Labor Day 2014: Economic solutions already here for full employment, zero public deficits and debts

Labor Day is an Orwellian holiday: US “leaders” psychopathically pretend to care about American labor while lying about a real unemployment rate of close to 25% (the so-called “official” rate excludes under-employed and discouraged workers).

Along with unemployment, Americans receive policy enabling oligarchs to “legally” hide $20 to $30 trillion in offshore tax havens in a rigged-casino economy designed for “peak inequality.” For comparison, $1 to $3 trillion ends global poverty forever, saving a million children’s lives every month from slow and gruesome death (here, here). And, as always, US “leaders” lie-begat Americans into unlawful Wars of Aggression (in comparison, 11 days of US war cost would pay for all tuition of US college students).

Americans could have full-employment and zero public deficits and debt with monetary and credit reform.

These solutions are obvious upon a few moments of your attention. See for yourself:

What is monetary and credit reform? 

Since the 1913 legislation of the Federal Reserve, the US has had a national “debt system;” the Orwellian opposite of a monetary system. What we use for money is created as a debt, with the  consequence of unpayable and increasing aggregate debt. This is a description of the simple mechanics of adding negative numbers. Although it’s taught in every macroeconomics course in structure, the consequences of increasing and unpayable debt are omitted (unpayable because it destroys what is used for money, and eventually the debt becomes tragic-comic in amount).

Monetary reform creates debt-free money as a public service for the direct payment of public goods and services. This would replace the existing system of creating what we use for money out of debt; both from the Federal Reserve issuing credit for US federal debt instruments charged to taxpayers with interest, and private banks issuing credit through fractional reserve lending.

Closely related is credit reform that replaces private bank credit with public credit (and here). This transfers interest payments from private profits to public service.

Benefits of monetary and credit reform: no debt, optimal infrastructure, falling prices

The benefits include paying the national debt, ending a national debt forever, issuing money and credit for full employment, and optimal infrastructure. The prima facie case of benefits should undergo professional multiple and independent cost-benefit analyses. The facts that a Federal Reserve-type debt-based system causes unpayable debt, unemployment, inflation, and decaying infrastructure is relatively easy to demonstrate.

Debt begone: Monetary reform pays the national debt of over $17 trillion dollars virtually without cost, and ends its gross $400 billion+ annual interest payments. This saves the ~100 million US households an average of ~$170,000 in total debt cost, with ~$4,000 gross annual interest cost. Another way to calculate the savings is to figure those amounts per $50,000 annual household income (for example, if your household earns $100,000/year, you save $300,000 in national debt costs and $8,000 every year in gross interest).

The way the national debt is paid nearly cost-free is to use government-created money to pay the debt securities as they are due instead of what is done today: never pay them and “roll them over” (re-issue the debt to existing owners or issue new debt to pay for redeemed debt instruments) while only paying the interest. What is done today is similar to only paying the interest on a credit card with ever-increasing debt total. The inflationary effect of paying the debt will be counteracted by simultaneously removing private banks’ fractional reserve authority proportional to the payments (increasing banks’ reserve requirements).

When government has authority to transparently create money, a national debt becomes a tragic-comic part of history. Trial and error will inform total money supply, with an option of removing money from the supply through some form of simple taxation. For example, if public credit issues mortgages and credit cards at ~5%, this form of taxation can pay for public goods and services with the ability to raise or lower the interest rate. Again, proposals such as these should be subject to professional and independent cost-benefit analyses.

Full employment, optimal infrastructure, falling prices: Government can become the employer of last resort for hard and soft infrastructure investment. This provides triple benefits for employment, the best infrastructure we can imagine, and falling overall prices to the extent infrastructure investment contributes more economic output relative to costs of inputs. History demonstrates infrastructure investment does reduce overall prices in the current debt-funded model that typically adds ~50% of the projects’ nominal cost to its total cost. Monetary reform with infrastructure means the cost of debt-funding disappears, making this employment even more attractive.

Additional anticipated benefits are reductions of crime and other social costs related to human despair as people see and participate in creating a brighter future for all.

What’s missing for the implementation of these solutions: Our 1% “leaders” will not and can not implement solutions without becoming visible in criminal culpability for having the current system that parasitically transfers literal trillions from the 99%.

The solution to this problem is also obvious: prosecute obvious criminals in “leadership” in government, economics, and corporate media for fundamental fraud by lying to the 99% that debt is “money,” and lying in omission by failing to inform that public credit and money would solve all current economic issues. The public costs of this fraud are trillions of dollars, harm to millions of Americans, and significant totals of deaths.

An alternative to criminal prosecution is Truth and Reconciliation (and here).

** Note: has blocked public access to my articles on their site (and from other whistleblowers). Some links in my articles are therefore now blocked. If you’d like to search for those articles other sites may have republished, use words from the article title within the blocked link. Or, go to, paste the expired link into the box, click “Browse history,” click onto the screenshots of that page for each time it was screen-shot and uploaded to webarchive. Then switch the expired URLs with webarchived ones of that same information. I’ll update as “hobby time” allows; including my earliest work from 2009 to 2011 (blocked author pages: here, here).


This entry was posted in General. Bookmark the permalink.
  • PatFields

    As above presented, this overtly government-note scheme of a purported “debt-free money as a public service for the direct payment of public goods and services”, makes no more sense than government’s banknote scheme, currently in place. All it does is to remove government’s initial interest charge.

    Debt doesn’t exist only as a function of interest on principal. It exists because something real, of an equivalent intrinsic value, is yet to be supplied for some item received (the principal itself). Any note, whatever its source, interest accruing or not, is an IOU.

