We Started a Country Over a Tea Tax. This One's Worse
Updated: Sep 28
In 1609, a 73-year-old priest went to jail for calling it theft. We call it monetary policy.
Policy Recommendation: Separate state and money. We can talk about the rest.
Let's finally name the Boogeyman. There's a reason inequality keeps growing no matter how much attention we pay it. There's a reason we're at war in the Middle East like it's 2001 even though nobody wanted it. Both have the same parent, hiding in plain sight: our central bank, the Federal Reserve.
More precisely, it's one power the Fed has, one our Founding Fathers never wanted any government to have. Debasement. Debasement is when a government skips the hassle of taxing you directly and creates new money to pay its bills instead. It's called debasement because it lowers the value of every dollar you already hold. People have been calling out this theft since at least 1609, when a 73-year-old Jesuit priest stood up to one of the greatest empires in history.
That priest was Juan de Mariana, and the empire was Spain under King Philip III. Philip was quietly siphoning his people's money. He stripped the silver out of Spain's everyday coins, made them pure copper, then ordered them re-stamped at double their face value. The crown got richer and the people got poorer, as always happens with debasement.
In A Treatise on the Alteration of Money, Mariana argued (correctly) that the value stored in your money is your private property. Shrinking that value is stealing it. Kings steward their people's property. Tyrants take it. If a king wants to spend more, Mariana said, he has to tax the people openly. For his trouble, Mariana was arrested and confined to a Madrid convent for about a year, and the treatise was banned.
Our Founding Fathers agreed with Mariana. Section 19 of the Coinage Act of 1792 gives the death penalty for anyone caught debasing our currency¹. Today, that would include most of D.C. They weren't all against central banks, just debasement. Hamilton used a central bank to unify our country under a single currency. It also gave out short-term loans to help a young economy grow.
So how did we do a 180? Meet the First Name Club. In 1910, seven men snuck off to Jekyll Island, Georgia (can't make this up), to sketch out what became our third and current central bank². They wanted an "elastic" money supply that could stretch when demand for cash spiked, like at harvest time, and a lender of last resort to stop the bank runs that kept wrecking the 1800s economy. They traveled using first names only. As one of them, Frank Vanderlip, admitted decades later, if anyone had known their group wrote the bill, Congress never would have passed it³. The club: Senator Nelson Aldrich; A. Piatt Andrew of the Treasury; Frank Vanderlip of National City Bank; Henry Davison of J.P. Morgan; Charles Norton of First National Bank of New York; Benjamin Strong of Bankers Trust; and Paul Warburg of Kuhn, Loeb. Vanderlip and Davison went one step further and ditched their first names too, traveling as Orville and Wilbur, after the Wright brothers.
The pitch was enticing: a strong, steady hand at the wheel, smoothing out the booms and busts. That's not what we got.
The next two decades showed the Fed could fail at every one of its well-intentioned goals. Output was more volatile after the Fed, not less⁴. Then came the Great Depression. Milton Friedman and Anna Schwartz showed the Fed made it far worse. Instead of acting as lender of last resort, it let the money supply shrink by a third. In 2002, Fed Governor (and future Chair) Ben Bernanke told them: "Regarding the Great Depression. You're right, we did it. We're very sorry. But thanks to you, we won't do it again."⁵
What the Fed did deliver was a central bank that answers to no voter. Debasement looks different with paper money, but it works the same way. When D.C. wants to spend more than it collects in taxes, which is always, the Treasury sells bonds. Then the Fed buys huge piles of those bonds from Wall Street with money it creates from nothing. During COVID, it bought $80 billion of Treasuries every month for nearly two years. The interest mostly flows back to the Treasury, and when the bonds come due, they just get rolled over⁶. That's how our government debases our currency without ever asking us.
Since 1914, our dollar has lost more value than Rome's currency did in the 250 years before the empire fell⁷.
