The Lost Science of Movement Building: For Monetary Reformers

By Harrison Tesoura Schultz Ph.D.

I wouldn’t have to worry about my student loans, unpaid bills and delinquent income taxes and rising rent any more if I could get just one Federal Reserve Note for every time I hear someone say “The NEED Act sounds great! But it’ll never happen.” Or “It’s too good to be true.” “Congress will never pass it.” As if we naively expected the United States Congress to enact our legislative demands without a fight. As if the completely abstract “State,” “The System” or even the actual “Money Power” that we are all either unconsciously or unwillingly enslaved to is anywhere near as powerful and as impervious to grassroots change as Hollywood and our mainstream media would have us believe. Resistance is fun not futile. “Those who are peaceful and indifferent are forgotten,” according to Elizabeth Gurley Flynn, “they never know the fighting joy of living.”[i]

WhatifItoldyou

Take for an example an article that Erving Goffman cited from The New Yorker in his landmark text Asylums which described how the New York City Police and Fire Departments, along with the Department of Water Supply, Gas, and Electricity conceded defeat to the swarms of anonymous children who ‘wrench’ open fire hydrants to recreate and cool off from the summer heat. The authorities provided special perforated hydrant spray-caps to reputable groups and individuals as a compromise to the children to preserve the city’s water supply.[ii]

Aslyums

Goffman also described how asylum inmates would collectively teas their staff, shout slogans, boo, bang their food trays on tables, start food fights.[iii] He noticed further that asylum staff would selectively tolerate and permit or even periodically promote certain persistent prohibited, disruptive behaviors, especially during the holiday season, so as to preserve institutional order.[iv] Goffman also observed that such behaviors were more commonly studied with regards to political uprising.[v]

PoorPeoplesMovements

Frances Fox Piven and Richard Cloward describe and indeed advocate economic and social disruption as the most effective means of forcing political economic elites to make concessions to poor people based on their historical comparative analysis of twentieth century grassroots Poor People’s Movements.  But what exactly is movement? “A social movement is a formally organized group that acts consciously and with some continuity to promote or resist change through collective action” according to the Robert A. Goldberg, author of Grassroots Resistance, Social Movements in Twentieth Century America.[vi]

Piven and Cloward emphasize “collective defiance as the key distinguishing feature” of effective grassroots protest movements.[vii] What “the people won was a response to their turbulence and not their organized numbers.”[viii] Piven and Cloward unequivocally advocate strategies which “escalate the momentum and impact of disruptive protest at each stage in its emergence and evolution.”[ix] “Thus mobs of unemployed workers were granted relief in the 1930s: striking industrial workers won higher pay and shorter hours: and angry civil rights demonstrators were granted the right to desegregated public accommodations in the 1960s.”[x]

The sit-down strike “admirably suited to the unorganized struggle of the mid-1930s. A small number of workers could sit down on the line and stop production, without benefit of much advance planning or advance commitment….a few sit down strikes could, and did stop an entire corporation. Thus, relatively small-scale and spontaneous actions could bring management to a heel. Most of the sit down strikes ended with gains for the workers.”[xi]

Piven and Cloward’s research validates Margaret Mead’s iconic assertion “never doubt that a small group of thoughtful committed citizens can change the world: indeed, it’s the only thing that ever has.” Erica Chenoweth encouragingly describes how “no government can withstand a challenge of 3.5% of its population without either accommodating the movement or (in extreme cases) disintegrating” in her landmark Ted Talk. The obvious and hopefully relieving implication is that we do not require a significant majority of the US population to engage in direct action, lobby for the NEED Act or even become monetarily literate in order for us to successfully leverage Congress into passing the NEED Act into law based on Piven and Cloward’s analysis of successful poor people’s movement’s.

How do we begin to actually build an audience of several million people as struggling, grassroots organizers however? Derek Sivers’ describes how any “lone nut” such as you or I can easily create a crowd in his landmark Ted Talk How to Start a Movement. The lone nut simply needs to publicly embrace and empower her first two followers as equals, thereby enabling more followers to emulate the behavior of the lone nut.

adbusters_occupy-wall-street_525

I have personally witnessed and indeed unwittingly aided in the dramatic, viral growth of a grassroots movement. I learned a lot from the experience. AdBusters originally called for twenty thousand radical grassroots activists to Occupy Wall Street in order to shut down the financial district and the stock exchange until congress enacted our one demand which should have been Dennis Kucinich’s National Emergency Employment Defense Act in hindsight. I admittedly didn’t think it was even worth discussing demands the early Saturday afternoon meetings we struggled through in Thompkins Square Park which was usually never larger than sixty very lose nuts including myself according to my counts. I certainly never thought OWS would ever grow large enough to leverage any kind of concession. I stayed involved in spite of the grueling nature of the meetings mainly because I was impressed by the adventurous, committed spirit of other more experienced key organizers in the movement I figured I would learn something from in the process of inevitable failure. I joined a group of a dozen such organizers with street performance experience. We agreed to sleep out on Wall Street two weeks before our official invasion date of September 17, 2011 as a “Test Run” to get a feel for what we should expect on S17.

I arrived late at the 8:00pm meeting before the test run at 60 Wall St on Sept 2nd 2011. I had heavily been drinking cheap scotch in order to prepare myself for what I expected to be a fairly unpleasant evening of rats, cockroaches, the NYPD, possibly some handcuffs, a jail cell and maybe even a dismissal from my job with several interesting, well-meaning, well-informed/educated strangers who were determined to cause trouble. However I felt like I had returned home after I threw down my blanket, kicked off my shoes and unpacked the chessboard in front of Federal Hall after we finished the meeting at 60 Wall St.

TestRun2
Photo by Christina Groves

Alex put on a giraffe hat, started singing and playing his guitar. I remember that Maria and Christina kept filming us while Sid, Vanessa and Jez talked to the spectators that started watching us, some of whom left us food and some spare cash along with plenty of encouragement. I was having a good time and I wasn’t able to focus on the chessboard I had just set up after I began showing Jez a little bit of capoeira.

I was more interested in having fun than in dealing with the NYPD and I admittedly felt more upset with my fellow occupiers for deciding to argue with the police and ruin our fun than I was with the police for arresting them, especially given how easy it turned out for Richie, Christina and I to avoid getting arrested.

I figured that the test run was a failure. There was nothing else for me to do but to go home. I got a call from Alex just as I began to fall asleep. Alex told me that the NYPD let most of them out right away except for Nico who had been forced to wait twenty four hours for not having a NY State ID before a Judge threw his case out. Alex also told me that he was going to regroup at another spot. I told him that I had to go to the day job as a business intelligence analyst I had just landed in a few hours. The game had changed by the time I woke up however. I saw lots of emails sent to the September 17th Google Groups thread the next morning of August 2nd 2011 while I was at work. Sean Captain later wrote,

“Recounting the arrests was the first item on the agenda at the next General Assembly meeting in Tompkins Square Park in the East Village. Nine had been released the next day with a summons. A tenth went before a judge, who threw the case out.

Something had finally happened. It wasn’t just meetings and emails. There had been a demonstration–albeit tiny–and arrests. For the first time, it felt like September 17th might not be a total flop. The general assemblies were still drudgery. But serious work was happening in the committees. Arts and Culture had grabbed national news.”

InsideStoryofOWS.PNG

https://www.fastcompany.com/1785918/inside-story-occupy-wall-street

No one doubted that the occupation of Zuccotti Park would begin on September 17, 2011 after the test run. The next questions became, “will it last through the rainstorm on Monday morning of September 19, 2011?” “Would OWS last through the week?” “Would it last through the month?” “Would it last through the October eviction?” “Would it last through the cold?” However we continued to grab more and more national news as our specific occupation of Zuccotti Park not only grew, but more importantly, the social media content or propaganda we continually created like the test run clip inspired countless other occupations across the country and the world. Sean Captain described how “live streaming was just part of the media operation. The press team posts photos and videos every day–some showing ugly aspects like pepper-spraying and rough arrests. It’s a continuation of the Arts and Culture Committee’s arrest video.”

Our “viral” success was not a one-time, historically unprecedented fluke based exclusively upon social media. Piven and Cloward describe how small groups of two up to a half dozen highly motivated and committed civil rights activists were able to inspire mass mobilizations across segregated colleges, churches and ghetto neighborhoods.”[xii]  “News of the February 1st sit-down strike of four black college students at a segregated lunch counter in Greensboro, North Carolina started a chain reaction of insurgency in 1960.”[xiii] Piven and Cloward describe how cadres of civil rights activists were “animated by the élan of the sit-ins and freedom rides, by the tactics of confrontation.”[xiv]

“Through the summer and fall of 1960 militant SNCC activities mushroomed. No one could say what precisely was happening, or who was involved, There was no organization to monitor protest activities, one participant said, “because the students were too busy protesting…no one really needed ‘organization’ because we had a movement” (Zinn, 36).”[xv]

The “chain reaction” of militant Civil Rights insurgency in 1960 described by Piven and Cloward manifested itself again in 2011 as OWS went “viral” as occupations began to form in cities all across the US and the entire World. Perhaps the most exciting, although least defining, features of social movements are the large public crowds that they can produce. Key late 19th century social scientists Gustave Le Bon and Gabriel Tarde fearfully described the invincible hypnotic, highly contagious power of crowds over individuals which I experienced first-hand with OWS.

