If government created money instead of debt: America’s brightest minds speak

Carl Herman, Contributing Writer
Activist Post

The US suffers from debt-damned economics: a Robber Baron-era paradigm whereby the harder Americans work, the more in debt we collectively descend. The reason is public confusion between “money” (which the US does not create and use to facilitate trade) and “debt/credit” (which our government says is “money” and what is created). Our modern-day Robber Baron/oligarchs maintain this confusion with the willing help of US corporate media’s intentional obfuscation.

So what do we do to stop transferring literally trillions of dollars of benefits every year from working Americans to oligarchs? With competent citizenry that understands, demands, and holds our group work (government) accountable for transparency, I recommend three concurrent strategies:

1.  Unleash tens of thousands of state and city legislators on the idea that under current laws and regulations, they can form their own banks. The benefit is at-cost credit instead of current borrowing costs. For example, California would save ~$5 billion in interest costs every year with at-cost credit (this would re-hire 20,000 laid-off teachers at $70,000/year and still have $1.6 billion left-over). At-cost credit could also mean at-cost public mortgages (think 1-2% interest rate). The one state with the foresight to have their own bank and create their own credit rather than beg to Wall Street is North Dakota: the only state with a growing budget surplus. This is a function of at-cost credit, and has nothing to do with the specific use of the credit; that is, the savings apply equally to every state and their unique circumstances of using money (more resources here and here).

2.  National monetary reform to create a “money supply” rather than government-issued debt securities. This breakthrough ends our national debt, allows government to be the employer of last resort for infrastructure investment for full-employment and the best infrastructure we can imagine, and provides trillions of dollars in annual benefits compared with our current parasitic debt system.

3.  Revolt from our allegiance to criminal “leadership” in politics, economics, and US corporate media. I recommend a Truth and Reconciliation process to more quickly divide those willing to choose a “Scrooge Conversion” and help the American public see the “emperor has no clothes” facts from those who continue literal destruction, misery, and death upon Americans and the world.

Corporate media will not remind you, but many of America’s brightest historical minds understood and communicated that publicly-created money (transparent government is public/group work) ends government debt and can create full-employment. This is my “top-ten” list:

  1. Thomas Edison (1847-1931) held over 1,000 US patents for his inventions and is considered among the most brilliant minds in American history. Edison understood the engineering of our monetary system and actively spoke for monetary reform. These seven paragraphs are from an interview with the New York Times in 1921 from a publicity tour Edison took with his friend and fellow inventor Henry Ford to discuss monetary reform. 
  2. Thomas Jefferson (1743-1826) was the primary author of the Declaration of Independence, a foundation of American ideals. He was a scholar of the Enlightenment, including religious tolerance and freedom. He communicates strong understanding of banks creating credit that cause inflation to devalue everyone’s currency, the gambling of created credit such as we see today in credit default swaps and exotic derivative trading. 
  3. Andrew Jackson (1767-1845) is the last US President to pay-off the national debt. He did so only after ending the Federal Reserve of his day, the privately-owned Second Bank of the United States. As did Thomas Jefferson, Jackson understood the subversive act and perpetual national debt with banks creating money to lend to the government. He did not understand the positive policy response of the government creating money directly for the payment of public goods and services; a missed historical opportunity.
  4. Peter Cooper (1791-1883) was one of America’s leading inventors and businessmen. He designed and built the first US locomotive in 1830, the “Tom Thumb.” Cooper was the first to introduce anthracite coal into iron production in 1845, resulting in the US’ first wrought iron beams for construction. In 1854, Cooper was a founder in the telegraph company that created the first trans-Atlantic cable. Peter Cooper was the Greenback Party candidate for President in 1876. 
  5. John F. Hylan (1868-1936) was Mayor of New York City from 1918 to 1925. New York has long been the US banking and financial headquarters, with the mayor’s office about a half-mile from the New York Stock Exchange. Hylan has two revealing communications in strong argument for monetary reform. 
  6. These revealing comments come from two Chairpersons of the House Banking Committee, totaling 24 years of service in that position of comprehensive insight into American banking. Louis McFadden (1876-1936) was Chair from 1919-1931, and Wright Patman (1893-1976) was Chair from 1963-1975.
  7. Benjamin Franklin (1706-1790) was a Founding Father of the United States and one of the most accomplished inventors and brilliant minds in human history. Among his achievements was contributing to the discovery of how to fund a government without taxes and its successful implementation in the colony of Pennsylvania.
  8. William Jennings Bryan (1860-1925) was an attorney, one of the nation’s most popular public speakers, and the Democratic Party’s choice for President in three elections: 1896, 1900, and 1908. Bryan’s political populism centered on American monetary policy.
  9. Charles Lindbergh Sr. (1859-1924) was a member of the House of Representatives from 1907-1917 (R-MN). Lindbergh’s powerful Congressional speech from his 1917 book Why is Your Country at War? is as strong and accurate a message that can be communicated.
  10. The Great Depression in the US (1929-1941) motivated professional economists to comprehensively and creatively address its causes. Upon consideration of previous US economic depressions, prominent economists proposed monetary reform as the nation’s most effective and practical policy response. This proposal was sent to a thousand academic economists from 157 universities, with 73% in full agreement with the proposal, 12.5% in approval with various considerations in its implementation, and only 14% in disagreement. 

Here’s an interview to hear me discuss our predicament and obvious solutions.

Video: America’s Controlled Economic Implosion

    Carl Herman is a National Board Certified Teacher in economics, government, and history. His hobby is research, education, and lobbying for improved public policy. A principal project of his 30-years’ experience working with US “leadership” in government, economics and corporate media was to grow the citizen’s lobby, RESULTS, that led to two UN Summits (1990 World Summit for Children  – the largest meeting of heads of state in world history – and the 1997 Microcredit Summit – topic of the 2006 Nobel Peace Prize). Because US political leadership of both parties reneged on each and every public and private promise to end poverty, and US corporate media behaved as their political propagandists, Carl shifted his hobby to “follow the money.” His conclusions are explained and documented in these two articles (academic/professional voice, and more passionate citizen voice):

    Open proposal for US revolution: end unlawful wars, parasitic economics
    Common Sense for new American Revolution: revolt from US government by dicts

    He can be reached at Carl_Herman@post.harvard.edu 

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