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OpEdNews Op Eds    H1'ed 8/19/15

Trumping the Federal Debt Without Playing the Default Card

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The QE liquidity swap does not increase the circulating money supply. The money supply increased when the bonds were issued -- when the debt was incurred and the government spent the funds.

Adding to the federal debt beyond its current level (i.e. by funding infrastructure with new QE that is not repaid with taxes) would increase the money competing for goods and services. But the economy actually needs that increased "demand" in order to promote full employment (one of the Fed's mandates). Demand (money) precedes supply (goods and services). The money has to be out there searching for goods and services before employers will add more workers to create this increased supply. Money can be added to the point of full productive capacity (full use of workers, supplies and machines) before adding more will drive up prices. And as Richard Duncan observes, we are a long way from full productive capacity now.

Whether full productive capacity would exhaust the earth's resources is another question, but there are many ways to put people to work that either don't use physical resources (e.g. education, art, social service, environmental cleanup) or that actually make resource use more efficient (investment in improved infrastructure, sustainable energy, research and development).

Time to Reset

Back to Donald Trump. Besides his experience with bankruptcy, Trump, along with Bernie Sanders on the left, is unique in not being beholden to big money. Sanders does not take it, and Trump does not need it. If either candidate makes it to the White House, he will be in a position to stand up to Wall Street and do what is right for the country. And that includes restoring the power to issue the national money supply to the people of the nation through their representative government.

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Ellen Brown is an attorney, founder of the Public Banking Institute, and author of twelve books including the best-selling WEB OF DEBT. In THE PUBLIC BANK SOLUTION, her latest book, she explores successful public banking models historically and (more...)
 

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