MSNBCrowd

There were too many people staying at Zuccotti Park full time for Occupiers with day jobs like myself to find space there to sleep at night. The occupation grew so large and stable that I found myself at a loss as to how to continue to contribute. It was very much like that moment in the movie Fight Club when Edward Norton’s character wandered around his home swilling vodka feeling useless with nothing to do because project mayhem took on a life of its own. Your movement WILL FAIL if you do not reach this critical stage. So I would visit Zuccotti every morning before work with three hand counters to get an average estimate how many people were sleeping there each night in order to alleviate my feelings of uselessness. The spread sheet I kept revealed the contagious growth of the Occupy crowd in Zuccotti Park which we had renamed Liberty Square at the time.

Liberty Plaza AM headcount
Day Date count1 count2 count3 Average Weather Comment
Monday 10/3/2011 209 162 118 163 mildly unpleasant
Tuesday 10/4/2011 266 245 208 240 mildly unpleasant
Wednesday 10/5/2011 304 260 219 261 Pleasant
Thursday 10/6/2011 336 310 274 307 Mild
Friday 10/7/2011 447 362 244 351 Pleasant
Saturday 10/8/2011
Sunday 10/9/2011
Monday 10/10/2011 656 620 533 603 beautiful!
Tuesday 10/11/2011 673 633 501 602 Beautiful!
Wednesday 10/12/2011
Thurdsay 10/13/2011 439 223 331 rained the night before – lots of people under tarps not a good count
Friday 10/14/2011 too many to count – day of bloomberg’s attempted clean up
Saturday 10/15/2011
Sunday 10/16/2011
Monday 10/17/2011 430 347 249 342 Pleasant
Tuesday 10/18/2011 531 399 380 437 drizzling, not freezing

However, the large disruptive crowds that small groups of activists sometimes organize during relatively rare moments of historical, credit/debt based crises are still merely the tip of the iceberg. Sean Captain described how the OWS was larger online than in person.

LouderOnline.PNG

https://www.fastcompany.com/1781296/protest-wall-street-louder-online

A protest crowd’s audience is ideally the largest element of a social movement if everything works out. This is how we reached and will reconnect with a population of monetarily literate and curious millions with our modern disruptive grassroots street theater and social media based approach to social change. Goldberg describes how,

“The mobilization drama is played before an audience not only of organizations but of individuals, affiliated and unaffiliated. Within and outside associations, as members of family and informal work groups, in casual circles of friends, and alone, individuals make decisions about social movements. They listen to movement representatives, and choose to affiliate, oppose, or remain neutral. Authorities and contenders are acutely aware of this audience. It is this contest for public support, not only from groups but from the unaffiliated, that explains the importance that activists attach to their message and the intense struggle for control waged over a movement’s image.”[xvi]

Grassroots Resistance

Piven and Clowrd argue “The most useful way to think about the effectiveness of protest is to examine the disruptive effects on institutions of different forms of mass defiance, and then to examine the political reverberations of those disruptions.”[xvii] This is why effective modern movement builders pay very careful attention and attempt to manage the mainstream media interpretations of their image according to Goldberg.

“They are attuned to News schedules, competition between the press and networks and reporters’ thirst for authoritative sources. The stakes of the “media dance” are high. Television coverage may confer legitimacy on a movement and enhance its credibility by mirroring widespread popular discontent or, perhaps by creating that impression. These images will in turn, influence the reactions of authorities, polity members, and other challenging groups. Media attention can raise rank-and-file morale and facilitate resource building by carrying the movement’s case before large, un-mobilized audiences. Such a hearing is vital to movements without extensive memberships. But if the rewards are great, so too are the risks, Silence or negative coverage may sap a movement’s energy and prepare the ground for repression. Because the camera transforms activists into instant media stars, it may exacerbate internal tensions and encourage dissension. Also, news deadlines, the demand for knowledgeable informants, and the centralization of network facilities favor hierarchical and national protest groups over decentralized organizations. Regardless of the type of movement, however, efforts to manipulate the media will continue to consume much time and effort.”[xviii]

PeopleMedia
Photo by Erik R. McGregor

Modern grassroots organizers share photos and videos of direct actions mixed with mainstream media news sources on Facebook, Twitter, YouTube & Instagram to build audiences, day by day, week by week, until journalists themselves become audiences members, typically pitching story ideas about the movement to their editors, inevitably creating mainstream media interpretations of the movement, which in turn expand the activists’ audience regardless of how favorable the content is. Hence why organizers pay careful attention to the statistics or analytics on the reach, likes, comments and shares of the links, photos, videos of their social media channels to give their audience more of the kind of action and information they want to see and less of what they react negatively towards or ignore, which is worse. We pay even more attention to the social media analytics we see on posts of mainstream media coverage of our direct actions that we post to our social media platforms to examine the potential political reverberations of our disruptive actions.

WagingNonViolence

https://wagingnonviolence.org/feature/how-ows-anti-market-research-analyst-helps-the-movement-go-viral/

 

Summary of the Lost Social Scientific Theory of Movement Building

Audience participation, or “armchair activism” as some direct action junkies derisively refer to it, is critical to the “success” of the movement in terms of it actually achieving its demands and direct action is how organizers create and expand audiences. The kind of disruptive direct action that can eventually attract and motivate large audiences of millions into action “requires only small numbers of persons, but these must be so highly motivated and involved that they are willing to risk the great hardships involved in direct action.”[xix]

RevForHellofIt

“The first duty of a revolutionist,” however, “is to get away with it” according to Abbie Hoffman.[xx] My friends and I have discovered through several years’ worth of experimentation that it is possible to mitigate the predictable threats of arrest and police violence using homemade art, grassroots street theater to create propaganda or memes disrupt and inspire people’s imaginations. We disseminate our propaganda on social media, monitor the analytics and create more content based on what attracts more followers, audiences and eventually mainstream attention. We haven’t yet experienced a single arrest much less an accidental injury at any of our ongoing 420 Fight Club Demonstrations at the NYC Branch of the Federal Reserve. We intend to maintain our perfect track record as well.

Kuhn

Thomas S. Kuhn similarly described how revolutions in old, outdated, anomaly-ridden scientific paradigms in crisis are not accomplished without forceful, persuasive argumentation that ultimately disrupts and overshadows the logic of the old paradigm.[xxi] We therefore work to capitalize on the profound emotional significance of a slogan, of an expressive gesture, or of a work of art”[xxii] described by Karl Manheim to make monetary literacy and reform with the NEED Act appealing from the perspective of the counter cultural imagination of the radical left. Our goal is to inspire other frustrated, angry individuals who have been alienated by our educational system into teaching themselves more about monetary history, policy and into taking direct, democratic action most importantly by calling their congress representatives to demand sponsorship for the NEED Act.

 

What a Grassroots Social Movement is not

 

Piven and Cloward identify a persistent, perilous confusion between mass movements on the one hand and the formalized bureaucratic organizations, such as for our purpose; The American Monetary Institute, Greens For Monetary Reform, The Alliance For Just Money as well their competitor organizations from the Public Banking Institute (PBI) and Modern Money Theory (MMT) “which tend to emerge on the crest of the movement on the other hand,”

“The presumption of most reformers and revolutionaries who have tried to organize the lower classes, is that one the economic and political resources of at least modest numbers of people are combined in disciplined action, public or private elites will be forced to yield up the concessions necessary to sustain and enlarge mass affiliation.[xxiii]

The mass membership movement model “has not succeed in practice” according to Piven and Cloward’s historical comparative analysis of “successful” twentieth century North American social movements. The authors debunk the popular conviction that the “formal organization is a vehicle of power.”[xxiv] They describe how “the bureaucratic organizations that were developed within these movements tended to blunt the militancy that was the fundamental source of such influence as the movement’s exerted.[xxv] Anthony Giddens and his colleagues similarly observed that “increasing the size of the group tends to decrease its intensity of interaction.”[xxvi]

Tyranny

Another implicit assumption of these mass membership monetary reform bureaucracies, specifically the newly emerging Alliance for Just Money is that monetary education will somehow inspire successful action enabling radical redistributions of actual social wealth, which is dangerously naïve, wishful thinking given how obviously adverse average Americans are to educating themselves. Leon Festinger observed “there should be a relative absence of motivation to seek support or new information at all.”[xxvii] especially in individuals whose daily behaviors, routines and lifestyle are free from doubt, insecurity, moral confusion or “cognitive dissonance.” Such individuals are typically only exposed to new information accidentally or forcefully.[xxviii] Such individuals are also likely to set up defensive processes to prevent the cognition from becoming firmly established moreover.[xxix]

Festinger describes how most individuals will only seek out new people from whom to elicit new information only after they have been exposed to some sort of seemingly anomalous, disruptive social action that disrupts the values and beliefs upon which the mundane action of their day to day lives revolve. The basic theoretical assumption of change underlying Occupy The NEED Act therefore is that action inspires education, and not the other way around as members of our “parent” monetary reform organizations seem to implicitly assume by way of contrast in spite of our ongoing solidarity in terms of enacting the NEED Act.

