Most people don't understand the world's monetary system or banking.  According to Henry Ford that's probably a good thing, since he believed that if they were made to understand it there would be a revolution the following morning.  He was probably right, but let's lift the veil and see what's under there anyway.  

Most people like to think of a bank as a warehouse for money.  They like to think of it as a place where they deposit money and then assume that the money is stored in a secure vault so that they could, if they so chose, go to the bank and ask for the money in cash and the bank would be obliged to give it to them.  That's the way banking should work.  It is not the the way, however, that it does work — not by a long shot.

Imagine that you have several very valuable Persian carpets that you need to store.  You might look for a reputable warehouse facility with good security and a climate controlled environment where you could store them.  If you return to the warehouse some time later to get your rugs, you would rightly be alarmed if the proprietor told you that the rugs are no longer there because he leased them out to a hotel for the rest of the year.  If that were to happen, you would call the police immediately and have the warehouse owner arrested.  No doubt he would be charged with either theft or embezzlement.   He would be tried and  quite possibly sent to prison.  In addition,  you would probably file suit to try to recover your carpets or at least their value from his business or personal assets. I don't suspect that many would argue that it should be otherwise.  The area of law that covers this type of relationship is called a bailment. You as the owner of the carpets are the bailor and the warehouseman, in this case, is referred to as the bailee. This contractual relationship transfers possession of the carpets, but not the ownership of them. Further, under ordinary circumstances, the bailee is not entitled to use the goods that are in his possession.  Yet when it comes to depositing your money in a bank, things do not work this way — far from it.

Unlike a warehouse, where you still hold title to the goods you have stored and those items are expected to be delivered into your possession upon request, banks are not governed by the same laws.  The money that you deposit into a bank becomes an asset of the bank. The bank is then considered to owe you the amount that you deposited, as though you made a loan to the bank.  By law, banks are only required to hold in reserve a fraction of the money deposited and are free to loan out the rest. This system is called "fractional reserve" banking and is now common throughout the world.

 The amount of money that has been deposited in a bank, plus the amount they have on their books as accounts receivable is called their Net Transaction Accounts (NTA).  The percentage of the NTA that must be held in reserve depends on the amount of money that the bank has on its books.  For banks that have NTA values of from $0 to $9.3 million dollars they are allowed to hold 0% of the money in reserve.  Banks that have over $9.3 million but less than $43.9 million must hold 3% of their depositors' money in reserve.  Banks that have over $43.9 million must hold 10% of their depositors' money in reserve.  Even these reserve funds are not kept in the bank.  A bank's reserves are actually a checking account that is kept with the Federal Reserve.  When compared with the laws that govern warehousing and pawn brokers, the banks actions  amount can be viewed as legalized embezzlement, on the one hand,  or the moral equivalent of counterfeiting on the other. 

The underlying theory behind this legalized embezzlement scheme is that not all of their depositors are likely to show up at the same time and ask for their money.  Normally, this is the case, which is why they continue getting away with it year after year.  However, when large numbers of  depositors do show up and ask for their money, it's called a "run on the bank" and the bank will either close its doors to try to avoid paying money out, or the bank will quickly fail, since only a small fraction of the money deposited in the bank is actually available.  The rest of the money has been loaned out to borrowers.  In fact, banks generally try to loan out as much as they are legally allowed to loan and when they can loan no more, the bank is said to be "loaned up." 

But the trail doesn't end there.  When someone borrows money from a bank they are generally issued a check which they then deposit in their own bank.  That money goes onto the books of that bank as an asset and, assuming it is a large bank, it may in turn loan out 90% (remember that 10% must be held in reserve for large banks) of the amount deposited from the first loan. Then that money is loaned and deposited in another bank and the cycle continues until the amount has been carved down to nothing.

While this pyramid embezzling scheme would be bad enough in its own right, recall that I likened it to counterfeiting as well.  Let's look at why this is so.  It turns out that about $9,000 worth of loans (if we follow the money trail through a series of banks) will be granted for each $1,000 deposited.  So where did the other $8,000.00 come from?  It didn't come from anywhere, it is money created, literally, from thin air.  The act of granting the loan creates the money, which is, in fact, just an entry in a banks ledger.  Creating money from thin air, does however increase the number of dollars in circulation. When you hear the phrase "increasing the money supply," this is what is meant.  When you increase the money supply, you create inflation, which appears to the common person as rising prices, but is, in reality, loss of value in each individual unit of money. 

Money, as it turns out, is simply a commodity like any other and when the supply of anything, whether it is  wheat, cotton, silver or money  is increased, its value is reduced.  The only difference is that when you reduce the price of other commodities, it is a boon to the consumer and serves to raise the standard of living.  When you devalue the dollar through inflation, it is a curse  that appears to be rising costs of literally everything and consequently lowers the standard of living.

In summary, through fractional reserve banking, banks are legally allowed to embezzle the money of their depositors, to lend that money to others in order to profit themselves, to create money in a way that is the moral equivalent of counterfeiting, and to increase inflation, thereby lowering the standard of living for all Americans. 

