Thursday, June 23, 2011

UPDATE 6/21/2011

Today I began mailing letters to seven politicians: Congressmen Tim Murphy, Mike Doyle, Jason Altmire and Mike Kelly, Senators Pat Toomey and Bob Casey and PA State Representative Jesse White.  Other than a few minor differences necessary to personalize them, the letters are identical to the 6/21/2011 letter that I sent to the Senator Pat Toomey.  The Toomey letter is located below this UPDATE.  I also plan to send a mass mailing to many other politicians in order to get them to publicly state their position on the issue of Treasury issued debt free money.

I would like to emphasize three extremely important facts that completely discredit the current public “debate” regarding the federal budget deficit, the national debt and raising the debt ceiling.

1.      The $4.6 trillion that has been raided from the social security, Medicare, civil service retirement, military retirement and other trust funds, has been added directly to the national debt.  This scandal is never mentioned in the public “debate.”  This is why politicians can claim that they must cut social security and Medicare to deal with the national debt.  

2.      The raided $4.6 trillion is what the politicians call intergovernmental debt.  They say: “This is money that the government owes to itself.”  This is not true.  This is money that the politicians owe to the American people. 

3.      This money can be repaid in full without raising taxes or borrowing money from the credit markets.  This can be accomplished by using the provisions stated in the United States Constitution: Article 1, Section 8, Paragraph 5, and the law: the Legal Tender Act of 1862.
We must DEMAND that our political leaders address these three points.  The fact that politicians, the media and academia suppress the truth compounds this monumental and historic scandal.  The truth is revealed in my letter to Senator Pat Toomey.


Post Office Box 815
Coraopolis, PA 15108
June 21, 2011

Senator Pat Toomey 
502 Hart Senate Office Building
Washington, D.C. 20510

Dear Senator Toomey,

You have refused to acknowledge my December 10, 2010, letter, my February 6, 2011, e-mailed copy of that letter and my February 7, 2011, phone call confirming that your Washington, DC, office received the e-mail.  I would like to remind you, Senator, that I have a Constitutional right “to petition the government for a redress of grievances.”  To date, you have denied me this right.

My grievance has to do with the $4.6 trillion intergovernmental debt.  As you know, the intergovernmental debt is the money that politicians have raided from the trust funds and spent.  These trust funds include social security, Medicare, federal civil service retirement, and military retirement.  In the current public “debate” regarding the budget deficit and the national debt ceiling, the fact that this $4.6 trillion is owed to the American people is rarely mentioned.  Until this money is returned to the American people, in the form of cash, (not IOUs), the money is stolen.  Politicians claim that they will repay the missing money out of future tax revenue.  This will only perpetuate the theft.  You don’t repay the taxpayers with their own money.  The money must come from a source other than the victims of the theft.

You should know that you can repay the $4.6 trillion to the American people without raising taxes or borrowing from the credit markets.  And you can use the same revenue source to solve the budget deficit and national debt problems.  How?  Simply follow the instructions in the United States Constitution. Article 1, Section 8, Paragraph 5, states:  “Congress shall have [the] power to coin money [and] regulate the value thereof.”  The word “coin” can also mean create, as in the expression “to coin a phrase.”  Thus, Congress can create money.  There is nothing in the Constitution about the Federal Reserve or a central bank.

As you know, in 1913, in defiance of the Constitution, Congress gave the power to issue money to the Federal Reserve.  Some scholars believe this action was illegal because it was done without a Constitutional amendment.  I agree, but I am not recommending the abolition of the Federal Reserve.  My objective is to tell the American people (and to remind you) that Congress and the Treasury still have the authority to issue debt free money without involving the Federal Reserve.  There is an extremely important distinction between money issued by the Federal Reserve and money issued by the Treasury.  Money issued by the Federal Reserve is based on debt.  In fact, the Federal Reserve Notes we spend every day are responsible for our $14.3 trillion national debt.  Treasury issued United States Notes (Greenbacks) are based on the law as stated
in the Constitution above.  And, unlike federal Reserve Notes, United States Notes carry no debt.

In 1862, at President Abraham Lincoln’s request, Congress directed the Treasury to issue $60 million worth of United States Notes.  Under the authority of the Legal Tender Act of 1862, during the course of the Civil War, $449 million worth of this legal tender currency was issued (The Federal Reserve didn’t exist in 1862.)  This caused no inflation even though the money supply was increased by 25%.  After President Lincoln was assassinated, Congress reduced that amount to $300 million and froze it at that level.  Subsequently, Congress refused to authorize the issuance of any more debt free money.  However, the original $300 million is still an uncirculated part of our national money supply.  The $300 million amount can be increased by Congress and put into circulation immediately.

