Three Thoughts About Money

Three Thoughts About Money

Thomas Allen

Discussed below are Executive Order 11110, cryptocurrency as a form of fiat money, and payment of interest on the national debt.

Executive Order 11110

Some people believe that President Kennedy was assassinated because he was planning to abolish the Federal Reserve System. Their proof is Executive Order 11110. Using this executive order as proof, some claim that Kennedy was planning to replace federal reserve notes with US notes, a.k.a. greenbacks. One wonders if these people have ever read Executive Order 11110.

The portended part of Executive Order 11110 reads:

(j) The authority vested in the President by paragraph (b) of section 43 of the Act of May 12, 1933, as amended (31 U.S.C. 821 (b)), to issue silver certificates against any silver bullion, silver, or standard silver dollars in the Treasury not then held for redemption of any outstanding silver certificates, to prescribe the denominations of such silver certificates, and to coin standard silver dollars and subsidiary silver currency for their redemption,  (https://www.presidency.ucsb.edu/documents/executive-order-11110-amendment-executive-order-no-10289-amended-relating-the-performance)

Executive Order 11110 had nothing to do with the Federal Reserve. It delegated the President's authority to issue silver certificates to the Secretary of the Treasury. In 1878, Congress authorized the President to issue silver certificates — long before the Federal Reserve existed. 

Moreover, Executive Order 11110  had nothing to do with US notes. By law, the Department of the Treasury had to maintain $346,681,016 of US notes in circulation from 1878 to 1971. 

When this executive order was issued, three types of paper money were circulating in the United States: silver certificates, US notes, and Federal Reserve notes. Although all had equivalent purchasing power, all were issued under different laws. (One may still find silver certificates and US notes in circulation. I have received one of each since 2000.)

Furthermore, the President cannot abolish the Federal Reserve. Only Congress can abolish it. Congress created it; Congress can abolish it.

        Moreover, a common misconception that some people have about US notes is that they are debt-free money. They are not. A note is a debt instrument. Therefore, a US note is a debt. However, it is a noninterest-bearing and nonmaturing debt that is legal tender.

This strange notion that President Kennedy was assassinated because of Executive Order 11110 and that this executive order replaced Federal Reserve notes with US notes, which would have led to abolishing the Federal Reserve, has been floating around for at least 40 years.

Cryptocurrency

Cryptocurrency like Bitcoin is not real money. It is a type of fiat money. Real money has quantity, measurement, and substance. Fiat paper money has only quantity. Likewise, cryptocurrency has only quantity.

An early illustration of these three attributes in real money is recorded in Genesis 23:16. Abraham bought a burial plot. He paid 400 (quantity) shekels (measurement of weight) of silver (substance). In pre-1933 money, if a person bought something with a $20 gold coin, he paid with money that had quantity (20), measurement (dollar, a unit of weight equal to 23.22 grains), and substance (gold).

Cryptocurrency lacks two of these three characteristics. For example, a Bitcoin has a quantity of one. It can be converted to fiat money, such as dollars or euros, which has quantity but, like Bitcoin, lacks measurement and substance. (Bitcoin averaged about $60,000 in 2024 and ranged between about $39,507 and $99,637.) Unlike fiat paper money like the dollar, which appears to have a measurement, cryptocurrency does not even seem to give the illusion of a measurement until it is converted to a fiat currency. However, even if cryptocurrency has a measurement, its measurement, like fiat currency, is an abstraction. It measures nothing of substance. A unit of measurement has to be something concrete and definable, like the meter, ounce, minute, or horsepower, so that things can be compared with it. It has to be something that instruments can determine. Also, it lacks substance as its monetary value exceeds the value of the material of which it is made, and it does not promise to deliver anything concrete. (See “What Is the Difference Between Commodity and Fiat Money” and “Differences Between Real Money and Fiat Money” by Thomas Allen.)

