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The Trillion Dollar Coin: What You Really Need to Know

January 16, 2013 2 comments

Recently a novel idea began circulating in the Washington Beltway that the government could print a $1 Trillion coin and use that to fund its operations in the absence of an agreement on the raising of the debt ceiling. This idea certainly sounds like it came from fantasyland, but if one follows it carefully through to its logical conclusion, it will shine a light on our current monetary system and how it is fundamentally unsustainable. The floating of the $trillion coin has inadvertently opened up a window not just to reform, but to transform our monetary system. The resulting transformational consequences would be welcomed by all political perspectives.

The idea here is that the Treasury Dept has the legal right to issue such a coin, deposit the coin in an account at the Federal Reserve, and then draw upon the account to fund projects approved by Congress. This idea hits at the heart of the power structure across the planet, which has at its core, the ability to create money out of thin air. Currently our entire money supply is created out of thin air by private banks which in turn charge interest on that money. There are many people who, because of its official sounding name, think the Federal Reserve is a branch or part of the U.S. government. However, they are very mistaken. The Federal Reserve is no more federal than Federal Express. The Federal Reserve is simply a [powerful] cartel of private banks with an official sounding name that has usurped the right to print our money, a power bestowed upon Congress in the Constitution by the founding fathers.

“Article I Section 8: The Congress shall have the power to coin money”

FoundingFathersSo what replaced the system that the founding fathers originally intended? In 1913, the passage of the Federal Reserve Act granting the Federal Reserve the legal authority to issue Federal Reserve Notes. When President Wilson signed the bill, he declared it the “first of a series of constructive acts to aid business”. In fact the only business it aided was that of the private banks. The system was designed from its inception to ensure that every dollar that came into existence had to be borrowed from this private cartel of banks called the Federal Reserve.

So what most people also do not know is that every single dollar in circulation has to be borrowed by somebody. In other words, the entire money supply is DEBT BASED and someone is paying interest on that debt to the private bankers. In fact the total cost for 2012 for just servicing the interest on the U.S. government debt was an astounding $359 billion and $454 billion the year before. The interest on our debt for those two years exceeds the entire stimulus bill of 2009.  Think of what we could do with that much money every year: transportation, healthcare, modernizing the electric grid, education, research, are just a few examples that quickly come to mind.

It becomes very easy to see that the ability to collect interest on the national debt involves huge sums of money being paid out to those with the power to create our money and that these people will do almost anything to make sure that things remain exactly as they are. That is why they encourage their corporate controlled media to ridicule the $trillion coin idea as something out of a fantasy tale, or having the talking heads echoing that investors will be spooked, and broadcasting that the world will think that the U.S. has totally lost its marbles.

So how exactly does this idea of printing a $1 trillion coin threaten their power? If the U.S. government does issue such a coin, it will simply be issuing its own currency as the founding fathers originally wrote into the Constitution, bypassing the need to borrow the money from the private bankers. This is what threatens their extremely privileged position. NO INTEREST WILL BE PAID TO THEM ON THIS MONEY!

The question NOT being asked by the corporate media shills is that if the U.S. government can issue its own interest free money in the form of a $trillion coin, then why is it borrowing the money at interest instead?

One can therefore think of the idea of issuing a $trillion dollar coin as being equivalent to the idea of the government printing its own money. The philosophy and result are essentially the same.

Think about this: if you had the LEGAL right to print your own money would you:

1. print your own money to pay your bills?

2. borrow money at interest from the private banks to pay your bills?

Of course any sane person would print their own money. Yet here we have the unimaginable stupidity of a government with the ability to print its own interest and debt free money. Instead chooses to borrow that money at interest. Astoundingly, the corporate controlled media is not asking why this practice continues.

It actually gets even worse. It costs the government 4 cents to print a bill of any denomination, for the paper, labor, ink equipment maintenance etc. It does not matter whether the bill is $1, $5, $20, or $100, the cost is the same.  So if you were the one printing totalprintingcoststhis legal money, the last 4 bills mentioned would have cost you 16 cents to print.  Now can you imagine the totally absurd notion of  you taking these 4 bills to your banker, selling it to them for the cost of printing (16 cents), and then borrowing it back at face value ($126) with interest charges? This is the height of lunacy, and yet this is exactly what our government does. The Treasury Dept prints the bills, delivers them to the Federal Reserve branch offices, charges them for the cost of printing, and then borrows this money back at face value with interest. Ask yourself why the corporate controlled media is not covering this story.

Henry Ford once wrote: “It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.”

The fatal flaw in our monetary system is that every dollar has to be borrowed into existence, then this money is extinguished once the loan is paid back. So there is a balance here? Wrong! If you borrow $1000, you add $1000 to the money supply. When you pay the loan back, you extinguish the $1000. The problem is where does the money to pay the interest come from? There is not enough money in circulation to repay both the principal and the interest. This lies at the very heart of our deficit problem. Someone has to borrow money into circulation to cover the costs of your interest payments. The amount of debt in our system must continue to grow in order to service the interest payments on the original debt. So the more the debt grows, the more interest payments needed, the more that must be borrowed to pay that interest, the more debt grows. The fact the U.S. is trillions in deficit is by design. In reality it is impossible to repay this debt. When you hear those clueless people talking about paying off the debt, it cannot be done. If we paid off the entire debt, we would have no money in circulation.

Pretty clever system these money masters have created for themselves, keeping the nation and its people in perpetual debt slavery and getting paid interest for something they created out of thin air, something they never owned, something the Constitution never gave them the right to do. The result of the unsustainability of our current system is that ultimately the amount of debt overhang will become so huge that the system will collapse in on itself. There are many including myself who believe that we are approaching that end point.

InterestOnUS-DeabtThere are those who say that if the government printed this $trillion coin (government printed its own debt free money) that inflation would skyrocket. I have already read hyperbolic articles about the U.S. becoming the next Zimbabwe or Weimar Republic. The reality is that this money would be deposited in an account at the Federal Reserve and could only be spent for expenditures that had been approved by Congress. Since no money would reach circulation without congressionally approved expenditures, it would not add to inflation anymore than the current system of borrowing the money to finance our expenditures. Actually the use of an interest free $1 trillion coin would help lower inflation by eliminating the costs of paying interest to the private bankers while money could enter into circulation the same way as it does currently.

The talking heads on the corporate media blabber about how the $trillion dollar coin (government printing its own debt free money) would scare investors. How would investors be scared when they see that U.S. government would no longer have to pay interest on any new money it created? The money supply could now grow to facilitate economy activity and it would be interest free. The chart to the right from the Treasury Direct website shows the huge costs of serving the interest payments to the private bankers and yet this could all be avoided if the government simply printed its own debt free money. Over 8 trillion dollars!

The “experts” in the corporate media ridicule the idea of the coin (government printing its own debt free money) and say that nothing like this has ever been done before. That would not be accurate either.

In fact during our colonial days, our government did fund its operations by issuing colonial scrip. Our colonies were flourishing at this time and because the government was printing its own money, there was no need for income taxes. (By the way, it is not a coincidence that the Federal Income tax was instituted just before the Federal Reserve Act because the bankers know that the government would need the revenue to pay for the interest on its money supply and debt.) The colonial governments would issue this colonial scrip to pay their debts. There were some colonies that printed too many and suffered inflation, but most were judicious in their creation. Once the British bankers became aware of this colonial prosperity and how their debt based money system was being bypassed, they petitioned King George to forbid the colonies to issue their own currency. Since the bankers controlled the monarchy then, much as they control our government today, their wishes were granted. This quickly resulted in not enough circulating money to facilitate economic activity and the colonies quickly entered into a deep depression. It was this economic depression that was the driving force for the American Revolution.

