Kiss? As with lips? Of course not. KISS means “Keep It Simple, Stupid.” How I wish America had done it.
Article I, Section 10, of the Constitution of the United States, reads in part, that “No State shall make any Thing but gold and silver Coin a Tender in Payment of Debts.”
If only the Founders had written, “All money shall consist of either gold and silver coin, or be backed 100% by such.” The states and individuals could have minted money, as well as the US Treasury, but all would be backed by, or made of, gold and silver. Banks or individuals would have coined and printed gold backed money, and their reputations and dependability would determine if they were popular and acceptable by the public, just like any other consumer product.
For 150 years, the dollar was a twentieth of an ounce of gold, backed by such, and was revered around the world. The Founders had not the slightest thought of a government going haywire, printing currency by the trillions of dollars, and eventually destroying its value and reputation. If only they had written Constitution as above, think of how simple it would have been, and how marvelous it would be today.
If the coin of the realm were gold and silver, or currency backed 100% by such, there would be no central bank, no Greenspan, no thousands of “economists,” inventing various theories about money. It would be a simple matter of mining gold and silver, probably at the historic ratio of 16 to 1, making coins out of it, and backing every single paper bill in existence. There could be no deficit financing worth noticing, because who would want to loan a government their own valuable money? Government couldn’t print it to pay its bills, so there would be no deficits, unless the government could convince someone into loaning them their own money, or a foreign nation doing so. Other nations probably would have fiat (unbacked, and created at will) currencies, so they wouldn’t be acceptable to the United States, which would have good money.
America would have gold and silver mines producing the nation’s wealth. As the population increased, so would the gold and silver production, which would increase the currency or money supply, according to how much gold and silver were placed into circulation. Private mints would eliminate a government monopoly on “money.” The degree of “economist,” would be largely superfluous, as government economics would be so simple, that no predicting or hypothecating would be necessary, or even possible. As gold and silver were mined and coined or stored, there would have been no inflation, and prices would have remained the same year after year, changed only by supply and demand of things bought with genuine money. If it rained a lot or little, farm products may change price, as do other consumer goods, but there still would be no inflation. Inflation is caused by an increase in the currency supply. If the gold and silver supply (money) had increased, there might have been a bit of inflation, or if the population increased faster than the money supply, there could have been a bit of deflation, but a wise treasury would have balanced those two factors, eliminating inflation or deflation. Private mints would naturally offset most governmental actions. The prices of gold or silver might go up or down a bit due to the same things, but the money supply and prices, would be remarkably stable, making savings a very desirable thing to do.
America today, saves virtually nothing. It may even have a negative savings rate. Who can blame them? When the dollars are depreciating faster than interest paid for savings, and the interest being taxable, who would want to save? If the dollars were backed by gold and silver, and the coins were made of such, savings would be a marvelous thing to do, because your savings would be safe. Saving in good money, is responsible for economic progress. It is citizens saving their surplus assets, which allows a bank to loan those savings to persons wanting to build infrastructure, manufacturing, or other profit producing business. Since all money would be valuable, and backed, there would be no “fractional reserve banking,” which is government allowing a bank to cheat, by loaning dollars without having more than 10% of them on deposit. No bankers could create money out of thin air, nor government either. Bankers would be paying a decent interest rate to savers of real money, as the market dictated. If they paid too little, people would save at another bank, and borrowers the same. The market would be governing banking, not government. There would be no FDIC, with its penny on deposit for every hundred dollars it insures, or is it a nickel? Banks would have private insurance, or a great reputation, whichever its customers demanded. No force of any kind. If people chose to save at one bank over another, or borrow in the same manner, bankers would be competitive. No National banks, merely ’banks.’ Government would have nothing to do with banking. Instead, we have politicians using printing press money to get elected, by promising more and more largess from the public treasury.
Under a gold-silver coin and backed currency, no deficit, no fractional reserve banking system, I’ll guarantee you there would be individual, church, and voluntary help for the needy, but no forced charity, as is the income tax. Everything economic, would be on a voluntary basis, with no creating ’money’ out of thin air, loaning ’money,’ with none necessarily on deposit, and paying government bills with printing press ’money.’ If a person were poor, he could get a job, fail, beg, or even die, but no federal government handouts. No Social Security, no federal backing of anything, except the dollars, which would be backed 100% with gold and silver, no matter who issues them, and coins being made out of the same.
The size of the federal government, with valuable money, would be about 2% of its current size, and DC would be a farm supply town, if it existed at all, with a touch of federal government, perhaps. The Constitution does not call for regulating of anything, other than the value of the money, which of course, would be made of, or backed by, gold and silver. This would have prohibited 98% of the current federal government, by merely enforcing the Constitution, and no handouts possible by politicians. No bureaucracies or Presidential Cabinet would exist, which are not in the Constitution anyway. Since government wouldn’t have been able to subsidize anything, give anything away, or control anything, bureaucracies and a Cabinet would have never even been thought of, and certainly unnecessary. The State Dept had but seven employees under Thomas Jefferson, and the world has not grown any larger.
It’s too bad the Founders didn’t add a sentence at the beginning of Article II, Section 2, reading: “The United States of America shall be a neutral nation, and only act to defend itself on its own shores.” Since the Constitution would have been enforced, it would mean according to Article I, Section 8, there would be no “public lands,” which are unconstitutional. This eliminates a lot more bureaucracy. These are part of KISS, just like never producing fiat money. With 98% of the federal government never having been formed, imagine how simple our lives would be today. No income taxes, no federal bureaucracy or courts, no soldiers everywhere, making us hated by the world, and above all, stable, uniform money, the supply of which could not be increased, unless the gold and silver supply increased. Prosperity beyond our wildest dreams, with no dozens of federal taxes, no bureaucracy, no welfare, unless a state, private, or religious charity wanted to indulge. America would be a whole, prosperous nation, with magnificent cities, working populace, sound money, virtually no taxes, no underclass, and be the envy of the world. Money, and its value, is the backbone of a civilization. When the money is debased, the civilization collapses. It has happened over and over again in history. Our Constitution allowed it to happen unfortunately. If only the Founders had changed just a few words! Protect yourself.