 

Move #MMT, Get Out of Our Way

But they'd rather 2

Max Weber describes a key rule for maintaining objectivity in the social sciences. “First, to keep readers and themselves, sharply aware at every moment of the standards by which they judge reality and from which the value-judgment is derived, instead of, as happens too often, deceiving themselves in the conflict of ideals by a value mélange of values of the most different orders and  types, and seeking to offer something to everybody.”[xxx]

Thus I am required to confess by the rules of my own sociological methods that my biases towards MMT in favor AMI’s scholarship and the NEED Act are the largely the result of my experiences with Occupy Wall Street which of course has largely been deemed a failure due to its lack of coherent, legislative demands. I find it frustrating that MMT, a community of highly educated arguably “wealthy,” successful scholars, is not held to the same standard of coherent legislation that the mainstream media expected out of an incalculable mass of exploited, alienated, struggling, working, poor people.

I first found out about PBI and AMI through the Occupy community and I immediately gravitated towards AMI, reading more of their materials including the Lost Science of Money because AMI proposed a far more radical, sweeping solution that Occupy could have organized around as a coherent demand through an actual piece of legislation which AMI’s reformist competitors like PBI and MMT completely lack in spite of our competitors’ admittedly stronger social media presences. It would be simple for a new disruptive grassroots Occupy movement to organize around a central demand for public banks, which most #RealMonetaryReformers feel is absolutely necessary once we have broken Wall Street’s monopoly on the means of producing our nation’s money as we would rather not socialize the distribution costs of circulating privatized debt as money. There is however absolutely no way to organize an effective grassroots movement around abstract theory, especially not that of MMT.

Modern Money Theory is a far and away the most counterproductive bureaucratic organization in the mainstream monetary reform conversation from the standpoint of grassroots movement building irrespective of the damning critiques of the accuracy of their theory of how our current monetary system actual works and how it could potentially work more effectively. Modern Money Theory tells us that no government, including that of the US can’t ever go broke, that government debt equals money creation and that the US Gov could therefore easily afford to eliminate the student debt crisis and create a voluntary job guarantee.

I am of course oversimplifying MMT’s theory which does them far more justice than they deserve as good theories are simple according to Aristotle and Occam. The reason why I feel comfortable endorsing theories Zarlenga articulates in The Lost Science of Money because the book is simple and easy to understand. I feel comfortable promoting the NEED Act because I can easily imagine how it will benefit me and everyone else I know, love and indeed despise. 1) End fractional reserve lending, 2) nationalize the Fed, 3) in order to spend, rather than borrow money, to fund completely tax and debt-free housing, medical, educational and predatory debt jubilees, universal housing, universal healthcare, universal education, universal basic guaranteed income, a voluntary job guarantee, clean, renewable energy and transportation, money out of politics and much more potentially. I nag Jamie Walton to write in monetary reparations for victims of colonialism and slavery into the bill along with universal veterinary medicine, which I understand according to the late Zarlenga himself, is absolutely possible.

MMT by way of contrast relies on far too much specialized, unsystematic, inaccessible, verbose, specialized jargon for an economic layman and a completely outsider to the banking system such as myself, much less any average MMT follower to even personally attempt to critique the validity their theory – which is undoubtedly the point of their theory! MMT reminds of me of Talcott Parson’s unnecessarily complicated functionalist theories…which no one studies anyone.

The purpose of theory in the social scientific method is used to interpret and understand facts or objects of scientific inquiry moreover. Theories aren’t supposed to be treated like facts. Theories are supposed to evolve and change unlike facts. And they are never guides to practical action in Weber’s sociology.”[xxxi] However MMT’s explanation of money is presented as incontrovertibly accurate according to their founders and followers, in spite of poor criticism of its accuracy by #RealMonetaryRefomers mainstream economists alike. MMT typically accuse their critics of misunderstanding and jealousy “Why are you getting so much attention?” One of the more vocal opponents of MMT, in an apparent moment of weakness, even confessed that there is a “lot of jealousy” in the heterodox community over the success the MMTers have achieved.” [xxxii].

MMT hasn’t significantly modified, adapted or evolved its theory based upon criticism which betrays it as dogma, and as neo laissez faire capitalist dogma at that, as opposed to objective social scientific theory. Ben Hunt describes,

Modern Monetary Theory – which is neither modern nor a theory – is a post hoc rationalization of political expediency and power-expanding action. MMT is the theoretical justification for the economic policies of Trump and his Wall Street fellow travelers alike, who want nothing more than to keep the market punchbowl in place and well-spiked with pure grain ZIRP alcohol forever and ever, amen.”

“MMT is the theoretical justification for the economic policies of every potential Democratic presidential candidate in 2020. Because with MMT, you CAN have it all. You can pay for wars without end. You can pay for universal single-payer healthcare. You can pay for everyone to go to college. You can pay for a universal basic income. I mean … why not? A caring sovereign’s gotta do what a caring sovereign’s gotta do.”

Jointhepak

https://www.epsilontheory.com/modern-monetary-theory-or-how-i-learned-to-stop-worrying-and-love-the-national-debt/

MMT is a shameless attempt to construct hegemonic discourse. MMT essentially suggests that money will somehow be more equitably distributed if only everyone thinks like they do. “Were economists and policy makers to understand that the MMT general case explains the true nature of government debt operations, we suggest that [the Fed and Treasury’s debt operations] could be markedly improved.”[xxxiii]

Yet unlike AMI, MMT has not created any legislation to enact its vague policy recommendations. MMT merely offers us and actual politicians such as Alexandria Occasio Cortez and Bernie Sanders theory, which is not at all even the goal of objective social science. Theory is rather just a tool used for making and testing further empirical observations rather than a guide to practical action in Max Weber’s approach to sociology.

Pitching MMT theory in front of the mainstream media certainly hasn’t been working for Alexandria Alexia Cortez who “hasn’t come across as a policy genius in the barrage of TV interviews she has done. She’s shown that she has no idea of how to pay for her radical program of vastly expanded entitlements or for her “Green New Deal” with its combination of statist control and radical environmentalism.” I find genuinely disturbing that Alexandria Occasio-Cortez uses MMT’s theory about how taxes do not fund government spending as some sort of incontrovertible fact to explain to the mainstream media how she’s going to fund our #GreenNewDeal.

“MMT even generalizes its position by assuming that treasury spending equals money creation and comes prior to taxation. This is to say that taxes do not fund government expenditure, for government expenditure would create the money that flows back to the treasury by way of taxes. This is remindful of medieval tally sticks where this mechanism was evident. With regard to contemporary settings, however, there is no such evidence. Today, it is primarily the banks that decide if and how much money to create, and all economic actors can trigger primary bank credit in that they go into debt with the banks – government, nonbank financial institutions, banks as bank customers, companies, and private households. There is no mechanical sequence in the money circuit.”

“Don’t let yourself be fooled. The biggest part of government expenditure is funded by taxes. Tax revenues represent transfers of already existing money. The money that serves for paying taxes is neither extinguished upon paying taxes, nor is it created or re-created when government spends its tax revenues” Professor Joseph Huber. [xxxiv]

HeyMMT

So thanks for making @AOC run a marathon in the opposite direction of the finish line by educating her on theory rather than actual legislation much less monetary literacy MMT. This is exactly why Max Weber makes a critical distinction between social science, the objective study of facts, and social policy, which Weber describes as statements of ideals meant for guiding action.[xxxv] MMT’s “policy” recommendations, such as zero interest rates, control inflation with taxation are no better a guide for practical action than is the completely useless, potentially disastrous Ron Paul mantra, “End the Fed.” MMT moreover, has no power of enforcing Wall Street much less their own their own policy ideas. Linette Lopez explains,

“For the Wall Street I’ve covered for the past 8 years, MMT looks like a heady brew of easy money, major paydays for CEOs, and a chance to let K Street show its worth. For the last 10 years, we’ve had rates at zero and deficit spending, and, last year, the GOP granted Wall Street the tax cut it’s been wanting for a long time. These were some golden years if you played them right.”

“But, besides the fact that we’re now watching the stock-market bubble pop (which won’t happen in an MMT world because rates won’t go up), we saw some pretty unproductive behavior from corporate America and the bankers who love it.”

