Pointing to a given year to explain today runs the risk of marginalizing other, prior factors. There is always a backstory.

Nonetheless, 1913 qualifies just as surely as 9/11 "changed the world forever."

One could justify the Panic of 1907 as a precursor event. And certainly 1910 saw the collusion at Jekyll Island that gave rise to the later realities. Indeed, the Sixteenth Amendment to the U.S. Constitution began with a resolution passed by the Sixty-first Congress and submitted to legislatures of the several states on July 12, 1909. "

The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration."

The requisite three-fourths of states ratified this amendment, including Ohio (January 19, 1911) and an income tax, the Revenue Act of 1913, became the law of the land. This was signed by President Woodrow Wilson on October 3, 1913.

Only, oops, in 1953 Ohio was preparing to celebrate the 150th anniversary of statehood. Although Congress had approved Ohio's boundaries and constitution, it had never passed a resolution formally admitting it. Technically, therefore, Ohio wasn't a state! This is the point that tax resisters have used to declare the income tax unconstitutional (among others.)

Opponents of a federal income tax at the time believed it would excessively centralize government power. They had a point. The only previous time in American history that had seen an income tax was Lincoln's Revenue Act of 1862, to pay for his unnecessary civil war. That tax was discarded a few years later. Progressives had tried more than once in the latter part of the 19th century to get a graduated income tax. Now they had one, albeit modest in its requirements. The income tax was deemed necessary to make up revenue shortfall due to lowered tariffs.

However, the income tax was propagandized to ordinary people on the basis that "you'll never have to bother about it." A 1% rate on income of $3,000 or more, and graduated up to 7% for the top bracket. So, you see, 'soak the rich' has a long and ignoble history. Anyway, that all changed with the start of World War Two. "We the people" got to fight, die, or be 'Rosie the Riveter' and pay for the war as well.

Curiously, the biggest item of federal revenue in the early years of the 20th century was ... the alcohol excise tax.

Well, old Woody was a busy fellow and the Federal Reserve Act passed the Senate on Dec. 23, 1913. Surely a paradigm shift that year. There had been government chartered national banks before (they failed) but never a privately owned central bank that purports to be part of the government. With central control of the monetary and fiscal policies both, Our Father Who Art in Washington held the high cards.

Why is it important?

Before he died, Wilson is reported to have stated to friends that he had been “deceived” and that “I have betrayed my Country” speaking of the Federal Reserve Act. (I cannot verify the accuracy of this -- but if he didn't say it, he should have!)

This one, however, is on the Woodrow Wilson Presidential Library site:

"We have restricted credit, we have restricted opportunity, we have controlled development, and we have come to be one of the worst ruled, one of the most completely controlled and dominated, governments in the civilized world--no longer a government by free opinion, no longer a government by conviction and the vote of the majority, but a government by the opinion and the duress of small groups of dominant men." -- excerpt from 1912 campaign speech

The Founding Fathers had something to say about a central bank ...

"I believe that banking institutions are more dangerous to our liberties than standing armies. Already they have raised up a monied aristocracy that has set the government at defiance. The issuing power (of money) should be taken away from the banks and restored to the people to whom it properly belongs." --Thomas Jefferson.

"History records that the money changers have used every form of abuse, intrigue, deceit, and violent means possible to maintain their control over governments by controlling money and it's issuance". -- James Madison

And others:

"Whoever controls the volume of money in any country is absolute master of all industry and commerce." -- James A. Garfield

"If Congress has the right [it doesn't] to issue paper money [currency], it was given to them to be used by...[the government] and not to be delegated to individuals or corporations" -- President Andrew Jackson, Vetoed Bank Bill of 1836

"The [Federal Reserve Act] as it stands seems to me to open the way to a vast inflation of the currency... I do not like to think that any law can be passed that will make it possible to submerge the gold standard in a flood of irredeemable paper currency." -- Henry Cabot Lodge Sr., 1913

"This [Federal Reserve Act] establishes the most gigantic trust on earth. When the President [Wilson] signs this bill, the invisible government of the monetary power will be legalized.... the worst legislative crime of the ages is perpetrated by this banking and currency bill."

"From now on, depressions will be scientifically created."

"The financial system has been turned over to the Federal Reserve Board. That Board administers the finance system by authority of a purely profiteering group. The system is Private, conducted for the sole purpose of obtaining the greatest possible profits from the use of other people's money" -- Charles A. Lindbergh Sr.

"It is well that the people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning." -- Henry Ford

And to put the dollar decline into context:

Data from the U.S. Department of Treasury indicates: the cost of goods and services remained relatively consistent between 1635 and 1913, around a level of roughly 25 times the buying power of the U.S. dollar in 2006.

From an inflation calculator:

"$1.00 in 1913 had about the same buying power as $21.54 in 2008."

Yikes. Or, to put it another way, since the Federal Reserve was created to stabilize the economy, the U.S. dollar is now worth 4.64 cents. Heckuva job, Feds!

