that the people that handled the dollar generated and shared some wealth, stimulating the economy.

Even money that flows into foreign hands eventually finds its way back to the US Treasury.   A recent article (2/3/2011) in the Boston Globe illustrates this.

“United States…(has) funneled more than $60 billion of aid into Egypt since President Hosni Mubarak came to power in 1981, but more than half of the money has been spent supplying weapons to the country’s military, an arrangement that …has benefited American military contractors…”

Those contractors are people that pay mortgages and food bills.  The money flows in unseen circles throughout the economy.

Circulated money is not taxpayer money it is government money

Government spending and taxing do not have a hard connection. Did your taxes go down when there was a budget surplus under Clinton? Do your taxes go up when the deficit goes up? Does the government lose its ability to spend when there isn’t enough taxpayer money coming in? The answer to all three questions is “No.”

“The government pays its bills through taxes, debt, and inflation of the currency.” (http://en.wikipedia.org/wiki/National_debt ) As long as there is a demand for money (that is not everyone is “rich”) and inflation is low, the government can incur more debt and pay the debt by creating more money.

Increased economic activity also increases tax income because when money changes hands faster (the ‘velocity of money’ increases), taxes are collected faster . This is why, to a point, lowering tax rates increases tax income because if people have more money they usually spend more money.

As long as the economy continues to grow, this is sustainable. When the world finally reaches a point of stable or declining population growth, or reduced expectations for standards of living, things will change dramatically.


The government placed itself squarely in the economic system (taxing and spending) for the purpose of controlling people. Our government taxes partially to pay for debt but primarily it taxes to control the society. It does this for two reasons. One is that some of our leaders want to be sure that no one gets too rich for too long. This effectively keeps the middle class from becoming wealthy. Rather than let market forces control the economy, they use taxes to level incomes and spending to redistribute the money. You can thank Karl Marx for expressing this as graduated income tax and it may not be completely bad.

Another reason for taxing and spending is Social Engineering: “Government influence of behavior through incentives and disincentives built into economic policy and tax policy.” The government taxes what it wants to discourage and gives money to what it wants to encourage. So if you look at what is taxed, business, employment, property, sales, alcohol, tobacco, etc. and look at what is subsidized, unemployment, government make-work, social programs that create life-long dependence, disability, out of wedlock children, etc., you have to wonder why would our representatives want to discourage and encourage these things.

Since the government doesn’t spend money but circulates it, the tax rate determines how fast the money gets back to the government. Tax rates control how many times a dollar must be exchanged before it is returned to the source. There is the eternal push and pull over this between the Socialists (Democrats) and Individualists (used to be Republicans). The Socialists want to increase taxes thereby giving government more power to spend and control the people. The Individualists want to reduce taxes thereby leaving the money in the hands of the people longer and giving less control to government people.

The federal government holds the state governments hostage by taxing their citizens and businesses, then giving it back to the states only if the state governments comply with the federal’s wishes. A recent example is Louisiana, which was forced tighten its drinking laws (back door prohibition) or lose sorely needed highway money.  The Feds also use taxing to influence people’s behavior, social engineering.  For example:

“…the Internal Revenue Service finally agreed to allow 2010 taxes to reflect the costs of pumps and milk bags… That means women with flexible spending accounts can use their pre-tax dollars to pay for nursing supplies. Those who itemize can add them in to their health care costs.” – Politics Daily 2/15/2011

Sorta gives you a warm feeling to know the IRS loves breast feeding, no?  What does this have to do with balancing the budget?

For those who say that the government does not have the legal authority to collect income tax, you may be right (sort of). It seems to be true that the government cannot show the chapter and verse that gives its authority to tax BUT if you fail to pay and try to challenge it in court, you will be tried in an Article I Tribunal (Tax Court) NOT an Article III Tribunal (Constitutional Court). So any attempt to defend yourself by using The Constitution or Law will fail, you will lose your property and go to jail.

Article III tribunals are the Supreme Court of the United States and the 13 United States courts of appeals and 94 United States district courts that make up the judicial branch of the government defined by Article III of the Constitution. These courts have the power to hear cases involving the Constitution or federal law and certain cases involving disputes between citizens of different states or countries. Only Article III courts may judge cases involving life, liberty, and private property rights, with limited exceptions.

The United States Tax Court is an Article I tribunal.