“[I]magine how much money Wall Street and corporate America would spend on lobbying in an MMT world. K Street would explode. The lobbyists would all be stalking the halls of Congress for their corporate masters, trying to get loopholes written into the tax legislation when the economy gets too hot and taxes have to go up.“

LinetteLopez.PNG https://www.businessinsider.com/alexandria-ocasio-cortez-wall-street-should-love-mmt-2019-1

AMI stipulates the creation of a monetary authority in SEC 302 of the NEED Act rather than further expand our nation’s historically unprecedented debt with buffer stocks to give the economy a new sugar high. Nor do we propose more unnecessary, arguable unconstitutional taxation to control inflation. The objective of this Monetary Authority is not only to effectively ensure “the goals of maximum employment, stable prices, and moderate long-term interest rates” but also implicitly to eliminate the very possibility of Wall Street’s likely abuses of MMT’s “theory” as articulated by Ben Hunt and Linette Lopez. The monetary authority established by the NEED Act furthermore also conforms with Weber’s description of a “rational monetary authority.”

WeberMonetaryAuthority.jpg

Please RSVP on Facebook for my presentation on Weber’s neglected monetary theory and critique of George Knapp’s State Theory of Money to the Sociology Department of the New School for Social Research at 7:00pm est on Wednesday April 10 of this year 2019 so I know how much weed, wine and cheese to stock up on!

MMT is not only poor, literally, practically useless theory, it is also completely inaccurate and dangerously misleading as best articulated by AMI affiliated scholar Professor Joseph Huber. “To Mosler, financial restraints in a fiat money system are ‘imaginary.’ Wray contends that ‘for a sovereign nation, ‘affordability’ is not an issue; it spends by crediting bank accounts with its own IOUs, something it can never run out of. This is not totally unfounded, but overshooting the mark by far.”[xxxvi]

“MMT describes the situation as if government were creating itself the money it spends on policies aimed at propping up employment and economic growth.”[xxxvii] Professor Huber points out that the Federal Reserve only holds a small portion of the US government’s debt in spite of MMT’s assertion that the Fed absorbs all treasury debt. “Lumping government and central bank together in one and the same category of financial institutions creates confusion rather than simplicity. This applies all the more since central banks today act much more often as bank of the banks rather than bank of the state.”[xxxviii]

”MMT’s re-interpretation of the issue of government IOUs as an issue of sovereign money, thus depicting government as a creditor rather than a debtor, is misguided. The real situation is quite obvious and does not need further interpretation: the government enters into debt with banks and nonbanks. The principal has to be redeemed, but is actually revolved, accumulating truly majestic mountains of debt. The entire debt mass is interest-bearing to banks and nonbanks, absorbing in most cases something between a sixth and a third of tax revenues depending on the country and level of government expenditure, in extreme cases more than 50 per cent”[xxxix]

Whenyourealize

Warren Mosler’s description of the NEED Act as an “innocent fraud” would therefore perhaps be a better description of MMT itself were it not for the truly troubling way in which MMT’s style of scholarship conforms to a far more suspicious, historical pattern of pseudo-scientific, scholastic style propaganda, observable to careful readers of The Lost Science of Money which depicts debt as somehow good, and government-issued sovereign money as evil.

soverignNEEDActCurrency

Zarlenga describes a censored history of sovereign governments effectively creating and distributing their nation’s money without paying any interest to bankers to maintain their monetary systems for the common good of their citizens. Zarlenga explains the rise of dominant civilizations such as Ancient Sparta, Rome and the U.S. due to money issued debt-free by sovereign governments. He also describes the fall of Western civilizations due to banks usurping the power from government to create money for private profit. This is accomplished in part due to direct censorship of the lost history of sovereign money. “For example, in the Athenian Constitution that comes down to us, we can find how the garbage was collected, but search in vain to learn how the Athens state coinage system operated.”[xl]

One of the central “theories” or themes of the Lost Science of Money is that the banks have used systematic lies disguised as cutting edge academic economic “theory” or propaganda to confuse and mislead the public into believing that debt is inevitable, unavoidable and somehow beneficial to society. Zarlenga bases his theory in part on Professor Carroll Quigley who wrote:

“The influence of financial capitalism and of the international bankers who created it was exercised both on business and on governments, but could have done neither if it had not been able to persuade both these to accept two “axioms” of its own ideology. Both of these were based on the assumption that politicians were too weak and too subject to temporary popular pressures to be trusted with control of the money system; accordingly, the sanctity of all values and the soundness of money must be protected in two ways: by basing the value of money on gold and by allowing bankers to control the supply of money. To do this it was necessary to conceal, or even to mislead, both governments and people about the nature of money and its methods of operation[xli]

Zarlenga furthermore acknowledges that “in America today, the idea that government should control the issuance of money is guaranteed to arouse ridicule among most economists. The government’s monetary role is under attack by diverse elements from the paid apologists for privately controlled central banks, to free banking advocates to gold standard enthusiasts.”[xlii] Zarlenga further “theorizes” that universities deliberately promote pseudo-scientific theories which completely ignore or justify debt and usury because universities are funded by banks.

GovBorrowsMoney

“Understand also that many of the economics chairs at universities are endowed by financial institutions – banks and related bodies. These groups have a direct influence over who does and doesn’t get promoted to those chairs of influence and therefore over which monetary ideas the next generation of economists and teachers are indoctrinated with.”[xliii]

“It’s possible for the financiers to look over the current crop of professors and single out those with plausible theories beneficial to their activities. Elements of the financial establishment could see to it that those ideas were promoted and refutations of them were ignored, possibly without the professors (such as potentially Kelton, Wray, Fullwiler, etc) ever being certain of why their works were well received”[xliv] (parentheses added).

Zarlenga corroborates his theory by describing how the Fugger banking cartel financed John Eck, a student of Conrad Summenhart who both wrote propaganda justifying usury in 1515 specifically to errode the Catholic Church’s ban. These author’s preceded John Calvin’s justifications for usury The Institutes of the Christian Religion in 1536.[xlv]

Zarlenga describes how the Calvinist Clergyman John Witherspoon, in 1786 anonymously published Essays on Money in order to “theoretically attack the idea of government paper money,” specifically in order to discredit the idea of debt-free currency before the Constitutional Convention of 1787. “State bills are an absurd form of money and not money at all.”[xlvi] Zarlenga thoroughly describes British,[xlvii] French,[xlviii] and more Protestant church and university propaganda,[xlix] falsely discrediting the U.S. Greenbacks which Lincoln issued debt-free in order to finance the U.S. Civil War to preserve the union.

Regarding the Great Depression, Zarlenga quotes Friedman and Schwartz, “One can read through the academic journals and find only an occasional sign the academic world even knew about the unprecedented banking collapse in progress, let alone understood the cause and the remedy.”[l] Zarlenga describes how Keynes deliberately warned President Roosevelt not to create money to pay for the New Deal, but to borrow it instead, arguing that there was already enough money in circulation.”[li] “English economists such as Keynes, had a small excuse for their ignorance of the possibility of using Greenbacks – their nation had virtually no tradition of governmentally created money since the late 1600s.”[lii] Zarlenga also described how Alan Greenspan “used the Conservative’s basic ploy – blaming the evils of the private Federal Reserve System on the government,” to shift blame from the financiers to the government for prolonging the depression.”[liii]

Makes any sense

I don’t know anyone who sees any validity in MMT’s definition of all money as debt[liv] having read Zarlenga’s lost history of debt-free money before coming across MMT. I don’t know anyone who sees any validity in MMT’s outright denial or worse still their benevolent depictions of fractional reserve lending having first studied the Lost Science of Money.

“MMTers today express no less admiration for what they see as a smoothly run and benign system, apparently unimpressed by the long list of dysfunctions of fractional reserve banking that has been drawn by so many scholars over the last two centuries. The long list of deficiencies includes unstable banks and finances; lack of money safety; inflation and asset inflation;  distortion of income distribution to the benefit of financial income at the expense of earned income; and overshooting, or even initial triggering, of economic and financial boom-and-bust cycles, thus proneness to crisis.”[lv]

I can count the number of people I know on one hand who have the patience and the fortitude to even wade through and read MMT literature for the purposes of critiquing having read the Lost Science of Money First. Kudos to you if you’ve made it this far through my critique of MMT. The fact that MMT and their followers have failed to critique and account for Zarlenga’s lost history of facts about debt-free money in spite of MMT’s bold and utterly suspicious condemnation of the NEED Act gives MMT absolutely no credence in the dedicated community that has organized itself around Zarlenga’s book and bill.

 

Occupy the Lost Science of Money

zarlengazuccotti

Zarlenga doesn’t create a new theory of money. His presentation of Aristotle’s ancient “theory” that money is created by human law rather than nature is far more illuminating and useful than MMT’s deliberately misleading “modern” intellectual masturbation could ever be. Zarlenga presents lost, censored facts about money that support and clarify his chartalist theory far less speculatively than MMT.

zarlengafed

Zarlenga certainly never seemed to assume that the economy would fix itself if only enough people bought his book memorized all the lost facts of money he wrote about and acted accordingly. Stephen Zarlenga was thrilled by Occupy Wall Street furthermore. He, Dennis Kucinich and countless other revolutionary grassroots monetary reformers such as Nick Egnatz made public overtures to us to make the NEED Act the number one legislative demand of Occupy Wall Street.

