This tax free & tuition free solution to funding all education requires a basic understanding of what money is and how money works. This page is not intended to go into all the complexities covered in college economics courses, and only a brief reminder of some of the relevant basics is touched upon for sake of context. It is written in a manner that most people of voting age should be able to comprehend with a bit of study and thought.
Many people, when they think about money, are of a mind that the money is valuable. While this has some merit, the simple truth is that money represents the existence of something of value and inherits it’s value from the assets it represents. Money has been like this since it was invented. While that may seem strange and provoke some debate, you will find that the use of money of exchange in the form of tokens made of paper, wood, bamboo, etc.. as types of “warehouse claim tokens” for ancient city states’ warehouses occurred long before people started mining and refining gold & silver and striking coins. These tokens represented goods stored in the warehouses (like grain), and it was the goods in the warehouses that were valuable, not the tokens. The token could be exchanged in the barter markets as if they were a bag of the grain only because the token could be taken to the warehouse and traded for a bag of grain. It stands to reason that the use of metal tokens (like gold & silver coin), as the medium of exchange was turned to originally as a type of security feature to hinder counterfeiting of the warehouse claim tokens because of the difficulty of mining and refining it, not because it was scarce or inherently valuable. In fact, there is no evidence that gold & silver became valuable in the modern sense until being used by the ancient city states as the medium of exchange aka money of exchange. Even older than the invention of money of exchange is the invention of the ledger in very crude forms (tally sticks & hash marks), and the oldest form of money is actually money of account — credits & debts on a ledger representing something of value, or something of value owed. This had been how the warehouses did things before the invention of money of exchange, which worked fine for a small community, but with a large city state you can see how quickly it would become an accounting nightmare.
Fiat currency is a term most people recognize now, but it actually takes a few different forms which many people don’t know. The word “fiat” doesn’t mean “fake,” it means “by decree,” or “let it be done” in Latin. Gold & silver coin are technically fiat because their use and weights were established in ancient history via many different official decrees and even by a Constitutional decree & Act’s of Congress when the US was established. While some forms of fiat currency may have nothing of value represented by it’s face value, we actually use a form of fiat currency that is more accurately called representative currency. Representative currency represents valuables in a more all-encompassing way than commodity money (the oldest type of fiat currency — remember the warehouse claim tokens of the city states?), and includes representation of commodities. Since not all assets are commodities, representative currency has a broader representative scope and is superior to commodity money which was historically limited to representing a single type or class of commodity. Granted, depending on one’s definition of fiat currency (which has changed many times over the last 100 years), people may debate this, but note that the backing is “the authorities ability to pay” in Black’s Law dictionary’s current definition:
Fiat Currency: Currency by official order whose value is based on the authorities ability to pay.
Pay what? Something of value — an asset of some kind (goods, services, commodities, etc..).
In more modern times of the USA the money supply — both money of exchange (coin & paper money), and money of account (ledger debit & credit entries in accounts) — was backed almost exclusively by gold & silver before 1933. Gold & silver were the main types of assets being represented by the currency but, after the Industrial Revolution (which eventually caused the Great Depression), it became physically impossible to continue to use gold & silver to back the bulk of the money supply due to the massive amounts of new goods & services that entered the economy. See, there is only about 1 oz of gold & 12 oz of silver per person on Earth (above & below ground), and so out of necessity because there was not enough money in existence to buy everything being created — the bulk of the money supply had eventually moved into the hands of the factory owners (and their expenses were so low that it never moved back into circulation) — the system was change in 1933 to end the Great Depression by expanding the types of assets that could be used to back the money supply (see The Public Papers & Address of Franklin D. Roosevelt — The New Deal or New Deal economics). This made it possible to expand the money supply to keep pace with the expansion of all the new goods & services being created.
In our modern system — New Deal economics — the money supply represents a broader range of assets than gold & silver but is no longer redeemable directly at the US Treasury or Federal Reserve Bank in any particular commodity (our money is redeemable in our markets, however). In other words, when things of value are created, developed, discovered or acquired, their value can and may be accounted for on the ledger of the US Treasury or used as collateral by the Federal Reserve Bank, and it is the value of these assets that our modern currency represents — assets back the money supply. Granted, while the currency is not redeemable in gold, silver, or any other particular commodity or assets directly from the US Treasury or Federal Reserve Bank, Congress has specified that Federal Reserve Banks must hold collateral equal in value to the Federal Reserve notes that the Federal Reserve Bank puts in to circulation.