The practice of fractional banking should be outlawed, once and for all, and banks should be required to maintain 100% of their depositors' money in reserve.  They could earn a  profit by charging storage fees,  exactly as the warehouseman does and by selling other products such as checks. Bank runs would then be unnecessary, since people would be certain that their money could be requested on demand,  bank failures would cease, the money supply would not be increased through the practice of loaning up, and the resulting inflation that it causes would cease.

While fractional banking is morally equivelant to counterfeiting, ordinary banks do not literally print dollar bills.  For that you need the biggest of all banks, the Federal Reserve.  That will be the topic of a future article.

Today, Christina Romer, the top White House economic advisor, said that the effects of the stimulus bill were tapering off.   She went on to say that by the fourth quarter of 2009 the effects of the stimulus bill will no longer be  contributing to economic growth.  So where are the jobs? 

It's hard to say the words economist and progressive in the same sentence without a chuckle, and yet there are thousands of them being turned out by universities across the nation, just like the ones that Dr. Romer was training at the University of California, Berkeley.  If one listens to what progressives try to pass off as economics, one might believe that the recently enacted Stimulus legislation could create jobs — even if they are government jobs.  The truth is, however, that there can never be a net growth of jobs nationwide when created by means of government money.  Not in the past.  Not now.  Not ever.  The reasons are actually pretty simple and don't require an advanced degree in economics from Berkeley to comprehend. Yet they have been passing this fallacy of government job creation off on the American people for generations — and getting away with it.  It's time that we get a little wiser.

First, and most important, the government has no money that it has not taken from someone else (if you're thinking well, they can borrow or print it, we'll get to that in a moment.) The principle method for government acquisition of money is through taxation.   When they take money from one group of people to create government jobs for another group of people, those that were taxed have less money to spend and the prudent don't borrow money to buy things on credit.  Instead they  buy fewer clothes, fewer washing machines, fewer houses, fewer cars, and  less food.  This means that fewer people will be hired to make clothes,build  washing machines, houses and cars, and farmers will not make as much money from growing crops.  The jobs created by the government are offset by the jobs lost or not created in other sectors of the economy resulting in zero net growth in jobs at best. All that has been accomplished is that one group of people has been deprived of the use of their money, certain sectors of the economy fail to grow,  while another group benefits by receiving the money and other sectors of the economy grow.  The net benefit is like cutting the end off of a blanket and sewing it back on to the other end.   But wait, isn't that what's called redistribution of wealth?  Yes it is.  That's what the President told Joe the Plumber he wanted to do and that's exactly what he's doing.  But "growing the economy from the bottom up," as he puts it, makes as much sense as growing corn from the top down.  It has not worked, can not work and will never work except in the topsy turvy minds of progressives.  Yet having failed miserably the first time,  the odds are the Democrats will try to generate support for doubling down on this  fool's bet.

I told you I'd come back to the issue of the government borrowing or printing money to create jobs.  Borrowing or creating money for government job creation works even less well than taxation.  If the government borrows money from somewhere, say China, the American people will still have to pay the money back through taxation, but this time with a nice bit of interest tacked on to it.  The interest on the debt for the fiscal year ending in October 2009 is $383,363,826,680.60 — but who's counting. The good news is that this can't go on for much longer.  The bad new is that the reason is that United States is quickly becoming a subprime borrower and it's going to be hard to find lenders as foolish as Fannie Mae and Freddy Mac.  

The other method is printing the money (they don't actually have to print it, it's just an entry in an accounting ledger.)  This is an even more insidious form of taxation, but one that has worked well for the government since 1913 when the Federal Reserve was created. While it is truly sinister and evil beyond belief, one must give them high marks for having come up with a con that has lasted one hundred years without the public ever catching on.  When the  Fed creates "liquidity" (creates money out of thin air to give to the government through bonds) it pushes more money into the system (increases the money supply) , the result is that each individual dollar is worth less than it was before, but people don't see the value of the dollar go down, they perceive what appears to be the cost of products going up.  It doesn't matter if the products are houses, cars, milk, gold or oil everything looks like it's getting more expensive.  Wait, here's the beauty of the con — the people don't blame the government that caused the problem.  They blame the producers of the products for  raising prices and being greedy profit mongers.  Then the government is able to hold hearings to regulate them and raise their taxes yet further with full public support.  Now is that slick or what?  The effect on the economy is, however, recession and massive layoffs, but that's not what really counts in Washington.

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

Read the Small Print

Pull out your billfold and take a look at a bill of any denomination and notice inscribed across the top the words "Federal Reserve Note." You've seen these words almost daily throughout your lifetime, but only a handful of Americans actually understand what the Federal Reserve is and what it is that it does. Most assume the Federal Reserve is a branch of the government, perhaps related to the Treasury Department in some way. That assumption is far from the truth. While the subject is far too complex to cover in this post, what Americans need to understand and be concerned about is that this agency (actually a legalized banking cartel), is not a branch of the government, and yet they have the power to create money from thin air and then infuse that money into our economy in extremely large amounts in almost utter secrecy, with no oversight and only limited hindsight.

