First: To label any government monopoly as "non-profit" is misleading; it only means that they aren't incorporated, really, and have no investors to grovel to. Most government-run monopolies are behemoths that only passably serve customers if all profits are channeled into large parasitic private interests - most of which wouldn't exist if the government hadn't bloated them to gross extremes. Example: the military-industrial complex, the pharmaceutical industry, education, agriculture, energy, telecommunications, etc. etc.

Second: you seem to largely believe that I'm a "Bug". Let me clear the record: I'm not a gold bug. Tying any currency to a single commodity is disastrous, and the reason for a lot of our problems in the late 19th century. The silver act I was talking about? It put us on a de facto gold standard, and that is what ruined us. Multiple commodities - and I mean 50+ strong, stable commodities (think energy, or agricultural staples, or heavy metals - or all of the above) - would tie currency into the very web that it is supposed to represent, preventing shocks and fluctuations without apocalyptic economic conditions (in which case, we'd all have bigger problems to worry about anyway).

Third: I'd like to dispel some misconceptions: Glass-Steagall wasn't completely repealed, and those parts of it that were had absolutely nothing to do with the financial crisis.

Hoarding does one thing: it allows prices to rise. This only becomes a problem when suddenly someone is dumping things back into the market. However, this isn't a problem if you have a currency based on multiple, stable commodities. Hoarding would only cause a rise in a particular market (and a loss to the hoarders), while providing an advantage to competitors that use the rise of demand to elbow into the market. Hoarding doesn't make sense to any businessman. Anywhere.

Debt-to-asset ratios are nothing to the Fed. The expansion of their books? That's like writing a ton of zeroes at the end of their listed bonds, and for some reason they don't think this will create wild changes when those bonds spread around... sigh...

Systems only wipe out everyone in interdependent webs of finance. If you have your own backed currency with controls based on contracts with private interests, your currency is essentially tied to its own micro-economy, and truly earth-shattering effects would have to be felt across the board in order to shake it.

Centralized banking IS banking run by the biggest banks themselves. One big private bank whose actions are confidential, yet has complete control over the currency and securitizes the entire banking system. Since when did you think that anything tied to government was not run by the biggest private interests they influenced?

No, it's an argument against the government involving itself in even the most absurdly simple economic situations. If the government had not forced themselves by law to trade a certain ratio of silver for a certain ratio of gold (and vice versa), they wouldn't have gotten themselves into the horrific situations they did. The true value of any commodity backed currency would have been much more stable on a group of inter-dependent commodities. Instead, it was falsely stable and enforced by law to be tied to two expensive and relatively nonpractical metals whose fluctuating value crashed small banks. That's the kind of regulation I'm talking about.

A common retort: well, what about the years of wildcat banking before the National Bank Act? During this period, state regulations usually created situations in which fractional reserve banking was rather risky, and bank reserves were dropping before the the biggest panic of 1837; why? Because Western land could only be purchased with gold and silver, thus depriving many large East coast banks of their reserves. Banks were also required to hold a certain amount of bonds in addition to their reserves as securitization. (Ironically, state bonds were probably much of the reason these banks' currencies wouldn't keep their value.) Add this into a declining export cotton market, and suddenly there are runs on banks and the Panic of 1837.

Local banks would be far more stable and would probably be based off a franchise system with networked multiple-commodity-based currency systems. A very few currency systems would come out on top; their value would be determined by their stability.

The period most liberals point to when defending the institution of the Fed is the middle-to-end of the 19th century; i.e., the period in time around the railroad boom and the Long Depression. This was a time when the government was heavily financing big railroad companies such as the First Transcontinental Railroad; it was also a time when the government guaranteed a fixed exchange rate between gold and silver - utterly preposterous.

Two groups of events collided at the same time to form the worst economic depression the US had seen up until that point:

First, the government passed the Sherman Silver Purchase Act, in which they agreed to purchase wild amounts of silver in return for fiat currency - which backfired, due to the fact that anyone selling silver would take the silver tickets and immediately exchange them for their equivalent value in gold, completely depleting the government's gold supply. Suddenly, silver's value goes up and gold plummets; the government ends up on the wrong end of the scale.

Second, private railroad companies start wiping the floor with government subsidized railroads, and investors who sided on the government subsidization side of things go bankrupt. Banks are no longer able to receive aid due to missing gold and, with failing investments, go for broke.

