source: Carl Herman, Examiner.com
The central economic solution to unleash trillions of dollars for the US economy is simple:
- Our Robber Baron-era monetary system must be recognized as a national “debt supply” that only profits the banks that create the debt.
- This Orwellian opposite of a national money supply must be ended. In addition, shocking as it is for most Americans to discover, we’ve already overpaid in tax totals in the several trillions of dollars as revealed in collective governments’ published Comprehensive Annual Financial Reports (CAFRs). We need this ended and transformed to maximize the benefits of that money to the American people.
- The US will unleash trillions of dollars worth of economic productivity with the end of government debts, creating money for the direct payment of public goods and services, and creating at-cost credit/lending as a public service that benefits the public rather than private banks.
Let’s look at each in detail. If you’d like me to explain the following, my podcast interview is here.
- Our Robber Baron-era monetary system must be recognized as a national “debt supply” that only profits the banks that create the debt.
I teach college-level economics. What I’m about to explain is in each and every economics textbook that explains US monetary policy. The more detailed explanation that I provide to my students is here. The US government does not create money, except the literal “change” of coins. When the federal government wants more money than available on deposit from tax revenue, it sells debt securities: bills, notes, and bonds (up to a year, 2-10 years, more than 10 years). The total federal debt is now ~$14 trillion with annual interest payment over $400 billion and at risk to hit $500 billion and more with rising interest rates.
The increase in our “money supply” is therefore not money, but debt. There is no plan to ever pay the debt; Congress just “rolls it over” by issuing new debt securities to pay-off those that mature. Congress cannot repay the debt because doing so would destroy what we use for money, and the total amount is ~$140,000 per average US household. Because the US only pays the interest on the debt, this is similar to a family being bankrupt and only and always paying just the interest on their debt.
Because Americans have a difficult time embracing numbers in the millions, billions, and trillions, let’s take two comparisons to understand how much the annual interest cost is for us. First, all 49 of the 50 states’budgets’deficits would all be covered if we didn’t have this cost (curious about the only state that is solvent? It’s North Dakota; we’ll discuss them shortly). Second, the total estimated cost to end poverty and save a million children’s lives every month (while reducing population growth rates) is ~$100 billion a year for ~10 years to reach self-sufficiency.
The contrast of a national “money supply” would be the government issuing money to pay for public goods and services rather than debt securities. I explain in more detail in our third point how this can be done. For now, just be clear that the monetary system the US uses in your world of the present is a Robber Baron-era creature that creates a national “debt supply” that can never be repaid with crushing annual debt costs.
Banks have legal authority to create debt out of nothing and then “lend” it to the public and government, profiting from the interest they charge. This is in contrast to government creating money out of nothing to invest in public goods and services, profiting the public through full employment if the government becomes the employer of last resort, no debt or interest cost, state-of-the-art infrastructure, and when investments contribute more to GDP than cost of inputs we have the added benefit of decreasing prices. If investment costs are more than GDP improvement, then that cost acts as a tax through the resultant inflation, and retaining the savings from full employment and ending the national debt.
Although what I’ve explained and documented in the previous five paragraphs is conservative economics curriculum, most Americans haven’t paused for a moment’s thought to recognize that early 21stCentury US economic management is a form of debt-slavery that is becomes self-evident with those few moments of thought.
2. This Orwellian opposite of a national money supply must be ended. In addition, shocking as it is for most Americans to discover, we’ve already overpaid in tax totals in the several trillions of dollars as revealed in collective governments’ published Comprehensive Annual Financial Reports (CAFRs). We need this ended and transformed to maximize the benefits of that money to the American people.
Let’s consider if we should either keep or end our national “debt supply.” To depart from academic language for a moment:
Having $14 trillion of unpayable debt and soon $500 billion annual cost for interest is freaking insane.
Yes, we should create money rather than debt. Please trust your ability to understand fraud and parasitic debt when you see it. And “parasitic” has academic agreement as an appropriate description of our national “debt supply.”
Fortunately, leading US economic voices are responding to the current economic crisis by speaking in unprecedented strong language to explain the criminal fraud. Their expert testimony is here. I also recommend “discussing” this issue of government creating either money or debt with leading historical American voices: including Benjamin Franklin, Thomas Jefferson, Thomas Edison, 86% of teaching economics professors when polled of whether the US government should create money or debt, and two past Chairs of the House Banking Committee.
But wait, there’s more: the essential fraud of creating debt also includes fraud of government agencies over-taxing the American public by the multiple trillions of dollars. A few paragraphs from my detailed explanation and documentation:
California has a budget deficit of ~$20 billion. The combined investments of CAFRs for the state of CA, Los Angeles County, and the City of Los Angeles is over $450 billion; over 22 times the amount of the budget shortfall (documentation page numbers below).
California claims they need this money mainly for public employee retirement benefits. Let’s check that story. The CAFR data shows current member contribution pays for all retiree benefits except for $1.8 billion (net cost). If just these three state agencies surrendered their withheld money back to the public instead of lording over it as communists, each Californian would receive ~$15,000. To pay for the shortfall in the retirement account, each individual could be taxed $50.
Why has political “leadership” and corporate media not informed American taxpayers of this option and publicly submitted this data for professional and independent economist cost-benefit analysis to provide other options?
The answer to that question is also the answer to the question of how political “leadership” gets away with Orwellian unlawful wars.
So far, we’re only considering three CAFRs in the state of California. The comprehensive reality is far more dramatic. If you combine all of California’s ~10,000 government agencies’ CAFRs, the combined total according to Walter Burien’s sampling analysis is $8 trillion. Let’s say Walter’s way-off. For argument’s sake, let’s say the total is less than half; only $3.5 trillion. If that was returned to the public, each Californian would receive $100,000.
