Note: I make the following factual assertions as a National Board Certified Teacher of US Government, Economics, and History, with all economics factual claims receiving zero refutation since I began writing in 2008 among Advanced Placement Macroeconomics teachers on our discussion board, public audiences of these articles, and international conferences. I invite readers to empower their civic voices with the strongest comprehensive facts most important to building a brighter future. I challenge professionals, academics, and citizens to add their voices for the benefit of all Earth’s inhabitants.
Human beings will either continue being looted and lied-to, or earn voices for justice from basic education that includes how to create what we use for money:
- What we have now is debt created by privately-owned banks used for money (and here).
- We could have the power of debt-free money created to directly pay for public goods and services, with
- public banking to create at-cost credit.
Debt-free money is creating money as a positive number, while public credit creates what we use for money as a negative number. Both are useful tools for good-faith experimentation to manage an economy’s money supply. Both options are vastly superior to what we have today: allowing private banks authority to create what we use for money only and always as debt owed to them, combined with their primary responsibility to maximize their own profits.
If the public cannot, or will not, demand control over money then freedom is not possible because the only freedom possible is slavery to those who command money creation as we witness today:
The UK Guardian is Earth’s third most-read on-line newspaper. In a revealing article with rare admittance of the central facts, The truth is out: money is just an IOU, and the banks are rolling it in, the author explains what the Bank of England and US Federal Reserve admit (when you press for the truth):
What we use for money is created as debt by private banks.
This system is like adding negative numbers forever. The aggregate debt only gets larger, and will never be repaid because this is what we use for money. Also, as we see today, the interest and debt total become so tragic-comic we can’t get close to affording to pay.
What this also means is that with monetary and credit reform the public could have instant prosperity: full-employment, zero public deficits and debt, the best infrastructure we can imagine, falling prices, and release of public TRILLIONS held in “rainy day” accounts.
These solutions are OBVIOUS with a few moments of attention, and affirmed by leading Americans since Benjamin Franklin. See for yourself with what we have now, and what these solutions offer.
What we have:
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).
We have escalating and unpayable national debt, a real-inflation rate more than double the stated rate, and because private banks and their admitted privately-owned pinnacle bank, the Fed, create credit/debt for what we use as money, this becomes the literal mother of all conflicts of interest. If the Fed were to deliver its three stated goals of “maximize employment, stable prices, and moderate long-term interest rates,” we have a stunning observation:an honest Fed would at least ask for independent professional cost-benefit analyses to determine if government-created debt-free money and public credit would do better than their ever-increasing and unpayable aggregate debt.
- North Dakota has a public bank for at-cost credit that results in it being the only state with annual increasing surpluses rather than deficits.
- The Big Banks demand public subsidies (so-called “bailouts”) while gambling with over $200 TRILLION in derivatives with the same fraudulent methods as the subprime gambling. They’re not even banks anymore; deriving most of their income from subsidies and apparent market manipulations.
- Without public credit, governments hoard (and gamble) with “rainy day” accounts. The total from all government sources in California from school boards, cities, counties, public services, and the state is a game-changing $8 TRILLION: ~$650,000 of wealth per household that could be released!
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 the simple description of the sum of forever increasing 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.
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 $18 trillion dollars virtually without cost, and ends its gross $400 billion+ annual interest payments. This saves the ~100 million US households an average of ~$180,000 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 $350,000 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. It also releases CAFR funds back to the public worth TRILLIONS. 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 .01% “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 99.99%.
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.
Carl Herman is a National Board Certified Teacher of US Government, Economics, and History. He worked with both US political parties over 18 years and two UN Summits with the citizen’s lobby, RESULTS, for US domestic and foreign policy to end poverty. He can be reached at Carl_Herman@post.harvard.edu
Note: Examiner.com has blocked public access to my articles on their site (and from other whistleblowers), so some links in my previous work are 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 http://archive.org/web/, paste the expired link into the box, click “Browse history,” then click onto the screenshots of that page for each time it was screen-shot and uploaded to webarchive. I’ll update as “hobby time” allows; including my earliest work from 2009 to 2011 (blocked author pages: here, here).