Comment Re:Best money laundering vehicle (Score 1) 134
And to forestall the incoming ignorance, yes, I know about Article I, Section 10. It prohibits the *states* from issuing legal tender that is not gold or silver. The Federal government is under no such restriction.
Actually, it is, by virtue of the 10th Amendment, which just about everyone in the US Federal Government ignores these days.
The reasoning, which you will no doubt find specious, is as follows: The 10th Amendment explicitly states that if a right isn't *granted* to the US Federal government by the Constitution, then it does not have that right. Rather, it is reserved to the States or to the People.
The biggest problem that I see when people have arguments about the US Constitution here is that people tend to cherry-pick it to support their position, rather than considering it as a whole, as it should be, a practice that is now even the norm, with hordes of lawyers nit-picking this, that and the other thing and obtaining rulings in their favor based upon interpretations of the minuscule, extended far beyond such.
The design and intent of the Constitution and its Amendments as a whole, complete, living document was to ensure the most constraint possible upon the Federal government, while still allowing it to function on behalf of the entire Union and its citizens as they envisioned, and to accommodate change, as those that came later saw fit, which they created via the Amendment process. It actually worked quite well until people (Read: Lawyers, politicians and lobbyists, which I deem pretty much the same thing, only in different phases of their parasitic lives with regards to the Federal government) started emphasizing one section or phrase out of context to obtain the results they wanted.
Now, in your example, the states are explicitly forbidden from issuing legal tender that is not gold or silver. This means they they cannot create fiat money, but does NOT mean that they can't coin legal tender from gold or silver, should they so desire.
And, by simple logic, applying the 10th Amendment as it should be used, The Federal government, not having been granted the power to create fiat money, does not have the right to do so, as Article I, Section 8 states, in part: "To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures". Now, call me old-fashioned, but I'd hardly call paper money/fiat money or other forms of non-specie currency "coining".
The rationalizations that led to the belief that the Federal government can do so are detailed here: http://en.wikipedia.org/wiki/Legal_Tender_Cases
Of course, the deed is long since done, and will not be undone easily, especially now that Federal Reserve holds sway over the Federal government, and by extension, over all of the citizens of the US.
Now, you might ask "Why would the Founders explicitly state that the States cannot use anything other than gold or silver to create legal tender, yet not explicitly forbid the Federal government from doing the same?"
The answer is a simple one, and is a result of their fundamental philosophy with regards to a Federal government and the framing of the Constitution. Barring an explicit statement concerning legal tender and its creation with regards to the States, nothing would prohibit them from creating fiat money on their own, potentially leading to disastrous economic results. This view is further bolstered by the fact that, again, by the 10th Amendment, as the Federal government was never explicitly granted the right to create fiat money as legal tender, that right *would have* fallen to either the States or the People, again because of the 10th Amendment, so they sought to prevent that, knowing as they did, that the 10th Amendment would also prevent the Federal government from doing the same, as the Constitution only explicitly *grants" powers to the Federal government, and the Federal government should never gain power by implication, interpretation or assumption. So, in short, they didn't explicitly forbid the Federal government from creating fiat money as legal tender simply because there was no need: It wasn't a power granted to it in the first place.
Of course, this is the best of my quasi-informed opinion: I'm still reading and learning... and in computer nerd parlance? My impression of the Constitution and the Bill of Rights is this: The Constitution was the original codebase, and the Bill of Rights an upgrade to it, not a "bug fix", per se, but an enhancement to the original code, to clarify things, qualify them and refine their intent.
And in all honesty? As I read, re-read the Constitution and the Bill of Rights? Each time I am humbled, astonished and amazed at what our Founders wrought, so long ago. Were they perfect? Of course not. Was it perfect? No. Yet, working together, they created something beyond themselves, almost certainly in many cases even in the face of their own self-interests, selfishness and prejudices.
And they did so not just for themselves and those alive in their time, but for all of us that would come later, for all time.
Regards,
dj