Another distinction between real money and fiat money is how the quantity of money in circulation is determined. With real money, the markets decide how much money is in circulation. The money supply adjusts automatically to meet monetary needs. Under a fiat monetary system, the money supply is regulated artificially; instead of the markets deciding, some entity decides. For paper fiat money, the government or its central bank regulates the quantity in circulation. With cryptocurrency, the programmer regulates it with the program that he wrote that creates the cryptocurrency. Like other fiat currencies, the quantity of cryptocurrency is independent of the market or economic needs or demand for money. (See “Gold and Silver as Fiat Money” by Thomas Allen.)

One advantage that the existing paper fiat monetary system has over cryptocurrency is that it has a mechanism for withdrawing excess money. Cryptocurrency lacks such a mechanism. Once cryptocurrency is issued, it remains in circulation forever unless it is lost.

Interest on the National Debt

Many people express concern about paying the ever-growing interest on the ever-growing US national debt. However, two legal methods can be used to eliminate paying the interest on the US debt.

First, Congress can require the Federal Reserve Bank to buy all US government’s debt securities. Under current law, all earnings of the Federal Reserve above its operational cost go to the US Treasury. Thus, nearly all the interest that the federal government pays on its debts would return to the US Treasury. If Congress thought that the Federal Reserve’s operating expenses were too high, it could limit those expenses.

Second, the federal government could pay the interest with government notes, a.k.a. US notes, also called greenbacks. Also, it could pay off or even buy back the US government’s debt securities with government notes. Government notes are notes issued directly by the government instead of indirectly through the central bank, as are Federal Reserve notes. Moreover, instead of issuing bonds, treasury bills, etc., the federal government could just issue government notes. From the government’s perspective, government notes have a great advantage over other governmental debt. Government notes pay no interest and never mature. (See “Difference Between Bank Notes and Government Notes” by Thomas Allen.)

Of course, if either of these two methods is used, the US dollar will go the way of the Zimbabwean dollar much quicker than it will under the current system. (At its peak, the Zimbabwean inflation was estimated at 79.6 billion percent month-on-month, 89.7 sextillion percent year-on-year in mid-November 2008.)

Copyright © 2025 by Thomas Coley Allen.

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Tariffs as Revenue

Tariffs as Revenue

Thomas Allen

Some people, like President Trump, suggest replacing the federal income tax with tariffs. Tariffs are heralded as a means to increase employment and wages and to reduce, if not eliminate, dependency on foreign sources.

The primary benefit of replacing income tax with tariffs is that the federal government's size would need to be reduced by 80 to 90 percent. That is about the size of the federal government that tariffs could support without exploding debt that would dwarf the current federal debt — this assumes that the tariff is for revenue and not protectionism. 

Replacing the income tax with tariffs will, at least in the short run, result in a large-scale loss of jobs. More than a million federal employees will lose their jobs. Likewise, a much larger number of people whose livelihoods depend on federal contracts will lose theirs. Also, many State and local employees will lose their jobs because these jobs depend on federal grant money. Many people whose jobs depend on the federal government will become unemployed.

Additionally, if the goal of the tariff is to promote and protect domestic companies, the federal government will collect even less revenue. The more effective that a tariff is at protecting domestic companies, the less the country imports. Fewer imports result in less revenue for the federal government.

Exports buy imports. The less the country imports, the less it can export. Conversely, the less the country exports, the less it can import. If the country imports less, the federal government collects less revenue. As the country approaches autarky, the federal government becomes smaller for want of revenue — if tariffs are the primary source of revenue. By then, most of the federal government’s budget will be used to prevent smuggling.

Also, many people believe that the exporters pay the tariffs. They do not. Consumers of the importing country pay the tariffs. In this respect, tariffs are like sales taxes; the buyer pays the tax; the seller does not.

One great advantage resulting from abandoning the income tax is that it frees the slaves from the largest slave owner in the country, the US government. Slavery is defined as one party or person owning the labor of another. The income tax is a tax on labor; that is, the amount of labor that it takes a person to pay his taxes is the amount of labor owned by the US government.