I beat myself up a little bit every day for not having the wherewithal to learn more about the NEED Act the first time I saw a flyer for the bill which Donald from AMI had circulated through Zuccotti park. I can only imagine where the world might be today had I deviated from our deliberate lack of demands and endorsed the NEED Act as an Occupy organizer all those times I was on MSNBC, Fox and RT America from 2011 until 2013.

But, like Frances Fox Piven said “I don’t think that social protest works as a little explosion and gets bigger and bigger and bigger and bigger. It doesn’t happen that way. It’s much more interrupted, dispersed, there are periods of discouragement — 1959-1960 the civil rights movement people thought it was over, after 1962 in Albany, Georgia — this movement [Occupy] is going to be like that too.”

And we certainly had many, many ups and downs as a movement to learn from since we began in 2011. But we’ve learned a lot from our mistakes and our success. The obvious vision and goal of Occupy The NEED Act is to inspire and organize new sufficiently disruptive occupations at every branch of the Federal Reserve Banking system in order to shut down the economy, buttressed by millions of constant phone calls to congress demanding the passage of the NEED Act into law.

We use our street theater to urge our audience to call their congress representatives and demand their sponsorship for HR 2990 of the 112th Congress because the disruptive power of a barrage of phone calls cannot be understated. “a large volume of calls on an issue could bring an office to a halt… “It brings a legislative issue right to the top of the mind of a member,” “It makes it impossible to ignore for the whole staff. You don’t get a whole lot else done” according to the New York Times. I learned that calling your elected officials and telling them what to do is more important than voting for them from Distinguished Political Science Professor Kathleen Dolan at the University of Wisconsin, Milwaukee. Michael Barbaro and Kate Taylor of the New York Times described how a deluge of phone calls from #OWS supporters indeed prevented a cleanup and eviction of Zuccotti Park on October 14, 2011.

We are obviously still in a prolonged “test-run” phase that has yet to go viral. However, outreach and direct action can be so much fun when its done right, that the work becomes its own reward irrespective of how close or far off the finish line to getting our greenbacks with the NEED Act may feel. The goal honestly feels much closer to me than it did when I first began working on this project over four years ago, even if only because I no longer have an unfinished dissertation about the Lost Science of Movement Building dragging me down anymore. Here are some tried and true tactics that my many Occupy The NEED Act comrades and I have collectively discovered after several years’ worth of social experimentation at the NYC Fed that will help YOU begin to organize YOUR very own occupation at your local Federal Reserve Branch for the NEED Act!

 

Practical Suggestions for “Monetary Reformers”

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Enough with the Conferences Already!

AMI and Alliance conferences along with travel expenses cost too much money for most Occupiers to attend. If you absolutely must organize a conference please at least livestream everything and archive it on YouTube like MMT does especially if you cannot afford to make the conference completely free and offer free food like MMT does.

Mark Young Book

Think more like a lobbyist or a drug rep and organize shorter teach-ins at specific departments to get specific Professors and students interested in the Lost Science of Money and the NEED Act. Mark Young from the Alliance for Just Money is going to talk about updates and revisions that the Alliance is working on and we’ve asked Sue Peters from the Greens For Monetary Reform coalition to overview her monetary history lecture series after I present Max Weber’s monetary theory and history to the Sociology Department at the New School on Wednesday night April 10, 2019.

 

Occupy Your Local City Governments

Visiting our local Brooklyn Community Board meetings paid off big with lots of local press that went national for 420 Fight Club which gave us recognition which in turn enabled us to get more phone calls to Governor Cuomo from our street canvassing. A senior colleague at the Drup Policy Alliance who asked to remain anonymous told us that our calls, one group mic-checked call in particular, scared our reluctant NY Governor. Cuomo eventually passed the medical cannabis” Compassionate Care Act due to constant calls, lobbying and pressure from countless activists and patients such as ourselves.

vice420fightclub

So I just made my first visit to my local Brooklyn Community Board 4 meeting in Bushwick to ask them to talk to our district Congresswoman Nydia Velazquez into re-sponsoring the NEED Act to fund a faster, completely debt and tax-free #GreenNewDeal. It went well, they want to learn more! I hope to soon have follow up news to post on this blog. Send us a clip of yourself Occupying your local government for the NEED Act and we’ll post it in our Propaganda Gallery along with others from across the country!

Begin Organizing “Test-Runs” to Gradually Occupy Your Local Federal Reserve Branch

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The legendary hypnotherapist Milton Erickson used the metaphor of “walking the patient across the ice” to explain how to change and improve people’s behaviors. Erickson was working with an old man who would get tense and inevitably slip with anticipation of failure upon crossing frozen ice. Erickson had the old man close his eyes and he began to walk the old man back and forth across ice without the old man knowing where he was until his feet and body intuitively got a feel for the ice. Then Erickson had the old man open his eyes after he had walked him into the middle of the ice patch, allowing the old man to safely walk himself across the treacherous ice.

MyVoiceWill

Organizing a direct action also involves taking lots of blind baby steps across slippery territory, but remember you are never actually alone. Like Master Ericson, “my voice” and those of countless other organizers who inspired me, will get stuck in your head if you’ve gotten this far through this article.” Social media is the other reason why you aren’t ever literally alone no matter how small your first demonstrations may turnout. Small demonstrations are far safer and therefore far more fun, relaxing and enjoyable in my opinion than the large, unavoidably dangerous, uncontrollable mass actions which we’re working to inspire but which we’d honestly rather not have to organize altogether, and which we hope to clean up as quickly as possible once we ALL get our goddam money!

IMG_0291

Focus on keeping your regular ongoing weekly or monthly action at your local Fed creative and interesting rather than large and it will overwhelm you so fast your head will spin off. The easiest way to launch your new weekly or monthly direct action campaign is to create an event link on Facebook and ask any supportive friends you may have to RSVP even if they know they can’t make it, just to attract others who are interested. Your friends will likely grow more interested in actually attending your action even if they are hesitant or unable to make it as they see new people RSVP to the event.

Another tried and true way to walk your hesitant friends across the ice to the action is to invite them to a bar near your local Federal Reserve at least one full week before the actual date of your action. Start getting them drunk, tell them about how the NEED Act will end their debt and wage slavery, and then have them Facebook live record you drunk dialing your local congress rep, demanding that the “sponsor HR 2990 of the 112th Congress.” Then ask your friends if they’ll drunk dial their Congress Rep too. This method worked out really well for us at our latest December 23rd celebration at the NYC Fed to mark the 105th anniversary of the Federal Reserve Act of 1913.

After that, simply lead your intoxicated friends from the bar to the nearby Fed Branch with signs for the NEED Act you’ve prepared for your first group photo at your nearby Fed. Bring Guy Fawkes masks for any of your friends who may need to preserve their Anonymity and then watch them carefully as “the mask reveals the wearer’s true personality” according to Goffman.

IMG_0290

Post your money shot, your group photo in front of your local Fed to the profile pic of your Facebook event link to promote your actual action. Share all the b-real photos, any videos to your Facebook event link to attract more RSVPs to your next FB event page in order to get more people at your next action where your next primary goal will be to get a new group shot with more people in it than your last one. Wash, rinse and repeat week by week if you can or just month by month until you lose control over the crowd.

FirstFedAction

You can begin tweeting your photos and FB links to local journalists who might be interested in covering your action. Visit your local city government meetings and other mass actions in your area with your signs and flyers for the NEED Act to find press to invite to your ongoing actions at your local Fed. Send some great content to us and we’ll post it on our very own Occupy The NEED Act Propaganda Gallery Page. We’d also love to hit the road and come help YOU organize a text run if you live near the Boston, Washington DC or Philly Fed Branches.

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Drunk Dial For Democracy From Home

Start a movement from your own home if you live too far away to organize test-runs at a nearby Federal Reserve Branch. This works out really well for Occupy The NEED Act founder William George who often invites friends over and gets them drunk in exchange for calling Oklahoma Congressman Tom Cole while I get my friends high and teach them martial arts in front of the NYC Fed on Facebook Live.

Solo canvasing

resistance is fun

Solo canvassing is highly effective when you utilize the tried and true “People’s Sign Committee” trick from Occupy Wall Street. Simply leave several signs on the ground and people will stop and automatically look at them without you having to persuade them to stop, talk to you, take a flyer and share their contact info with you.

Resistance is fun not futile

People who stop are usually very grateful to hear about the NEED Act for the first time. Don’t try to tell them everything about the bill. Just tell them that it will pay for pretty much whatever is important it them by nationalizing the Fed and spending, rather than borrowing money into existence to pay for the basic needs of our society.  After that the trick is to stay in contact with the new people you meet. Getting an email and a new follower on Twitter is best. Ask them to RSVP to your next action on Facebook. They’ll be interested in meeting other people interested in the NEED Act.

OccupyNEEDActGuy

Try to get them engaged on the spot. Many people will look up their congress rep on their smartphone and call their rep if you ask them to. I’ve also found that people love taking photos with the signs, which you can also offer to tweet to their congress rep for them.

