Here's a truly progressive proposal to reform the privately-owned, debt-based monetary system. Two time presidential candidate Congressman Dennis Kucinich (D-OH) will soon be introducing this legislation which truly is the way out of recession and back to prosperity. The following article summarizes the legislation and also provides a link where the proposed American Monetary Act can be read.
THE WAY OUT
The primary cause of a recession is a shortage of money in the hands of the American people, the way out of recession is to put more money in their hands. Under the present monetary system this can only be done by borrowing more and going deeper in debt. It is difficult for people to understand that we have no money, instead we circulate bank-created interest-bearing debt as a "substitute money."
The American Monetary Act takes three simple steps to correct this debt problem.
(1) Incorporate the Federal Reserve Banks into the U. S. Treasury where all new money is created by government as real money, not interest-bearing debt, and spent into circulation to promote the general welfare; monitored to be neither inflationary nor deflationary.
(2) Eliminate Fractional Reserve Banking in a manner that makes the federal government the only entity with the power to create, issue and regulate our money, as Article I, Section 8, Clause 5 of the United States Constitution mandates.
(3) As the "debt-money" created by the privately owned Federal Reserve System and the commercial banks disappears when debts are paid, it will be replaced with real money spent into circulation to rebuild our badly decayed public infrastructure, which includes roads, bridges, dams, water and sewage plants, mass transit, schools, etc. It also includes universal health care and education for all. This will create millions of high paying jobs. Also a substantial stimulus check will be sent out to immediately put money back in the hands of the American people. We don't need to "get credit flowing," we need to get real money flowing. All of this will be an interest-free, debt-free, inflation-free dividend to the American people.
What the so-called "too big to fail" banks don't want you to know is that all of their money was created in the form of debt, and when they can no longer create more "debt-money" it will disappear as the debts are paid or defaulted, which means we will have to replace their debt money by spending real U. S. dollars into circulation. Then we will finally get the benefits we should have received in the first place - and all these benefits come without debt, without taxes, and without inflation. It will be a permanent money supply, not temporary as the present bank-created "debt-money" which disappears when debts are paid. The real money we will need to spend into circulation to replace this "debt-money" is literally trillions of dollars. And it all will appear as a bonus or dividend for the people. This will be permanent money with no debt or interest charges attached.
To allow this recession or depression to continue when the way out is well known is inexcusable. The American Monetary Act IS the way out of the present recession.
Click the link below to read the American Montary Act
Step 1: The Federal Reserve Bank of New York "buys" assets, normally government securities for sale on the open market, by creating the "money" to buy them out of thin air, and, in the process, the big banks are given, free of charge, an equal amount of new, so-called "reserves." These "reserves" become the basis for a 10 to 33 fold expansion of "debt-money" which will be loaned into existence by the banking system - with an interest charge attached. We must all realize that, as Congressman Kucinich says, "The Federal Reserve is no more Federal than Federal Express." It is privately owned and controlled by the "too big to fail" banks.
Step 2: Based on new "reserves" just created out of thin air and given to the big banks free of charge, the banking system uses the Federal Reserve's Fractional Reserve System to expand or multiply those "reserves" by 10 to 33 times. These so-called "reserves" are sometimes called "high-powered dollars" because of their multiplier effect. The required reserve on demand deposits is presently 10% for big banks and 3% for smaller banks. So, for the big banks, if they received, for example, one million of new "reserves" just created out of nothing by the Fed, they can create out of nothing, and loan out at interest, ten times that amount. If and when any of these new "reserves" trickle down from the big banks to the small banks, those banks, with a 3% reserve requirement on demand deposits, can create out of nothing, and loan out at interest, 33 1/3 times the amount of new "reserves" just received.
That's the whole process as simply as it can be stated. The end result is that, using the example of one million of new "reserves", our people and their government and businesses are deeper in debt, interest bearing debt, not one million dollars deeper, but someplace between $10 million and $33 million deeper. The more "debt-money" we have, the deeper in debt we are.
The American Monetary Act eliminates this debt-based system and takes back the power to create, issue and regulate our money. This legislation is the way out of recession and back to prosperity.
The banking system presently holds over $7 trillion of deposits. These are all in the form of interest-bearing "debt-money." When banks can no longer create money and loan it into circulation with an interest charge attached, all $7 trillion will disappear as debts are paid or defaulted. But we need this $7 trillion in our economy, so the government, under the American Monetary Act, will replace the "debt-money" as it disappears with real U. S. money spent directly into circulation as a tax-free, debt-free, interest-free dividend to the American people.
While the final decision on how to spend this $7 trillion will be made by Congress and the President, here are some definite possibilities. The dividend check and the program to rebuild the infrastructure are the first two programs suggested by the American Monetary Act.
$825 billion to issue a check for $5,000 to every person on the Social Security rolls, both those working and paying in, and those retired and receiving benefits. This is as much as the whole Stimulus Plan passed by Congress but, instead of borrowing the money, it is spent into circulation as a dividend to the American people. $5,000 in the hands of all American workers will go a long way towards ending the current recession.