If the purpose of tariffs is revenue, then the same percentage should be levied on all imported goods without considering the product imported or the country of origin. Thus, the federal government does not pick favorites or winners and losers by levying higher tariffs on some imports than on others.

Appendix 1. Reciprocal Tariffs

President Trump has implemented reciprocal tariffs on countries that levy tariffs on imports from the United States. His goal is for these countries to eliminate their tariffs on imports from the United States in exchange for the United States eliminating their tariffs on imports from their countries. However, such reciprocal tariffs are unconstitutional — at least under the Constitution that the Founding Fathers gave the United States.

The Constitution delegates to Congress the authority to levy tariffs. It does not delegate the President such power. Consequently, Congress would have to levy the reciprocal tariffs and give the President the authority to implement them. Even if Congress enacted such a law, it would be unconstitutional. According to Article 1, Section 8, Clause 1, the Constitution authorizes Congress to levy tariffs for revenue and for no other reasons, such as protectionism or reciprocity. The goal of Trump’s reciprocal tariffs is to eliminate tariffs and, consequently, eliminate raising revenue from tariffs.

Appendix 2. Replacing the Income Tax with a National Sales Tax

For years, some people have been promoting replacing the federal income tax with a national sales tax. If a sales tax is to replace the income tax, it needs to be done by constitutional amendment. This amendment must clearly prohibit all taxes on income from whatever source (wages, salaries, tips, dividends, interest, capital gains, etc.). Also, it must fix the maximum tax rate. Further, it must clearly define in great detail what can be taxed and what cannot be taxed. Moreover, it must not provide any outs, such as national or economic emergencies or war. Most importantly, the amendment needs to be written so that someone with an IQ of 70, which is about the average IQ of federal judges, can understand it.

Appendix 3. Eliminating the Corporate Income Tax

The North Carolina General Assembly is moving toward eliminating the corporate income tax. If it retains an income tax, it should eliminate the personal income tax instead of the corporate income tax. Why? Corporations (C corporations, S corporations, B corporations, limited liability companies, nonprofits, closed corporations, professional corporations, etc.), unlike a natural person, are creatures of the government and have privileges that individuals do not have. Moreover, the personal income tax enslaves people. Corporate income taxes do not because corporations are not living beings (contrary to what the US Supreme Court and many libertarians believe).

Moreover, a natural person has a natural law right to privacy. The income tax is a massive invasion of privacy. On the other hand, being creatures of the government, corporations have no right to privacy; the government has every right to know what its creatures are doing. (If we have a government of, by, and for the people, and if the people are the masters and the government is the servant — as our politicians continuously remind us — then the people have the right to know everything about the government, including information classified as top secret; the government has no right to secrecy. By extension, the people also have a right to know everything that a corporation does.)

Proprietaries, partnerships, and associations that do not have a charter from a government should be treated as individuals. Likewise, churches that are not incorporated should be exempt from income taxes. Individuals and organizations exempt from income tax should not report any kind of income to the government.

Copyright © 2025 by Thomas Coley Allen.

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Commentary on Hebrews 1:8

Commentary on Hebrews 1:8

Thomas Allen

But unto the Son he saith, Thy throne, God, is for ever and ever;

Hebrews 1:8 is another verse that Trinitarians use to prove the Trinity Doctrine. This verse calls Jesus God. Therefore, it proves that Jesus, who is the Son of God, which Trinitarians interpret as God the Son, is the second person of the Triune God. Adam Clarke writes, “Thy throne, O God, is for ever and ever. If this be said of the Son of God, i.e., Jesus Christ, then Jesus Christ must be God; and indeed the design of the apostle is to prove this.” (Adam Clarke’s Commentary on the Bible, abridged by Ralph Earle, 1967, p. 1249.)