Right now the Federal Reserve is audit exempt in the areas of monetary policy, foreign transactions, and Federal Market Committee operations. Questions like where has all the TARP money gone can remain unanswered — legally. When logic dictates that Americans should have the right to "follow the money" that ultimately affects the nation's economy, when it comes to the Federal Reserve, we simply cannot. There are trillions of American dollars involved here, controlled by a select few in almost complete secrecy and, according to them, for purposes that you have no business knowing about. Something is very wrong with that, and because most people are not attuned to what the Fed is, much less what it does, this status quo operation has operated under cloak for nearly a century.

Since the Federal Reserve has operated unsupervised for nearly 100 years, things must be going pretty well; right? Wrong. The American dollar has lost over 95% of its value since the Federal Reserve began in 1913, and right now they're creating money in unprecedented amounts. Some say there are about $9 trillion in Fed transactions, but they admit to $2 trillion. Believe it or not, the Fed is protected by law from disclosing this $7 trillion discrepancy.

Federal Reserve Transparency: Bills H.R. 1207 & S. 604

In an effort to introduce long overdue transparency to the Federal Reserve, there are two bills recently introduced that would require a full-scale audit of the Fed by the end of 2010. These bills were each read twice in their respective House and Senate chambers and are now shelved in committees taking backseat to controversial health care and cap-and-trade legislation. The House version, called the Federal Reserve Transparency Act of 2009, H.R. 1207, is sponsored by Texas Representative Ron Paul (R) and currently has 282 co-sponsors. This Bill now sits in the Committee on Financial Services, chaired by Barney Frank, since February 26, 2009. There are enough co-sponsors to pass this bill in the House, but it will need to get past Barney Frank and then be allowed by Nancy Pelosi, who is not in support of a transparent Fed. She alone can stop this vote from occurring even with over 60% of the House wanting the Bill to pass. The Senate version, The Federal Reserve Sunshine Act of 2009, S.604, is sponsored by Vermont Senator Bernard Sanders(I), and currently has 23 co-sponsors. That Bill is now in the Committee on Banking, Housing, and Urban Affairs, chaired by Chris Dodd, on March 16, 2009.

These are brief, easily-readable one-page bills that should be receiving enthusiastic ayes from the Democrats, whose 2008 campaign mantra was all about transparency. Not so. Even with the tremendous amount of support these bills have received, they remain sidelined in committee. To get these bills to the floor for a vote, they need to get through these committees first. In the House Committee on Financial Services, all 29 Republican representatives sitting on this committee support H.R. 1207 and have signed on as co-sponsors, while only 10 of the 42 Democrats in this committee have done the same. Barney Frank, the Chair of the Committee on Financial Services, so far is not one of the bill's cosponsors. There are seven Blue Dog Democrats currently sitting on the Financial Services Committee, but only three of them are showing support by cosponsoring the bill. Joe Baca (CA), Joe Donnelly (IN), Charles, Wilson (OH), and Dennis Moore (KS) are the four Blue Dog Democrats that have NOT co-sponsored the bill. Since Blue Dogs are supposed to be moderate, especially on fiscal issues, you may want to call these people and ask them why they have not supported this bill along with their fellow committee Blue Dogs.  

Below is a list of Co-sponsors of HR1207, the House Bill, and S604, the Senate Bill. This list is current through 8/2/09. If your representative or senator is not on this list, call them right away and ask that they become a co-sponsor for these bills seeking a Fed audit or ask them to explain why they will not. Visit the websites for the Committee on Financial Services and the Committee on Banking, Housing, and Urban Affairs and contact them to ask when the bills will return to the House and Senate for a vote. If they have since become a co-sponsor but are not yet on this list, let them know you appreciate their support for a transparent Fed.

Who's Voting How – Read. Remember. Vote.

HR 1207 Co-Sponsors (as of 8/2/2009)

