According to British economist James Robertson and prolific American author Ellen Brown, the main problems facing the US could be solved if our government would just take over the Federal Reserve Bank, and start printing its own government-issued currency, just as the Constitution authorized it to do in the late 18th century. It should then spend that money into the economy by the trillions -- almost exclusively on the building of infrastructure. And not just physical infrastructure. But also the social kind -- as in free education, at the university level, for all qualified students willing and able to study the subjects that would prepare them to be the kind of qualified workers the then-burgeoning job market would badly need. And what kind of subjects would those be? Probably various kinds of engineering and science, for the most part.
Plus, no more fractional reserve banking: banks must gradually be forced lend out no more money than they actually have. Private banks would have to compete with each other to get money from the federal government which would now own and control the Fed. As for private banks, lending out additional money which they didn't have (another way to describe fractional reserve banking), would now be considered a form of counterfeiting.
The Central Monetary Authority (another name for the nationalized Fed) would simply create the new money, debt free. No more borrowing from China, Japan and rich folks all around the world. This new money would then be spent as outlined above. This would in turn very soon create the millions of jobs this country so desperately needs. Otherwise we are going to have a depression, the likes of which will make the 1930s appear to be not so bad after all.
Source: British economist James Roberson's book, Creating New Money.
The international financial breakdown that began in 2007 is now entering a near-terminal stage. Tough remedial measures are beginning to take effect to reduce "sovereign debt," i.e. the excessive debts incurred by governments in their effort to relieve the excessive debts of commercial banks. This year, 2011, could well see widespread economic hardship , threats to public order , and a possible break-up of the Eurozone , as well as sensible changes in the balance of power in the international currency system -- changes which will favor China, India, Brazil, etc. and not the United States.
The good news is that in 2010, understanding spread that the root cause of this financial breakdown and others like it has been governments' unnecessary dependence on commercial banks to provide our national money supplies as profit-making debt. The challenge in 2011 is to persuade governments to look favorably at the monetary reform that is crucial, which will consist of transferring the function of creating and managing national money supplies to public agencies that serve the public interest, and taking it away from private bankers who, as the grandest parasites, use this power to continually extract wealth from the rest of society even as they cripple their hosts in the process.
As an immediate emergency measure, that reform could help to minimize economic damage and social disruption resulting from unnecessarily harsh responses to the present crisis. As a longer-term remedy , it would help to prevent the continuing recurrence of similar crises. In the even larger scheme of things , it would help to change the money system from one that seems to motivate us to destroy human civilization and life on earth, into one that motivates us to save them. But the explanation of this phenomenon will be left for another article.
Recent signs of the coming banking reform in the US
1. A Bill introduced in Congress on 17 December "to end the current practice of fractional reserve lending " has been enthusiastically welcomed by the American Monetary Institute as "a crucial and heroic step to resolve our growing financial crisis and achieve a just and sustainable money system for our nation." The proposed Act will be called the "National Emergency Employment Defense Act of 2010." In many ways it and its purposes resemble those of the Proposed Bank of England Act, 2010.
2. At the American Monetary Institute's recent Annual Conference, Prof Kaoru Yamaguchi of the Doshisha Business School in Kyoto, Japan, gave a paper titled "On the Liquidation of Government Debt under A Debt-Free Money System -- Modeling the American Monetary Act."
It "demonstrates how the government debt could be liquidated, without cost, under an alternative macroeconomic system of debt-free money that is proposed by the American Monetary Act. Finally, it is proposed that a debt-free macroeconomic system is far superior to the debt-burdened current macroeconomic system in a sense that it can not only liquidate government debt, but also attain higher economic growth."
Recent signs of the coming banking reform in the UK
1. An Independent Commission on Banking An Independent Commission on Banking set up by the UK Coalition Government in June 2010
Unfortunately its terms of reference don't specifically include the root question: who should create the national money supply?
However, that point has been taken up in the important paper , "Towards a Twenty First Century Banking and Monetary System", submitted jointly to the Commission in November by Positive Money, the New Economics Foundationand Prof Richard Werner, Director of Banking, Finance and Sustainable Development at Southampton University.
It was very good to see the New Economics Foundation supporting the monetary reform proposal they published ten years ago in "Creating New Money" by Joseph Huber and James Robertson, with an enthusiastic foreword by their then director, Ed Mayo. For another recent NEF contribution (14 November ) see Josh Ryan-Collins' blog post on the "beginning of a monetary revolution."
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