Like Unitarians, Trinitarians note that the author of Hebrews contrasts Jesus, the Son of God, with the angels. However, according to the Trinitarians, Jesus rules as God and, therefore, is God.

According to Trinitarians, the exalted Jesus is superior to the angels, and they minister to him — with which Unitarians agree. Moreover, he is a sovereign sitting on a throne, and the angels worship him because he is their creator and God. Although angels may change according to God’s will, Christ is the unchangeable, ever-reigning King because he is God. Thus, in this verse, God declares His Son to be God.

Hebrews 1:8 supports Modalism as much as, if not better than, it supports Trinitarianism. After all, it refers to Jesus as God and not as the second person of a Triune God. Hence, it refers to a different manifestation of God and not to a different person of God.

Both Trinitarians and Unitarians agree that Hebrews 1:8 describes Jesus, the Son of God. However, they disagree about the meaning of “God” in reference to Jesus. For Trinitarians, “God” means the Supreme God. For Unitarians, “God” means that Jesus is the perfect agent of God, i.e., Jesus is the Messiah.

Also, both Trinitarians and Unitarians agree that the author is using Psalm 45:6 (“Thy throne, O God, is for ever and ever: the sceptre of thy kingdom is a right sceptre.”) to describe Jesus. However, according to Unitarians, the writer of Hebrews is not suggesting that Jesus is God. He is contrasting the Son with the angels and asserting that the Son is superior to the angels — with which Trinitarians agree. Therefore, the Son can be addressed as God. Moreover, he can be called God because he is God’s agent, just as judges in the Old Testament were called god because they were God’s agents. Only Jesus is the perfect agent, the Messiah. In Hebrews 1:8, “God” means a divine hero who reflects divine majesty. Further, in Psalm 45:6, “God” refers to the king of Israel. Thus, the author of Hebrews is applying the title given to a king of Israel to Jesus as the Messiah. This verse is part of the author’s proof that Jesus is the Messiah, who is a man. He is not arguing that Jesus is the preexisting God-man, the second person of the Triune God. Because of his perfect obedience, Jesus qualifies to be the righteous ruler of the world.

Also, the Bible does not always use the term “god” to mean the Supreme God. For example, Moses is called god in Exodus 7:1.

Moreover, since chapter one of Hebrews proves that Jesus, the Son of God, is superior to the angels, he cannot be God (or God the Son). Proving that God is superior to angels is unnecessary. Further, Jesus cannot be an archangel because archangels are angels, and Jesus is their superior.

Additionally, some Bibles provide an alternative translation. Instead of reading “. . . your throne, O God, . . .,” they read, “ . . . God is your throne . . .”. The alternative translation undermines the Trinitarian interpretation of this verse.

Further proof that Hebrews 1:8 does not support the Trinity Doctrine is Hebrews 1:9 (“Thou hast loved righteousness, and hated iniquity; therefore God, even thy God, hath anointed thee with the oil of gladness above thy fellows.”). This verse declares that Jesus has a God. If the exalted Jesus is God, how can he have a God? The Supreme God has no God. If Jesus is God, this verse is nonsensical. Thus, “God” in verse 8 is used in an inferior sense as a title designating Jesus as a king who is a superior being and does not mean the Supreme Being.

When Hebrews 1:8 is read in context, it refers to the post-resurrected Jesus and his exaltation to God’s right hand. God has given him the privilege to rule along with his Father, God Himself. Because he is God’s perfect agent, Jesus can be called God in the sense that human representatives of God were called god in the Old Testament. Nevertheless, Jesus still has a God, the one true God, his Father, to whom he is accountable.

Even some Trinitarians agree with the Unitarians. They do not view this text as proof of the Trinity. It stresses the exalted function of God’s Messiah as the ruler of men. (Most of the Trinitarian commentators that I consulted do not give any weight to Hebrew 1:8 as supporting the Trinity Doctrine.)

Copyright © 2025 by Thomas Coley Allen.

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