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Become a Badass Armchair Activist

The easiest and most important way you can help us Occupy The NEED Act is to call your local congress representative and tell the to “sponsor HR 2990 of the 112th Congress to fund a completely tax-free #GreenNewDeal,” or something along those lines. Upload a digital recording of yourself to YouTube, Tweet the link to your call directly to your congress rep and you can even tweet the link to us at @TheNEEDAct and we’ll post your clip along with those of your fellow sovereign currency comrades on the Propaganda Gallery page of this blog.

Please follow and tweet to us at @TheNEEDAct for more information.

Please donate to support my research and activism if you are able to do so.

Special Thanks to….for helping William George, Leah Rose Wilson, Mark Nicholson, Mark Proper, and of course Natalie Shmuel for helping me launch this new grassroots campaign for sovereign currency.

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References

[i] Elizabeth Gurley Flynn January 28, 1917. From Goldberg, Robert A. Grassroots Resistance, Social Movements in Twentieth Century America. Belmont, California: Wadsworth.

[ii] Goffman, Erving. 1961. Asylums. New York: Anchor Books. Pp. 197-198.

[iii] Goffman, 1961. Pp. 58, 300.

[iv] Goffman, 1961. P. 196.

[v] Goffman, 1961. P. 200.

[vi] Goldberg, Robert A. 1991. Grassroots Resistance, Social Movements in Twentieth Century America. Belmont, California: Wadsworth. P. 2.

[vii] Piven, Francis Fox, Richard A. Cloward. [1977], 1979. Poor People’s Movements: Why they Succeed and How they Fail New York: Vintage Books. P. 5.

[viii] Piven and Cloward. 1977, xxiii

[ix] Piven and Cloward. 1977. P. 37

[x] Piven and Cloward. 1977. P. P. 29.

[xi] Piven and Cloward. 1977. P. 145.

[xii] Piven and Cloward. 1977. Pp. 223-224.

[xiii] Goldberg. 1991. P. 147.

[xiv] Piven and Cloward. 1977. P. 234.

[xv] Piven and Clowrard. 1977. 222.

[xvi] Goldberg. 1991. Pp. 11-12.

[xvii] Piven and Cloward. 1977. 24

[xviii] Goldberg. 1991. P. 226.

[xix] Piven and Cloward. 1977. Pp. 223.

[xx] Hoffman, Abbie. Revolution for the Hell of It. [1968]. 2005, Avalon. NY. P. 116.

[xxi] Kuhn, Thomas S.[1962], 1970. The Structure of Scientific Revolutions. Second Edition, Enlarged. Chicago: University of Chicago Press. Pp. 93-94.

[xxii] Karl Mannheim [1923], 1993. “On the Problem of Generations.” From Karl Mannheim: Second Expanded Edition, Kurt H. Wolff, Editor, Transaction Publishers, New Brunswick. P. 380

[xxiii] Piven, and Cloward. 1977. P. xxi.

[xxiv] Piven and Cloward. 1977. P. xx.

[xxv] Piven and Cloward. 1977. xv-xvi.

[xxvi] Anthony Giddens, Mitchell Dunier, Richard P. Appelbaum, and Deborah Carr. 2008. Essentials of Sociology. Norton. New York. P. 123

[xxvii] Leon Festinger. 1957. A Theory of Cognitive Dissonance. Stanford: University Press. P. 30.

[xxviii] Festinger. 1957. P. 133.

[xxix] Festinger. 1957. P. 137.

[xxx] Max Weber. [1904] “Objectivity in Social Science and Social Policy.” from The Methodology of the Social Sciences. Translated by Edward A. Shills and Henry A. Finch. The Free Press. New York. 1949. P. 59.

[xxxi] Max Weber. 1904.  P. 52

[xxxii] Scott Fullwiler, Stephanie Kelton & L. Randall Wray. 2012. “Modern Money Theory: A Response To Critics.” Political Economy Research Institute. University of Massachusetts Amherst. P. 24.

[xxxiii] Fullwiler, Kelton, Wray. 2012. P. 26 http://www.peri.umass.edu/fileadmin/pdf/working_papers/working_papers_251-300/WP279.pdf

[xxxiv] Joseph Huber. 2014. “Modern Money Theory and New Currency Theory A comparative discussion, including an assessment of their relevance to monetary reform.” real-world economics review, issue no. 66 P. 47.

[xxxv] Max Weber. 1904. 60.

[xxxvi] Huber. 2014. P. 54

[xxxvii] Huber. 2014. P. 44.

[xxxviii] Huber. 2014. P. 48.

[xxxix] Huber. 2014. Pp. 47-48.

[xl] Stephen Zarlenga. 2002. The Lost Science of Money. Valatie, NY: The American Monetary Institute. P. 5.

[xli] Zarlenga. 2002. 520.

[xlii] Zarlenga. 2002. P. 433.

[xliii] Zarlenga. 2002. P. 359

[xliv] Zarlenga. 2002. P. 358.

[xlv] Zarlenga. 2002. 138.

[xlvi] Zarlenga. 2002. P. 397.

[xlvii] Zarlenga. 2002. 491.

[xlviii] Zarlenga. 2002. 447.

[xlix] Zarlenga. 2002. P. 471.

[l] Zarlenga. 2002. P. 550.

[li] Zarlenga. 2002. P. 554.

[lii] Zarlenga. 2002. P. 559.

[liii] Zarlenga. 2002. P. 567.

[liv] Wray says: “Fiat money will be defined as … nothing more than a debt.”

[lv] Huber. 2014. Pp. 43-44.

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Why Liberals, Conservatives, Democrats, Republicans and Independents Should Call Congress for The NEED Act

By Mark Young

What is the NEED Act? The NEED Act (HR 2990) is legislation proposed by Congressman Kucinich and promoted by monetary reformers that uses Article 1 Section 8 of the constitution to return the power to create money to the People and our Government and removes that power from the privately owned Federal Reserve and banks.

Tax

  1. Tax Relief

Regardless of your view point, people can agree that less taxes are ultimately a good thing. Reducing or eliminating taxes puts more money in the pockets of citizens and help the economy. The NEED Act allows for tax reduction or elimination without increasing the debt or reducing the safety net, services or investments to society.

debt

  1. The Debt

The United States debt is currently 18 trillion dollars and anyone that lives under a household budget knows that this amount of debt and our annual deficits are unsustainable. The NEED Act allows for the elimination of existing debt and future spending without new debt.

wages

  1. Wage and Income Disparity

One of the biggest problems plaguing all demographics and corners of society is the growing wage and income disparity. The NEED Act would allow for the creation of a living wage and for businesses to afford to pay their employees more through the elimination or reduction of corporate and personal taxes.

third world

  1. 3rd World Development

The economic development of third world countries would allow those countries to stimulate development and provide jobs to their citizens. This eliminates the need for US assistance and for outside investments in these areas and also reduces the instability seen in many countries by providing better economic prosperity for its citizens. Every country has the ability to enact similar legislation to the NEED Act in their nations.

big gov

  1. Smaller More Efficient Government

A smaller active government that still provides for citizens without becoming intrusive can also be an outcome of the NEED Act. The reduction or elimination of state, local and federal taxes reduces government intrusion and everyday life by its very nature.

infrastructure

  1. Infrastructure Improvement

The NEED Act would fund the trillions of dollars needed to rebuild our infrastructure and provide for more renewable resources without increasing the debt or privatizing public infrastructure.

welfare

  1. Elimination of Welfare and an Improved Safety Net

Welfare programs as structured today whether in the form of SNAP, Medicaid, Medicare, SSI or other programs can be virtually eliminated or reduced with the NEED Act. The traditional methods of utilizing wealth redistribution practices has created animosity in our society between various economic classes. The NEED Act can provide people with jobs at a living wage and remove the need for such programs and provide for a dignified retirement.

Employment

  1. 100% employment

Everyone should agree that working is better than receiving handouts. The NEED Act supports 100% employment through government jobs programs, if necessary, without increasing the debt or taxation.

9 Reasons Why You Should Occupy The NEED Act

Why should I occupy the NEED Act?

“As our money system is a key pillar in maintaining general economic welfare and as the Federal Reserve System and its private banking partners has consistently failed to promote or preserve the general welfare, it is essential that Congress, in the name of protecting the economic lives of the American people and the long-term security of our Nation, reassume the powers and responsibilities granted to it by the constitution. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,” Sec 2 (24).

What is the NEED Act?

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“A bill to create a full employment economy as a matter of national economic defense; to provide for public investment in capital infrastructure; to provide for reducing the cost of public investment; to retire public debt; to stabilize the Social Security retirement system; to restore the authority of Congress to create and regulate money, modernize and provide stability for the monetary system of the United States; and for other public purposes.” p. 1.

How?

photo (17)

“Reclaiming the power of the Federal Government to originate money, and to spend or lend money into circulation as needed, eliminates the need to treat money as a Federal liability or to pay interest charges on the Nation’s money supply to financial institutions; it also removes the undue influence of private financial institutions over public policy” Sec 2 (20).

