“It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.” – Henry Ford, founder of the Ford Motor Company.
Understanding the monetary system is everything. If you understand how the monetary system functions, you understand why this is an issue of an ever expanding public, not private sector. This is a dry topic. It’s not something that interests people, but I strongly encourage people to force themselves to read this through.
The Monetary System:
In our modern currency system, debt originates from the public sector. The debt is brought into existence with the stroke of a pen, and is given to central banks before being auctioned to commercial banks and various other institutions which originate the debt as private loans such as car loans, mortgages, business loans and so on. The money turns over in the economy and is multiplied through fractional reserve banking.
In addition to this, there are cash reserves, coins and so on. Money printed on a press.
There are two broad categories in which this monetary loop is closed:
- Interest repayment
It is the labour of the people: the hard work, the innovation, the business investment and entrepreneurial talent, as well as the research and development which gives money its value. All that money represents, is a guarantee to repay someone at a future date.
There are three ways in which wealth can be confiscated.
- Inflation (currency debasement)
- Interest Repayments
In order to keep themselves plump, governments have expanded the global currency supply. And have broadly raised taxes while pushing debt in the form of housing loans, student loans, car loans etc. to extract increasing interest repayments.
If creditors cut governments loose, like they have done with Venezuela, the last option is to debase currency entirely, leading to hyperinflation.
I’ve specified before that some governments are trying to take their currencies 100% electronic. The obvious implication is if everyone is to be shepherded into electronic currency, there should be no need for income taxes at all. The loop would be sealed without the need for taxation to keep coins and notes in circulation.
I doubt, however, any governments will remove income taxes, even if they go 100% electronic.