On June 4, 1963, President John F. Kennedy signed Executive order 11110 (amending E.O. 10289) authorizing the Treasury to issue billions of dollars of United States Notes.  Although the actual amount and the function of the E.O. are debated, the fact that Kennedy was responsible for the issuance of debt free money is not questioned.  After President Kennedy was assassinated, the United States Notes were withdrawn from circulation and no more debt free money was issued.  In 1966, Congress repealed the original 1933 legislation that gave Kennedy the authority to issue E.O. 11110.  In 1987, President Ronald Reagan repealed E.O. 11110 with E.O. 12608.

I don’t want to promote or endorse the conspiracy theories.  However, I mention these historical facts to prove that issuing debt free money is legal and practicable.  The only thing preventing debt free money from reentering our currently debt based national money supply is the United States Congress.

Therefore, I am publicly calling upon Representatives Tim Murphy, Jason Altmire, Mike Kelly and Mike Doyle to introduce legislation authorizing the Treasury to issue United States Notes.   This will be the same currency that was issued by Abraham Lincoln in 1862 and by John F. Kennedy in 1963.  This legal tender currency can be used to pay off the entire $4.6 trillion intergovernmental debt:  $2.6 trillion owed to social security; $317 billion owed to Medicare; $780 billion owed to the federal civil service retirement fund and $308 billion owed to the military retirement fund.  At the same time, the $23 billion funding shortfall of the Pension Benefit Guarantee Corporation (PBGC) can be eliminated.

In addition to this, I am asking you and Senator Bob Casey to support this legislation.  If you choose to withhold your support, please explain your reasons, in writing, and send them to me at: Ray Uhric, Post Office Box 815, Coraopolis, PA 15108.  I will put your letter on my blog site along with my response to your objections.  Then, the public can judge who is really following his Constitutional mandate to “promote the general welfare of the American people.”

The financial markets have nothing to say about repaying the trust funds with Treasury issued debt free money.  This is money that is owed to the American people.  Supplementing our debt based money supply with debt free money is perfectly legal.  And, there is no reason for this action to cause inflation.  The notion that dollars are just another commodity and that increasing the supply reduces the value is nonsense. 
Commodities are things with intrinsic value, such as corn, wheat or copper.  Dollars are just paper.  They get their value from the law as stated in the Constitution above.  The fact that currency speculators can attack the value of the dollar is a clear violation of the Constitution.  That our political leaders would let them get away with it is a scandal.  The size of our money supply and the value of the dollar are determined by Congress.  It’s the law.  It may be ignored by the politicians, but it is still the law     

Forgive me if I am highly suspicious of the motives of conservative politicians who claim that they must attack social security and Medicare in order to deal with our massive national debt.  It sounds like the same old “starve the beast” game plan to me.  A quick check of the historical record will illustrate the fact that Republicans, conservatives and the financial markets have despised and opposed social security and Medicare from the first day these programs were proposed.  Why would the financial markets and the financial services “industry” want to see social security and Medicare destroyed?  That would eliminate the competition, of course.  They want ALL the money for themselves and their shareholders. 

Apparently, the conservative “starve the beast” strategy to destroy social security and Medicare began with the Reagan administration.  Of course, this plan backfired when Congress simply borrowed more money to offset the lost revenue from the tax cuts and to fund the various wars and other government expenditures.  But now, with a $14.3 trillion national debt and the national debt ceiling looming, it looks like the government haters have the so-called “beast” by the throat.  But to the millions of people whose very survival depends on social security and Medicare, calling these great and vital programs “the beast” is a despicable example of conservative Republican spin.

It is interesting to note how the Cold War, tax cuts, the Iraq war, the mortgage meltdown, the global credit crisis, Dick Cheney’s idea that “Deficit don’t matter,” and other policy blunders have put social security and Medicare right where the government haters want it.  The “privatizers” and the financial markets must have been delighted as the politicians, year after year, weakened social security and Medicare by raiding the trust funds. Then, in a vicious and diabolical act of cruelty, they added every penny of the stolen money onto the national debt!  Is this scandalous economic policy really a legitimate way to conduct our nation’s fiscal business?  Is this a viable monetary system or a scam designed to fleece the taxpayers with debt?

Replacing the missing $4.6 trillion with debt free United States Notes can be accomplished in a matter of days.  Supplementing our current debt based money supply with debt free United States Notes will instantly solve the contrived budget crisis and eliminate the “need” to raise the debt ceiling.  Who could be opposed to that?  Obviously, the funding to make social security, Medicare, Medicaid and the PBGC permanently solvent is at the fingertips of Congress.  Politicians say we must endure austerity and slash social security and Medicare to send a signal to the markets (the bond vigilantes) so they will loan us more money and get us deeper in debt.  The only message we should send to the bond vigilantes is: Article 1, Section 8, Paragraph 5, of the United States Constitution.

This letter will be posted on my blog site  If you have any objections to my debt free monetary reform proposals, please send them to me at Ray Uhric, Post Office Box 815, Coraopolis, PA 15108.  I will put your letter and my response to it on my blog site.  This will make our debate a matter of public record.  The American people can then judge the relative merits of our respective arguments.

Thank you for your attention to this vitally important matter.  I await your timely reply.


Ray Uhric