“Real money can hardly ever multiply too much in any country, because it will always as it increases be a certain sign of the increase of trade, of which it is the measure, and consequently of the soundness and vigor of the whole body. But this paper money may and does increase, without any increase of trade; nay, often when trade declines, for it is not the measure of trade of the nation, but of the necessity of the government. It is absurd and must be ruinous, that the same cause which naturally exhausts the wealth of a nation, should likewise be the only productive cause of money.”
– “An Account of the European Settlements in America,” Edmund Burke, 1761
“The natural remedies, if the credit-sickness be far advanced, will always include a redistribution of wealth: the further it is postponed, the more violent it will be. Every collapse of a credit expansion is a bankruptcy, and the magnitude of the bankruptcy will be proportionate to the magnitude of the debt debauch. In bankruptcies, creditors must suffer.”
“To become the creditor of a government whose politicians intend to steal and waste the loan, or divert it toward a needless military expedition, or even disturb the nice balance of production and buying-power by a rash enterprise, is an immoral and uneconomic act. To become the creditor of a group of financiers who will use the capital to exploit another creditor for their own enrichment, is an immoral and uneconomic act.”
“Speaking broadly, it seems unlikely that both creditors and debtors can be happy at the same time: though it is quite possible, in modern debt manipulation, and under the influence of such economic laughing-gas as we pumped upon the world from 1922 to 1929, that both may make outcries of anesthetic pleasure. Upon emerging from this artificial sleep, the two classes will find their interests dissimilar. Upon this discovery, the debtor applies to the politician; the creditor to the majesty of the law: and a race ensues to see whether the politician can change the laws or the laws resist the politician.”
“Indeed, there is no easier route to absolutism, corruption and civil war than to permit government to indulge in the banking business.”
– “A World in Debt”, Freeman Tilden, Funk and Wagnalls, 1936, pgs 41, 133, 135, 169.
“The story of the great credit boom of the nineteen twenties was similarly told just about two hundred years before [in France.] It so happens that, whenever the volume of credit outstanding gets away from a close relationship with the actual wealth in existence, it becomes fiat credit. Instead of being based upon land or metal it becomes based upon the ephemeral, metaphysical idea of culture. Since neither culture nor credit are tangible, the result is a volatile, nervous condition which is extremely dangerous to society.”
“The complexity of this era of credit liquidation is far too great for the mob mind to grasp. It is hardly possible for them to see the picture wherein about 700 billion dollars of physical and intangible wealth is attempting to be turned into about 5 billion dollars of money.”
“Therefore, should a government or monarch interfere with or alter the intrinsic value of money, a practical fraud is committed on all existing creditors if its value is depreciated, and on all existing debtors if its value is appreciated. It is just the same as if gold were forcibly taken from one man and given to another. On the evening of March 12, 1933, President Roosevelt informed the citizens of the United States by radio that the issuance of new Federal Reserve notes to clear bank deposits was not fiat money — therefore, no devaluation of the currency — but historically it can be recalled that the same government promises were made in France prior to the issuance of the assignats; Germany and Austria made them before the hyper-inflation occurred and so on back through the ages.”
– “Popular Financial Delusions”, Robert L. Smitley, Roland Swain Company, 1933, pgs 9, 262.
“In democracies the Welfare State is the beginning, and the Police State the end. The two merge, sooner or later, in all experience, and for obvious reasons.”
– “Compulsory Medical Care and the Welfare State,” Melchior Palyi, National Institute of Professional Services, 1949, pg 13.
“Public indebtedness always ends by taking the peasant by the throat; he must pay, for only he can. Food can only be got out of the ground, and all these devices of soldiership, and law, and arithmetic, are but ways of getting down at last to him, the furrow-driver, and snatching the roots from him as he digs.”
– John Ruskin
“Third, the argument that prosperity is a product of credit, whereas from the beginning of economic thought it had been supposed that prosperity was from the increase and exchange of wealth, and credit was its product. This inverted way of thinking was fundamental. It rationalized the delusion as a whole. Its most astonishing imaginary success was in the field of international finance, where it became unorthodox to doubt that by use of credit in progressive magnitudes to inflate international trade the problem of international debt was solved. All debtor nations were going to meet their foreign obligations from a favorable balance of trade.”
“We kept thinking of surplus credit, and there is no such thing, short of total human satiety. That we had power to produce more food than we could eat ourselves, or more automobiles than we could use ourselves, was not a sign of surplus except in a particular, unimaginative sense. The power of production is in itself infinitely versatile. If there is more of it than we need to satisfy our immediate wants, then instead of using it to produce a surplus of goods to lend away in the foreign trade we may use it to perform prodigious collective works for the future. Or by economic and financial engineering we may convert it into credit and conserve it, as wild water is conserved, behind dams, against a time of famine. One way to convert and store it would be to pay off the public debt so that to meet any emergency thereafter the government should have a free, tremendous borrowing power, with no worry about its budget. But all the time it was easier to let it run away in happy torrents.”
“Fancy telling that woman at the “Savings” window, who gets her money up in small bills from the deeps of an old satchel, that her dollars, multiplied ten times by the bank, will go to build ornaments for a grand boulevard in a little Latin-American country she never heard of, or to build work-men’s houses in a German city better than the house she lives in. Fancy telling the man in overalls who comes next that his money, multiplied ten times by the bank, will go to a speculator on the New York Stock Exchange, or to mend a cathedral in Bavaria, or to a foreign bank that may lose it unless the matter of reparations is somehow settled in Europe, or that it may be loaned to Germany in order that Germany may pay reparations to the Allies in order that they may be willing to pay something on account of what they owe to the United States Treasury. Remember as you leave the bank that it was one of 25,000, big and little, all performing the same act of multiplication, all in the same general ways lending the product of multiplication, which is credit.”
“Gold they may lose; credit they may lose. But machines, factories, power plants, bridges, public buildings, roads, laboratories, better dwellings, parks—these things remain. They cannot fly away. What happens to the money seems relatively unimportant. Money is not things. It is merely the token of things. Destroy the token and there are the things still, physically untouched by a financial crisis. You can invent new tokens to represent them. That has happened before. Less than ten years ago was not German money wholly destroyed? The things it had represented, they were not destroyed, not even German credit, which was an intangible thing. A new money token was invented in place of the one that had been destroyed, and lo! Germany was in good credit again, the whole world anxious to become her creditor.”
– “A Bubble that Broke the World”, Garet Garrett, Little, Brown, and Company, 1932, pgs 13, 19, 57, 100.
“Bewildered statesman turned to government debt as a device for creating purchasing power. No one approved it in principle. But there was no effective resistance because the people demanded the fruits it brought. Another was the ever-growing reliance on social-welfare measures to mitigate the privations of the indigent, the unemployed, the sick, the aged. The instruments of debt and spending became standard equipment of politicians. And this need for spending opened the door to an easy surrender to the elements most interested in militarism and its handmaiden, imperialism.”
– “As We Go Marching,” John T. Flynn, Doubleday and Company, Inc., 1944, pg 27.
“President Roosevelt Promises Deficit of Seven Billion by June 30, 1934. . . . But with all his good intentions, the President could not spend money that fast. The loan organizations were, after all, manned by men who had financial training and felt a responsibility for the Government’s money. They could not make loans which were nothing but gifts. They had the same ingrained reluctance to give away money that the mules on the farms had exhibited the preceding summer to trample down rows of corn or rows of cotton. It was against nature.”
– “Economics and the Public Welfare,” Benjamin M. Anderson, D. Van Nostrand Company, Inc., 1949, pg 354.