Article I tribunals are certain federal courts having differing levels of independence from the executive and legislative branches. They can be Legislative Courts that review agency decisions, Ancillary Courts with judges appointed by Article III appeals court judges, or administrative agencies. Article I judges are not subject to the Article III protections. The United States Supreme Court has determined that Article I tribunals may exist, but that their power must be circumscribed and when deprivation of life, liberty, property is involved, their decisions are subject to ultimate review in an Article III court.

Constitutional protections don’t apply when it comes to taxes. You are assumed to be guilty until proved innocent. You are required to testify against yourself. People who contest the imposition of a tax may also bring an action in United States District Court or the Court of Federal Claims but ONLY after the tax has been paid first.

The Tax Court is the only place where taxpayers may bring a challenge without having first paid the disputed tax in full. So, if you haven’t paid your taxes, you can’t get your trial moved out of the Tax Court to the Article III court. Guess whom the Tax Court is going to side with.

( http://en.wikipedia.org/wiki/Article_I_and_Article_III_tribunals )
( http://en.wikipedia.org/wiki/United_States_Tax_Court )

A Balanced Budget?

Can anyone remember a time since the 1930’s that the U.S. did not have debt or when it had a balanced budget? We have been operating under this system for 80 years. On its face, it would seem that a country cannot continue to spend money it does not have but that is exactly what the U.S. has been doing for decades and it works! Any politician shouting that we need to balance the budget is either ignorant of the monetary system or is taking advantage of the ignorance of the populace by trying to look like a savior. The US Senators I have talked to do NOT understand what money is or where it comes from. Thank God that Bernake does.

Bottom Line

Economies are based on wealth production and trade, not on hoarding money. Even in this time of economic crisis, America is a very wealthy nation; producing more food than we can eat and burn. Money greases the skids of the economy but it is not wealth. As long as there is a demand for wealth and the ability to trade, wealth will be produced and flow into the hands of the people. People will continue to develop and trade wealth as long as government doesn’t prevent it through regulation, restriction or disincentives such as deflation and over taxation. Recessions and booms have and will always occur and the people on the fringe will feel the effects the most. At these times look to the wealth not to the money. If the money supply is properly administered, booms and busts will be made less severe by slowing the booms and spending into the busts.

One of government’s responsibilities is to provide “coin of the realm” to facilitate trade. The money supply is liquid and is controlled on a macro scale. Conservatives believe in freeing up money through lower taxes thereby giving the country its “head” and letting the people decide where growth should occur.

The Socialists believe in increasing the money supply by “spending” it or handing it out which gives the government people control over the country’s direction and growth. When people give you something, they usually have strings attached. The biggest danger is when government people become extreme in their desire to assure equality in outcomes or other Utopian dreams. When they do so, they risk destroying the incentives that create wealth. On the other hand, those who wish to let the free market completely alone, ignore the society’s wishes to guarantee that every citizen has access to his basic needs.

Then there are those few people who altogether dislike people and see mankind as blight on the earth and wish to destroy wealth production in order to reduce the population. Watch out for them as extermination is their goal.


There is a lot of misinformation being spread by both the Left and the Right for political reasons.  Limbaugh or Obama, Hannity or Pelosi; each side is giving you only half of the story to please their followers and some of that story is blatantly untrue.

Miscellaneous misconceptions and points to ponder

• No, our children and grand children will not have to pay our debt. That is just political banter. Are you paying your father’s debts?  “Paying off the debt” may be used as an excuse to raise taxes but it is not required.

• No, our nation will not be bankrupt because of debt. Bankruptcy is the state of insolvency, or not being able to pay your debts. An individual can become bankrupt. A company and state can become bankrupt but the federal government cannot go bankrupt. The US cannot become insolvent or unable to pay its debts unless it chooses to do so because there is an infinite supply of money. The nation can destroy (or increase) the value of its currency but it need not run out of money.

If you look at the list of other country’s debts you’ll see that those with the best economies have the most debt. (http://en.wikipedia.org/wiki/List_of_countries_by_external_debt )

• Pure central planning, socialism or communism does NOT work.

There is no hope that some central committee would be able to manage and control the production and distribution of all the goods and services needed and wanted.

It is obvious that no one person knows how to make something as simple as a pencil when you consider all of the resources and technology required. A pencil requires special knowledge in agriculture, forestry, mining, engineering, machining, manufacturing, paint chemistry, metallurgy, printing, design, and packaging, payroll, marketing, distribution, accounts management, etc. It is obvious that only a free market driven by the profit motive can bring everything together to make a pencil and all the other wealth we need or want.