Contrary to what some people believe or said while speaking loosely, our modern currency is not just “created out of thin air.” There must always be something of value, for every Dollar that gets created, being represented. This has proven to be a natural law of money since it’s invention long before the USA was founded. Every Nation in history that has turned to creating a fiat currency that did not represent something of value has eventually had their economy collapse. Why? Because money is nothing more than an abstract representation of something valuable and is not actually valuable with out it — it is the inherent nature of money, be it Dollars, Yen, Marks, Pounds, etc.. Keep in mind that the things that are considered valuable don’t always take such a tangible form as gold, silver, a car, a house, land, labor, food, etc.. There are all kinds of intangible assets that can & are used to back currency. In fact, there is a very large portion of the money supply which, speaking loosely, is backed by the value of promissory notes (and similar contractual obligations), created during the loan process. A promissory note (which is a legal binding enforceable contract), as long as the promise is kept and the loan is paid back, is considered valuable and used as the asset which the currency, created in the form of a bank deposit (money of account), represents. This use of promissory notes to create & back currency is true of all central banks, and technically it is the borrower creating the money, with the help of the bank, because the borrower creates the valuable asset that the credits (and debts), on the accounts represent (study double-entry bookkeeping for more depth on this). If the banks were actually “creating money out of thin air,” they would just create the ledger credit entries in the accounts without these contracts in hand. The banks never credit accounts until the borrowers sign these contracts, or in technical lingo, perfect the instrument — It is a crime for the banks to do this.
The main point of this brief history of money and relevant facts is to illustrate this: There must always be something of value being represented by money or it is worthless. Further, this natural law of money and other economic principles that have existed & proven out over thousands of years since money was invented, were not abandoned when the Federal Reserve System came into existence. Congress created the Federal Reserve System (all the banking laws), to govern the Federal Reserve Banks and to expanded on the existing economic system to allow the Federal Reserve Banks the ability to use debt based assets in the process of creating currency because the money supply needed to be expanded. And to interject a last point, debates about the merits of the Federal Reserve System are irrelevant to this people’s initiative because this initiative is focused on these preexisting economic principles before the Federal Reserve System was created by Congress and which the Federal Reserve System relies upon itself — specifically, the historical use of mediums of exchange, which we call “money,” to represent assets in an abstract way. Technically, the banks don’t even create public money (only a National Treasury can do this), they create private credit which can, according to US law, be redeemed in lawful money.
In light of the above, and on the note of using valuable assets for currency to represent (be they debt based or debt-free assets), in the realms of universally valuable things everyone recognizes as valuable, knowledge & education is well recognized and very valuable. Diplomas, degrees, and other types of official educational documents certify extensive testing for the existence of a measured amount of this valuable knowledge has been done, and they serve as evidence of the existence of this measured amount of valuable knowledge held by the graduates.
In all simplicity, the Congressional Order 101 initiative is about monetizing the measured amount of valuable knowledge that the diplomas, degrees and other official educational documents issued by our educational systems represent. And, once monetized, using that money, rather than taxes and tuition, to fund all forms of education.
We are ordering Congress (remember they work for We the People, and will follow a lawful order of the Majority), to start treating the high school diplomas, college diplomas, trade school certifications, GEDs, and other official educational documents like they are financial instruments that evidence the existence of valuable assets, because, in fact, they do.
And, we are ordering Congress to create the laws needed for the US Treasury to start accounting for the valuable assets these documents evidence so we can create and securely back new currency, and then use these newly created funds to pay for all public and private educational services and discharge debts.
That’s it, and it really can be and is that simple.
We don’t need to increase taxes or go further into debt. We don’t need to default on school loans or transfer the debt from the students to the public debt (which is how most of those proposals for “student debt relief” work). We don’t need a vastly overly complicated plan for reformation of the entire global banking system. Our existing infrastructure remains just as it is, and with nothing more than this minor change many problems are solved and life is improved for everyone. We simply need to start accounting for this vast amount of Wealth that has been going unaccounted for and is constantly being created all the time.