Another time that the U.S. government printed its own money was during the civil war. The bankers tried to extort interest rates from Lincoln of 24% to 36% to finance the war.

“I have two great enemies, the Southern Army in front of me and the bankers in the rear. Of the two, the one at my rear is my greatest foe.”

Abraham Lincoln

Instead of acquiescing to the bankers, Lincoln courageously started printing Greenbacks to finance the war saving the nation huge future interest payments. In fact the Greenbacks were so popular with the people that a political party formed called the Greenback Party. In the end, we all know what happened to Lincoln.

Not a Federal Reserve NoteAnother time the U.S. government  printed its own money was in 1963 under Kennedy’s Executive Order  No. 11110 that returned to the U.S. government the power to issue currency, without going through the Federal Reserve. This order instructed the Treasury to print bills against any silver inventory held by the government. There were billions of these certificates printed and they were known as United States Notes and they were all interest free. Some of you may remember some of these bills as they had a red seal, rather than the more common green seal of the Federal Reserve Notes. These United States Notes represented a mortal threat to the Federal Reserve System, and we all know what happened to Kennedy 5 months later.

After the Kennedy assassination, no more interest free United States Notes were issued. The Executive Order was never repealed by any U.S. President, This Executive Order is still valid, yet no president Republican or Democrat has ever utilized it!

Think about this, much of the $16 trillion in debt that was created since the Kennedy assassination has been because of the interest payments on the debt. If any subsequent president had found the courage to use Executive Order 1110, our current level of debt would be magnitudes smaller. We would not be in the same mess we are in now. So when you hear people talking about needing budget cuts in order to solve our problems and leaving a legacy of debt to our children, you are listening to people who do not understand our monetary system, or worse, they are supporters of the current system of debt that can never be paid off with the resulting perpetual interest payments to the private bankers. The better solution would be to have the government issuing its own money, debt free. Now that would be a great “gift” to our children and grandchildren!

One very valid point made by critics of having the government being able to issue its own money is that there will be nothing to restrain the government from simply overspending. In reality, banker issued debt money has also done little to limit government spending. The mechanism we have currently for that now is the congressionally approved debt ceiling, however flawed that is. Any move towards government issued money could be met by congressionally mandated structures to prevent runaway spending. At the least, if we did not have to deal with the interest payments, our spending would be significantly less than it is currently and that would help cut the deficit significantly.

decliningDollarWhen you hear all the propaganda on the corporate media ridiculing the $trillion coin idea (government printing its own debt free money) and saying how it will harm the economy and the markets, ask yourself, who is benefiting from the current arrangement and who is this person trying to persuade you?  They will tell you that this is inflationary. The truth of the matter is that the current system is inflationary. The chart shows how the value of the dollar has eroded since the creation of the Federal Reserve in 1913.

If the government wishes to build a bridge it has to pay those who supply the materials and those who supply the labor. This is expected and normal. However, the irony is that the government pays more to the financiers of the project than to those who supply the materials and the labor. Most people will recognize this with their home mortgages where the final cost of paying off a mortgage far exceeds the original sale price of the home because of interest charges. The unproductive bankers make far more money than the producers, the builders, and suppliers. What is wrong with this picture?

Money being spent on infrastructure projects creates wealth and since this wealth is balanced by the money being placed into circulation, there would be no inflationary effect. In fact by eliminating the financing costs of these infrastructure projects, you actually lower the price of every public project, reducing inflation.

The practical effects of the government printing its own money are not limited to the federal level. While states cannot explicitly print their currency, they can leverage the money they do have by utilizing the existing [deeply flawed] Fractional Reserve Lending system. States can create their own banks and use them to fund their projects at either no or very low interest rates. As discussed earlier, by eliminating the costs of obtaining money through the financiers, the cost of public projects is cut by almost half.  Ellen Brown, in her book “Web of Debt” outlines how the bankers have a stranglehold on our economy and how one state has created its own bank, the Bank of North Dakota.  If you have not read this book, then you probably do not understand our debt based monetary system. (Disclosure: I have no economic interest or benefit in promoting this book.)

This bank is popular with both Democratic and Republican legislators in the state of North Dakota.  This idea is starting to catch fire and 20 states are now considering some form of state banking legislation. By having a state owned bank that uses the fractional reserve lending system to create its own money out of thin air interest free, the state of North Dakota has a resource that is counter-cyclical, meaning it is capable of reducing the negative impact of recessions. They can make money available for local governments and businesses precisely when private banks decrease lending. This bank has existed for 90 years and remained stable during the financial crisis. The Bank of North Dakota is one key reason why the state has weathered the crisis better than most, has the lowest unemployment in the country, and has a current budget surplus.

Our current debt based money system is at the very heart of the poverty, debt, and economic problems facing our country and our world. The bankers have enriched themselves because we allowed them to both print our money and collect interest on it. The bankers have impoverished the people because they can print our money and collect interest on it.  The bankers have usurped our government because they have accumulated such wealth at the expense of the rest us and essentially made the politicians their paid servants. They then use those politicians to rig the system against the working people. The result is a Congress with extremely low approval ratings.  These facts are recognized by people across all political perspectives, from Democrat to Republican, from the Tea Party to Occupy. This not a Liberal cause, this is not a Conservative case, this is a Common Cause. We need to take back our government from the money masters and make it serve the people instead of the bankers.

DebtBasedMoneyHow can patriots allow such a system to exist? If we can print our own money by passing the banker middlemen, we will solve so many other problems that are symptoms of our debt based money system. Unemployment will drop, deficits will drop, poverty will drop, inflation will drop, and bank induced problems such as recessions and depressions will be alleviated. We all have our pet issues and they all have validity, but if we can unite together on this one issue, many of the other issues will be solved by themselves with a government that is responsive to the people, not the bankers and corporations, and a monetary system free of burden of debt so the needs of people and business can be met efficiently.

We need to start laying the foundations of a movement to change our monetary system BEFORE the inevitable next crisis. People need to become aware that there was once a better system in the past and that it is possible to have that again. This can be accomplished through education, independent media, social networks, and word of mouth. It is time to end the illusion that our current debt based money system works for the benefit of everyone. The discussion on the $trillion dollar coin provides us with a starting point to make that change possible.

“If the American people ever allow private banks to control the issue of currency, first by inflation [bubbles], then by deflation [recession or depression], the banks and the corporations that will grow up around them will deprive the people of all property, until their children wake up homeless on the continent their fathers conquered.”

Thomas Jefferson

It is time for patriots to take a break from mass entertainment, corporate media propaganda, and to become more familiar with the concept of a “wealth based” money system. These are some good places to start:

Sign the petition on the White House website to have the government print its own debt free money
http://wh.gov/m4co

Review: The White House petition website states that if any petition reaches a threshold of 25,000, it must respond to it. President Obama is surrounded by “expert advisors” who are linked to the current system of unrepayable debt with perpetual interest payments to the bankers, and they certainly will not be pushing this issue. However if enough people sign the petition, he may become aware of it.