Central planning has always failed economically whenever it has been tried, always results in freedom loss and poverty.

• Pure Laissez faire capitalism does NOT work either.

Unbridled capitalism proved to result in environmental destruction, abuse of workers, child labor, dangerous food and other bad things. The “free market” has lead to people being imprisoned on a tarmac in an airliner, sweltering for hours without restroom facilities because it costs too much to deplane due to a flight delay.  The free market results in people’s health insurance being canceled if they get seriously sick. The free market killed more soldiers in the Spanish American War than combat due to bad meat.  History provides us with the lesson that some standards and controls over business are necessary like preventing airlines from holding people beyond some limit. The danger is that too much control will kill the profit motive, the goose that lays the golden eggs. There is a struggle between too much and not enough control with Socialists on one side and Individualists on the other.

This has not always been the case. The government put itself into the economic cycle in the early 1900’s for the reason of controlling business and society and regulating outcomes. Before then the nation’s economy pretty much ran itself on the Laissez faire free market system. (http://en.wikipedia.org/wiki/Lassiez_faire) Abuses of the system resulted in unfair control of markets, destruction of competition, extremes between high and low incomes, and cornering of certain markets. This led to a desire for government control of the free market system to reduce the perceived abuses.

• We cannot take the government out of the economic system.

Government has become so interlaced with the economic system all over the world so that it is now impossible to remove it. The idea of going back to Laissez faire economy would create such a societal upheaval that it is incomprehensible. First it would require an across the board acceptance and over half of the people that rely on government for income would not agree. Second, it would take a systematic withdrawal if we did not want to descend into a serious depression that could lead to revolution. To avoid collapse, the conservative Individualists would have to develop another way of assuring some minimal distribution of wealth, which they are not inclined to do.

We can reduce government influence by reducing red tape, by reducing taxing and by reducing spending but we will never get the government completely out of the system again. And quite frankly we really don’t want to. We want some but not too much government oversight. The question is how do we bridle the government people since their tendency is to want more and more power.

• Money as with most property actually belongs to the government.

Land, buildings, cars, boats, airplanes all belong to the state. When you “buy” a piece of land you do not get the deed. You get a Warranty Deed which show you have some interest in the property but the state holds the deed. This is true for your vehicles too. Because the state owns the property, tribute (taxes) can be charged and the property can be summarily taken from you by Eminent Domain. Likewise as long as money can be confiscated you do not truly own it. The government giveth and the government taketh away. The only assets that you can truly own are ones that cannot be traced.


• Work is going away.

Technology has destroyed the need to have everyone fully employed.  For example, less than 2% of the people are needed to grow all of the food that we eat, sell, burn, feed our pets and throw away. The same is true for our other wealth necessities. As long as enough people are able to produce more wealth through technology than they can personally use, they will create a surplus of wealth that must be moved to those people not producing wealth.  A hundred years ago a lot of people were needed to produce the nation’s wealth but now technology is doing most of the work. From automated tractors to nail guns, increasing efficiency means fewer people are needed to produce the needed goods and services.

Today in America there are nearly twice as many people working for the government (22.5 million) than in all of manufacturing (11.5 million)….More Americans work for the government than work in construction, farming, fishing, forestry, manufacturing, mining and utilities combined….The employment trends described here are explained in part by hugely beneficial productivity improvements in such traditional industries as farming, manufacturing, financial services and telecommunications. These produce far more output per worker than in the past. The typical farmer, for example, is today at least three times more productive than in 1950. WSJ 4/1/2011

Before WWII increased productivity was rewarded by increased leisure time. During The War, increases were rewarded by increased pay and we have held to that system since then.

The problem to be solved is how to move wealth from those who produce it to those who need to consume it.  Conservatives believe that employment is the best method to do this.  The recession and slow growth since 2008 has resulted in many people dropping out of the employment picture.  Ever wonder how they live?

Free market advocates hold to a blind faith that the “invisible hand” will employ everyone and the deserving will get their piece of the pie.  Socialists believe that wealth distribution must be done through welfare or by “make work” government jobs.  The problem with creating government jobs, is that it expands the number of government employees that are looking for things to do.  Many end up doing things that reduce freedom.  As government expands, freedom retreats.   On the on the other hand Laissez-faire capitalism’s response to the Great Depression was to burn food and pour milk that couldn’t be sold into the sewers while many people went hungry.

