TARP/Bailout Expenditures

Thomas Lee Abshier, ND
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The Christian Constitutional Republic
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by: Thomas Lee Abshier, ND

TARP/Bailout Expenditures
By: Thomas Lee Abshier, ND
11/4/2011

-----Original Message-----
From: John F.
Sent: Friday, December 02, 2011 6:28 PM
To: Thomas Lee Abshier
Subject: TARP/BAILOUT FUNDS - WHERE THEY WENT

http://www.nomiprins.com/storage/bailouttallyoct2011CLEAN%20NO%20FORMULAS.pdf

On Fri, Dec 2, 2011 at 10:54 PM,
From: Thomas Lee Abshier, ND
To: John F.
Re: TARP/Bailout

Thomas A: That list of expenditures appears authoritative and credible. Clearly the Federal Reserve printed a lot of money and loaned it to a lot of banks.

In our discussions, you have repeatedly talked about all the problems with Fiat Money. I just want to make sure that you understand that I understand all of the damage that can be done by printing money of nothing and putting it into circulation. A fiat money system can be abused. It sometimes seems like you are trying to convince me of the dangers or problems with Fiat Money. I’m on board. I don’t need to be convinced. I just wasn’t sure that you realized that I knew that. Do you?

John F: [Yes, I get it. You do not condone the obvious wickedness being done.

But, there are still questions from the last couple salvos, that require more close examination of the model you would propose. I speak to you as a reformer appealing to you as a believer in Christ, who regards Him as the Lord (owner) of Land and Labor (i.e. all property including money), and authority for all aspects of life. If we are such, I seek to explore our mutual responsibility as to what Christ can empower us to do in our families, among our fellow church-members, and as a citizen of State and nation in this time of accelerating judgment. I am delighted that you already understand so much of what I see as being important for Christian leadership in our generation, and want to contribute what I can by pointing you to resources that I have found helpful, which are the Biblical definitions of our problems, and the Biblical solutions. Someone needs to be contributing Solutions that are not more damaging than the problems they are trying to solve.

Thomas A: I appreciate that you want to discern the best ideas for governing a society, and use those given to us in the Bible. Clearly, if God has designed these patterns for man, they should be implemented in society. But, the question is always, “What is the actual intent of God in that regards?” We only have the scripture to give us clues as to His way. And, given that the rules given in the Bible are situation-specific, and life is usually more complex, having multiple considerations, we must give a certain amount of latitude in the application of scripture to life. The debate over the application of God’s Law to life has been the millennia, and will continue until He returns to rule and reign as sovereign king and lawgiver. In the meantime, we must do our best to use the general principles of scripture to structure our economic and political systems according to the revealed direction, and then fill in the details with at our discretion. There really is latitude for free will, innovation, experimentation, and engineering in the prescriptions of the Holy Bible. I believe this is the case with regard to the type of money we use, whether fiat or alternate value-based.

John F: Also, I thought that article was helpful in showing how a man writes of the Fed “reckoning” additional dollars into the system, without promoting the verb “printing” as the mechanism.

Thomas A: The author used the word “reckoning” as a euphemism for “printing”. The Fed printed dollars out of thin air, and then loaned them to that entire list of institutions. Everyone knows what “printing more dollars” means, but they haven’t yet been sensitized to the word “reckoning”. No, they weren’t using the word “reckoning” to avoid giving the dollar more undeserved substance. Dollars are real in two senses: 1) the dollar is a piece of the All-Value, and that amount of value redeemable by a dollar should ideally stay steady. 2) The dollar is a piece of paper, metal, or digital entry, that symbolizes the potential to redeem a piece of the All-Value available for consumption.

