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The Need for Monetary Reform
Monetary reform is the critical missing element needed to move humanity back from the brink of nuclear disaster, away from a future dominated by fraud, ugliness and warfare, toward a world of justice and beauty.
The power to create money is an awesome power – at times stronger than the Executive, Legislative or Judicial powers combined. It’s like having a "magic checkbook," where checks can’t bounce. When controlled privately it can be used to gain riches, but more importantly it determines the direction of our society by deciding where the money goes – what gets funded and what does not. Will it be used to build and repair vital infrastructure such as the New Orleans Levees and Minneapolis bridges to protect major cities? Or will it go into warfare or real estate loans, creating asset price inflation - the real estate bubble.
Thus the money issuing power should never be alienated from democratically elected government and placed ambiguously into private hands as it is in America in the Federal Reserve System today. Indeed, most people would be surprised to learn that the bulk of our money supply is not created by our government, but by private banks when they make loans. Through the Feds fractional reserve process the system creates purchasing media when banks make loans into checking accounts, so most of our money is issued as interest-bearing debt.
Under the Constitution, Article I, Sec. 8, our government has the sovereign power to issue money and spend it into circulation to promote the general welfare through the creation and repair of infrastructure, including human infrastructure - health and education - rather than misusing the money system for speculation as banking has historically done, periodically causing one crisis after another. Our lawmakers must now reclaim that power!
Money has value because of skilled people, resources, and infrastructure, working together in a supportive social and legal framework. Money is the indispensable lubricant that lets them "run." It is not tangible wealth in itself, but a power to obtain wealth. Money is an abstract social power based in law; and whatever government accepts in payment of taxes will be money. Money’s value is not created by the private corporations that now control it.
Unhappily, mankind’s experience with private money creation has undeniably been a long history of fraud, mismanagement and even villainy. Banking abuses are pervasive and self-evident. Major banks and companies focus on misusing the money system instead of production. For example, in June 2005, Citibank and Merrill Lynch paid over $1.2 Billion to Enron pensioners to settle fraud charges, and billions more to others.
Private money creation through fractional reserve banking fosters an unprecedented concentration of wealth which destroys the democratic process and ultimately promotes military imperialism. Less than 1% of the population now claims ownership of almost 50% of the wealth, but vital infrastructure is ignored. The
American Society of Civil Engineers gives a D grade to our infrastructure and estimates that it will soon be a D- and that $1.6 trillion is needed to bring it to acceptable levels.
That fact alone shows the world’s dominant money system to be a major failure crying for reform.
Infrastructure repair would provide quality employment throughout the nation. There is a pretense that government must either borrow or tax to get the money for such projects. But it is well enough known that the government can directly create the money needed and spend it into circulation for such projects, without inflationary results.
Monetary reform is achieved in three parts which must be enacted together for it to work. Any one or any two of them alone won’t do it, but could actually further harm the monetary system. The reform has its best chance of passage in a severe monetary crisis periodically created by the privatized money system.
First, incorporate the Federal Reserve System into the U.S. Treasury where all new money could be created by government as money, not interest-bearing debt, and spent into circulation to promote the general welfare. The monetary system would be monitored to be neither inflationary nor deflationary.
Second, halt the bank’s privilege to create money by ending the fractional reserve system in a gentle and elegant way. All the past monetized private credit would be converted into U.S. government money. Banks would then act as intermediaries accepting savings deposits and loaning them out to borrowers. They would do what people think they do now.
Third, spend new money into circulation on infrastructure, including the crucial "human infrastructure" of education and healthcare needed for a growing society, starting with the $1.6 trillion that the American Society of Civil Engineers estimates is needed for infrastructure repair. This would create good jobs across our nation, re-invigorating local economies and re-funding government at all levels.
The false specter of inflation is usually raised against such suggestions that our government fulfill its responsibility to furnish the nation’s money supply. But that is a knee jerk reaction - the result of decades, even centuries, of propaganda against government. When one actually examines the monetary record, it becomes clear that government has a better record issuing and controlling money than the private issuers have.* Inflation is avoided because real material wealth has been created in the process.
This press release from the 2005 AMI Monetary Reform Conference in Chicago, highlights the beneficial effects of the plan both in terms of vast savings on interest and in avoiding such disasters in the first place:
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Money Reform Plan Would Save Taxpayers $ Billions Per Year in Katrina Cleanup
"An alteration in the way money is introduced into our economy would save at least $10 billion dollars per year in the cleanup and rebuilding aftermath of Hurricanes Katrina and Rita. If the clean-up loans last the normal 30 years, the savings will be over $250 billion," says Stephen Zarlenga, Director of the Institute. The plan, known as The American Monetary Act was discussed at the American Monetary Institute 2005 Monetary Reform Conference…. The proposed three part reform of our currency system would have the U.S. Government directly spend the money into circulation rather than the present method of allowing the banking system to create the money and then the government borrowing the money. Funding such infrastructure expenses through bonds generally doubles to triples their final cost.
The reform avoids this expense by removing the fractional reserve provision of the present system, which in effect allows the banking system to create the much needed new money that must be continually introduced into the economy as population and economic activity expands; or when emergencies such as Katrina, or warfare require great expenditures. Under the reform only the U.S. government, not the private banking system, would be allowed to create money.
"What we're proposing is very similar to the 'Chicago Plan' which came out of University of Chicago economists in the 1930s and was widely supported nationwide by the economics profession back then," said Zarlenga.
Under the plan the government spends the new money into circulation on necessary infrastructure, including education. A presentation at the conference by the American Society of Civil Engineers pointed out the deteriorating condition of American infrastructure, which currently receives an overall grade of D, and is predicted to reach D- soon.
Most of Katrina's Damage on New Orleans Was Avoidable
"This method of introducing new money through infrastructure creation and repair would actually have stopped most of the damage and loss of life in New Orleans, because the money would have been available to repair the levees, and they would have probably held" said Zarlenga.
"Under the present private control, money goes largely into speculative bubbles, including Wall Street games and real estate" he said, "Under societal control it would go much more to promoting the general welfare. Inflation is avoided because real material wealth has been created in the process, and catastrophic loss including loss of life is prevented." – End of press release.
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Lawmakers have often believed they could ignore the big questions on how our money system is structured. Right from the Constitutional Convention delegates ignored society’s monetary power and the excellent record of government issued money in building colonial infrastructure and giving us a nation. They left the money power up for grabs instead of properly placing it in a fourth, monetary branch of government. History shows that the money power will be a fourth branch whether we recognize it as such or not. It’s not safe to leave so much power and privilege in private hands! It’s counter to our system of checks and balances. The developing financial crisis requires us to re-evaluate and focus on it now. Lets fulfill our responsibility to get a real understanding of this problem and the solution.
As the late Congressman Wright Patman, Chairman of the House Committee on Banking and Currency for over 16 years, said, "I have never yet had anyone who could, through the use of logic and reason, justify the Federal Government borrowing the use of its own money....I believe the time will come when people will demand that this be changed. I believe the time will come in this country when they will actually blame you and me and everyone else connected with the Congress for sitting idly by and permitting such an idiotic system to continue."
Date de création : 28/04/2008 @ 13:57
Dernière modification : 28/04/2008 @ 14:12
Catégorie : ÉTRANGER
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