Inflation drives inequality, because whoever is closest to the new money gets to spend it before prices rise. Economists call this the Cantillon Effect. During COVID, the Fed's new money landed on Wall Street first, buying bonds and mortgage securities, so anyone who already owned stocks or a house got richer fast. CEOs don't shop at Walmart; they buy assets. By the time we came out of the pandemic, paychecks hadn't kept up, and home prices had gone from 3.5 times the typical salary to 5 times⁸. Instead of letting asset prices come back down, the Fed artificially inflated them, widening inequality and putting the American Dream further out of reach.
Lender of last resort became bailouts for Too Big To Fail. Capitalism is a profit-and-loss system. Losses matter as much as profits, because they tell us where capital should stop going. Bailing out private companies is closer to socialism. I even hesitate to call it "crony capitalism," because it's the opposite of capitalism's core idea: creative destruction.
Lastly, peace and the printing press cannot coexist. Debasement has always funded war. During our Revolutionary War, our Continental Congress started printing paper money. So much that six years later the Continentals were worth virtually nothing, "Not worth a Continental" came about⁹.
There is a 0% chance we're at war in the Middle East in 2026 if Congress had to tax us directly to pay for it. We would never go for it. Instead, the Pentagon wants another $200 billion for the Iran war¹⁰, and it will be borrowed, not taxed, because the Fed makes borrowing painless.
To take back our country, we need to take back our money. Let's start there. I'll leave you with Mariana's own closing words:
"If, however, I have been mistaken, I certainly deserve to be pardoned because of my sincere desire to help...Moreover, when a subject is a common concern, everyone is free to express his opinion on it, whether he speaks the truth or is mistaken. Finally, I beg God to shed His light upon the eyes and minds of those who are responsible for these things, so that they may peacefully agree to embrace and put it into action wholesome advice, once it is known."
If we are to take our country back, we'll have to do what our Founding Fathers intended and separate state and money.
Coinage Act of April 2 1792 | U.S. Mint, www.usmint.gov/learn/history/historical-documents/coinage-act-of-april-2-1792. Accessed 28 Sept. 2026.
Romero, Gary Richardson and Jessie. “The Meeting at Jekyll Island.” Federal Reserve History, www.federalreservehistory.org/essays/jekyll-island-conference. Accessed 28 Sept. 2026.
Editors, Post, et al. “Our Best Reporting: From Farm Boy to Financier - Stories of Railroad Moguls.” The Saturday Evening Post, 8 Sept. 2021, www.saturdayeveningpost.com/2021/08/our-best-reporting-from-farm-boy-to-financier-stories-of-railroad-moguls/.
Miron, Jeffrey A. “The Founding of the Fed and the Destabilization of the Post-1914 Economy.” NBER, 1 Sept. 1988, www.nber.org/papers/w2701.
“Remarks by Governor Ben S. Bernanke.” FRB Speech, Bernanke -- on Milton Friedman’s Ninetieth Birthday -- November 8, 2002, www.federalreserve.gov/boarddocs/Speeches/2002/20021108/default.htm. Accessed 28 Sept. 2026.
Costa, Biagio Bossone and Massimo. “The Fed’s Deferred Asset: An Anomaly That Explains Everything.” OMFIF, 26 May 2026, www.omfif.org/2026/05/the-feds-deferred-asset-an-anomaly-that-explains-everything-2/.
“NGC Ancients: The Decline of Roman Silver Coinage, Part I.” NGC, www.ngccoin.com/news/article/6842/NGC-ancient-coins/. Accessed 28 Sept. 2026.
“Median Sales Price of New Houses Sold for the United States.” FRED, 24 July 2026, fred.stlouisfed.org/series/MSPUS.
Thies, Clifford F. “Not Worth a Continental.” The Daily Economy, 3 Nov. 2021, thedailyeconomy.org/article/not-worth-a-continental/.
“Pentagon Seeks $200 Billion for the Iran War, AP Source Says.” Pentagon Seeks $200 Billion for the Iran War, AP Source Says, spectrumlocalnews.com/us/snplus/military/2026/03/19/iran-war-pentagon-200-billion-request-military-funding. Accessed 28 Sept. 2026.
