Reply #42: That's right.

[JackRiddler]

What I said was merely to repeat your own statement that Pennsylvania managed this system well, in contradiction to your elsewhere stated belief that a public institution could not run the monetary system without creating disaster. That doesn't mean Pennsylvania was acting as a bank, and more power to it. As you say, it was acting as a government. I'll add, as a government should. Rather than taxing people to pay off interest on a deficit borrowed from banks that pulled paper out of their ass (as per the present system), i.e. sucking money out of all of us and giving it to the banks, Pennsylvania intelligently cut out the bank altogether and just pulled the paper out of its own ass, no interest attached. Voila - it works if run responsibly, since the people so paid go out and use that liquidity and it stimulates production and they are happy people with fiat currency in their pockets working hard to make more things and get more of that fiat. (Picture radically simplified but not untrue.)

Then the British came and crashed this thing overnight - hey, they paid a lot to beat the French and they wanted revenue coming back to London in pounds, not a bunch of scrip useless outside PA - and they tried to finance their operations in the colonies instead by raising taxes, and surprise, there was a revolution.