Thomas Edison: Bonds vs. Bills

Posted by admin on Thursday, June 30, 2011

Thomas A. Edison Money Quotation saying government created debt instruments are the same whether that debt is for lenders and investors or for the public sector. Thomas A. Edison said:
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If the Nation can issue a dollar bond it can issue a dollar bill. The element that makes the bond good makes the bill good also Quote
 

“If the Nation can issue a dollar bond it can issue a dollar bill. The element that makes the bond good makes the bill good also” — Thomas A. Edison

 

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Thomas A. Edison is making the point that if the government can issue bonds (a form of debt) that are backed by and redeemable for dollars, then it should also be able to issue dollar bills directly without having to take on interest-bearing debt.

His view is that the full faith and credit of the nation that gives value to government-issued bonds is the same element that can give value to bills issued by the Treasury.

Edison seems to be arguing that the government’s power to tax citizens and demand payment of taxes in dollars provides sufficient backing for dollars issued by the government without relying on interest-paying bonds. He implies this could reduce the national debt burden.

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