As a note of caution, any time anyone talks about creating money, you should be skeptical due to the multitude of flimsy ideas used to justify it’s creation and the potential of causing damage to the economy. For example, creating a trillion Dollar coin. Remember, the natural law of representative currency is that it must represent something of value, but it must not falsely represent the value of the asset by over stating the value of the asset, as this causes inflation. So a trillion Dollar collectible coin made of platinum, while it is an asset, is obviously not an asset worth $1 Trillion US Dollars — even if as a collectible coin, and it’s value is reasonably a bit higher than just it’s weight in platinum.
Unlike those kinds of ideas, this economic innovation and solution has universally known and accepted valuables backing the currency being created – and not just because government or some website says it does: You said knowledge & education is valuable every time you pay taxes or tuition to fund schools. And, while this measured amount of valuable knowledge & education is in the realms of what is called an intangible asset, and it would be unable to be used as collateral for loans due to it’s unalienable nature (slavery is outlawed), we can be absolutely confident in this backing due to the fact that we test extensively for the existence of, and increase in, the knowledge held by the graduates before diplomas, degrees, certifications, etc.. are issued.
Further, where there to ever be a re-establishment of the requirement for the ability to redeem currency in the valuable thing the currency represents, it is possible, if this were the only asset being used to back the US Dollar, for the money to be taken to any graduate and given to the graduates in exchange for the graduates putting the knowledge and education they hold to work for you. Truth be told, using knowledge & education as the asset to back currency is better than gold & silver because the currency can be redeemed over and over throughout the life of the graduates.
Constitutionality of the Economics
(Note: For the info on the Constitutionality of doing a people’s initiative at the Federal level see this article: An indirect people’s initiative at the Federal level? Yes.)
The constitutionality of the Congressional Order 101 initiative’s economic innovation, in all simplicity, is in: 1) The creation of the Treasury, which implies the creation of the general public ledger of the Treasury & incorporates all economic principles regarding the sound uses of ledgers, and; 2) In the “measures” portion of the Weights & Measures clause.
- Accounting for assets on the general public ledger of the Treasury is the essence of creating money of account, which can then be transfered to other accounts via check, direct deposit or even converted into Bills of Credit (there are currently $300 million United States Notes still in circulation, aka Bills of Credit). Contrary to popular, but erroneous belief, money of account and Bills of Credit have always been a part of the monetary system since the United States of America was founded, and only the individual States were limited to gold & silver Coin.
- The asset that is going to be accounted for on the general public ledger in order to create the money to fund education is a measured amount of knowledge & education held by the graduates (which extensive testing proves exists), and is then evidenced by official documentation, like diplomas, degrees, etc..
But this will just cause inflation… right?
It is true that if we were to start “creating money out of thin air,” that this would cause inflation, but that is NOT what is being proposed.
Remember, what is being proposed is using an asset for the new currency being created to represent, and just as important, is that these assets are not currently being accounted for and used to sustain any currency, nor are they being over valued (as you will see in the next section where the valuation of these assets is explained).
Consider inflation, for a moment, in light of the time when we were using gold & silver as the assets for the money to represent. This is when the term “inflation” was coined. The cause of inflation during this time is very clearly understood: The money supply was inflated beyond the total value of the assets it represented. In other words, for each Oz. of gold, rather than there only being a single gold certificate printed or credit entry entered into the ledger representing it, there were 2 (or sometimes more). As an example, even tho the total of the face value of the money supply added up to, let’s say, 10,000 oz of gold, there was in fact only 5,000 oz. of gold in the vaults and this caused the actual value of the money supply to be 1/2 what it said it was worth on it’s face.
Even with the expansion of the monetary system to allow using debt based assets to back the currency, this same root cause of inflation remains the actual cause: The total money supply is inflated beyond the total value of all the assets accounted for. With debt based assets tho, another cause of inflation, for example, is if loans are not repaid. See, the promissory note is only valuable if the promise to repay the loan is kept, but if the borrower defaults on the loan, then the backing for that portion of the money supply that was borrowed into existence disappears. In fact, the use of debt based assets adds in many other complexities regarding the causes of inflation that are simply not relevant when using debt free assets, but all these additional causes still remain rooted in the total money supply becoming greater than the total value of the assets accounted for.