So what will The NEED Act pay for?

federal-reserveasswipe1


Jobs to Build a Green New Infrastructure for the 99%

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The New Revolution in Energy Jobs: Green Energy Jobs

The NEED Act will utilize direct funding by the United States Government to create 7–10 million new jobs “to modernize, improve, and upgrade the physical economy of the United States in such areas as transportation, agriculture, water usage and availability, sewage systems, medical care, education, and other infrastructure systems, to promote the general welfare, and to stabilize the Social Security retirement system” Sec 501.

(Debt)Free Education!

educationdebtsentance

“to sufficiently provide for universal pre-kindergarten, fully funded State programs for elementary and secondary education and universal college at every 2- and 4-year public institution of higher learning and create a learning environment so that every child has an opportunity to reach their full educational potential” Sec 505.

Guaranteed Social Security

Social-Security-Expand-It-protest

https://www.popularresistance.org/bi-partisans-in-dc-having-wrong-conversation-on-social-security/

“The Secretary in consultation with the Board of 25 Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds shall submit to the Monetary Authority any requests to cover impending deficits in Social Security Trust Fund accounts” Sec 506

(Debt)Free Money!

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The NEED Act “…shall make recommendations to the Congress for payment of  a Citizens Dividend as a tax-free grant to all United States citizens residing in the United States in order to provide liquidity to the banking system at the commencement of this Act, before governmental infrastructure expenditures have had a chance to work into circulation” Sec 507. Already have student loan debt? Student Debt Forgiveness to be funded as well!

“Imagine if the bailout went to all our citizens. Say 3 trillion to the citizens instead of to the banks. With 300 million citizens that $10,000 to every man, woman and child. $40,000 to a family of four. The depression/recession would be over! Banks could have competed for these deposits” www.monetary.org  

(Debt)Free Health Care!

universalhealthcare

“The Congress shall be aware that funding through this Act is available for a universal health care plan as may be enacted by Congress” Sec 508

Mortgage Assistance

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http://inhabitat.com/west-hollywoods-stylish-green-low-income-housing/

The Congress shall be aware that funding through this Act is available for Congressional enactments for resolving aspects of the mortgage crisis Sec 509

Full Text of The NEED Act

The National Emergency Employment Defense (NEED) Act

112th CONGRESS

1st Session

H. R. 2990

IN THE HOUSE OF REPRESENTATIVES

September 21, 2011

Mr. Kucinich (for himself and Mr. Conyers) introduced the following bill; which was referred to the Committee on Financial Services

A BILL

To create a full employment economy as a matter of national economic defense; to provide for public investment in capital infrastructure; to provide for reducing the cost of public investment; to retire public debt; to stabilize the Social Security retirement system; to restore the authority of Congress to create and regulate money, modernize and provide stability for the monetary system of the United States; and for other public purposes.

1.

Short title

This Act may be cited as the National Emergency Employment Defense Act of 2011.

2.

Findings; purposes

(a)

Findings

The Congress finds as follows:

(1)

Nearly 14,000,000 Americans are currently unemployed, another 12,000,000 estimated Americans are underemployed, wages are stagnant and millions of Americans are being asked to take pay cuts.

(2)

Over 43,000,000 Americans live below the poverty line, 49,000,000 of Americans go to bed hungry at night, and an estimated 3,000,000 Americans are homeless.

(3)

Over 1,500,000 non-business bankruptcies were filed in calendar year 2010, the highest number in five years, and the index of small business optimism is at a low not seen in nearly two decades.

(4)

More than 2,000,000 homes are in foreclosure and millions of homeowners are falling behind in their mortgage payments; the housing market in terms of construction and sales has undergone an historic decline; and the declining value of housing means Americans’ largest single investment, the home, is no longer a safe harbor for savings, nest eggs, social mobility or the transfer of generational wealth.

(5)

Notwithstanding passage of the Patient Protection and Affordable Care Act, a privatized health care system has made quality health care beyond the reach of most Americans.

(6)

The cost of higher education has put higher academic attainment outside the reach of millions more young Americans, and the current generation of young Americans will not be able to attain the quality of life of their parents, reversing a long-standing trend.

(7)

The American Society of Civil Engineers has estimated that there is $2.2 trillion in unmet infrastructure needs. Cities and States, urban and rural areas all have an urgent need to rebuild and repair roads, bridges, railroads, water systems, sewer systems and other infrastructure but lack the necessary funds, bond-issuing capacity and other needs which has led to America’s infrastructure falling into disrepair.

(8)

The Board of Governors of the Federal Reserve System have compounded the economic crisis by failing to take decisive action to move the economy forward, Wall Street, which was bailed out by the American people, is not investing its rising assets in Main Street America, and individual investors are beginning to turn away from the stock market.

(9)

Some banks, many of which received government bailouts, are not investing in small businesses, nor in the creation of jobs, the private sector is not creating jobs, and in fact most businesses are freezing their employment levels.

(10)

Congress is stymied by competing forces: a desire to put people to work and an aversion to borrowing money to create programs to do so.

(11)

Confidence in the United States’ economic leadership at home and around the world is waning, the value of our currency cannot be securely maintained, and no other path to economic recovery exists which will create the changes necessary to put people back to work, invest in rebuilding America’s infrastructure, i.e. highway, rail, airport, harbors, light rail, communication, shipping, water, sewer, education, and civil defense.

(12)

The aforementioned conditions require comprehensive action by the United States Congress to create full employment, invest in America and secure our Nation’s long-term economic, social and political future; and that such action is within our Constitutional right and responsibility.

(13)

The authority to create money is a sovereign power vested in the Congress under Article I, Section 8 of the Constitution.

(14)

The enactment of the Federal Reserve Act in 1913 by Congress effectively delegated the sovereign power to create money, to the Federal Reserve system and private financial industry.

(15)

This ceding of Constitutional power has contributed materially to a multitude of monetary and financial afflictions, including:

(A)

growing and unreasonable concentration of wealth;

(B)

unbridled expansion of national debt, both public and private;

(C)

excessive reliance on taxation of citizens for raising public revenues;

(D)

devaluation of the currency;

(E)

drastic increases in the cost of public infrastructure investments;

(F)

record levels of unemployment and underemployment; and

(G)

persistent erosion of the ability of Congress to exercise its Constitutional responsibilities to provide resources for the general welfare of all the American people.

(16)

A debt-based monetary system, where money comes into existence primarily through private bank lending, can neither create, nor sustain, a stable economic environment, but has proven to be a source of chronic financial instability and frequent crisis, as evidenced by the near collapse of the financial system in 2008.

(17)

Banks increased their value by lending money imprudently, which greatly inflated the value of bank holdings, exposing depositors and taxpayers to the risks of schemes like the bundling of subprime mortgages, and ultimately bringing undercapitalized banks and the entire financial system to the edge of ruin, creating circumstances where the taxpayers of the United States were called upon to save the banks from their own imprudent lending practices, misspending and mis-investments. The banks’ ability to create money out of nothing ultimately became the taxpayers’ liability, and raises a fundamental question about a practice of money creation which threatens the wealth of the American people.

(18)

Abolishing private money creation can be achieved with minimal disruption to current banking operations, regulation, and supervision.

(19)

The creation of money by private financial institutions as interest-bearing debts should cease once and for all.

(20)

Reclaiming the power of the Federal Government to originate money, and to spend or lend money into circulation as needed, eliminates the need to treat money as a Federal liability or to pay interest charges on the Nation’s money supply to financial institutions; it also removes the undue influence of private financial institutions over public policy.

(21)

Under the current Federal Reserve System, the persons responsible for the conduct of United States monetary policy have been unaccountable to the Congress and the Nation, have resisted auditing by the Government Accountability Office, and have claimed exemptions from some Federal statutes, including the Civil Rights Act of 1964, that apply to all agencies of the Federal Government.

(22)

The implementation of United States monetary policy by the Board of Governors of the Federal Reserve System has failed to promote full employment, and the failure of the Board of Governors to safeguard the financial system against wholesale fraud and abuse of citizens, demonstrates the risks of maintaining a system wherein the power to create and regulate money has been delegated to private individuals who are unaccountable to the People of the United States in any way, even through their representatives in Congress.

(23)

An examination of the historical record demonstrates that the exercise of control by the United States Government over the money system has provided greater moderation in the supply of money and promoting the general welfare, and has been indispensable in times of national emergency for generating resources required to support public investment, provide for national defense, and promote the general welfare, and is therefore superior to private control over the money system.

(24)

As our money system is a key pillar in maintaining general economic welfare and as the Federal Reserve System and its private banking partners has consistently failed to promote or preserve the general welfare, it is essential that Congress, in the name of protecting the economic lives of the American people and the long-term security of our Nation, reassume the powers and responsibilities granted to it by the Constitution.

(b)

Purposes

The purposes of this Act are as follows:

(1)

To create a Monetary Authority which shall pursue a monetary policy based on the governing principle that the supply of money in circulation should not become inflationary nor deflationary in and of itself, but will be sufficient to allow goods and services to move freely in trade in a balanced manner. The Monetary Authority shall maintain long run growth of the monetary and credit aggregates commensurate with the economy’s long run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates.

