Happy Constitution Day!
THE POWER TO CREATE MONEY
“Congress shall have Power…to coin Money, regulate the Value thereof, and of foreign coin… No state…shall make anything but gold and silver coin a tender in payment of debts.” – – (U.S. Const. art. I, §8 cl. 5, U.S. Const. art. 1, § 10, cl. 2.)
This clause was NOT intended to give our government power over money. Its real purpose was to set a limit on government power. When the Constitution was written, there were many mints that produced coins and put a value on them. What the clause is telling the government is, sure, if you want to coin money and put a value on it, go right ahead, but you do not have an exclusive power. Go ahead and compete with every other mint. Over time, our government has ignored this part of the Constitution and seized for itself a monopoly on the creation of money. Also note, the Constitution prohibited states from legalizing anything but gold and silver coin for the payment of debt. This gave confirmation that the power to regulate debt was a state, not a federal, function. This was truly sound money. Our money has lost value ever since, but especially after the Federal Reserve Bank and the Income Tax were instituted in 1913.
According to the U.S. Inflation Calculator (www.usinflationcalculator.com), what cost $1.00 today would have only cost $.08 in 1920.
Our dollar has lost 92.3% of its value in 100 years!
That’s why our cost of living is too high!