As an aside, there is also a strange thing about using debt based assets that is note worthy: When the loans are repaid, since the promissory notes (or other kinds of debt instruments), are no longer of value to any creditor (and this is the value the money represents), that portion of the money supply is destroyed in the process by the banks. If it wasn’t, this would also cause inflation when using debt based assets to back currency. So, the banks don’t get to keep that money they “loaned,” they do, however, get to keep the interest paid on the loan. Enough digression tho.
The point is, the erroneous assumption many people make who do not take the time to examine this proposal — that this will cause inflation — is simply not true. This will no more cause inflation than mining new gold & silver and turning that into money did.
What is the value of these assets?
The next obvious question…
It must be emphasized that by “asset,” the term is not being used like the movies depict CIA agents talking about people. There is NO proposal of setting a value on the graduate, but rather, the value is being set on the knowledge & education the graduate holds. The graduates are NOT the assets.
While everyone can grasp there is obviously a valuable asset, when we start looking at how to establish the monetary value of this measured amount of knowledge & education, it would not be wise for it to just be assigned some arbitrary value. And, as people try and assess the true value of education, they will find what I did: In truth, the actual value of an education is near infinite, and accurately calculating it would be impossible due to the multitude of factors involved. Further, the true value varies from student to student. And further still, knowledge continues to grow over time, long after people graduate.
What we can do, however, is use a very conservative minimal or base value so we don’t cheat ourselves out of the ability to account for enough of the value to completely fund the very system that is helping the students develop this Wealth in the first place.
Metaphorically speaking, the cost of a house built to code with $160k worth of raw materials & labor is worth at least $160k. Granted, that same house will sell for many times it’s base value once it reaches the market, but the valuation of the house starts with it’s base value.
While people may endlessly debate the true value of knowledge & education, we can all recognize that it has a minimal value. At the very least the base value of the measured amounts of knowledge & education these educational documents represent is equal to what it costs to provide the student who earned the diploma with the education.
Value = Cost
People already pay and have paid this amount, so it is already established that it has this value, and since we all know it is worth more than this, it is obviously not being assigned an inflated value like our example of the Trillion Dollar Coin.
For example, the current average cost for K-12 education is about $160,000.00, so in light of the example, the base value of a high school diploma is about $160,000.00. This could be broken down to about $12.5k per year, and at each grade, an official certificate could be created to make yearly accounting possible.
Another example, a college degree that costs a college $50,000.00 to help the student earning the degree develop their knowledge & education, would be registered as an asset worth $50,000.00 dollars, $50,000.00 dollars will be credited in the general public ledger of the US Treasury, and then transfered via check or direct deposit to the school that provided the education (a bit more depth on the details of how money works can be found here).
Further, while people may be tempted to develop more complicated accounting methods to more accurately account for a base value nearer the true value (and I have thought of a few — like using GPA variations to establish degrees of value with the minimal passing GPA equal to the base value and increasing the base value from there), you will find that the accounting is already going to be a bit complicated even with this simple variable cost-based formula establishing the base value of the educational documents. There are hundreds of millions of calculations that are going to be being done, let’s not overwhelm the accountants by making it even more complicated. Any such proposed changes adding complexity to this, if they are deemed wise, can always be done later.
So, are you saying students will get a “free” education!?
No. Few things in life are free. People will definitely have to earn their diplomas, degrees and certifications with hard work & study. It takes a lot of time & energy to go to school, develop this Wealth, and graduate. So it’s technically not “free,” but this will eliminate the need to use taxes or tuition to fund education.
Like sweat equity, this increase of mental sweat equity, as the knowledge one’s mind holds is developed, increases one’s own personal wealth, and more importantly for purposes of creating currency, it increases the Wealth of the Nation. This increase in mental sweat equity is tested for, and then certified to exist and/or have increased by documents like diplomas, degrees and certifications. Now that we have documented evidence of an asset, we can account for the value of the asset on the ledger, and this accounting of the value of assets on the general public ledger is the creation of money of account. That new money will then be transfered via check or money order to the educational service providers.