Rep Abercrombie, Neil [HI-1] – 2/26/2009
Rep Aderholt, Robert B. [AL-4] – 5/6/2009
Rep Adler, John H. [NJ-3] – 5/6/2009
Rep Akin, W. Todd [MO-2] – 3/19/2009
Rep Alexander, Rodney [LA-5] – 3/10/2009
Rep Altmire, Jason [PA-4] – 5/20/2009
Rep Austria, Steve [OH-7] – 5/6/2009
Rep Bachmann, Michele [MN-6] – 2/26/2009
Rep Bachus, Spencer [AL-6] – 4/29/2009
Rep Baird, Brian [WA-3] – 7/10/2009
Rep Baldwin, Tammy [WI-2] – 4/21/2009
Rep Barrett, J. Gresham [SC-3] – 4/28/2009
Rep Barrow, John [GA-12] – 5/12/2009
Rep Bartlett, Roscoe G. [MD-6] – 2/26/2009
Rep Barton, Joe [TX-6] – 5/4/2009
Rep Berkley, Shelley [NV-1] – 5/21/2009
Rep Berry, Marion [AR-1] – 5/20/2009
Rep Biggert, Judy [IL-13] – 4/28/2009
Rep Bilbray, Brian P. [CA-50] – 4/21/2009
Rep Bilirakis, Gus M. [FL-9] – 5/4/2009
Rep Bishop, Rob [UT-1] – 4/21/2009
Rep Bishop, Timothy H. [NY-1] – 7/10/2009
Rep Blackburn, Marsha [TN-7] – 3/16/2009
Rep Blunt, Roy [MO-7] – 3/24/2009
Rep Boccieri, John A. [OH-16] – 7/28/2009
Rep Boehner, John A. [OH-8] – 6/10/2009
Rep Bonner, Jo [AL-1] – 6/9/2009
Rep Bono Mack, Mary [CA-45] – 4/29/2009
Rep Boozman, John [AR-3] – 5/7/2009
Rep Boswell, Leonard L. [IA-3] – 6/9/2009
Rep Boucher, Rick [VA-9] – 7/20/2009
Rep Boustany, Charles W., Jr. [LA-7] – 5/13/2009
Rep Boyd, Allen [FL-2] – 7/14/2009
Rep Brady, Kevin [TX-8] – 4/22/2009
Rep Braley, Bruce L. [IA-1] – 6/11/2009
Rep Bright, Bobby [AL-2] – 6/11/2009
Rep Broun, Paul C. [GA-10] – 2/26/2009
Rep Brown, Corrine [FL-3] – 6/11/2009
Rep Brown, Henry E., Jr. [SC-1] – 4/28/2009
Rep Brown-Waite, Ginny [FL-5] – 5/20/2009
Rep Buchanan, Vern [FL-13] – 3/17/2009
Rep Burgess, Michael C. [TX-26] – 3/19/2009
Rep Burton, Dan [IN-5] – 2/26/2009
Rep Buyer, Steve [IN-4] – 4/30/2009
Rep Calvert, Ken [CA-44] – 4/29/2009
Rep Camp, Dave [MI-4] – 6/18/2009
Rep Campbell, John [CA-48] – 5/4/2009
Rep Cantor, Eric [VA-7] – 6/23/2009
Rep Cao, Anh “Joseph” [LA-2] – 6/11/2009
Rep Capito, Shelley Moore [WV-2] – 4/1/2009
Rep Carney, Christopher P. [PA-10] – 6/9/2009
Rep Carter, John R. [TX-31] – 3/31/2009
Rep Cassidy, Bill [LA-6] – 5/4/2009
Rep Castle, Michael N. [DE] – 3/17/2009
Rep Chaffetz, Jason [UT-3] – 3/6/2009
Rep Chandler, Ben [KY-6] – 7/7/2009
Rep Childers, Travis [MS-1] – 6/9/2009
Rep Coble, Howard [NC-6] – 6/11/2009
Rep Coffman, Mike [CO-6] – 6/16/2009
Rep Cole, Tom [OK-4] – 4/21/2009
Rep Conaway, K. Michael [TX-11] – 5/7/2009
Rep Conyers, John, Jr. [MI-14] – 6/23/2009
Rep Courtney, Joe [CT-2] – 7/8/2009
Rep Crenshaw, Ander [FL-4] – 5/4/2009
Rep Culberson, John Abney [TX-7] – 3/26/2009
Rep Dahlkemper, Kathleen A. [PA-3] – 7/22/2009
Rep Davis, Danny K. [IL-7] – 6/26/2009
Rep Davis, Geoff [KY-4] – 5/6/2009
Rep Deal, Nathan [GA-9] – 3/23/2009
Rep DeFazio, Peter A. [OR-4] – 3/9/2009
Rep Dent, Charles W. [PA-15] – 5/6/2009
Rep Diaz-Balart, Lincoln [FL-21] – 7/10/2009
Rep Diaz-Balart, Mario [FL-25] – 6/18/2009
Rep Doggett, Lloyd [TX-25] – 4/21/2009
Rep Dreier, David [CA-26] – 6/10/2009
Rep Duncan, John J., Jr. [TN-2] – 3/6/2009
Rep Edwards, Chet [TX-17] – 6/16/2009
Rep Edwards, Donna F. [MD-4] – 6/11/2009
Rep Ehlers, Vernon J. [MI-3] – 4/21/2009
Rep Emerson, Jo Ann [MO-8] – 7/15/2009
Rep Fallin, Mary [OK-5] – 4/2/2009
Rep Farr, Sam [CA-17] – 7/8/2009
Rep Filner, Bob [CA-51] – 7/28/2009
Rep Flake, Jeff [AZ-6] – 5/11/2009
Rep Fleming, John [LA-4] – 3/18/2009
Rep Forbes, J. Randy [VA-4] – 5/20/2009
Rep Fortenberry, Jeff [NE-1] – 5/12/2009
Rep Foxx, Virginia [NC-5] – 3/10/2009
Rep Franks, Trent [AZ-2] – 3/23/2009
Rep Frelinghuysen, Rodney P. [NJ-11] – 6/3/2009
Rep Fudge, Marcia L. [OH-11] – 7/9/2009
Rep Gallegly, Elton [CA-24] – 7/7/2009
Rep Garrett, Scott [NJ-5] – 3/5/2009
Rep Gerlach, Jim [PA-6] – 5/11/2009