The free YouTube video: “Secret of OZ”, by Bill Still

http://www.youtube.com/watch?v=swkq2E8mswI

Review: Having  private banks create money is the root economic cause of world poverty, ignorance, hunger, and much preventable disease. We can fix this. We can fix it in a matter of months — a year at most – if we have the will. We can make our government the most financially sound in the world — nearly overnight. All we have to do is to take back the power to create and control the quantity of money from private banks (including the privately-owned Federal Reserve banks) and put that power back into the hands of the Congress of the United States where it was under Presidents Jefferson, Jackson and Lincoln.

The book: “The Web of Debt” by Ellen Brown

http://www.webofdebt.com/

Review: Ellen Hodgson Brown may have done the impossible. She wrote a book about the most stupefying subject in the world – money, where it comes from and how it is manipulated – and made it readable, compelling, even suspenseful. Web of Debt is a page-turner that explains the origin of the Federal Reserve, the functioning of our money supply, currency speculation, capital flows, and the rest. As you read, interest grows like a Wall Street bonus package.

The book: “Modern Money Secrets” by Byron Dale

http://www.wealthmoney.org/modern-money-secrets/

Review: For the first time ever, I see a potential solution to our debt black hole.  Most financial “experts” don’t get it.  The Ivy League ones get lost in flawed neoclassical economics so they can’t see the obvious, and the ones wearing suits on TV are just propagandists.  Byron makes it real clear: no money gets into circulation without going into debt to a bank.  There is no other source.  The United States issues no sovereign money!  Therefore Americans are not free people.  It is time for us to admit the truth and either do something about it, or stop blowing up stuff on the 4th of July believing a myth.

The organization: The Public Banking Institute

http://publicbankinginstitute.org/

Since its founding little more than a year ago, the Public Banking Institute has become a significant force that is helping to turn banking and finance away from fraud and predation back toward their intended objectives of promoting general prosperity and the common good. According to the PBI website, PBI’s vision is to establish a distributed network of state and local publicly-owned banks that create affordable credit, while providing a sustainable alternative to the current high-risk centralized private banking system. (beyondmoney.net)

The organization: American Monetary Institute

http://www.monetary.org/the-need-for-monetary-reform/2009/09

The power to create money is an awesome power – at times stronger than the Executive, Legislative and Judicial powers combined. It’s like having a “magic check book,” where checks can’t bounce. When controlled privately it can be used to gain riches, but much 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 and real estate loans creating the real estate bubble – leading to a crash and depression.

The Disease is our Monetary System

If the American people ever allow private banks to control the issue of currency, first by inflation [bubbles], then by deflation [recession or depression], the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their fathers conquered.”
Thomas Jefferson

                       

emergency roomPicture yourself in this situation:

You are experiencing severe abdominal pains so you visit with your doctor. Your doctor does a perfunctory examination and announces that he will write you a prescription for a pain killer.  Of course you quickly recognize that the doctor is treating the symptom of your problem, but not the problem itself. So you visit a specialist who happened to fall asleep during the abdominal portion of his medical preparation. His uninformed diagnosis of your problem is acid indigestion and you are prescribed  antacids. Unfortunately his misdiagnosis causes your pains to continue. With the underlying disease untreated, you ultimately end up in a hospital where you are diagnosed with abdominal cancer.

In the above scenario, the following things have happened:

  • the first doctor treated the SYMPTOMS of your problem which did not nothing to treat the DISEASE that was causing the symptoms, and over time would only make the SYMPTOMS become worse.
  • the second specialist doctor misdiagnosed the DISEASE, so his treatment would also not address the problem and over time would cause the SYMPTOMS to worsen.
  • the hospital finally correctly diagnosed the DISEASE and therefore the prescribed treatments now have a chance at addressing the problem where the first 2 treatments would have failed.

We have a very similar situation existing in the economy right now. In place of the first doctor, we have our economically illiterate politicians who are looking at the SYMPTOMS of our problems such as unemployment, budget deficits, foreclosures, bank fraud, poverty, inflation, erosion of the middle class, to name just a few. They are trying to treat these SYMPTOMS,  however this does nothing to treat the DISEASE that is causing these SYMPTOMS. The financial class is also the largest donator to political campaigns. So the politicians find themselves in the position where it is to their advantage to intentionally remain ignorant of the DISEASE so they can maintain their power and positions of influence.

 Then we have the specialist economists “advising” our economically illiterate politicians on what to do, but they are also lacking what they need to correctly diagnose the DISEASE. The central banks have sponsored academic research at the major schools. However this sponsorship directly and indirectly influences the research, which ends up tending to support the existing money system. Those who develop conclusions that are not in the interests of the central bankers soon find themselves without jobs or further funding for their research. This leaves the economics students who are our future economic specialists with a view of banking that favors the entrenched banking interests.  With their lack of education on alternative monetary systems, it is not surprising that they misdiagnose the DISEASE due to their bias towards our current “debt based” money system. The end result is that both the economists and the politicians are nothing more than the hired servants of the financial class. It is in their individual interest to perpetuate the illusion that our current monetary system is the only “free and efficient” way to bring money into circulation. Listen closely to these economists during their interviews and notice how all of their “solutions” center around the SYMPTOMS while never mentioning “debt based” DISEASE itself.

Add to this mix a general public that is chained to this debt slavery, working more and more hours and finding it increasingly harder to maintain their families. After exhaustive toiling they seek relief and diversion in the form of mind numbing gladiator football games, celebrity worship, reality TV, or other minutia, rather than taking the time to educate themselves on complex issues. This disinterest or lack of understanding creates an environment where it becomes easy for the financiers to continue a system that benefits them personally at the expense of everyone else.  No one is watching the store and the till is open.

I recently attended the Public Banking Conference in Philadelphia where a 12 year old girl blew the crowd away with her understanding of our corrupt money system. If a 12 year can “get it”, then it is time for our leaders and the general public to “get it” as well. During this conference the following question was asked by another speaker, “How can a nation and its people become $trillions in debt when most of what they have done over the last 250 years is to produce wealth through their labor?” This profound question inspired me to do some serious thinking about where this debt actually originates.

Consider these questions: If you owned a printing press in your basement and could LEGALLY print your own  money…

  1.  would you choose to pay your bills by printing the money you needed?
  2. would you choose to pay your bills by going to the bankers for a loan?

Of course you would print your own money. Our government is in exactly this same position. It can legally print its own money as stipulated by the Constitution, and yet we have the spectacle of our the government  going to private bankers to borrow money to pay its bills, rather printing its own debt free money. Most people are not aware of this fact, and that is by design. 

Can you imagine yourself printing your money, then selling these same bills for the cost of printing to a private bank? Can you imagine yourself then going back to the bank and borrowing that same money at face value plus interest?

That is the unbelievable and absurd situation we currently have. The Treasury Department prints our paper dollars at a cost of approximately 4 cents per bill. The cost of printing each bill remains the same regardless of whether the denomination is $1, $10, or $100. These newly printed bills are then sold to a cartel of private bankers called the “Federal Reserve” for the cost of the printing. The government [taxpayers] then borrows this money back at face value plus interest.

The name “Federal Reserve” was deliberate in its attempt to deceive the people. It is a cartel of PRIVATE bankers, it has no reserves, and it is no more federal than Federal Express. In fact, the federal income tax was started in order to pay the interest on our “debt based” money supply.

Now there are 3 ways that money can be placed into circulation: it can be GIFTED, it can be SPENT, or it can be BORROWED.

If the government were to simply give people printed money, it would be GIFTED into circulation. Since this “free money” provides no incentive to produce anything , there is no increase in production. The money supply increases, but not the number of produced goods or services, which ultimately results in inflation.

