"We are completely saddled and bridled, and... the bank is so firmly mounted on us that we must go where [it] will guide." -Thomas Jefferson (The 5000 Year Leap by Skousen)
In Article I, Section 8, clause 5 of the constitution gives Congress the power "To coin money, regulate the value thereof, and of foreign coin..." The original intent of the founders was for the American dollar to be completely independent of any power outside of the American people. That is why they gave congress (the representatives of the people) the exclusive right to issue and control money. The states were not even allowed to mess with the money supply. The congress was even given the power to regulate the value of the money in the union, and as it relates to foreign currencies.
So what went wrong? Early on, due to pressures from European and American financial interests, the power to issue money was given to private bankers under the "Bank of the United States." Then the congress allowed banks to loan out 3 many times more money than they actually had. This would create a boom in the economy, then the banks would call for a bust and foreclose on property that the bank had furnished almost nothing for. This is called fractional banking.
Theoretically, according the the constitution, congress could print as much money as it needed and could pay off all its debts. But under our current system, if congress needs to borrow money, it has to ask the Federal Reserve for some of their green pieces of paper called "Federal Reserve Notes." Then the Federal Reserve exchanges their green paper for some pink papers from congress called U.S. Treasury Bonds. The green pieces of paper that we borrow from the Federal Reserve is what we call U.S. Dollars. Since the Federal Reserve controls the U.S. currency and aren't held to be transparent, the Federal Reserve has the ability to print however much money it wants, whenever it wants, and give it to whoever it wants- and no one will ever know except for the few privileged parties.
If the American people would demand that congress takes advantage of its power to issue currency and puts a stop to fractional banking, it would make the unstable monetary systems a thing of the past and push America far ahead in the world market. Jefferson, Jackson, and Lincoln all tried to do turn monetary policy around in this way, and at a time when the idea seemed to be catching on the London Times came out with this article about Lincoln's plans:
If that mischievous financial policy, which had its origin in the North American Republic during the
late war in that country (The Civil War), should become indurated down to a fixture, then that
Government will furnish its own money without cost. It will pay off its debts and be without debt. It will
have all the money necessary to carry on its commerce. It will become prosperous beyond precedent in
the history of the civilized governments of the world. The brains and the wealth of all countries will go to
North America. That government must be destroyed or it will destroy every monarchy on the globe.
(The 5000 Year Leap by Skousen)