Rep Giffords, Gabrielle [AZ-8] – 6/16/2009
Rep Gingrey, Phil [GA-11] – 3/30/2009
Rep Gohmert, Louie [TX-1] – 4/23/2009
Rep Goodlatte, Bob [VA-6] – 4/28/2009
Rep Granger, Kay [TX-12] – 4/28/2009
Rep Graves, Sam [MO-6] – 4/22/2009
Rep Grayson, Alan [FL-8] – 3/11/2009
Rep Griffith, Parker [AL-5] – 6/16/2009
Rep Grijalva, Raul M. [AZ-7] – 6/3/2009
Rep Guthrie, Brett [KY-2] – 5/7/2009
Rep Hall, Ralph M. [TX-4] – 4/29/2009
Rep Halvorson, Deborah L. [IL-11] – 6/3/2009
Rep Hare, Phil [IL-17] – 5/11/2009
Rep Harman, Jane [CA-36] – 7/7/2009
Rep Harper, Gregg [MS-3] – 5/11/2009
Rep Hastings, Doc [WA-4] – 5/11/2009
Rep Heller, Dean [NV-2] – 3/6/2009
Rep Hensarling, Jeb [TX-5] – 5/4/2009
Rep Herger, Wally [CA-2] – 4/21/2009
Rep Herseth Sandlin, Stephanie [SD] – 5/6/2009
Rep Hinchey, Maurice D. [NY-22] – 6/2/2009
Rep Hirono, Mazie K. [HI-2] – 7/8/2009
Rep Hoekstra, Peter [MI-2] – 4/28/2009
Rep Holden, Tim [PA-17] – 6/4/2009
Rep Hunter, Duncan D. [CA-52] – 5/13/2009
Rep Inglis, Bob [SC-4] – 4/23/2009
Rep Inslee, Jay [WA-1] – 5/12/2009
Rep Issa, Darrell E. [CA-49] – 6/16/2009
Rep Jackson, Jesse L., Jr. [IL-2] – 7/30/2009
Rep Jenkins, Lynn [KS-2] – 4/23/2009
Rep Johnson, Henry C. “Hank,” Jr. [GA-4] – 6/9/2009
Rep Johnson, Sam [TX-3] – 4/22/2009
Rep Johnson, Timothy V. [IL-15] – 4/23/2009
Rep Jones, Walter B., Jr. [NC-3] – 2/26/2009
Rep Jordan, Jim [OH-4] – 6/2/2009
Rep Kagen, Steve [WI-8] – 2/26/2009
Rep Kaptur, Marcy [OH-9] – 4/23/2009
Rep King, Peter T. [NY-3] – 6/4/2009
Rep King, Steve [IA-5] – 6/11/2009
Rep Kingston, Jack [GA-1] – 3/6/2009
Rep Kirk, Mark Steven [IL-10] – 7/15/2009
Rep Kirkpatrick, Ann [AZ-1] – 7/14/2009
Rep Kline, John [MN-2] – 4/29/2009
Rep Kosmas, Suzanne M. [FL-24] – 6/17/2009
Rep Kratovil, Frank, Jr. [MD-1] – 6/4/2009
Rep Kucinich, Dennis J. [OH-10] – 6/11/2009
Rep Lamborn, Doug [CO-5] – 4/21/2009
Rep Lance, Leonard [NJ-7] – 5/11/2009
Rep Latham, Tom [IA-4] – 4/21/2009
Rep LaTourette, Steven C. [OH-14] – 4/28/2009
Rep Latta, Robert E. [OH-5] – 5/20/2009
Rep Lee, Christopher J. [NY-26] – 6/10/2009
Rep Lewis, Jerry [CA-41] – 6/24/2009
Rep Linder, John [GA-7] – 5/6/2009
Rep Lipinski, Daniel [IL-3] – 6/4/2009
Rep LoBiondo, Frank A. [NJ-2] – 5/4/2009
Rep Loebsack, David [IA-2] – 6/10/2009
Rep Lofgren, Zoe [CA-16] – 7/7/2009
Rep Lucas, Frank D. [OK-3] – 4/21/2009
Rep Luetkemeyer, Blaine [MO-9] – 4/21/2009
Rep Lummis, Cynthia M. [WY] – 3/19/2009
Rep Lungren, Daniel E. [CA-3] – 5/7/2009
Rep Mack, Connie [FL-14] – 5/12/2009
Rep Maffei, Daniel B. [NY-25] – 5/12/2009
Rep Manzullo, Donald A. [IL-16] – 4/21/2009
Rep Marchant, Kenny [TX-24] – 3/11/2009
Rep Markey, Betsy [CO-4] – 6/25/2009
Rep Massa, Eric J. J. [NY-29] – 4/22/2009
Rep McCarthy, Kevin [CA-22] – 5/4/2009
Rep McCaul, Michael T. [TX-10] – 4/21/2009
Rep McClintock, Tom [CA-4] – 3/6/2009
Rep McCotter, Thaddeus G. [MI-11] – 3/19/2009
Rep McDermott, Jim [WA-7] – 4/29/2009
Rep McGovern, James P. [MA-3] – 6/10/2009
Rep McHenry, Patrick T. [NC-10] – 4/30/2009
Rep McHugh, John M. [NY-23] – 5/4/2009
Rep McIntyre, Mike [NC-7] – 6/10/2009
Rep McKeon, Howard P. “Buck” [CA-25] – 6/11/2009
Rep McMorris Rodgers, Cathy [WA-5] – 5/4/2009
Rep Melancon, Charlie [LA-3] – 7/10/2009
Rep Mica, John L. [FL-7] – 5/12/2009
Rep Michaud, Michael H. [ME-2] – 5/7/2009
Rep Miller, Candice S. [MI-10] – 4/28/2009
Rep Miller, Gary G. [CA-42] – 6/10/2009
Rep Miller, Jeff [FL-1] – 3/24/2009
Rep Minnick, Walter [ID-1] – 5/13/2009
Rep Mitchell, Harry E. [AZ-5] – 6/9/2009
Rep Moran, Jerry [KS-1] – 5/4/2009
Rep Murphy, Christopher S. [CT-5] – 7/7/2009
Rep Murphy, Patrick J. [PA-8] – 6/9/2009
Rep Murphy, Scott [NY-20] – 7/9/2009
Rep Murphy, Tim [PA-18] – 4/29/2009
Rep Myrick, Sue Wilkins [NC-9] – 4/28/2009
