California Man Sues Geithner to Stop “Bankrupting” the U.S.

March 3rd, 2012
in econ_news

tom-paineSMALLEconintersect:   A Federal Court suit by Clifford Johnson of Gualala, CA was refiled 29 February 2012 in the U.S. District Court, Northern District of California, San Francisco Division.  The suit seeks to end the current monetary system where the U.S. government borrows money from the banks rather than creating money by Treasury action.  The suit was originally filed 28 December 2011 and was refiled for procedural reasons.

The focus of the complaint is that the official web site of the U.S. Treasury contains three times an incorrect statement:

"United States Notes serve no function that is not already adequately served by Federal Reserve Notes."

Follow up:

The relief sought by the complaint, as a result of correction of the alleged incorrect statement and resulting dependent falsehoods on the Treasury website, is for the plaintiff (and all others) to be enabled to seek through political action for future Social Security payments to be made with Treasury currency, thus retiring debt held in the so-called Social Security Trust Fund.

An extension of the relief sought by removal of the Treasury policy statements is addressed in an attachment to the filing document which lists proposed legislation:

A bill sponsored by Representatives Dennis Kucinich and John Conyers, the N.E.E.D. Act, HR 2990 (formerly HR6550), would produce U.S. Notes, specifically for infrastructure, Social Security, and universal healthcare, and make the Federal Reserve a department under Treasury - for the first time, a true branch of  government.

The proposition is that the national debt crisis is a hoax that is perpetrated by the acquiescence of the government to using only money created by the banking system (Federal Reserve notes and bank credits denominated in those units).  In short the claim is that the Treasury should print government money rather than borrowing bank money and then there would be no national debt.  And the U.S. government would not be paying interest on U.S. money as is the case today.

There is historic precedence for the U.S. Treasury to print money directly rather than pay interest on bank created money.  From Scott Baker:

Congress is empowered by Article 1, Section 8, of the United States Constitution to produce debt-free United States Notes at any time, for any reason, and actually DID create them under president Lincoln (the original "Greenbacks" - $450 million) to defeat the South during the Civil War, when New York City banks wanted 24-36% interest.

A sense of the legal arguments can be obtained by reading the following section of the complaint:

First Amendment Claim

8      11. Government Speech Disqualifications. Said categorical and financial misinformations

9 (“falsehoods”) impair Johnson’s right to petition for new issues of United States currency, in violation

10 of the First Amendment, on the following separate and cumulative grounds:

11      (i) Viewpoint Coercion. In all public fora, Johnson’s viewpoint is repudiated by the abusively

12 induced ignorant recitation of said falsehoods, as concretized by recitations of the 2011 GAO report’s

13 financial misinformation in said Chicago-Sun article against H.R. 2911 and S. 2049, and in numerous

14 public comments re these bills submitted through said public forum.

15      (ii) Independent Unconstitutionality: Tax Power. There is no reason to gift massive amounts

16 of tax, or the nation’s good faith and credit, to private parties for merely executing mandated or

17 mechanical currency issues, such as the issues proposed by Johnson’s petitions. Issuing these parts of

18 the currency as Federal Reserve notes thus violates the constitution’s mandate that taxes only be raised

19 “to pay the Debts and provide for the common Defence and general Welfare of the United States.”

20 U.S. Const., Art. I, Sec. 8. Said falsehoods perpetuate a vast face value seigniorage tax for the welfare

21 of the private banks that own the Federal Reserve.

22     (iii) Independent Unconstitutionality: Fiat Money Power. On August 16, 1787, the Framers’

23 final vote on money powers delisted paper money lest it “excite the opposition of the” monopoly-bent

24 “Monied interest,” and be used to exploit a general paper-money phobia, so as to altogether exclude it.

25 Before voting, Madison obtained firm agreement that the delisting did “not disabl[e] the government

1 from the use of public notes as far as they could be safe and proper.” Said falsehoods impermissibly

2 suppress the use of public notes as far as they can be safe and proper, contrary to the Framers’ explicit

3 commitment to secure the sovereign’s paper money power against the Monied interest. U.S. Const.,

4 Art. I, Sec. 8, Cl. 4, 11; Notes Of The Federal Convention (Aug. 16, 1787); The Debate On The

5 Constitution, part 2 at 94, 110, 148, 422-423, 476-477, 639-640, 659, 678.

6 (iv) Prima Facie Capture. Said falsehoods are the artful product of numerical models and

7 obfuscating mumbo-jumbo designed and promulgated by the Federal Reserve. On their face, said

8 falsehoods secure the one-way bank-government lender-borrower relation inherent in the exclusive use

9 of Federal Reserve notes. The borrower is servant to the lender, wherefore this relation per se renders

10 the government subservient to private bank interests. On its face their mumbo-jumbo hijacks the

11 government, as in the 2011 GAO report’s rationale, which brazenly asserts that the Federal Reserve is

12 the government, so as to palm off the conclusion that there is no overall loss to the government when it

13 pays money in any amount into the Federal Reserve’s private account. This outrage boasts the capture

14 of representative government by private banking interests, and loots the Treasury.

15 WHEREFORE, Johnson prays that this court:

16      (1) Declare that the above-alleged Treasury made or fostered statements, that “United States

17 Notes serve no function that is not already adequately served by Federal Reserve Notes” and that there

18 is no government benefit when a $1 United States coin replaces a $1 Federal Reserve note, impermissibly

19 impair Johnson’s First Amendment right to petition for new issues of United States currency, because

20 and insofar as: (a) they by deception coerce and distort public debate; (b) they are repugnant to the

21 constitution’s tax and money powers under U.S. Const. Art. 1, Sec. 8; and (c) they are attributable to

22 the private banking interests that own the Federal Reserve System.

23      (2) Award the costs of this suit to Johnson.

24      (3) Grant such alternative and additional relief as deemed fit and proper.

25 February 29, 2012

--------------- End of Excerpt --------------

John Lounsbury


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1 comment

  1. DrBernard says :

    Stupendous progress! Thank you.

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