    Millennia of history plainly proves that the ideal TRULY DEBT-FREE money is metallic coin, the value of which is objectively derived from the metal’s own unique supply-demand characteristics. All these paper and digital representations are … self-delusion.

    Paper Rots, Coin Does Not.

    • Carl_Herman

      With all respect, PatFields, the historical evidence presented refutes your unsubstantiated claim of no difference between “money” and “debt.” Money created by government for the direct payment of public infrastructure creates full-employment, the best infrastructure we can imagine, and falling prices from economic output greater than the infrastructure investment cost.

      I think your second point is about private debt rather than my point of public/government debt.

      Linking money to a commodity adds a dangerous variable that can be manipulated. Money can and should be a legal invention to facilitate trade and creation with available resources in public infrastructure. What, you like our current system of taxation and fraud in the trillions to pay for infrastructure?

      • PatFields

        What you impose on your unsuspecting fellows as ‘money’ Mr. Herman … simply
        isn’t. It is, in fact, purely credit on their (present and future) Labor.

        “Of all the contrivances for cheating the laboring classes of mankind, none has been more effective than that which deludes them with paper money.” –Daniel Webster

        If it’s government ‘created’ notes you want, you might be delighted to learn, you already have it. See …

        18 U.S. Code § 8 – “Obligation or other security of the United States defined
        The term “obligation or other security of the United States” includes all bonds, certificates of indebtedness, national bank currency, Federal Reserve notes, Federal Reserve bank notes, coupons, United States notes, Treasury notes, gold certificates, silver certificates, fractional notes, certificates of deposit, bills, checks, or drafts for money, drawn by or upon authorized officers of the United States, stamps and other representatives of value, of whatever denomination, issued under any Act of Congress, and canceled United States stamps.”

        If it’s an imaginary credit ‘representative of value’, it’s all encompassed in there. Where does that come from, Sir? Some fourth dimensional phase shift?

        Money Is Weighed, Fictions Are Counted.

        • Carl_Herman

          You’re welcome to champion commodity-based money in this coming contest of ideas. The code you provide is merely a definition; it has no authority to create debt-free money.

          You ask a question: we have the power to create what we use for money out of nothing, yes. The benefit of this in our present is for any unemployed person interested in work to have a job creating infrastructure. This creates employment, upgraded infrastructure, and falling prices as the infrastructure contributes more economic output than investment cost.

          • ICFubar

            Yes! The secret is the quantity of money created…not too much and not to little, a Goldilocks situation for a Goldilocks planet.

          • PatFields

            Mr. Herman said: “You ask a question: we have the power to create what we use for money out of nothing, yes.”

            No I didn’t and no we don’t. Money immediately and entirely extinguishes debt. In that way, the chosen medium can be saved indefinitely for future needs. So what’s imposed by governments (at gunpoint) as ‘money’ is a willful, self-serving delusion which has depreciated 98% since 1913 … making simple, common savings for ordinary folks, virtually impossible.

            We see the wisdom of using metallic money as the ideal, each time a thousand year-old hoard of coin is discovered somewhere. The record shows those coins actually increase in purchase power, on their weight and fineness of metal alone.

            The exact opposite is true with these paper illusions. From 15th century China to the present, they fail … with the same catastrophic disarray we’re seeing develop all around us today. In fact, their average mean-time before failure is about 37 years. That’s a pretty dramatic endorsement for metallic money … real, genuine money.

            This crap about jobs and infrastructure is a fan-dance lure for the gullible among us. As example, if government had quietly and dutifully applied taxes over the past century, toward that shambles they’d made of the infrastructure, your ‘argument’ would be moot. And, if all goods-at-market (including money) was left to find natural equilibrium through consequential supply-demand arbitration, opportunities for work would remain in constant balance as well.

            Economy is an actual balance to things, not theoretical contrivance of it.

          • Carl_Herman

            PatFields: your argument will have opportunity. In the meantime, I’ll end my conversation with you to remind the public that linking money to gold, for example, has resulted in wild fluctuations in value, and market manipulation. The biggest looters are the ones holding the gold, and PatF wants them to have power in that version of money?

            Gold price manipulation:

            gold price swings that strongly argue against linking the value of what we use for money with another variable:

          • PatFields

            Mr. Herman, the periods of ‘wild fluctuations’ to which you allude, didn’t affect the purchase power of metallic money, but rather that of the banknotes causing all the instability in the first place. Still, with quite apparent prejudicial sentiments for the banker’s continuing plunder of Mankind, your ‘viewpoint’ is to be expected.

            As to ‘market manipulation’ … which is manipulative … trading with a bottomless supply of printed stamps … or, with a finite amount of gold, silver and copper which must, by natural circumstance, keep in balance with all other goods-at-market?

            To assert ‘pricing’ of real money through limitless debt-note Plantation Scrip is as close as one can get to a definition of ‘Manipulation’.

  • ICFubar

    I’m in total agreement but other theories abound, MMT and of course precious metals as “real” money despite the many drawbacks. Money must be created debt free to be of any value to mankind and banning fractional reserve practices should draw a line on speculative bubbles.

  • decembre

    No matter how you turn it around, money is virtual, we are earthlings, the two don’t go together. Only Corporation, moral persons made equal to human persons, live in the virtual. We are human beings, we need something else, something concrete to help us fulfill the basic needs, drink-eat-sleep, of everyone starting with protecting our earth whithout wich we cannot survive. Robots will rule the virtual world, not us. We are excluding ourselves from the futur world but nobody seems to notice. . .