If the money is SPENT into circulation, it is used to pay for a goods or service that have been produced. The creation of these goods or services represents the creation of wealth. Therefore this created money is a payment for wealth that has been produced. This also increases the money supply, but since a matching amount goods or services were also created, this does not result in inflation.  This money is then “wealth based” making it is a representation of wealth that has been created and therefore has  no debt or interest burden associated with it.

If the money is BORROWED into existence as it is done in our current “debt based” monetary system, the money is created out of thin air by the banks using the fractional reserve lending system. This money is then a representation of debt and has a debt and interest burden associated with it.

The way money is brought into circulation is at the very heart of our problems. It turns out that in our “debt based” monetary system, our entire money supply (except for coins) is created when a loan is taken out. Once the loan is repaid, the money is removed from circulation.  This system unfortunately has a fatal flaw that guarantees its ultimate collapse.

Let’s assume that we are on an island with a totally closed monetary system and you were to borrow $100 at 10% interest. You can pay back the $100 principle because $100 was put into circulation as a result of your loan. However, where will the $10 in interest payments come from if there is no other money in circulation? The fact of the matter is that the loan must default because there is not enough money in circulation to pay principal and interest. Since the $100 in circulation is the result of the loan being taken out. This $100 is placed as a liability on the bank’s books. Once you have paid off the loan, this liability is removed from the bank’s ledger.  That is how the money is extinguished once you have repaid the principal on the loan. The only way to pay back the interest on the loan is to borrow more money into circulation. Only the principle is extinguished, the interest is not extinguished because the interest was not a liability on the bank’s ledger. The interest amount ends up in the pockets of the bankers. If someone takes  out additional loans to cover the interest charges, it will only delay the day of reckoning. Ultimately you will have an even higher interest burden that can never be repaid. Doesn’t this sound familiar to the economic situation we currently find ourselves in?

Of course our monetary system has millions of people, taking out loans, making payments and doing other transactions all of the time. However, the fact remains that you can only repay a loan with interest if you or someone else takes out a loan to place additional money into circulation. The problem is that now someone else will have a loan to repay and will also need additional money in circulation to pay for their interest charges. So the debt burden for the money to pay the interest payment on your loan  has been shifted to someone else, and over time the interest burden continues to grow. It becomes quickly obvious that as a nation we must constantly be in debt in order to service the interest charges on our money supply. As time passes, this debt overhang with its associated compounding interest charges becomes a larger and larger burden on the society, eventually reaching a level that is no longer sustainable as it is becoming today.

The other fatal flaw in this system is that in order for the money supply to keep up with the growth in the economy, we must also continue to grow the debt in order to grow the money supply. Some of those clueless politicians represented by the first doctor we visited at the beginning of this article think we should pay off the debt. What they do not realize is that if the debt was ever totally paid down, there would be no money in circulation. Our current “debt based” monetary system is the DISEASE. Until we change our monetary system from “debt based” to “wealth based”, we can never pay off the debt, because if we did, there would be no money in circulation. The patient would die!

Think about this example of the insanity of the current system. If a government wants to build a bridge, instead of printing and then SPENDING the money into the economy with no interest bearing debt associated with it, the government instead goes to the bankers and BORROWS the money into existence. By BORROWING the money into existence, the government incurs interest charges which means that over the term of loan the government will pay more money for this bridge in finance charges than it pays for the materials and for the labor for the project. This financing cost of “debt based” money is then passed on to everyone.

In a “wealth based” system, the government would SPEND the money into existence, rather than BORROW it into existence. The costs of all infrastructure projects could be cut by more than half. This fact should resonate to those of you with a home mortgage, once your mortgage is paid off, the interest charges have easily exceeded the original cost of your home. The same thing is happening to all of our infrastructure projects. The financial class is profiting  immensely from our current “debt based” system.

Benjamin FranklinSo, is a “wealth based” monetary system some utopian vision of what has never been and can never be? The answer is no. In our colonial past we had colonial scrip where the government SPENT the money into existence.  Our colonies were prospering at that time. David Hayes writes about Benjamin Franklin during a visit to England:

The English officials asked how it was the Colonies managed to collect enough taxes to build poor houses, and how they were able to handle the great burden of caring for the poor. Franklin’s reply was most revealing: “We have no poor houses in the Colonies, and if we had, we would have no one to put in them, as in the Colonies there is not a single unemployed man, no poor and no vagabonds.” Think long and hard about this. In the American colonies before the American Revolution, there was “not a single unemployed man, no poor and no vagabonds”. — no one on Welfare, no one on Social Security, no homeless, no income tax, no alphabet agencies, No IRS, BATF, FBI, DEA, CIA, HEW, OSHA, SBA, and on and on and on to provide for the “general welfare” of our villages, towns, cities and states. How did Benjamin Franklin explain this to the British officials of his day?
How would he explain it to today’s lawyers, judges, politicians and other government officials? “It is because, in the Colonies, we issue our own paper money. We call it Colonial Script, and we issue only enough to move all goods freely from the producers to the Consumers; and as we create our money, we control the purchasing power of money, and have no interest to pay.”

There was a reason the term Commonwealth was applied to Massachusetts, Pennsylvania, Virginia and Kentucky. The term was also used interchangeably  with the term “state” by Vermont and Delaware in its 1776 constitution. When Benjamin Franklin was in England, he observed hunger, tramps, beggars, and poverty in the richest nation of its time. He asked how England with all its wealth had such grinding levels of poverty. The reply was that they had too many workers and that the rich were already overburdened with taxes. (Sound familiar?) However, they also had misdiagnosed their problem. It was not that they had too many workers, it was that they had too little money in circulation and it all carried the endless burden of unrepayable debt and interest.

The colonies did not have this problem because they used “wealth based” money that had need SPENT into circulation. This caught the attention of the English bankers. They had laws passed that prohibited the colonies from using their “wealth based” currency and mandated that “debt based” currency should be used. Within a year after passage of these laws, the colonies found themselves with mass unemployment and beggars as Franklin had found in England. This suffering brought on by a “debt based” currency was the trigger for the Revolutionary War. Unfortunately, even after the Revolutionary War, the monetary system remained “debt based” and except for brief periods of time we never returned to a ‘wealth based” currency.

Later in our history, Abraham Lincoln was faced with the financing costs of the civil war. He went to the bankers and found to his dismay that they were going to charge him 24% to 36% interest which would have left the country hopelessly indebted to the bankers. Instead, he issued Treasury Notes that came to be known as Greenbacks because of their green colored ink on the back. This money was independent and debt free and was spend into circulation with no debt or interest burden. Lincoln understood the power of the bankers which led him to write:

“The money powers prey upon the nation in times of peace and conspire against it in times of adversity. It is more despotic than a monarch, more insolent than autocracy, and more selfish than a bureaucracy. It denounces, as public enemies, all who question its methods or throw light upon its crimes. I have two great enemies, the Southern Army in front of me and the bankers in the rear. Of the two, the one at the rear is my greatest foe.”
Abraham Lincoln

In fact, Lincoln did exactly what the founding fathers had envisioned for the Republic when they specified that “only Congress shall have the right to coin money”. We all know what happened to Lincoln after the war.

Not a Federal Reserve NoteJohn Kennedy also understood the damage that the current “debt based” money system was having on the nation and he signed Exec­utive Order 11110 which allowed the Treasury to issue “United States Notes” without having to go through the Federal Reserve system. Some of you may remember these
“United States Notes” as they had the red seal on them, not the usual green seal of the Federal Reserve Notes. This money was also spent into the economy and was free of any debt and interest burdens.