Rep Neugebauer, Randy [TX-19] – 4/30/2009
Rep Nunes, Devin [CA-21] – 6/12/2009
Rep Oberstar, James L. [MN-8] – 7/31/2009
Rep Olson, Pete [TX-22] – 4/21/2009
Rep Ortiz, Solomon P. [TX-27] – 5/14/2009
Rep Pascrell, Bill, Jr. [NJ-8] – 6/9/2009
Rep Pastor, Ed [AZ-4] – 5/20/2009
Rep Paulsen, Erik [MN-3] – 3/30/2009
Rep Payne, Donald M. [NJ-10] – 7/30/2009
Rep Pence, Mike [IN-6] – 4/21/2009
Rep Perlmutter, Ed [CO-7] – 6/10/2009
Rep Perriello, Thomas S.P. [VA-5] – 5/13/2009
Rep Peterson, Collin C. [MN-7] – 3/19/2009
Rep Petri, Thomas E. [WI-6] – 3/10/2009
Rep Pitts, Joseph R. [PA-16] – 4/28/2009
Rep Platts, Todd Russell [PA-19] – 3/19/2009
Rep Poe, Ted [TX-2] – 2/26/2009
Rep Polis, Jared [CO-2] – 6/11/2009
Rep Posey, Bill [FL-15] – 2/26/2009
Rep Price, Tom [GA-6] – 3/10/2009
Rep Putnam, Adam H. [FL-12] – 4/28/2009
Rep Radanovich, George [CA-19] – 5/6/2009
Rep Rehberg, Denny [MT] – 2/26/2009
Rep Reichert, David G. [WA-8] – 5/20/2009
Rep Richardson, Laura [CA-37] – 7/28/2009
Rep Roe, David P. [TN-1] – 4/21/2009
Rep Rogers, Harold [KY-5] – 7/14/2009
Rep Rogers, Mike D. [AL-3] – 5/13/2009
Rep Rogers, Mike J. [MI-8] – 5/20/2009
Rep Rohrabacher, Dana [CA-46] – 3/6/2009
Rep Rooney, Thomas J. [FL-16] – 4/22/2009
Rep Ros-Lehtinen, Ileana [FL-18] – 4/28/2009
Rep Roskam, Peter J. [IL-6] – 6/2/2009
Rep Ross, Mike [AR-4] – 5/21/2009
Rep Rothman, Steven R. [NJ-9] – 6/18/2009
Rep Royce, Edward R. [CA-40] – 5/12/2009
Rep Ryan, Paul [WI-1] – 5/14/2009
Rep Salazar, John T. [CO-3] – 7/15/2009
Rep Sarbanes, John P. [MD-3] – 6/15/2009
Rep Scalise, Steve [LA-1] – 5/20/2009
Rep Schakowsky, Janice D. [IL-9] – 5/6/2009
Rep Schauer, Mark H. [MI-7] – 5/20/2009
Rep Schiff, Adam B. [CA-29] – 7/14/2009
Rep Schmidt, Jean [OH-2] – 6/11/2009
Rep Schock, Aaron [IL-18] – 5/6/2009
Rep Scott, David [GA-13] – 7/20/2009
Rep Sensenbrenner, F. James, Jr. [WI-5] – 5/7/2009
Rep Sessions, Pete [TX-32] – 3/23/2009
Rep Shadegg, John B. [AZ-3] – 5/7/2009
Rep Shea-Porter, Carol [NH-1] – 6/9/2009
Rep Sherman, Brad [CA-27] – 6/23/2009
Rep Shimkus, John [IL-19] – 4/22/2009
Rep Shuler, Heath [NC-11] – 6/12/2009
Rep Shuster, Bill [PA-9] – 5/7/2009
Rep Simpson, Michael K. [ID-2] – 4/28/2009
Rep Slaughter, Louise McIntosh [NY-28] – 6/17/2009
Rep Smith, Adam [WA-9] – 4/22/2009
Rep Smith, Adrian [NE-3] – 4/28/2009
Rep Smith, Christopher H. [NJ-4] – 6/15/2009
Rep Smith, Lamar [TX-21] – 4/2/2009
Rep Snyder, Vic [AR-2] – 6/23/2009
Rep Souder, Mark E. [IN-3] – 6/16/2009
Rep Space, Zachary T. [OH-18] – 6/23/2009
Rep Speier, Jackie [CA-12] – 6/11/2009
Rep Stark, Fortney Pete [CA-13] – 3/26/2009
Rep Stearns, Cliff [FL-6] – 3/6/2009
Rep Sullivan, John [OK-1] – 7/8/2009
Rep Taylor, Gene [MS-4] – 3/6/2009
Rep Teague, Harry [NM-2] – 6/12/2009
Rep Terry, Lee [NE-2] – 3/30/2009
Rep Thompson, Bennie G. [MS-2] – 7/17/2009
Rep Thompson, Glenn [PA-5] – 4/22/2009
Rep Thornberry, Mac [TX-13] – 5/21/2009
Rep Tiahrt, Todd [KS-4] – 4/28/2009
Rep Tiberi, Patrick J. [OH-12] – 4/28/2009
Rep Tierney, John F. [MA-6] – 7/20/2009
Rep Titus, Dina [NV-3] – 7/14/2009
Rep Tonko, Paul D. [NY-21] – 6/9/2009
Rep Turner, Michael R. [OH-3] – 5/13/2009
Rep Upton, Fred [MI-6] – 4/29/2009
Rep Visclosky, Peter J. [IN-1] – 7/20/2009
Rep Walden, Greg [OR-2] – 5/4/2009
Rep Walz, Timothy J. [MN-1] – 5/7/2009
Rep Wamp, Zach [TN-3] – 3/16/2009
Rep Welch, Peter [VT] – 5/21/2009
Rep Westmoreland, Lynn A. [GA-3] – 4/2/2009
Rep Whitfield, Ed [KY-1] – 5/14/2009
Rep Wilson, Joe [SC-2] – 4/29/2009
Rep Wittman, Robert J. [VA-1] – 4/1/2009
Rep Wolf, Frank R. [VA-10] – 6/11/2009
Rep Woolsey, Lynn C. [CA-6] – 2/26/2009
Rep Wu, David [OR-1] – 7/13/2009
Rep Yarmuth, John A. [KY-3] – 7/14/2009
Rep Young, C.W. Bill [FL-10] – 6/3/2009
Rep Young, Don [AK] – 3/6/2009

