The only question is how this situation was allowed to develop in a country presumably run for the benefit "of the people, by the people, and for the people." The answer is actually simple, once we free ourselves of the shackles imposed by the Great Defunct Economist, John Maynard Keynes.
By adhering to the letter rather than to the intent of the law, the federal government and the Federal Reserve have, between them, shifted the backing of the currency. The backing of the currency (or equity shares, or any other type of financial instrument) is what financial experts call the "underlying," with the additional word "asset" understood. The "underlying" of the currency has changed from "qualified industrial, commercial, and agricultural paper" (i.e., hard assets representing existing production and the present value of future production), to the federal government's ability to collect taxes. The currency has thereby shifted from being asset backed, to being debt backed.
This has had the expected effect. The value of the dollar has been falling for decades, prices have been rising, ownership of the means of production has become increasingly concentrated, basic industries have been leaving the country, and fewer and fewer people are able to make a decent income solely by selling their labor.
There are many other factors that have caused this situation, of course, but the virtual monopoly over the creation of money currently enjoyed by the federal government in unacknowledged alliance with the Federal Reserve has all but ensured that the great mass of people will be cut off from access to the means of acquiring and possessing private property. Further, freed from the necessity of having to tax in order to raise the money it needs, the federal government has acquired more and more power over the lives of American citizens, calling to mind the warning voiced by Pope Pius XI in 1931 in his "encyclical" Quadragesimo Anno ("On the Restructuring of the Social Order"), which itself echoed those issued by Henry C. Adams in his 1898 study, Public Debt: An Essay in the Science of Finance. As Pius XI declared,
105. In the first place, it is obvious that not only is wealth concentrated in our times but an immense power and despotic economic dictatorship is consolidated in the hands of a few, who often are not owners but only the trustees and managing directors of invested funds which they administer according to their own arbitrary will and pleasure.We don't need to be Catholic, or even believe in any God, gods, or goddesses to see the common sense of what Pius XI said and the dangers inherent in ignoring his warning. We need only substitute "State bureaucrats" for the "trustees and managing directors of invested funds which they administer according to their own arbitrary will and pleasure" to realize the danger of allowing the federal government — or any government, for that matter — to have such enormous control over money and credit, and thus complete mastery over the economic life's blood of every man, woman, and child in the country.
106. This dictatorship is being most forcibly exercised by those who, since they hold the money and completely control it, control credit also and rule the lending of money. Hence they regulate the flow, so to speak, of the life-blood whereby the entire economic system lives, and have so firmly in their grasp the soul, as it were, of economic life that no one can breathe against their will.