John F: I’m always going to give you a hard time about using the word “printing” because that word feeds the idea that dollars are “something”. The paper Federal Reserve Notes are just a real, tangible claim-slip for imaginary debt where nothing is owed, and nothing can be paid, that people nevertheless value!. Federal Reserve Notes are not “notes” at all, since they fall short of the definition of a note's function. That is FRNs do not have printed on them a covenantal contract to deliver QMS like on Gold/Silver Certificates. . People claim that FRNs are dollars, or money -- which I don't believe they are. :)

Thomas A: Money is primarily a contract between buyer and seller, and only incidentally, tangentially, and peripherally is money a contract with the government. Men establish debts with each other by making contracts to perform/receive service and render/receive payments. Money is the medium by which men exchange potential value for real consumable goods and services. The FRN contains the inscription, “This note is legal tender for all debts public and private.” Thus, the government has declared that it will accept these notes for all public debt (taxes, fines, purchases...). This is the only contract that government has with the consuming-producing-trading public. The fact that government does not make a contract to redeem the FRN in gold or silver upon demand does not reduce the fact that it is a covenantal note between the public and government, as it has promised to discharge public debt with the payment of FRNs. Private parties using the same note as symbols of value is a matter of choice, and the terms of the contract to exchange value for value (i.e. what constitutes value) is the decision of each party to the trade.

With regard to the fiat money. You persist in believing that fiat money cannot discharge debt, does not represent value, and is in short “imaginary”. I refer you again to my essay on Gold Certificates vs. Federal Reserve Notes. Money is primarily a contract to exchange value for value. This exchange contract, the debts and credits for value exchanged, is not altered by the fact that the debit/credit notes (universal checks, money, dollars) can be redeemed for alternate value (as per the government’s commitment to exchange scrip for gold/silver). The primary purpose of money is not to have inherent value itself, but rather to represent consumable value. Gold/Silver or other QMS substance used as scrip, or scrip redeemable for gold/silver is not necessary for the contract to exchange value to be real.

You appear to believe that “debt”, “dollars”, and “money” are only real when an exchange scrip is used that has a secondary redemption source.

I readily admit that the exchange scrip, fiat money, can be counterfeited by officials who have been given the trust of maintaining the integrity of the money supply, and that trust can be betrayed. Granted, the fiat system is more susceptible to abuse than a strict, QMS-only system of money. But, the potential for abuse by trusted authorities does not make a fiat system fraudulent or money fraudulent, it makes the money potentially fraudulent. Potential theft is not prosecutable, nor immoral, nor judged by God, whereas actual theft is all of the above.

Even if a gold/silver only coin money were established to give money “reality”, it would quickly change to a close relative to our current system. Carrying gold/silver around is cumbersome, and this system will inevitably move to a gold/silver certificate system. And, at that point, whether intentional or malicious, the number of gold/silver certificates in circulation will not correspond 100% with the gold/silver in reserve (e.g. in Ft. Knox).

Granted, when the authorities (Federal Reserve) print too many gold/silver certificates, people will begin to redeem them for their alternate value, and this provides a powerful feedback mechanism to the authorities to stop excess printing. It is a good system which has a built-in feedback mechanism that strongly dissuades government from printing money to discharge debt or buying constituents. I have no complaint against the system other than the fact that it is a more limiting system in terms of its ability to support willing labor’s entry and contribution to the workforce and value pool.

But, the question here is about whether the FRN is real or not. Thus, what makes it real? It is not an alternate gold/silver redemption possibility that gives the FRN reality. It is rather the acceptance of the FRN as a valid representation of produced value, and the associated right to redeem or consume value that gives the FRN reality.

Alternate redemption does not give a dollar the force of law in contract to discharge debt with a note. Alternate redemption is not what gives money its substance. Again, money is given substance by trust that value produced will be redeemable for value consumed. Money is the intermediary vehicle which stores value between the time of production and consumption. The need to have a gold/silver-backed alternate redemption possibility is a testimony to our belief that government is not trustworthy to properly discharge its responsibility to properly regulate the money supply to maintain a stable value of the dollar. Even though a gold-backed certificate is good insurance to maintain the value of the dollar, such a money system does not rise to the level of a requirement by God or scripture.

Ideally, money would be introduced wisely, and appropriately to correspond accurately with the total of All-Value available for consumption, and committed to be produced. Such a system would provide the optimum flexibility and freedom to expand the economy. A nation unable to live by its word, and hence needing the restrictions of an alternate value-redemption system for its money, will suffer the relative poverty that comes from needing to live under the restrictions of the letter of the Law, rather than by the freedom and prosperity available under the spirit of the Law.

T.