source: Carl Herman, Examiner.com
Many of America’s brightest historical minds recognized and communicated the obvious answer to US national debt:
US government can create money instead of debt.
Current law lets banks create what we use for money, which we then borrow at interest. This Orwellian “monetary” system is the opposite of money because it’s debt. Allowing banks to create what circulates instead of money is inflationary, as time proves with certainty.
Therefore, we should stop letting banks create debt and inflation. We can and should have debt-free money, and manage its supply to manage inflation.
The US can end debt-damned economics: our crippling Robber Baron-era system whereby the harder Americans work, the more in debt we collectively descend. Our modern-day Robber Baron/oligarchs maintain this confusion with the willing help of US corporate media’s intentional obfuscation.
Here’s an interview to hear me discuss our predicament and obvious solutions.
So what do we do to stop transferring literally trillions of dollars of benefits every year from working Americans to oligarchs? With competent citizenry that understands, demands, and holds our group work (government) accountable for transparency, I recommend three concurrent strategies:
- Unleash tens of thousands of state and city legislators on the idea that under current laws and regulations, they can form their own banks. The benefit is at-cost credit instead of current borrowing costs. For example, California would save ~$5 billion in interest costs every year with at-cost credit (this would re-hire 20,000 laid-off teachers at $70,000/year and still have $1.6 billion left-over). At-cost credit could also mean at-cost public mortgages (think 1-2% interest rate). The one state with the foresight to have their own bank and create their own credit rather than beg to Wall Street is North Dakota: the only state with a growing budget surplus. This is a function of at-cost credit, and has nothing to do with the specific use of the credit; that is, the savings apply equally to every state and their unique circumstances of using money (more resources here and here).
- National monetary reform to create a “money supply” rather than government-issued debt securities. This breakthrough ends our national debt, allows government to be the employer of last resort for infrastructure investment for full-employment and the best infrastructure we can imagine, and provides trillions of dollars in annual benefits compared with our current parasitic debt system.
- Revolt from our allegiance to criminal “leadership” in politics, economics, and US corporate media. I recommend a Truth and Reconciliation process to more quickly divide those willing to choose a “Scrooge Conversion” and help the American public see the “emperor has no clothes” facts from those who continue literal destruction, misery, and death upon Americans and the world.
Corporate media will not remind you, but many of America’s brightest historical minds understood and communicated that publicly-created money (transparent government is public/group work) ends government debt and can create full-employment. This is my “top-ten” list. Here is one of the ten:
Thomas Edison (1847-1931) held over 1,000 US patents for his inventions and is considered among the most brilliant minds in American history. Edison understood the engineering of our monetary system and actively spoke for monetary reform. The following seven paragraphs are from an interview with the New York Times in 1921 from a publicity tour Edison took with his friend and fellow inventor Henry Ford to discuss monetary reform at a potential site for a hydroelectric dam at Muscle Shoals, Alabama. He discusses with the reporter how the US government should directly create the money for this public good.
“That is to say, under the old way any time we wish to add to the national wealth we are compelled to add to the national debt. Now, that is what Henry Ford wants to prevent. He thinks it is stupid, and so do I, that for the loan of $30,000,000 of their own money the people of the United States should be compelled to pay $66,000,000 — that is what it amounts to, with interest. People who will not turn a shovelful of dirt nor contribute a pound of material will collect more money from the United States than will the people who supply the material and do the work. That is the terrible thing about interest. In all our great bond issues the interest is always greater than the principal. All of the great public works cost more than twice the actual cost, on that account. Under the present system of doing business we simply add 120 to 150 per cent, to the stated cost.
But here is the point: If our nation can issue a dollar bond, it can issue a dollar bill. The element that makes the bond good makes the bill good. The difference between the bond and the bill is that the bond lets the money brokers collect twice the amount of the bond and an additional 20 per cent, whereas the currency pays nobody but those who directly contribute to Muscle Shoals in some useful way.
… if the Government issues currency, it provides itself with enough money to increase the national wealth at Muscles Shoals without disturbing the business of the rest of the country. And in doing this it increases its income without adding a penny to its debt.
It is absurd to say that our country can issue $30,000,000 in bonds and not $30,000,000 in currency. Both are promises to pay; but one promise fattens the usurer, and the other helps the people. If the currency issued by the Government were no good, then the bonds issued would be no good either. It is a terrible situation when the Government, to increase the national wealth, must go into debt and submit to ruinous interest charges at the hands of men who control the fictitious values of gold.
Look at it another way. If the Government issues bonds, the brokers will sell them. The bonds will be negotiable; they will be considered as gilt edged paper. Why? Because the government is behind them, but who is behind the Government? The people. Therefore it is the people who constitute the basis of Government credit. Why then cannot the people have the benefit of their own gilt-edged credit by receiving non-interest bearing currency on Muscle Shoals, instead of the bankers receiving the benefit of the people’s credit in interest-bearing bonds?
Certainly there is a complete set of misleading slogans kept on hand for just such outbreaks of common sense among the people. The people are so ignorant of what they think are the intricacies of the money system that they are easily impressed by big words. There would be new shrieks of ‘fiat money,’ and ‘paper money’ and ‘green-backism,’ and all the rest of it – the same old cries with which the people have been shouted down from the beginning.
But maybe we have passed beyond the time when the thoughtful 2 per cent – you know, I gather from my questionnaire that only 2 per cent of the people think,” and Mr. Edison smiled broadly. “Maybe they can’t shout down American thinkers any longer. The only dynamite that works in this country is the dynamite of a sound idea. I think we are getting a sound idea on the money question. The people have an instinct which tells them that something is wrong, and that the wrong somehow centers in money. They have an instinct, also, which tells them when a proposal is made in their interests or against them.”