The linchpin of the Matrix

The January 1946 issue of American Affairs carried an article written by Beardsley Ruml who, at that time, was Chairman of the Federal Reserve Bank of New York. Ruml had devised the system of automatic withholding during World War II, so he was well qualified to speak on the nature and purpose of the federal income tax.

His theme was spelled out in the title of his article: “Taxes for Revenue Are Obsolete.”

In an introduction to the article, the magazine’s editor summarized Ruml’s views as follows:

His thesis is that, given control of a central banking system and an inconvertible currency [a currency not backed by gold], a sovereign national government is finally free of money worries and needs no longer levy taxes for the purpose of providing itself with revenue. All taxation, therefore, should be regarded from the point of view of social and economic consequences.

G. Edward Griffin
The Creature From Jekyll Island (pg. 204)

If this is known, the rest follows. Welcome to the green pill.

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About Aeoli Pera

Maybe do this later?
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9 Responses to The linchpin of the Matrix

  1. Tom Bri says:

    I’ll have to think about that.
    The obvious point is that this would depend on the level of spending the government wanted to do. ‘Printing’ money works up to the point that higher inflation levels occurred and political fallout restricted it.
    Another thought is that alternative methods of private payments would have to be controlled. An unrestricted bitcoin, allowing the private market to avoid fiat currency would be a threat, if private parties began to avoid the government money. This could be mitigated by gradually increasing the legal difficulty in using the private currency, making it hard/dangerous for the average person to use, while large institutions would be bought in or held in control with threats. This goes in line with recent pressure to do away with cash, so that untaxed trade doesn’t occur, as in attempts to make garagesalers pay income tax on their gains.
    I’m interested in what some of you second and third order thinkers come up with.

  2. I haven’t read a full published version of his temarks, that said, look at the context of the statement. US Government spending had reached over 40 percent, and there had been limited rationing in the Continental US. None of the prior economic models accounted for that situation.

    From a strictly practical point if view, he’s right if you assume lots of externalities, such as net import dependence and tourism, are kept out of the model. Those were not material parts of the US economy at the time.

    I’m sure at least one of our fellow posters would chime in if we discuss this in rabble.

    https://fred.stlouisfed.org/series/FYONGDA188S

  3. glososli says:

    The only deficit that matters (ultimately) is that with the rest of the world.
    The US has an awful trade deficit, which has been funded for decades by overseas nations.
    That is already changing. Collapse will result.

    Meanwhile, what came first, deposits or loans? Surely the banks loan people’s savings?
    Ha, nope:

    • Heaviside says:

      Glosoli is right.

      I don’t know why the Federal Reserve in particular would be the linchpin of “the Matrix.” The government couldn’t function without electricity either.

      • Aeoli Pera says:

        >I don’t know why the Federal Reserve in particular would be the linchpin of “the Matrix.”

        Because this is an argument even a normie can understand for the existence of conspiracies and social engineering.

  4. Lazer says:

    “The spirit of the times may alter, will alter. Our rulers will become corrupt, our people careless… From the conclusion of this war we shall be going downhill. It will not then be necessary to resort every moment to the people for support. They will be forgotten, therefore, and their rights disregarded. They will forget themselves, but in the sole faculty of making money, and will never think of uniting to affect a due respect for their rights. The shackles, therefore, will be made heavier and heavier, till our rights shall revive or expire in a convulsion.”
    –Thomas Jefferson

    Your quote and the above are why nothing of any real value or lasting change rarely gets done this planet. Once the purchasing power is devalued your entire psychology is set up around making money, and there’s no amygdala moral based behavior. This also explains why sapiens becomes lawless at the end of his civilization cycle.

    • glosoli says:

      I forgot who wrote a long treatise on the subject, but he was suggesting that capitalism is both inevitable, de-humanising, and ultimately will destroy itself.
      Perhaps we are destined to live simple tribal lives, rather than specialise.

      I would add that plenty of things of real value have been achieved on this planet (like not eating or abusing our children for example), and that the last 100 years have been a currency devaluation aberration, nothing like this has been seen ever before.
      Likely never will again.
      Hence the bubble bursting this time will be horrendous.
      I have a chart to share at the new site, but can’t find an upload button.

      • Aeoli Pera says:

        >I would add that plenty of things of real value have been achieved on this planet (like not eating or abusing our children for example), and that the last 100 years have been a currency devaluation aberration, nothing like this has been seen ever before.

        The former, absolutely. The latter…bro, currency debasement has been around for as long as currency has been around. Government-instituted inflation predates the ancient Greeks at least, hence the “iron coin” idea.

        • glosoli says:

          Did you see the chart I linked at the new place?
          Past 100 years so different from the previous 800.
          I do believe the past 100 years as far as currencies is concerned is in a league of its own.

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