Historical highlights since 1913:

In 1916, aside from assisting the British by selling 'Allied war bonds', Wilson was campaigning for re-election on the slogan of 'He kept us out of war!' At the same time, his 'brain', Col. Edward Mandell House was in jolly old England arranging the secret treaty to bring the U.S. into World War One. (The text of this treaty is in the "Memoirs of William Jennings Bryan", Vol. 2.) A Fed flexible money supply and taxation fueled Wilson's ambition for an historical legacy: "Make the world safe for democracy." And, of course, his dream for the League of Nations.

1920: Excess spending by the British government for the war led to a private arrangement for the Federal Reserve to help prop up the British pound. Thus, the very low prime rates fuelled irrational exuberance leading to margin buying by countless speculators on the stock market. And also, a housing bubble -- and farmers over-extending themselves buying more acreage. And 'installment buying' -- "only a dollar a month", so the first was easy, and anyone can afford another dollar. Or twelve. Then, in an effort to cool the mutated growth, the Fed pulled the rates lever up.

1929-1932: The great stock market crash. Followed by sucker's rallies, Hoover interventions that made things worse, like the Smoot-Hawley tariff. Far from being a do-nothing president, as the Conventional Wisdom has it, the Great Engineer engineered a lot and some of became the seeds of FDR's New Deal. It took three years for the stock market to find a bottom.

1933: FDR is elected to save the country. Various 'stimuli' are tried. Worries about deficit spending led to: Excise taxes, taxes on personal income, inheritance, corporate income, holding company and "excess profits" taxes all rose. The 'bank holiday' to prevent panic runs on banks. The confiscation of citizen gold "to prevent hoarding", later changed to a purchase at $20.47/troy oz. Followed by a reset of the price of gold to $35/oz. In other words, an inflationary hit to the people. And wage and price controls, the start of the never-ending Farm Bill, paying farmers not to grow (keep prices up!) and slaughtering 2 million cattle and 5 million pigs, to the same end.

1936: The Fed raises bank reserve requirements, leading to the recession of 1937-8. Imagine, a recession encompassed within a depression. Unemployment rose yet again.

1940: FDR campaigns for re-election on the basis he kept the nation out of a European war. The Selective Service Act of 1940 is passed; even Lincoln and Wilson hadn't been so bold. War manufacturing was already underway: shipbuilding to supply the British. The Reconstruction Finance Corporation (RFC) engineered by Hoover in 1932, which grew during the New Deal, provided initial funding. One could with justification call this the start of the 'mililtary-industrial-complex'. Once America entered World War Two directly, FDR raised taxes to pay for the war. Some 40% of GDP over those four years paid the bills.

But hey, he solved unemployment. About 12 millions were in the active military during the period.

1946: It's claimed the U.S. owned 80% of the world's gold reserves by that time. Repayment of foreign loans, war reparations, and so on. Perhaps this was the start of the Prosperity Bubble. At any rate, America had fully recovered its economy, though the stock market did not reach the 1929 highs until 1950. Onward and upward!

1970-1: The British came with 3 billion U.S. dollars to redeem for gold. Apparently, Nixon looked at the balance sheet and said, Oh, damn! No more redeeming after this, trashing the Bretton Woods agreement of 1944, and breaking the final link to a gold standard. The dollar floated for a long time after, as world reserve currency, on a sea of oil, as it were.Funny how things got worse after: wage and price controls, the OPEC crisis, et cetera.

Taxes higher, real income stagnant, one crisis and bailout after another. Chrysler in 1979 and now they're back again. Stagflation. Deficit spending. An out-of-control national debt. And at every step, the Fed's invisible hand does ... what? (Not that it's invisible any more! PPT, anyone?)

Post-war foreign policy Interventions

Korea 1950-53 Iran 1953

Vietnam 1953-1973

Lebanon 1958 Laos 1964-73

Dominican Republic 1965-66

Cambodia 1969-70 Lebanon 1982-84

Grenada 1983

Libya 1986

Panama 1989

Iraq 1991-?

Somalia 1992-94

Croatia 1994

Haiti 1994

Bosnia 1995

Sudan 1998

Afghanistan 1998

Yugoslavia 1999

Afghanistan 2001-?

Our tax dollars at work: undeclared wars, regime change, and the list isn't even complete. Not only tax, of course -- the Fed has been there to aid and abet deficit spending and the military-industrial complex. Have they succeeded in accomplishing their brief: to stablize the economy and maintain high employment?

America's gold reserve has not been audited since 1956. For all we know, those stories of the paint fading on the gold bars at Fort Knox are true!

Has America spent its birthright? Is not only the economy but America itself broken? And broke? What would a Chapter 11 for a nation look like? Can anything be fixed? Maybe not but one step at a time can't hurt. Here's one change you can believe in:

End the Fed!