What is the solution?

This tax free & tuition free solution to funding all education requires a basic understanding of 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 the basics is touched upon for sake of context.

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 asset it represents. Money has been like this since it was invented with the exception of gold and silver Coins, which were developed much later and are technically a return to the barter system, rather than actually being money. While that may seem strange and provoke much debate, you will find that the use of money of exchange in the form of tokens made of paper, wood, bamboo, etc.. as warehouse claim tickets occurred long before people started smelting gold & silver and striking coin. In fact, gold and silver coin as the medium of exchange was turned to originally as a type of security feature to stop counterfeiting because of the difficulty of mining and refining it, not because it was scarce or inherently valuable (it became valuable later because of being used in this way). Even older than the invention of money of exchange, is the invention of the ledger (in a very crude form), and so the oldest form of money is actually money of account — debits and credits on a ledger.

As most people know, money was backed almost exclusively by gold and silver at one time in the USA (and technically, the bulk of the gold and silver was never turned into Coin, but rather, kept as bars). Gold and silver were the main assets being represented by the currency. In our modern system, both coin & paper money (money of exchange) and ledger entries in bank accounts (money of account) represent a broader range of assets and are no longer redeemable at the Treasury in any particular commodity (they are redeemable in the markets, however). In other words, when things of value are created, developed, discovered or acquired, their value can and may be accounted for, and it is the value of these assets which have been accounted for, that our modern currency represents, or in other words, these assets back the money supply. Granted, while the currency is not redeemable in gold, silver, or any other particular commodity 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.

Fiat currency is a term most people recognize now, but it actually takes a few different forms which many people don’t know. While some forms of it 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 tickets?), and includes representation of commodities. Since not all assets are commodities, it has a broader representative scope, and is superior to commodity money. 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 dictionaries current definition:

Fiat Currency: Currency by official order whose value is based on the authorities ability to pay.

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, to represent. This has proven to be a natural law of money since it’s invention. Every Nation in history that has turned to creating a fiat currency that did not represent something of value, has had their economy collapse if they failed to find something of value to back it with because money is nothing more than an abstract representation of a valuable and is not money with out it – that is the inherent nature of money. 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, etc.. There are all kinds of intangible assets that can be 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 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. If the banks were actually “creating money out of thin air,” they would just create the ledger entries without these contracts. The banks never credit accounts until the borrowers sign these contracts, or in technical lingo, perfect the instrument — It is a crime to do this.

The main point of this brief history of money is to illustrate this: There must always be something of value for money to represent or it is worthless. This natural law of money, that has existed since money was invented, was not abandoned when the Federal Reserve System came into existence. Congress created the Federal Reserve System to govern the Federal Reserve Banks and 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 due to the massive increase of goods & services that the Industrial Revolution caused (the goods & services vastly outpaced the money supply and that made exclusively using gold and silver a physical impossibility — which is what caused the Great Depression of the early 1900’s). 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 the preexisting economic principles before the Federal Reserve System was created by Congress.

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 (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 serve as an abstract representation of this measured amount of valuable knowledge held by the graduate.

The Solution:

In all simplicity, the Congressional Order 101 initiative is about monetizing the measured amount of valuable knowledge that the diplomas, degrees and other 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 educational documents like they are financial instruments that evidence the existence of  valuables, 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.

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, 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.

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 it does every time you pay taxes or tuition for 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, 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 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 represented, 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.

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.

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). So even tho the total of the face value of the money supply added up to 100 Oz of gold, there was in fact only 50 Oz. of gold and this caused the actual value of the money to be 1/2 what it said it was worth on it’s face, for example.

Even with the expansion of 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 currency disappears. In fact, the use of debt based assets adds in many other complexities regarding the causes of inflation that are simple 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 a debt based asset 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, and if it wasn’t, this would also cause inflation when using debt based assets. 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 the CIA 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 see there is obviously a valuable asset, when we start looking at how to establish the monetary value, it would not be wise for it to just be some arbitrary value someone just makes up. 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.

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. While people may debate the value of knowledge & education, we can all recognize that it has a minimal value. At the very least the value of the measured amount 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 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 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 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, a certificate could be created to make yearly accounting possible.

Another example, a college degree that costs a college $20,000 to help the student earning the degree, would be registered as an asset worth $20,000.00 dollars, $20,000.00 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 or used to repay a loan.

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), you will find that the accounting is already going to be a bit complicated even with this simple formula establishing the base value. 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 “free” education!?

No. Few things in life are free. People will definitely have to earn their diplomas, degrees and certifications with hard work and study. It takes a lot of time and energy to go to school, develop this Wealth, and graduate.

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 being created, 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 system to help the students develop this valuable Wealth, the money of account must go to the educational system.

The good news for the students is this: 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 either.

How will this impact the National Debt?

According to the Debt Clock the current National Debt is at about 20 Trillion Dollars, and the next 20-25 future generations of unborn children are currently slated to be indentured to work it off. 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 debts because the source of the funding originally came from public sources (and likewise, funding that came from private sources would be returned to those sources).

For a very rough idea of what that means:

  1. There are about 300 million Americans, and about 200 million have graduated from high school.
  2. 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 (government accountants will crunch the numbers later and provide more exact calculations).
  3. So: $50k x 200,000,000 = $10,000,000,000,000.00 ($10T)

As you can see, this solution will, in addition to funding all education, also reduces the current National Debt by 1/2, and that is just from accounting for the existing high school diplomas.

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, and the like… all produce various official certifications and documentation that represent measured amounts of valuable knowledge and education. And 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 the reason why repaying money that is borrowed into existence is destroyed when the loan is repaid. This is also why $20 Trillion Dollars will NOT actually be going into circulation. Granted, if the total value of all the 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 money

Further, for those who may be concerned for the Federal Reserve Banks financial health and 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 will have very minimal impact on all the the private debt. The private debt is still in existence 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:

  1. The direct initiative – This method involves, in part, drafting up the exact wording of the legislation that will become public law.
  2. 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.

Download: Congressional Order 101, study it, print it, then sign & seal it (with your finger print or a notary), and date it — this is, in essence, your vote for this.

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 people’s addresses via the following link:

Find Your Representative


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 they will do this unless there is some interest shown by the people.

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.

In Closing

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, and are, in fact, assets 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 page 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 Google+ community or Facebook groups if you have questions or want to be more actively involved with this initiative:

Facebook Group – Congressional Order 101

Google+ Community – Congressional Order 101

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