There is a Huffington Post article written in 2010 by Warren Mosler. The article is Taxes For Revenue Are Obsolete. Mosler introduces the article with the following statement:

April 15th has come and gone, but the issue of taxation remains the course de jour. I was recently forwarded an article entitled Taxes For Revenue Are Obsolete, written in 1946 by Beardsley Ruml, the former Chairman of the Federal Reserve Bank of New York and published in a periodical named American Affairs.

The following is an excerpt from what Beardley Ruml wrote in 1946.

The necessity for a government to tax in order to maintain both its independence and its solvency is true for state and local governments, but it is not true for a national government. Two changes of the greatest consequence have occurred in the last twenty-five years which have substantially altered the position of the national state with respect to the financing of its current requirements.

• The first of these changes is the gaining of vast new experience in the management of central banks.
• The second change is the elimination, for domestic purposes, of the convertibility of the currency into gold.

This shows that what the Modern Money Model describes as the way our sovereign currency works was well known in 1946. If people in 1946 understood this back then, why do people find it so hard to accept now? It is just amazing what knowledge we seem to have lost over the last 71 years.

History.com has the article FDR takes United States off gold standard.

On June 5, 1933, the United States went off the gold standard, a monetary system in which currency is backed by gold, when Congress enacted a joint resolution nullifying the right of creditors to demand payment in gold.
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The government held the $35 per ounce price until August 15, 1971, when President Richard Nixon announced that the United States would no longer convert dollars to gold at a fixed value, thus completely abandoning the gold standard. In 1974, President Gerald Ford signed legislation that permitted Americans again to own gold bullion.

For a long time, I have known about the $35 per ounce price of gold and the restrictions on owning gold in the United States. This article told me about some details that I had not realized.

I didn’t realize that went “off the gold standard” since 1933. I did know that we were really off the gold standard since 1971.

How did we manage to go off the gold standard in 1933 and 1971? The Bretton Woods agreement is the answer.

Within the Final Act, the most important part in the eyes of the conference participants and for the later operation of the world economy was the IMF agreement. Its major features were:

• An adjustably pegged foreign exchange market rate system: Exchange rates were pegged to gold. Governments were only supposed to alter exchange rates to correct a “fundamental disequilibrium.”

One final piece of history from the WikiPedia article.

The institutions were formally organized at an inaugural meeting in Savannah, Georgia, on March 8–18, 1946.

I record this information here to pave the way for the next item I am about to post.