Further, while it really is the students who are developing the valuable Wealth that will be used to back the currency (they are the ones indirectly creating the money, the cause), they are not doing it alone. And since the value of the Wealth being created is established by pegging it to the cost for the educational systems that help the students develop this valuable Wealth, the new money must go to the educational systems. So you see, the students are actually still paying for their education… but it is by using money they literally created via this capitalistic economic innovation. Capitalism is about turning wealth into capital, and is what has always distinguished it from Socialism
The good news for the students is this: Even tho you don’t get to keep the money you are indirectly creating, you will get to keep the Wealth, and all through your life you will always be able to put that knowledge & education to use in exchange for money. You will also no longer have to pay taxes for funding the public educational systems or tuition for private education or repay loans when you get older. Nor will your decedents have to pay taxes & tuition for educational services.
How will this impact the National Debt?
According to the Debt Clock the current National Debt is over $20 Trillion Dollars, and the next 20-25 future generations of unborn children are currently slated to be indentured to work it off (typically, it’s just the interest being paid when the “budget is balanced,” which is $270+ billion a year). This was the past and current plan to pay the Debt… until now.
Among the elements of the Order, there is a stipulation that the value of all educational documents of all currently living people will be accounted for and monetized, not just those of future generations of graduates. A large portion of these funds are being directed into “paying off,” or more accurately, discharging the public debt because the source of the funding originally came from public sources (and likewise, funding that came from private sources would be refunded to those sources. Again, a bit more depth on the details of how money works can be found here). Pertaining to the National Debt, for a very rough idea of what this will mean:
- There are about 300 million Americans, and about 200 million have graduated from high school.
- The average cost of public K-12 schooling is around $160k ($12,500 a year per student for 13 years — tho, in the past it was lower, many people graduated over 60+ years ago), SO, lets use $50k as an average value of the education of a single student past or present.
- So: $50k x 200,000,000 = $10,000,000,000,000.00 ($10T)
Again, this is a very rough calculation, but government accountants will crunch the numbers later and provide more exact calculations. Nonetheless, as you can see, this solution will, in addition to funding all education, also massively reduces the current National Debt, and that is just from accounting for the existing high school diplomas with a low-ball average value of $50k per diploma.
Further, in the future, this solution will also have an impact on all aspects of the entire Budget, not just the Education Budget. For example, while not the total costs of these areas, the training provided for military personal, law enforcement, firefighters, prison educational systems, public internships and other publicly funded education related services all produce various official certifications and documentation that represent measured amounts of valuable knowledge and education. While these education costs are not part of the Educational Budget, they are part of the Budget. As you can see, this solution will not only have a huge impact on the current public debt, but it will help prevent it from ever getting so out of hand in the future. Granted, unless overspending is reigned in, we will once again find ourselves in Debt. Hopefully we have learned our lesson about allowing this to happen.
And one last note, because I presume many people at this point will be wondering how $20+ trillion dollars of new money is not going to cause inflation regardless of the truth of it’s actual cause. First, there will be no money being printed. We are talking about creating money of account… not printing money. Second, when money of account is created on a ledger with debt, the credit cancels out the debt. Remember basic math and what happens when you add a positive number to a negative number:
20,000,000,000,000 + -20,000,000,000,000 = 0
This is why $20 Trillion Dollars will NOT actually be going into circulation. This is also the reason why repaying money that is borrowed into existence is destroyed when the debt is repaid. Granted, if the total value of all these already existing assets is a bit more or less than the total of the public debt, there may be some National Debt remaining, or for the first time, a National Credit. In the event of a National Credit, only that portion will move into circulation, for example:
20,002,850,121,873.12 + -20,000,000,000,000 = $2,850,121,873.12 of new asset backed money moving into circulation.
Further, for those who may be concerned for the Federal Reserve Banks financial health and the banking systems ability to continue to exist and provide services to the population (which are far more than just loan services), this is almost all regarding dealing with the public debt(and some private debt in the form of student loans (many of which are being defaulted on anyways), and will have very minimal impact on the bulk of the private debt. The private debt is still in existence (about $40 Trillion) and while this is a proposal to start backing a portion of the money supply with debt-free assets, there is no need to cease using debt based assets as well. Assets are assets, and therefore both kinds of assets can be used without conflict, and the ability for money to be borrowed into existence via the Federal Reserve System remains, not only possible, but very useful.
How do we make this happen?
We are using an indirect people’s initiative (remember that stuff earlier about an Order to Congress?). As many know, a people’s initiative is a method by which the people of a State can enact law by overriding their elected legislative body. They come in 2 flavors:
- The direct initiative – This method involves, in part, drafting up the exact wording of the legislation that will become public law.