S 604 Co-Sponsors (as of 8/4/2009)

Sen Barrasso, John [WY] – 7/15/2009
Sen Bennett, Robert F. [UT] – 7/15/2009
Sen Brownback, Sam [KS] – 7/8/2009
Sen Burr, Richard [NC] – 7/9/2009
Sen Cardin, Benjamin L. [MD] – 7/28/2009
Sen Chambliss, Saxby [GA] – 7/8/2009
Sen Coburn, Tom [OK] – 7/20/2009
Sen Cornyn, John [TX] – 7/20/2009
Sen Crapo, Mike [ID] – 6/25/2009
Sen DeMint, Jim [SC] – 6/11/2009
Sen Feingold, Russell D. [WI] – 7/15/2009
Sen Graham, Lindsey [SC] – 7/24/2009
Sen Grassley, Chuck [IA] – 8/3/2009
Sen Harkin, Tom [IA] – 7/20/2009
Sen Hatch, Orrin G. [UT] – 7/24/2009
Sen Hutchison, Kay Bailey [TX] – 7/20/2009
Sen Inhofe, James M. [OK] – 7/9/2009
Sen Isakson, Johnny [GA] – 7/8/2009
Sen Lincoln, Blanche L. [AR] – 7/15/2009
Sen McCain, John [AZ] – 7/15/2009
Sen Risch, James E. [ID] – 8/3/2009
Sen Vitter, David [LA] – 6/16/2009
Sen Webb, Jim [VA] – 8/3/2009

