January 22, 2013

The secret battle against our money creating power

Ellen Brown, Alternet - For centuries, a secret battle has raged over who should create the nation’s money supply – governments or banks.  Today, all that is left of the US Treasury’s money-creating power is the ability to mint coins. If we the people want to reclaim that power so that we can pay our obligations when due, the Treasury will need to mint more than nickels and dimes. It will need to create some coins with very large numbers on them.

To bail out the banks, the Federal Reserve, as head of the private banking system, issued over $2 trillion as “quantitative easing,” simply by creating the money on a computer screen. Congress, the White House, and the Treasury all rolled over and acquiesced. When it was proposed that the government bail itself out of its budget woes by minting a $1 trillion coin, the Federal Reserve said it would not accept the Treasury’s legal tender. And the White House again acquiesced, evidently embarrassed to have entertained this “ludicrous” alternative.

Somehow we have come to accept that it is less silly for the central bank to create money out of thin air and lend it at near zero interest to private commercial banks, to be re-lent to the public and the government at market interest rates, than for the government to simply create the money itself, debt- and interest-free.

The banks obviously have the upper hand in this game; and they’ve had it for the last 2-1/2 centuries, making us forget that any other option exists. We have forgotten our historical roots.  The American colonists did not think it was silly when they escaped a grinding debt to British bankers and a chronically short money supply by printing their own paper scrip, an innovative solution that allowed the colonies to thrive.

In fact, the trillion dollar coin represents one of the most important principles of popular prosperity ever conceived: national debt-free money creation.  Some of our greatest leaders, including Benjamin Franklin, Thomas Jefferson, and Abraham Lincoln, promoted the essential strategy behind it: that debt-free money offers a way to break the shackles of debt and free the nation to realize its full potential.

We have lost not only the power to create our own money but the memory that we once had that power. With the help of such campaigns as Occupy Wall Street, Strike Debt, and the Free University, however, we are starting to re-learn the great secret of money: that how it gets created determines who has the power in society — we the people, or they the bankers.


The other way to deal with the national debt


Capt. America said...

We should have rid ourselves of paper and metal money decades ago and converted to hard plastic coins with anti-counterfeiting holograms and ciruits inside. Coins $100 and over should contain a record of everyone who ever owned them and be trackable. Paper and metal money has been bonehead stupid for a long time. If coins were to be well spent on infrastructure, there would be little or no inflationary pressure, because they would be backed by the value of the infrastructure.

Anonymous said...

The wealth of the nation is in the health and educated skills of the people, and in the unused national resources.

Were the Constitution to require that no more money could circulate than the value of that natural wealth, there'd be no reason not to put money creation back in to the hands of Congress.

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