- The indirect initiative – This method sets forth certain required elements to accomplish a desired result, but the actual legislation is left to the elected legislative body to draft.
While protest movements are very effective for bring to light problems, they are not very effect at getting those problems solved. This is the purpose of people’s initiative actions. And, while more common to dealing with & influencing local State government, they can be just as effective on the Federal level.
In some ways this is a modern precedent, not the people’s initiatives mind you (these happen all the time), but doing one at the Federal level. While the methods & customs of how people’s initiative actions are conducted at the local level were observed, as we apply the methods & customs to the Federal Government, since there is no formal method established by an Act of Congress yet, a few elements are left to common sense. Two of the biggest differences that common sense dictates are:
- While people signing the Order are, in essence, casting a vote for having Congress draft the proposed legislation, it will be Congress that will be voting on the final legislation (and redrafting it and voting until some Act passes). With state level indirect initiatives, after the legislature drafts the legislation, the population votes on it. In some ways this is like a “petition for a redress of grievances” except that we aren’t asking, we are ordering our public servants to make the proposed changes… and it takes a Majority of the People to make this happen.
- There is no time limit for the expiration of this initiative to succeed or fail set. With local initiatives, if they don’t get enough signatures by a set date, the initiative fails and a new initiative must be conducted. Since doing a people’s initiative at the Federal level is a modern precedent and it will take time for this initiative to circulate via Constructive Notice and for the people to grasp their rights & powers to do this, therefore the initiative shall remain open ended.
To make this people’s initiative happen, download: Congressional Order 101, study it, print it, then sign & seal it (with your finger print or a notary), and date it.
Next: Grab an envelope and a stamp and mail your signed Order to Congress via one of your elected Senators or Representatives. This is, in essence, casting your vote for this.
You can find your Congress peoples’ addresses via the following link:
It’s that simple.
One last quick note to help with sorting all the mail: On the back of the envelope clearly print: Congressional Order 101
This may seem a bit old fashioned to some, and some people will think I should have set up some kind of digital means for everyone to send this Order, but this initiative requires a wet ink signature and proof of identity.
Once you have mailed off your Order, then tell your family, friends, co-workers, teachers, etc.. about Congressional Order 101, or better yet, just send them a link to this page.
While I have no doubt this will eventually have the backing of the Majority, there are a few things that I believe may prolong it happening:
Please don’t worry about if a Majority of people are going to do this. It will happen, it’s just a matter of how long it will take. In fact, there is a provision in the Order that Congress can act on the Order even before a majority of people sign & mail it in, but it is unlikely Congress will do this unless there is some interest shown by the people. In essence, this stipulation allows Congress to treat this like a Petition (which doesn’t require a Majority), rather than an Order.
Please don’t get hung up on the wording in the Order. This is an indirect initiative. The Order is not going to be the actual wording of the law that Congress is being ordered to create. So if you don’t like the way I worded it, or think I should have added or left stuff out, don’t worry, Congress will be taking care of those details when they draft the actual legislation.
Please don’t change the wording of the Order. If we try sending a bunch of different “orders” to Congress, none of these separate orders will gain the Majority backing we may need to make this happen. In addition to the Order tho, if people would like to offer additional ideas, simply title a separate page: Addendum (or something like this) – and write your ideas out on these pages and include it with your Order. Do your best to keep it brief, Congress people (and staff) already have too much reading to do.
I hope I have clearly explained the tax free & tuition free solution to all educational funding.
Like any true innovation, it requires a bit of time to process the information and consider it. But, once people grasp the simplicity that their diplomas and degrees represent a measured amount of valuable knowledge they hold, which is, in fact, an intangible asset with a universal value, all that is left to do is have Congress draft some law and the US Treasury to start accounting for them on the general public ledger.
I would ask people to help make this site and the initiative to go “viral,” but I think of this as a brilliant “cure” to educational funding & economic “diseases,” so… rather than going “viral,” help this brilliant idea Supernova by sharing it, and help give birth to future generations of super stars!
Christopher Theodore of the family of RHODES
Feel free to join the LinkedIn Group if you have questions or want to be more actively involved with this initiative:
#CongressionalOrder101 #EduFunding #Initiative