What CAFRs reveal is a communist-style policy whereby the US taxpayers surrender enormous assets to the state, who then “invest” these collective trillions that swell in these accounts. Concurrently, taxpayers are informed of budget deficits to either squeeze more taxes from them and/or cut public services. To add insult to injury, the state lies in omission by never reminding Americans of their hard-earned and withheld trillions as they eliminate jobs, reduce education, and attack the quality of our lives.
An honest government would inform the public, submit to comprehensive audit to discover how many of our trillions of dollars are held in “investments,” and allow independent economists opportunity for cost-benefit analyses to consider our options for our re-discovered trillions.
The fact that this doesn’t happen is prima facie evidence of criminal fraud.
The American Constitution is a contract of limited government whereby the public informs and is informed by our representatives. CAFRs are damning public documents that expose “leadership” from Left and Right as exactly what leading economic voices have said: an absolutely corrupt and self-serving oligarchy.
3. The US will unleash trillions of dollars worth of economic productivity with the end of government debts, creating money for the direct payment of public goods and services, and creating at-cost credit/lending as a public service that benefits the public rather than private banks.
To end federal government debt, government simply creates money to pay the debt securities as they become due. For more explanation, read this.
Forgive me for sparking your citizenry as best I can imagine: “Duh. Why haven’t you thought about this before? Is $14 trillion of debt and $500 billion a year in interest cost enough for you to declare this economic emperor has no clothes? With one in threeUS families now according to Censusdata as officially ‘low-income,’ will you now withdraw your consent from US government leaders as we can imagine Gandhi and Dr. King would have done?”
The conservative benefits of government creating money rather than debt is over a trillion dollars every year. As I explain in detail here:
The governmental cost of this reform is negligible. The benefits are astounding: the American public would no longer pay $500 billion every year for national debt interest payments (because 40% of the debt is intra-governmental transfers, this is a savings of $300 billion/year). If lending is run at a non-profit rate or at nominal interest returned to the American public (for infrastructure, schools, fire and police protection, etc.) rather than profiting the banks, the savings to the US public is conservatively $500 billion.If the US Federal government increased the money supply by 3% a year to keep up with population increase and economic growth, we could spend an additional $400 billion yearly into public programs or refund it as a public dividend.This savings would allow us to simplify or eliminate the income tax.The estimated savings of eliminating the income tax with all its complexity, loopholes, and evasion is $250 billion/year.The total benefits for monetary reform are conservatively over a trillion dollars every year to the American public.
The only solvent state in the nation today is North Dakota. They are also the only state with a state-owned bank. This allows the state to create loans/credit at-cost and/or issue loans with profits that act as tax revenue. If we unleashed this power as a full public service, mortgages could be 2% interest with the result that state taxes would be close to fully-paid. More details are here.
Independent writers are the only ones to explain, document, and prove these “emperor has no clothes” obvious observations because corporate media, obviously, do not report on these issues. More details are here, and consider these as evidence of corporate media complicity in policy areas of money and power:
The Church Senate Committee hearings had the cooperation of CIA Director William Colby’s testimony that over 400 CIA operatives were controlling US corporate media reporting on specific issues of national interest in what they called Operation Mockingbird. This stunning testimony was then confirmed by Pulitzer Prize reporter Carl Bernstein’s research and reporting. Of course, corporate media refused to publish Bernstein’s article and it became the cover-story for Rolling Stone.
Let’s consider the specific case of corporate media collusion with official government rhetoric to lie about Iranian President Ahmadinejad’s October 2005 speech and contrive a non-existent physical threat to Israel. First: for the US political leaders and corporate media to accuse the president of Iran with threatening to destroy Israel, that’s the most serious of accusations. A threat of national destruction is the most vicious statement a head of state can make. For corporate media to not be in collusion to “report” this proven lie would have to mean that everyone involved in the story never read the speech in question, never consulted with Persian experts, and disregarded all people like me who informed them of their egregious error. Again, here’s my link of corporate media’s “reporting” in print and television allowing US political leaders to lie and repeating the lie themselves.
Of course, you have to verify the speech in order to not interpret the facts as a mistranslation or possible translation. This is appropriately analogous to checking the instant replay of the pitch at the Red Sox game to make sure it really was so outrageously outside the strike-zone that an “official” call that the pitch was a strike is stating a known lie. If it was an immediate error, it could and should have been corrected. That five years has passed and corporate media doesn’t inform Americans of the actual content and context of the speech is absolute evidence of an official propaganda arm of the same oligarchy spinning for unlawful war against Iran.
Two more economic resources: the PuppetGov 8-minute video, “America’s controlled economic implosion” at the top-left of this article, and my article, Solutions to US economic controlled demolition are obvious,but We the People must demand them.
Independent writers also have to explain, document, and declare the “emperor has no clothes” facts of unlawful US wars; with that article here, including:
Would you like the comfort of a heroic political example? Try Abraham Lincoln for speaking-up as a freshman member of Congress that the US lied to initiate war with Mexico to steal land and resources.
Are you Christian and would like comfort and reminder of Jesus’ One Commandment? As I wrote for Thanksgiving 2009 in detail, Jesus commanded (that term means that this is not something one can safely and/or ethically refuse) to love God with all one’s heart, all one’s soul, and all one’s mind; and to love each other as Jesus loves you. And talk about someone willing to confront an imperialistic and invading government! If the Romans had a critical mass demanding ethical public service under the law, as I am asking you to consider in our world of the present, perhaps they never would have destroyed themselves in their tragic-comic corruption.
Are you academic and would like a paper with expert testimony and full documentation? Read Open proposal to US higher education. And if you want more resources than you’ll ever need, read Government by dicts: my comprehensive resources to prove US fascism and rigged-casino economics.