We all know what happened to Kennedy a few months after signing that executive order.

The amounts of money that benefit the financial class by maintaining our current “debt based” money system is staggering. According to the US Treasury, the amount of interest we have paid on the “Debt Outstanding” since 1988 is more than $8.2 trillion. To better understand the scope of that figure, that would be $8,200 billion! Our interest payments on the debt are projected to continue to grow if nothing is changed. Can you imagine what could be done for our nation with all that money? Education, healthcare, infrastructure, space exploration, alternative energy sources, research & development, lower tax rates, to name just a few. Add to that the fact that with huge debt overhang, we would not be at the mercy of the global bankers in this time of economic crisis. In fact if we eliminated fractional reserve lending, and had a “wealth based” money supply, there would be no crisis.

I see so many good people working so hard to address unemployment, lack of health insurance, budget deficits, foreclosures, endless wars, bank fraud, poverty, inflation, erosion of the middle class, and other SYMPTOMS of our current “debt based” money system that afflict our society and place huge burdens on the people. Yet until we eliminate the DISEASE, we will never be successful in eliminating the SYMPTOMS. This corrupt “debt based” system is at the very core of most of our social and economic problems. However, there are alternatives to our current system and many people and organizations are working towards changing our money system . The very powerful forces who wish to keep our current “debt based” system in place for their own self-serving individual benefit have the advantage of inertia, the support of the media controlled by them,  and a general lack of knowledge about the subject. Most people are not even aware of the DISEASE, its nature, and that alternatives do exist.

We need to start laying down the foundations of a movement BEFORE the inevitable next economic crisis hits us. People need to become aware that in the past we had a better system. This can be accomplished through education, independent media, and word of mouth. It is time to end the illusion that our current “debt based” system works for the benefit of everyone.

James Madison wrote in 1789, “That the people have an indubitable, unalienable, and indefeasible right to reform or change their government whenever it be found adverse in inadequate to the purpose of its institution.”   How can patriots allow such a system to continue to exist? I would encourage people to take a break from mass entertainment and to become more familiar with the concept of a “wealth based” money system. These are some good places to start:

The free YouTube video: “Secret of OZ”, by Bill Still
http://www.youtube.com/watch?v=swkq2E8mswI

Review: Having  private banks create money is the root economic cause of world poverty, ignorance, hunger, and much preventable disease. We can fix this. We can fix it in a matter of months — a year at most – if we have the will. We can make our government the most financially sound in the world — nearly overnight. All we have to do is to take back the power to create and control the quantity of money from private banks (including the privately-owned Federal Reserve banks) and put that power back into the hands of the Congress of the United States where it was under Presidents Jefferson, Jackson and Lincoln.

The book: “The Web of Debt” by Ellen Brown
http://www.webofdebt.com/

Review: Ellen Hodgson Brown may have done the impossible. She wrote a book about the most stupefying subject in the world – money, where it comes from and how it is manipulated – and made it readable, compelling, even suspenseful. Web of Debt is a page-turner that explains the origin of the Federal Reserve, the functioning of our money supply, currency speculation, capital flows, and the rest. As you read, interest grows like a Wall Street bonus package.

The book: “Modern Money Secrets” by Byron Dale
http://www.wealthmoney.org/modern-money-secrets/

Review: For the first time ever, I see a potential solution to our debt black hole.  Most financial “experts” don’t get it.  The Ivy League ones get lost in flawed neoclassical economics so they can’t see the obvious, and the ones wearing suits on TV are just propagandists.  Byron makes it real clear: no money gets into circulation without going into debt to a bank.  There is no other source.  The United States issues no sovereign money!  Therefore Americans are not free people.  It is time for us to admit the truth and either do something about it, or stop blowing up stuff on the 4th of July believing a myth. 

The organization: The Public Banking Institute
http://publicbankinginstitute.org/

Since its founding little more than a year ago, the Public Banking Institute has become a significant force that is helping to turn banking and finance away from fraud and predation back toward their intended objectives of promoting general prosperity and the common good. According to the PBI website, PBI’s vision is to establish a distributed network of state and local publicly-owned banks that create affordable credit, while providing a sustainable alternative to the current high-risk centralized private banking system. (beyondmoney.net)

The organization: American Monetary Institute
http://www.monetary.org/the-need-for-monetary-reform/2009/09

The power to create money is an awesome power – at times stronger than the Executive, Legislative and Judicial powers combined. It’s like having a “magic check book,” where checks can’t bounce. When controlled privately it can be used to gain riches, but much 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 and real estate loans creating the real estate bubble – leading to a crash and depression.

Rudy Avizius
http://www.endtheillusion.org

Occupy Evictions: Did the Money Masters Win?

December 14, 2011 2 comments

Has anyone asked themselves this question: where would our country’s economy be right now, if they had enforced banking regulations as vigorously as they enforce park rules?

It is ironic that so many in this country have fallen for the corporate media propaganda that seeks to divide the masses and have us fight each other. They wish to accomplish this so that we do not focus on those who pillaged the economy and Treasury and left the devastation of millions without jobs, millions of families foreclosed upon and left in the streets to fend for themselves, the 50 million without health insurance, and the record nearly 46 million now on food stamps . This is a standard divide and conquer tactic so that we are focused on each other, rather than on the perpetrators. The corporate media drivel tells us that these victims are lazy, and need to work harder to find jobs. The corporate media where the rich pay other rich people to tell the middle class to blame poor people.

Does anyone else find it odd how so many millions became so lazy and shiftless after the financial overlords trashed our economy in 2008?

The millionaire talking heads on the media propaganda networks will have the masses blame it on the victims, rather than the perpetrators.

Riot police surround seated demonstratorsAll this is happening while those who committed the fraud continue to pay themselves huge salaries, stock options, and bonuses. Thanks to the Citizens United ruling, these financial overlords now contribute unlimited money ANONYMOUSLY to their paid servants of both political parties in Washington DC. This allows these money masters to get legislation passed favorable to them and to shield themselves from prosecution for their fraud. The hired politicians are not our leaders, they are the puppets of their financial masters.
Where is the outrage of the masses, that there have been no prosecutions of those who stole from the taxpayers? Where is the outrage for all of the fraudulent paperwork being used in foreclosures taking place across the nation? Where is the outrage when our president pressures the NY State Attorney General to drop his opposition to a “settlement” that leaves the amount of the fraud unknown and is favorable to those who committed it? Where is the outrage to the total failure of the regulators to do their jobs?

(Oh yeah, they did convict Bernie Madoff. However, his mistake was that he stole from the rich, not the taxpayers, and THAT is why he is in jail. )

raising weapons against protestorsInstead, we have the financial overlords turn their enforcers, the police, on the Occupy Movement, who accuse the money masters of this fraud. The media which these financial overlords also control, chimes in and tries to ridicule the protestors: they are dirty, they have no message, they are lazy, etc, etc. Sadly, so many among the masses cannot see this propaganda for what it is and they parrot what they hear. The puppet mayors have conference calls to coordinate police action against these accusers since they are threatening the very core of the financial elites’ power structure in the country, and of course the funding that keeps the politicians in power.