Solution? Why, put more financial power into the hands of the government via a private bank monopoly, of course! No, not really; the real solution would have been to allow banks to issue their own private currencies. Government run currency is a racket.

Your "logical necessity" is taking place in an economic vacuum; that is, in the realm in which the owner of said property switching human labor for automation is the only existing party. The reality runs a little more like this:

Bob, a manufacturing guru in the widgets market, finds that if he invests around $60,000 for the research and resources and work to build a new machine, he can replace a couple hundred workers with a monster of a machine that will do their work for twice as long and twice as fast at half price. What does this mean? This means that Bob's capital has risen and the rate at which his company is now capable of creating widgets has risen considerably, while also meaning that he has to pay fewer workers to tend the machine and he can now lower prices for his widgets to account for his expanding supply. Cheaper goods are now entering the market, and more are able to afford Bob's goods while saving more money in the process.

"Saving" money in the market in general allows one of two things to happen: 1) the saver can now buy things he was not able to before, meaning that more demand is created and therefore more labor is used, or 2) the money is saved, placing more money on the positive side in bank's balance sheets, meaning more investment and more spending of money - more labor, in other words.

Meanwhile, Steve, a laborer laid off by Bob, is finding that he is in an increasingly large group of individuals in the unskilled labor field, bummed out in unemployment and waiting to find work. He finds an ad in the paper advertised by Frank. Frank has decided that he would absolutely love to take advantage of the high supply of cheap labor, and starts a business making fine widgets to compete with Bob. Now that the widget market has expanded, Frank can now find a niche and a customer base without relying on nonexistent demand - demand now created by the lowering of prices on the market. Steve decides that it wouldn't be overly ironic for him to purchase a widget from Bob's company with money paid by Frank.

The world turns.

There's a significant difference between supporting a system that involves paying for services you profit by (i.e., protection of private property by local police forces) and paying for services by which you do not profit (i.e., for education for other people's children when you are, yourself, without children). This is especially the case when even the parents can safely assume that their tax money isn't going to a good home, since the system it feeds is so bloated and inefficient that more money translates into little to no to negative improvement for their children's education.

The real crime is that parents cannot choose not to pay for these services in favor of spending said tax money on alternative, privately run schools (whose green-to-grade ratio is far higher); they are forced to pay for public school AND private school were they to choose to do so. The perfect system would involve an opt-out option, and opt-in eligibility would either be by choice or by the parents of children sending kids to said public school. Tighter budgets - controlled by demand, in turn based on productivity, in a competitive environment - would give schools the motivation to actually produce instead of throwing more money at useless programs.

I meant that someone from that time period would be shocked that paper was not representative of or exchangeable for either gold or silver, as was the case back then. Bimetallism was what kept us going through the industrial revolution. Violent currency instability occurred when the government instated the Coinage Act of 1873, which demonetized silver (and put us on one currency that had no competition). When the government later issued the Sherman Silver Purchase Act - requiring the government to buy silver at monthly quotas for double the market price - the currency market was warped even more (since the government was required by this act to buy silver, those selling silver to the government took the tickets they were given in return and traded them for gold - the circus that ensued caused the Panic of 1893). Ultimately, even though the ratio of value was set by the government between the two metals, the availability of both options allowed currency instability to cause less of a volatile environment, and recovery tended to be quick.

"... a disproportionate income tax? By the Federal government?! What'll they have next? A forced monopoly on currency?"

MFW Ghana, Eritrea are amongst the fastest growing real GDPs in the world. "Quit fighting"? "Join the modern world"? Most of the stunted growth everyone is referring to here is due to an overabundance of liquid assets - food, money, medication - being reappropriated by force and placed into the hands of oppressors; the individuals stuck in these sustained power vacuums can't help but face the problems of the here and now. Their only thought is to see the next sunrise. While in that state, they have no luxury to educate themselves or produce goods to compete, let alone innovate. Trade the subsidies and all forms of monetary aid for micro-loaning schemes meant to support individuals and individual small businesses, and you will give locals an alternative to the force-driven monopoly that is sustainable and promotes growth. Starve the cancerous militia and the people will have the motivation and the inspiration to provide alternatives.