Conservatives must attack and solve this problem of assuring some minimal level of income for all citizens without expanding government if they want to maximize freedom.  They must not hold to a blind faith that the free market will solve this without some central planning but must also find a way to bridle the process to keep the socialists from running away with it.

• Corporations for the most part, do not pay taxes.

Taxes placed on corporations are paid by customers/consumers, by reduced employee (also consumers) benefits and pay, by reduced profits to owners (also consumers) and by restricting investment and development in the corporation. As much as half of the price you pay for goods and services is tax passed down to you on the provider.

• Government is not some big impersonal machine.

Government is made of people with the same strengths and weaknesses as non-government people. Government people assume power that is enforced by legal violence, imprisonment, coercion and collective acceptance. Power tends to corrupt people. Knowing this, the founding fathers wanted to rein in the people in government, spread power thinly across many people and to make it hard to make new laws. Those in power always push for more power. A person in power uses that power to build fences and restrict other people and almost never to reduce controls on people. Because the Constitution was intended to hold back the power of government, government people are always looking for ways around the restrictions or simply choose to ignore it. It takes a mighty shove to push back creeping government controls.

• Republicans (who used to represent Individualists and with the help of the Tea Party may do so again) are wrong when they say our children must pay for the debt, that government money is limited, that the government must conduct its business as a person or business would with a limited money, that all spending leads to inflation, that all inflation is bad, that graduated income tax is bad, that all citizens do not have a birthright to a certain portion of the nation’s natural resources, that employers do not owe some loyalty to their employees, that unbridled capitalism does not create abuse of people and the environment.

• Some other points to ponder: All corporations are not evil abusers of the people and environment, profit is not bad, central planning is not better than the free market in producing and distributing wealth, not everyone can or should be equal, people that work for the government are just as selfish as those who work for free enterprise, people should not be prevented from living as well as they can, global warming is not caused by man, the US is a Christian country, religion has done more good than harm, slavery was not invented by the US but Americans helped end it, well designed nuclear energy is safe.

• The real meaning of the labels “Liberals” and “Conservatives” is clouded. What we are really talking about is a struggle for power between the group and the individual. If the group trumps the individual, freedom is lost to the tyranny of the majority. If the individual always has more power than the group, we get individual tyrants. Socialists have hijacked the label ‘Liberal’ or ‘Progressive’ when in fact they support strong fascist government control both in restricting people and forcing unwanted change on them. True ‘Conservatives’ hold to the old American ideals of personal freedom and responsibility, minimal government control, incentives that allow and encourage individuals seeking their own way and reliance on charity rather confiscation and redistribution to fill in the gaps.

• Logic is not an effective tool when it comes to arguing for the free market and freedom or against so-called liberalism, progressiveness, socialism or communism.

Liberal proponents are primarily postmodernists (http://en.wikipedia.org/wiki/Post_modernism ) who proclaim that there is no absolute truth and no right and wrong. They believe that logic is no way to solve problems, since logic is based in modernist scientific western civilization, somehow bad because it came mostly from white male leaders and resulted in world wars and oppression of less capable people. Postmodernists rely on more feminine based approaches to problem solving including feelings, anecdote and consensus.

The Death of Common Sense: How Law is Suffocating America
by Philip K. Howard
The Burden of Bad Ideas by Heather Mac Donald http://www.theburdenofbadideas.org/
Liberal Fascism by Jonah Goldberg

Commanding Heights The Battle for the World Economy available from Netflix DVDs



The love of wealth endangers the soul and happiness. Reliance on money and hoarding wealth can give you a false security if it replaces your relationship with God.

Remember the serpent’s false promise assuring that we can reach salvation on our own. “For God doth know that in the day ye eat thereof, then your eyes shall be opened, and ye shall be as gods.” – Genesis 3-5

Copyright 2016 by NotesOnMoney
The above information may be distributed for free with out changes.


For some years I offered Part 2 of this report for free.  However, simply giving away something of value make it worth nothing.  So starting in 2016 Part 2 will only be available for a fee.  It is available from NotesOnMoney@gmail.com

This report includes:
• The 12 ways of making money
• What money will do for you
• What money will buy without spending it
• Making time work for you instead of against you.
• Learning to deal with your money
• An overview of investment options including

o Real Estate
o Business
o Equities

I’ve developed this information from years of research, interviews with economists and advanced students, and personal experience.  To obtain Part 2 email a request with your comments to NotesOnMoney@gmail.com.  We will negotiate.

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