These are just some of the spectacles we have witnessed recently:
• Police in full riot gear surrounding peaceful protestors sitting in parks

• Police pointing weapons at peaceful protestors while enforcing park rules

• Oakland streets turned into a war zone in order to enforce park ordinances

• Colleges calling in police with full riot gear, rubber bullets, and batons beating students protesting rising tuition costs

• Seated students at UC Davis who presented no imminent threat to anyone being assaulted with MILITARY GRADE pepper spray by a calm police officer under no apparent duress. The video of this atrocity went viral on the Internet with millions of viewers within days.

• A complete press blackout during the eviction of the protestors in Zuccotti Park where the reporters were roughed up and not allowed within 3 blocks of the park, and the CBS helicopter filming the scene was chased out by NYPD helicopters. Residents in the area were ordered to stay indoors so that no one could record police activities.

• A police lieutenant in the New York Police Department (NYPD) pepper spraying protesters trapped in a net, calmly walking away, and then this criminal had to suffer the unbearable consequence of losing 10 vacation days for a criminal physical assault that would have landed anyone else a prison term. He was left in a position of authority and commands many officers below him. So much for the police investigating themselves.

If the crime and damage to the nation because of park rule violations, or curfew violations deserves such a violent reaction, what would be a proportionate response to those who trashed our economy and left so many jobless, without healthcare, and without their homes? We need riot police in corporate offices arresting these perpetrators. Instead, those who committed these crimes shield themselves from prosecution because of their “contributions” to those in political and judicial offices and so nothing happens to them. The masses in the country continue to follow the media pied piper and turn their anger on the accusers, rather than the perpetrators.

harmless rubber bulletsThere are those who still think that we live in a free country. If you are one of them, try going to Wall Street with a sign and see just how free you are to express your opinion.

Those who do not think, simply parrot what the propaganda they hear on the corporate media. You hear them say that the movement has no message. No message? The very name Occupy Wall Street tells the message. Then the parrots say that they should be protesting in Washington DC, not Wall Street. Well, since the politicians are the puppets of the money powers, if you want change you do not confront the puppets, you confront the puppeteers. The movement is EXACTLY where it needs to be.

The irony is that Occupy Wall Street was never allowed to even get near Wall Street. Any marches in that direction were met with a forceful and often violent response by the police. The enforcers of the power structure defended the “Temple of Greed” on Wall Street with extraordinary vigor. The protestors had to settle for a park blocks from their intended target.

One of the Citadels of Greed, JP Morgan Chase was so grateful for the loyalty that the enforcers exhibited in protecting their interests. They donated $6.5 million in computer laptops to the NYPD. These will presumably be used with facial recognition software to determine the identities of the all the protestors so they can then share this data with Homeland Security. An empire in decline often turns on its own citizens as the end game approaches.

police attack studentsNot all cities jumped on the violent confrontation bandwagon. Albany, NY police refused to arrest protestors despite pressure from the puppet governor and mayor. Washington DC and Philadelphia PA are other cities took the constitutional right to Freedom of Speech and Assembly not as obstacles, but as the bedrock of our nation’s soul. These cities did not have the violent clashes as did so many others. They did not need to field thousands of police in full riot gear and thus saved their cities $millions in overtime pay that the confrontational cities imposed on their taxpayers. The more violent and confrontational cities will inevitably also have to face numerous criminal and civil lawsuits that will also potentially cost $millions. All this to protect the bankers?

These cities need to take a look at the professional manner in which the Washington DC police and city officials handled their protests. These cities then need to send their police chiefs for some workshops in Washington DC on effective methods of policing. It is obvious that they certainly need the training!

These confrontational cities on behalf of the money powers, have acted as though these protestors were some sort of “contagion” that needed to be disinfected. The irony was that every time they were excessive in their responses, the movement only grew in strength. It was after the mass arrests on the Brooklyn Bridge that the movement started spreading to over a thousand cities across the globe. The money powers are growing more and more nervous as the conversation in the nation shifted from shredding the social safety net to the excessive wealth disparities that are visible to all, but those who choose not to see. So the money powers redoubled their efforts and coordinated the evictions with their paid servants, the politicians, to try to stop this “contagion”.

Leave your big bankWith the full backing of the police, the treasury, all branches of government, and even the military if needed, the money powers now have successfully “evicted” the peaceful protestors from many of the parks and they think they have “won”.

Arrogant fools, you cannot evict an idea. The Occupy Movement is now moving to Occupy homes going into foreclosure. This will make it much more difficult for the banks to evict homeowners from their homes by making every eviction another possible confrontation. Some will block access to ports. These new tactics will threaten the unprecedented levels of wealth accumulation by the financial overlord parasites who place themselves in close proximity to working peoples’ money and find more and more ways to skim more for themselves. This will also serve to unite the millions of people in danger of foreclosure with the Occupy Movement. This will unite people in the neighborhoods affected by foreclosure and homelessness with the Occupy Movement. This was a WIN-WIN-WIN for the movement. So here we have ANOTHER example of where the movement was met with a forceful response, and instead it grew in strength. Many other protestors will go to their hometowns and organize even more people to the movement increasing its strength even more. The “contagion” spreads. Brilliant strategy Mayor Bloomberg!

Many of the protestors moved back to their college campuses. At UC Davis, there were approximately 150 students protesting tuition hikes when the police pepper sprayed some seated protestors. The video was viewed by millions across the world. The outrage caused a 3 block line of students to silently shame the Chancellor as she walked out of a Regents Meeting the evening of the incident. The next day thousands of students showed up at an assembly to call for her resignation. Another example of how a violent reaction to a small demonstration grew the movement from a small number to thousands. The “contagion” spreads even more.

Oakland's port shut down

Mayor Bloomberg, Mayor Quan, Mayor Hancock, to name just a few, do you really think that now that these demonstrators are no longer in your parks, they will just go home and stay silent? Do you really think that your batons, rubber bullets, riot police, and pepper spray will make the anger of the injustices go away?

No, they will take the skills they learned and contacts they made at these parks and they will be very busy. They will be organizing at their colleges and universities, they will be organizing in their home towns, they will be spreading the word, they will be occupying homes in foreclosure, and the “contagion” will spread beyond your money masters’ wildest fears. These financial elites will long for the days where the only thing they had to deal with was park gatherings and signs.

Unfortunately, none of the structural problems that the Occupy Movement have been shining a light on have been addressed by the puppet politicians. This GUARANTEES that the economic, social and political systems will continue to deteriorate. This fact alone will add more frustrated people, many of which will join the movement. And the “contagion” spreads even more.

None of the perpetrators of the financial fraud have been prosecuted. It doesn’t take a Phd in economics to know that this means the financial crimes will not stop. The parasitic money masters are continuing the same behaviors that got us into this mess to begin with. The level of derivatives is now even greater than it was in 2008. This guarantees that we will face another devastating econmic collapse, probably significantly greater than in 2008. This will result in even more unemployment, foreclosures, lost health benefits, gigantic bank bailouts, government guarantees, and social safety net cuts with the resulting social unrest inherent under such conditions. What’s in YOUR wallet? The “contagion” will now spread across the wider society.

Using an insect lifecycle as a metaphor, the movement will go into the pupa stage where it will appear that it has become dormant. Imagine the tens-of-thousands of people occupying parks, plazas, colleges, homes in foreclosure, and other places around the country. They will spend the winter organizing.