Rarely will you find someone that understands wealth for what it actually is: surplus production. Beyond that though, wealth is the ladder that allowed mankind to climb above his savage, disease-ridden and brutal history to create the standards of living that Americans see around them every day, but take for granted. The reality is that even the poorest Americans live much easier, healthier, and longer lives than their ancestors of even 150 years ago.

In order to gain a clearer understanding of the true nature of wealth, it is only necessary to take a few short steps back to the days of the American settlers who founded this country. Imagine that you live, like some of the early settlers, at a subsistence level. You plant corn and some other vegetables and hunt a little game in order to survive. At the subsistence level, you have no wealth. Your only goal is to stay alive. And if you plan to live for longer than just that one year, you will need to set aside enough of your harvest to provide you with seeds to plant again the following year. Thus, you have some savings; but if you consume that seed now, you will likely perish following year. Again, you have no wealth, but you can afford to continue living.

If through planning, forethought, and lots of hard work you are able to grow more crops than you can consume, have enough seed to plant again the following year, and still have surplus, then you have acquired some wealth. Wealth is created by the hand of the producer and is nothing more than surplus goods. With a portion of the wealth you created, you could trade for a pair of shoes, clothes or tools. These items would then represent the surplus you created during the year by your own efforts. Perhaps you had enough foresight to expand your fields, plant more seed, and the following year you have even larger surplus (wealth) that you could use to barter for other goods. This is the method by which wealth was once created, and it remains the way that honest men create it today: through planning, forethought, and hard work at some gainful employment, enterprise, or industry.

In the days of the early settlers, however, people often bartered the actual surplus commodities that they produced with others who had produced different commodities that they either needed or wanted. Honest men traded value for value with others who were willing to trade. The concept of trading value for value between honest and willing people is the root idea of the economic system known as capitalism.

In addition to barter, early colonists also used gold and silver coins and particularly Spanish dollars, known as Pieces of Eight, so called because they were often divided into eight bits for smaller transactions. They traded gold and silver coins for labor, food, tools, lumber, tobacco, and other products. The coins, just like any of the other goods for which they traded, represented the surplus that was produced. Thus, they represented wealth. Gold and silver coins became widely used as a means of storing wealth because they were of known weight, purity, value, durability, easily divisible, easily aggregated, and easily portable.

As the colonists acquired wealth, the person that produced it was able to raise his standard of living beyond that of mere subsistence. Furthermore, when that wealth was traded, value for value, with others in the community, it served to raise the standard of living of the persons to whom it was transferred as well. As the trading continued within the community, and ultimately the nation, the standard of living was raised for all of the participants in the trading network that developed. In this way, through hard work, innovation, and the production of surplus goods, coupled with free trade among willing participants, the standard of living continued to grow to the point where we stand today — poised precariously on the precipice of history.

For those who have read this far, I'm sure most of you think, "Well that was simple. Everybody knows that." The sad truth is that while the basic principles of capitalism and wealth are indeed simple, it seems that very few people today actually do understand it; and of those that do, many would dispute it. If you actually did know and believe it, then congratulations. Start explaining it to as many others as you can. When you hear statements such as this one by Barack Obama on October 8, 2008, "We need policies that grow our economy from the bottom-up, so that every American, everywhere has the chance to get ahead," ask yourself how that fits into the definition of capitalism and the creation of wealth as described earlier in this article. How can one create a robust economy based on the upward flow of wealth from those who live below the subsistence level and who produce nothing while consuming the wealth of others. The short answer is that it can not, so long as those people continue to be held in the state of welfare bondage where they are neither encouraged or expected to produce anything of value.

Life, in the context of the Declaration of Independence, carries with it not only the connotation of the right to exist, but also denotes the right to live that life to its fullest extent and for that life to be under the sole and complete ownership of the individual to which it was given. Only in a purely capitalistic society can man be said to truly own his own life. In any state where capitalism is not practiced fully, a man's life is owned in full or in part by the state. Consider the modern world. It is controlled either by states with socialist-collectivist economic and political ideologies, by semi-theocracies or by some form of tribalism. There is not among them even one truly capitalist society. Yet,  it is only through capitalism that man can be truly free and the master of his own destiny.

Liberty, as used in the Declaration of Independence means that man has the unalienable right to act according to his own rational judgment. Man, stripped bare, is one of the most poorly-suited animals for survival. He does not have a coat of fur to protect him from the sun or from the cold. He does not posses slashing claws or sharp fangs to help him kill prey. Neither is he gifted with legs fleet enough to outrun the predators who view him as food. Instead, man was endowed with the largest brain relative to his size of any animal on the planet. It is his only resource. His rational and proper use of it his only salvation. It is, therefore, through the power of mind and only through the power of mind that man has managed to survive long enough to create new generations of men. However, man's mind only functions to its fullest potential when it is free to do so and allowed to act in accordance with the purpose for which it evolved — his self-interest which is his survival.

Property, which was the word dropped from that important sentence of the first draft of the Declaration of Independence connotes that man has a right to own things. Among the things which he owns, first and foremost he owns himself, also those things which he creates through his vision and imagination, through his toil and his inspiration and those things which he has acquired through trade of value for value with other free men. Those things which he owns, no other man may take from him absent his permission, either through stealth, violence or through threat of violence. Without the concept of private property, neither capitalism nor freedom are possible.

Pursuit of Happiness, as used in the final draft of the Declaration of Independence, does not mean that man has the right to happiness, but that he has the right to make the choices through rational thought and judgment, that he believes will lead to his happiness. The pursuit of happiness flows directly from and is dependent upon each man's ability to live his life to its fullest capacity, to have the liberty to choose his own path and to be secure in the fruits of his labor and to act in his own self-interest. The practice of capitalism, is in fact synonymous with the pursuit of happiness. In a free market men are free to produce whatever they believe that other men may value and to freely trade the product of their enterprise with other men for something of value without the interference of other parties. As noted by Supreme Court Justice, Stephen Johnson Field in 1883, "Among these inalienable rights, as proclaimed in that great document, is the right of men to pursue their happiness, by which is meant the right to pursue any lawful business or vocation, in any manner not inconsistent with the equal rights of others, which may increase their prosperity or develop their faculties, so as to give to them their highest enjoyment."