Spending cuts and tax increases are presented by the President and Congressional leaders as the only two options to address the current debt crisis. But there's a third choice -- one that will eliminate the debt...forever. It will also (re)assert democratic control over our money system. Democratic monetary reform eliminates the entire $14.3 trillion by issuing and circulating US money.
The US federal debt is serious. A $14.3 trillion national debt...and rising...is a problem. Interest on the debt was over $400 billion last year. It will be more this year.
This serious problem is being exploited to ram through Congress a horrific solution -- which include cuts to Social Security, and Medicaid. Leaders of both political parties are pushing their own plans. Republicans want only spending cuts. Democrats will agree to greater cuts in exchange for some tax increases.
It's all so distracting and unnecessary.
Spending cuts and tax increases are presented as the only two options. But there's a third choice -- one that will eliminate the debt...forever. It will also (re)assert democratic control over our money system.
The banksters and banking corporations that fundamentally control the economy, fund both political parties with campaign contributions/investments, and flood Capital Hill with lobbyists want the public to keep its debt solution blinders focused only on spending and taxes. They don't want us to know that democratic monetary reform is a third way -- and the only way to eliminate the debt.
The most radical proposal currently before Congress would cut the debt by $4 trillion. That still leaves over $10 trillion in debt. Democratic monetary reform eliminates the entire $14.3 trillion by issuing and circulating US money.
The US Constitution provides the government the power and authority to coin money. For most of our nation's history, the government has ceded this power and authority to a private (corporate) central bank and banking corporations.
As it now stands, the US Treasury issues notes, bills or bonds when it needs money it currently doesn't have. These are sent to the private/corporate Federal Reserve, which records them as assets to itself and liabilities to the government. It then records credits for those amounts to the US Treasury. Money is, thus, issued as debt -- out of thin air by the corporate controlled central bank. All money in our society is, in fact, debt-money. Since there is no money created to pay the interest, only the principle of the US debt, the only way to keep the unstable system going is to create even more debt.
But as Thomas Edison observed when learning of this bizarre scenario, "If our nation can issue a dollar bond, it can issue a dollar bill. The element that makes the bond good makes the bill good..."
It's time We the People
issue the debt-free money we need to meet our most pressing needs. As Treasury bonds, bills and notes come due, pay them off in US money. When the government needs new money for legitimate purposes, simply issue it.
No more interest payments to banking corporations. No more handing our economic and political sovereignty to banking corporations. No more national debt.
US money doesn't have to be inflationary if the proper executive, legislative, and regulatory checks and balances are put in place. The massive devaluing of the dollar over the last century, it should be noted, has occurred under a corporate controlled monetary system.
Much of the blame for our current money system rests with banking corporations -- which have consolidated economic profits and political power from this scheme. Except for a few years in our nation's history when Andrew Jackson and Abraham Lincoln were Presidents, corporations ran our central bank. Lincoln's Greenbacks were an anomaly -- interest-free US money issued to meet the nation's needs.
But the rest of the blame is on you and me. We have a collective democratic obligation to know monetary matters and to demand our federal representatives reassert their constitutional power and authority to issue and circulate our own money. The ideas and work of Stephen Zarlenga, Rep. Dennis Kucinich, and Bill Still are among those who understand what's required to democratize our money system.
Of course our nation wastes money on programs -- both social and especially military. And of course our tax system needs revamping to close tax loopholes on giant corporations and to create greater taxes on the super rich. But all the spending cuts and tax increases won't amount to much if all the money is our society continues to be created as debt and controlled by banking corporations.
None of the talks, negotiations or posturing of President Obama, House Speaker John Boehner, the Senate Gang of Six or any other inside the beltway group includes democratizing our money system.
Monetary reform isn't on the table and never will be until we force the issue.
It's time to force the issue.
Greg Coleridge is Outreach Director of Move to Amend. He previously worked for more than three decades with the American Friends Service Committee in Ohio where he educated, advocated and organized on a range of justice, peace, environmental and democracy issues -- including helping coordinate Move to Amend activities in the Buckeye state.
He is the author of Citizens over Corporations: A Brief History of Democracy in Ohio and Challenges to Freedom in the Future (2003), writer of the documentary CorpOrNation: The Story of Citizens and Corporations in Ohio (2003), and contributed several articles to the anthology Defying Corporations, Defining Democracy - A Book of History and Strategy (2001). He currently maintains and distributes via email a weekly REAL Democracy History Calendar and Monetary History Calendar.
Greg is a Principal with the Program on Corporations, Law & Democracy (POCLAD) and Advisor to the American Monetary Institute (AMI). He previously served an elected term on the national governing board of Common Cause.