Then in Spring, movement will metamorphose and emerge more powerful than ever. More and more frustrated people who sitting on the fence will start to support the changes called for. Now the money powers will be getting even more nervous. Their divide and conquer tactics, as well as the use of redirection will not work like it used to.

police brutality
Watch for more violence by the enforcers as the money masters and their hired politicians vainly try to cling to their positions of privilege and power. Watch how shrill the media attacks will become. Maybe they will start a war to distract the public from their crimes. Maybe they will infiltrate more provocateurs into the movement as they have already tried. Learn to recognize these tactics and do not allow yourself to fall for them.

It is time to let the “too big to fail” banks know that they do not have the final say. They can buy our politicians, they can generate fraudulent mortgage documents, they can buy protection against prosecution, but they have no defense against the combined economic might of the people!

So, what can YOU do? VOTE WITH YOUR POCKET BOOK!

The big banks have been draining our economy, placing their profits in off shore accounts, not paying their fair share in taxes, financing the shipping of our jobs overseas, getting government bailouts, and paying their executives HUGE bonuses. They take the money they make in your community and ship it out impoverishing your community. Move your money to a local bank or credit union. With the banks using fractional reserve lending, it means that they are leveraged 10 to 1. This means that if only 10% of all deposits from a “too big to fail” bank are withdrawn, they will be insolvent. We, the People can bring these giants down! A local bank or credit union will invest in your communities, pay taxes in your communities and make it a better to place to live. Move your money to a local bank or credit union!

Time to send these Wall Street criminals a message!

Stop paying a 3% bank tax on all credit card transactions.

Stop shopping at the big chain stores. They take their profits and ship them out of your communities impoverishing them. Many of them “hide” their profits by moving them to off-shore tax havens. Patronize your local merchants. They are paying their taxes, they are keeping the money in your community, they are part of your community.

Since money in politics is at the root of the government corruption, we need to repeal the Citizens United ruling that allows the money powers to drown out the voices of the people with unlimited money donated ANONYMOUSLY to our corrupt politicians of both parties. Some organizations that are working towards this end include:

http://www.followthemoney.org
http://www.opensecrets.org
http://www.campaignmoney.com
http://www.citizen.org
http://www.commoncause.org

Take the time to educate yourself on these issues. It is time to take our country back from the criminals who have hijacked our democratic republic and raided the national treasury for their own self-serving ends, thrown millions of families into the streets using fraudulent documents. It is time to return this nation to its people! These criminals need to “occupy” prison cells.

http://www.endtheillusion.org

Are we solving the ROOT CAUSE of our economic problems?

Are we solving the ROOT CAUSE of our economic problems?

Picture yourself in the following scenario: you are visiting your doctor complaining of abdominal pains, the doctor gives you a prescription for a strong pain killer. Certainly the pain medicine will help you feel better, but does it really solve the problem that caused the pains in the first place? Could this be the result of appendicitis or some other serious condition? You would rightly question the doctor’s judgment. The doctor is treating the SYMPTOMS of the problem, not the ROOT CAUSE.

Yet collectively we are doing exactly the same thing on a national and even international level. Consider the following scenarios:

  • During the health care debate, we witnessed the spectacle of Mitch McConnell (Republican Senator from Kentucky), worrying about the effect that the emerging health care bill would have on health insurance companies. This was coming from a Senator who represents a state with the 5th highest level of poverty in the nation. Why is he so worried about the insurance companies? Would the majority of his constituents have called his office asking him to protect the insurance company profits?
  • AT&T warrantless surveillance

  • When it was discovered that telecommunications companies were illegally spying on citizens of the United States, Jay Rockefeller (Democratic Senator from West Virginia) voted to give these same companies “retroactive immunity” to protect them from the lawsuits that were working their way through the legal system. If no crime was committed, why did they need to receive retroactive immunity? If a crime was committed, why did they receive retroactive immunity? Would the majority of his constituents have called his office and asked him to authorize corporate spying on Americans with no judicial overview?

Of course, these are not the only elected representatives who did this and the examples just cited are only 2 of literally thousands of such efforts by members of both political parties on behalf of the well connected insiders. These efforts worked directly against the interests of the vast majority of their constituents. So, why would these seemingly intelligent people work so blatantly against the interests of the people who they are supposed to represent?

The answer is that all of these people received significant amounts of campaign money from the very corporations who would benefit from their efforts. It turns out that Senator Mitch McConnell received $932,207 from the insurance industry and $2,758,468 from medical professionals over his career. Senator Jay Rockefeller received $42,000 from the telecommunications industry in 2006 while the lawsuits and the bills for immunity were working their way through the legislative process. (Mitch McConnell also strongly supported retroactive immunity for the telecoms and received siginificant sums from them).

Does anyone really think that a regular citizen has the same access to their elected representatives as those corporations who contribute thousands and millions to these campaigns? If you showed up at your elected representative’s office at the same time as a lobbyist, who would get to meet with the elected official first? When it comes time to allocate access, priority will always be given to those with the money. In 2008, the telecommunication industry contributed over $9.4 million–from January 2007 to June 2009, and the insurance industry contributed $46,720,000 in 2008 to politicians in both political parties. In the aftermath of our financial meltdown, we certainly need significant financial regulatory reform, but realistically we cannot possibly hope to have effective financial reform when in 2008 the banking industry contributed $37,242,212, hedge funds contributed $16,993,557, and so on and so on. You have a situation where we have elected representatives sitting on the committees that have jurisdiction over specific industries or issues where these same representatives are receiving huge contributions from those very same companies they are supposed to be regulating.

corruptionLike drug addicts, our politicians have become totally dependent and addicted to these large campaign contributions for their political survival. It is an illusion that we have a government of the people and by the people. Instead, we have devolved into a government of the corporations, by the corporations, and for the corporations. We are moving further and further towards centralizing power and wealth into the hands of fewer and fewer people with inside connections. Our elected representatives are not truly our decision makers, but have become mere figureheads on the stage providing a fig leaf of cover to perpetuate the illusion that this government represents the interests of the people. The situation has become so bad that Senator Dick Durbin, Senator from Illinois remarked: "And the banks — hard to believe in a time when we’re facing a banking crisis that many of the banks created — are still the most powerful lobby on Capitol Hill. And they frankly own the place."  How else could we have seen the most massive transfer of wealth in human history from the poor and working classes to the same people, banks, and corporations whose bad decisions brought the world economy to its knees?

Think back to the doctor who only prescribed a solution to the SYMPTOM of the problem. In this economic situation, the ROOT CAUSE of the problem is money in politics and any attempt to “fix” the problem without addressing the ROOT CAUSE, is doomed to failure because any “fix” will only address the SYMPTOMS of the problem. Until we have public financing of all political campaigns, without any private or corporate funding we will always have these problems. There are those who might say, that we do not need any more spending since this would add to the deficit and cost more money to the treasury. However, consider how much the “influenced decisions” have cost the nation so far. How many bills were recently passed that were obviously designed to favor a single special interest? Just ponder this very incomplete list:

