81 online
Most Popular Choices
Share on Facebook 47 Printer Friendly Page More Sharing
General News    H1'ed 4/29/12

A Cure-all for the Financial Ills of our time?

By       (Page 1 of 2 pages)   28 comments
Follow Me on Twitter     Message Josh Mitteldorf
Become a Fan
  (53 fans)

An alien lands in New Orleans and asks an Earthling about the devastation. "So -- is there no building material for repairing the damage?"

          "Actually," says the Earthling, "there are building materials stockpiled just out of town."

" So, there are no workers to do the job?"

          "Actually, there are hordes of unemployed workers who would love to have the work."

" So -- what's the problem?"

          " Well, the way things work here, we need these pieces of green paper before we can get started..."

" Beam me up! There's no intelligent life on this planet!"

Philadelphia -- There were two visions expressed at this weekend's first (annual?) convention of the Public Banking Institute. The first is the very practical idea that states and cities around America could be rescued from insolvency if they had their own banks, instead of relying on commercial banks to borrow money through bonds. Tax-exempt bond issues supply money to states and municipal governments typically at 5 or 6% interest, while banks these days are able to borrow from the Fed at 1/4% per year.

The second vision is hinted in the joke (above) that Board President Ellen Brown told as she opened her address to the group. It is the radically-subversive idea that the system we have for introducing money into the economy is a boon for the banks, but perhaps a major drag on our economy. Perhaps a simple, direct system of money creation by the Treasury Dept instead of the Fed would put an end to cycles of recession, and create a foundation for long-term prosperity.

Banking is a huge leech on our economy. 40% of every dollar we spend on goods and services -- 40% of all that we create and all we consume -- is siphoned off the top as bank interest in one form or another. (Calculations of Margrit Kennedy) The US Government is in the absurd position of paying interest to a private bank for every dollar that is put into circulation. The Federal Reserve system has privatized the power to create money, which, according to the Constitution, ought to belong to Congress alone. Presently, interest on the national debt costs the Federal government $500 billion in 2011, and (because of structural deficit spending) it is the fastest-growing portion of the Federal budget.

The problem is that an expanding economy needs an expanding money supply. But since 1913, the Federal Reserve (a private consortium of banks) creates the money, backed by new Treasury Notes (bonds) which the Federal Government issues. In essence, every dollar in the money supply represents a dollar of Federal debt. Interest on this debt grows exponentially -- which means it's not much of a problem until suddenly it is. It's a ticking time bomb.

We need another system.

It has not always been thus. Colonial America had paper money created separately by each colony -- a system promoted by young Benjamin Franklin in the 1730s. British King George put an end to the colonies' power, one of the inflammatory actions leading up to the Revolutionary War.

Fourscore and seven years later, President Lincoln financed the Civil War by printing "greenbacks" -- direct money creation by the Federal Government, a sound and simple and publicly-accountable system for regulating the money supply. The greenback system died with Lincoln.

Some say it's not an accident that the present monetary system is so dysfunctional that it is stifling economic activity, and so complicated that "only economists can understand it". The system has many victims, but there are a few who benefit. Carroll Quigley was a professor of history and Washington insider who wrote, in 1966:

[T]he powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent private meetings and conferences.  The apex of the system was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations . (from Tragedy and Hope: A History of the World in Our Time (cited by Brown

A venerable voice at the conference was Bill Still, who has been educating the public on this issue for over 20 years. His video from the 1980s is available now on Youtube

Next Page  1  |  2

(Note: You can view every article as one long page if you sign up as an Advocate Member, or higher).

Well Said 6   Must Read 5   Valuable 5  
Rate It | View Ratings

Josh Mitteldorf Social Media Pages: Facebook page url on login Profile not filled in       Twitter page url on login Profile not filled in       Linkedin page url on login Profile not filled in       Instagram page url on login Profile not filled in

Josh Mitteldorf, de-platformed senior editor at OpEdNews, blogs on aging at http://JoshMitteldorf.ScienceBlog.com. Read how to stay young at http://AgingAdvice.org.
Educated to be an astrophysicist, he has branched out from there (more...)

Go To Commenting
The views expressed herein are the sole responsibility of the author and do not necessarily reflect those of this website or its editors.
Follow Me on Twitter     Writers Guidelines

Contact AuthorContact Author Contact EditorContact Editor Author PageView Authors' Articles
Support OpEdNews

OpEdNews depends upon can't survive without your help.

If you value this article and the work of OpEdNews, please either Donate or Purchase a premium membership.

If you've enjoyed this, sign up for our daily or weekly newsletter to get lots of great progressive content.
Daily Weekly     OpEd News Newsletter
   (Opens new browser window)

Most Popular Articles by this Author:     (View All Most Popular Articles by this Author)

Twitter Bans The Donald

Cold Fusion: Tangible Hope in an Age of Despair

Artificial Earthquakes

New Scientific Study: Smoking Gun Evidence of 9/11 Explosives in WTC Dust

PayPal cuts off Bradley Manning Legal Defense; Backs Off under Grass Roots Pressure

To View Comments or Join the Conversation:

Tell A Friend