  • The nation passed deregulation bills such as:
    • Phil GrammThe Gramm, Leach, Bliley Act which repealed the Glass-Steagall Act which tore down the firewall banning the banks from gambling with depositors funds. Do you really think that a majority of constituents called their representative’s office and asked to have these protections removed?
    • The Commodity Futures Modernization Act which explicitly banned regulation of derivatives, allowing banks like JP Morgan Chase to become the largest derivative holder in the WORLD at $87,362 BILLION! There is not enough money on this planet to bail this out if these gambling debts go bad. Do you really think that a majority of constituents called their representative’s office and asked to allow these “financial weapons of mass destruction” to remain totally unregulated and opaque to regulators?  
  • The gutting of America’s manufacturing sector because of one sided trade agreements and tax policies that allow companies to defer and often never pay taxes on foreign-earned profits. So foreign profits of U.S. companies end up taxed at a lower rate than their U.S. income, creating an incentive to invest in foreign factories. The jobs left the country along with the factories. Do you really think that a majority of constituents called their representative’s office and asked to have these perverse incentives implemented to move the foundation of economic base to foreign countries?
  • The nation committed over $12,200 BILLION dollars to bailout, backstop, and guarantee the banks and financials.  (I like to use $1000’s of billions, rather than $trillions since it is easier to grasp the unbelievable scale of these numbers.) Do you really think that a majority of constituents called their representative’s office and asked them to use their tax dollars to reward the same corporations and people who created the economic mess?
  • How can we have had over a year pass since the economic meltdown, and yet no meaningful regulation of the financial industry has been passed?  Do you really think that a majority of constituents are calling their representative’s office and asking them to refrain from regulating the banks and financials?
  • The “too big to fail” banks have been not only been bailed out, but encouraged to become even bigger. Do you really think that a majority of constituents called their representative’s office and asked them to allow these big banks to buy up the smaller ones at pennies on the dollar and to provide taxpayer guarantees on any loses they might incur?
  • Almost 2/3 of Americans opposed the TARP bailouts, yet the bailouts passed anyways. We KNOW that a majority of constituents did NOT call their representative’s office and ask them to use their tax dollars to reward the same corporations and people who created the economic mess.
  • follow the money

  • A bankruptcy bill passed in 2005 that forced people to pay credit card and private student loan debt before unpaid child support. The politicians had the audacity to call this the Consumer Protection Act of 2005. Do you really think that a majority of constituents called their representative’s office and asked them to protect the big banks’ already obscene profits?
  • In several states there were efforts to ban labeling milk as free from artificial growth hormone rBST also known as rbGH (synthetic or recombinant bovine growth hormone). I find it hard to believe that a majority of constituents called their representative’s office and told them that they did not want to know if there were any artificial growth hormones in the milk their children drank. The good news here is that many of these efforts were defeated as the result of grassroots efforts by organizations such Physicians for Social Responsibility.

  • Efforts to label genetically modified foods have been blocked from passage. Do you really think that a majority of constituents called their representative’s office and said that they preferred to be uninformed as to whether the food their families eat have been genetically modified?
  • Larry SummersThe people on the economic team in the current administration such as Larry Summers, Timothy Geithner, John Dugan, Gary Gensler, to name just a few, not only missed predicting this economic collapse, but were complicit in enabling the deregulation that made it possible. I doubt that the majority of people who called the White House asked that these Wall Street insiders be part of the decision making team.

  • The Federal Reserve has provided over $2,000 BILLION in free money to the “big” banks by allowing them to “borrow” money at 0%. These banks then “deposit” this money with the Federal Reserve as a “savings account” for which they collect interest, while paying no interest on the “loan”. I would think that a majority of people would like to have sweet deal such as this for themselves.
  • There is very limited transparency as to how the alphabet soup of bailout program funds that were distributed. This invites fraud and corruption. We have a situation where the financial corporations do not even fear the government because they know that their paid off politicians will not call them on this. Even Elizabeth Warren, the chair of the Congressional TARP Oversight Panel cannot get the information she needs and is frustrated by the lack of transparency. Do you really think that a majority of constituents called their representative’s office and asked them to give these big financial institutions a break and allow them to ignore even congressional inquiries?

How did any of the above help most Americans? Would the majority of any elected politicians’ constituents have supported any of the above decisions? Of course not! It was money that influenced these decisions that benefited a small inside group without regard for the vast majority of the workers in this country who actually produce the wealth of the nation. By not having public financing of campaigns, the nation is paying a huge price with the legislation that is being influenced by the private money. To illustrate this point, the big financial companies contributed over $2,300,000 to both presidential candidates during the 2008 campaign. These companies hedged their “bets” by contributing to both candidates, so they would “win” no matter who won the election. When you consider the $thousands of billions committed to these financials, that $2 million was truly a great return on their “investment”.

government for saleThe cost of running publicly financed or at least significantly reformed fund raising in campaigns is miniscule compared to these numbers. The need to build walls between lawmakers and those private interests looking to buy votes is obvious and unfortunately too many of the currently elected politicians are against this because as long as this system is perpetuated, incumbents are at an advantage. This money in politics is the ROOT CAUSE of all of the bad decisions listed above and many, many, more.

There currently limits on the amounts of “hard money” that can be contributed directly to a campaign, however “soft money” can be contributed without limits to organizations that do not directly support specific candidates. An example of soft money is: an ad that says Tom Smith supported cutting Medicare benefits and accepted contributions from some special interest, call Tom Smith and tell him what you think of this. Political Action Committees (PACS) are where unions and corporations provide contributions, but they are limited to $5,000 for a single candidate.

A WARNING

There are dark storm clouds on the horizon. There was recently a case before the United States Supreme Court, The Citizens United v. Federal Election Commission, where the current federal prohibition against corporate campaign contributions was struck down. We are now witnessing a situation where the level of corruption and influence will go from the current very bad, to even worse. This marks a pivotal turning point in this nation’s history where corporate spending on campaigns will notch up exponentially. It will inevitably result in even more bad legislation influenced by the huge increase in corporate campaign spending, and sideline most citizens even more from the political process. Using first amendment arguments, the Supreme Court could actually give corporations equal protection to that of individuals. Where in the constitution did our founding fathers give corporations the same 1st amendment rights as individuals?

So what can you do?

  1. Call your representatives and DEMAND public financing of all political campaigns with strict limits on private funding. Let them know you are a voting constituent and will be watching their actions closely.
  2. Support organizations such as Common Cause, Public Citizen, followthemoney.org, opensecrets.org, youstreet.org, to name just a few.  These organizations are fighting to bring transparency and responsiveness to our government and need your support.
  3. Protest the bailouts, lobbying, as well as the bonuses, by moving your money from the big banks to a small community bank. Can you imagine the effect this would have on congress and the big banks when literally $billions would be withdrawn from their system. Vote with your pocketbook!
  4. Send AIG a message about their lobbying and bonuses by cancelling any policies you have with them and insuring with another more responsible company. Be aware that they have changed their name to 21st Century auto insurance to mask the tarnished image that the AIG name has. It is the same company! Vote with your pocketbook!
  5. Minimize the use your of credit cards. Every time you charge something, the issuing bank makes money from BOTH you and the merchants. With the widespread use of credit cards, the average 2-3% charge to the merchants by the credit card companies amounts to a BANK TAX on all purchases since the merchants have to pass this cost on to the consumer. This BANK TAX is a huge source of income for the big banks. Remember the merchant that charges you less for cash is actually doing you a favor by passing the BANK TAX savings on to you. Patronize merchants who offer this discount. Ask those who do not offer the discount to provide it. Vote with your pocketbook!

Remember, that any “reforms” that do not address money in politics are only nibbling at the edges by treating the SYMPTOMS of the problem like the doctor giving you pain killers,  rather than getting at the ROOT CAUSE of the problem. If enough people follow through with the steps outlined above, we will have the beginnings of a true populist revolt against our current corrupt system that is fueled and sustained by private money. It is time the citizens took control of this fight similar to the way the passengers on the Detroit Christmas flight did. Our government will not do it for us.

Rudy Avizius
http://www.endtheillusion.org

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