(2)

To create a full employment economy as a matter of national economic defense; to provide for public investment in capital infrastructure; to provide for reducing the cost of public investment; to retire public debt; to stabilize the Social Security retirement system; to restore the authority of Congress to create and regulate money, to modernize and provide stability for the monetary system of the United States, and for other public purposes.

(3)

To abolish the creation of money, or purchasing power, by private persons through lending against deposits, by means of fractional reserve banking, or by any other means.

(4)

To enable the Federal Government to invest or lend new money into circulation as authorized by Congress and to provide means for public investment in capital infrastructure.

(5)

To incorporate the Federal Reserve System into the Executive Branch under the United States Treasury, and to make other provisions for reorganization of the Federal Reserve System.

(6)

To provide for an orderly transition.

(7)

To make other provisions necessary to accomplish the purposes of this Act.

3.

Definitions

(a)

In General

For purposes of this Act, the following definitions shall apply:

(1)

Bureau

The term Bureau means the Bureau of the Federal Reserve established under section 314 of title 31, United States Code, as added by section 303.

(2)

Deposit

The term deposit—

(A)

has the meaning given such term in section 3(l) of the Federal Deposit Insurance Act); and

(B)

includes—

(i)

a member account (as defined in section 101(5) of the Federal Credit Union Act) in a credit union; and

(ii)

any transaction account.

(3)

Depository institution

The term depository institution—

(A)

has the same meaning as in section 3 of the Federal Deposit Insurance Act; and

(B)

includes any credit union (as defined in section 101 of the Federal Credit Union Act).

(4)

Instrument of indebtedness of the united states; treasury instruments

The terms instrument of indebtedness of the United States and Treasury instrumentinclude any obligation issued under subchapter I of chapter 31 of title 31, United States Code.

(5)

Member bank

The term member bank has the same meaning as in the first section of the Federal Reserve Act.

(6)

Money

The term money refers to United States Money, as established under title I.

(7)

Monetary authority

The term Monetary Authority means the Monetary Authority established under section 302.

(8)

Secretary

The term Secretary means the Secretary of the Treasury.

(9)

State

The term State has the same meaning as in section 3 of the Federal Deposit Insurance Act.

(10)

Effective date

The term effective date means the date determined and published in the Federal Register by the Secretary, during the 90-day period beginning on the date of the enactment of this Act, that—

(A)

is not less than 1 year after such date of enactment and not more than 2 years after such date; and

(B)

is the date on which the designated provisions of this Act take effect.

(b)

Technical and Conforming Amendment to the FDIA

Section 3(l) of the Federal Deposit Insurance Act (12 U.S.C. 1813(l)) is amended by adding at the end the following:

Such term does not include any amount on which any interest is paid or which is received or held by a bank or savings association pursuant to a loan agreement for a fixed term of time (as determined without regard to any designation on the agreement as a loan, certificate, or other particular instrument).

.

4.

Coordination with other law

(a)

In General

This Act shall supersede any provision of Federal law in effect on the day before the date of the enactment of this Act that is inconsistent with any provision of this Act but only to the extent of such inconsistency.

(b)

Technical and Conforming Amendments

Before the end of the 6-month period beginning on the date of the enactment of this Act, the Secretary of the Treasury shall submit to the Congress a proposed draft of legislation of the Monetary Authority that, if enacted, would implement such technical and conforming amendments as the Monetary Authority may recommend—

(1)

to repeal the provisions of law referred to in subsection (a) that are inconsistent with this Act; and

(2)

to further clarify and implement the provisions of this Act.

I

Origination of United States Money

101.

Exercise of constitutional authority to create money

(a)

In General

Pursuant to the exercise by the Congress of the authority contained in the 5th clause of section 8 of Article I of the Constitution of the United States of America—

(1)

the authority to create money within the United States shall hereafter reside exclusively with the Federal Government; and

(2)

the money so created shall be known as United States Money and denominated and expressed as provided in section 5101 of title 31, United States Code.

(b)

Exercise of Sovereign Power

The creation of United States Money under this Act is the legal expression of the sovereign power of the Nation and confers upon its bearer an unconditional means of payment.

(c)

Limitation on Expression

Beginning on the effective date—

(1)

only the coin, notes, or other forms of legal tender, including electronic currency, originated by the United States Treasury under the authority of this Act shall be deemed as United States money; and

(2)

it shall be unlawful for any person to designate any credit, note, bond, script or other financial instrument as United States Money.

102.

Unlawful for persons to create money

Any person who creates or originates United States money by lending against deposits, through so-called fractional reserve banking, or by any other means, after the effective date shall be fined under title 18, United States Code, imprisoned for not more than 5 years, or both.

103.

Production of united states money

(a)

Commencing Full Production of United States Currency

Section 5115 of title 31, United States Code, is amended by striking subsections (a) and (b) and inserting the following new subsections:

(a)

In General

In order to furnish suitable notes for circulation as United States money, the Secretary of the Treasury shall cause plates and dies to be engraved in the best manner to guard against counterfeits and fraudulent alterations, and shall have printed therefrom and numbered such quantities of such notes of the same denominations as are currently issued.

(b)

Form and Tenor

United States currency notes for circulation as United States money shall be in form and tenor as directed by the Secretary of the Treasury.

.

(b)

Ceasing Production of Federal Reserve Notes

The Secretary of the Treasury shall wind-down and cease production of Federal reserve notes under the 8th undesignated paragraph of section 16 of the Federal Reserve Act (12 U.S.C. 418) as quickly as practicable after the date of the enactment of this Act, but no later than the effective date, in coordination with the start-up and maintenance of production of United States currency under section 5115 of title 31, United States Code. The Secretary shall ensure that at all times the amount of Federal Reserve notes in circulation is sufficient to meet demand until the production of United States currency is sufficient to meet such demand.

(c)

Continuing Circulation Until Retirement

Any Federal Reserve notes in circulation shall continue to be legal tender until retired in accordance with applicable provisions of law.

104.

Legal tender

(a)

In General

United States Money shall enter into general domestic circulation as full legal tender in payment of all debts public and private.

(b)

Technical and Conforming Amendment

Section 5103 of title 31, United States Code, is amended by striking (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) and inserting in the form of United States Money.

105.

Disbursements to be denominated in united states money

On the effective date, all United States Government disbursements shall be denominated in United States Money, the unit being the dollar, symbolized as $.

106.

Origination in lieu of borrowing

(a)

In General

After the effective date, and subject to limitations established by the United States Monetary Authority under provisions of section 302, the Secretary shall originate United States Money to address any negative fund balances resulting from a shortfall in available Government receipts to fund Government appropriations authorized by Congress under law.

(b)

Prohibition on Government Borrowing

After the effective date, unless otherwise provided by an Act of the Congress enacted after such date—

(1)

no amount may be borrowed by the Secretary from any source; and

(2)

no amount may be borrowed by any Federal agency or department, any independent establishment of the executive branch, or any other instrumentality of the United States (other than a national bank, Federal savings association, or Federal credit union) from any source other than the Secretary.

(c)

Rule of Construction

No provision of this Act shall be construed as preventing the Congress from exercising its constitutional authority to borrow money on the full faith and credit of the United States.

(d)

Technical and Conforming Amendment

On the effective date, chapter 31 of title 31, United States Code, is hereby repealed, subject to the retirement of outstanding instruments of indebtedness of the United States in accordance with section 401.

107.

Retirement of instruments of indebtedness

Before the effective date, the Secretary shall commence to retire all outstanding instruments of indebtedness of the United States by payment in full of the amount legally due the bearer in United States Money, as such amounts become due.

108.

Accounting

(a)

In General

The Secretary shall account for the disbursement of United States Money and of current fund balances through accounting reports maintained and published by the Secretary and by departments and agencies of the United States Government.

(b)

GAO Audit

The Comptroller General of the United States shall conduct an independent biennial audit.

II

Entry of United States Money Into Circulation

201.

Entry of United States money into circulation

The Secretary shall cause United States Money to enter into circulation by and through any of the following means:

(1)

Any origination or disbursement of funds to accomplish Federal expenditures authorized and appropriated by an Act of the Congress.

(2)

Any disbursement to retire outstanding instruments of indebtedness of the Federal Government or the Secretary of the Treasury as such instruments become due.

(3)

Any contribution authorized by an Act of the Congress subject to any limitation established by the Monetary Authority to the Revolving Fund established in section 302 of this Act.

(4)

Any action provided for in the transitional arrangements specified in title IV of this Act, including the conversion of all deposits in transaction accounts into United States Money.

(5)

Any exercise of lender of last resort emergency authorities under the emergency procedures specified in section 305.

(6)

Any purchase of stock in a Federal reserve bank from a member bank and of any other assets as prescribed under the Federal Reserve Act as required to accomplish the purposes of section 301.

(7)

Any other means, and for any other purpose explicitly authorized by an Act of the Congress that becomes law after the effective date of this Act.

III

Reconstruction of the Federal Reserve System

301.

Reconstitution of the federal reserve

(a)

Government Acquisition of All Net Assets of Federal Reserve System

On the effective date, the Secretary shall purchase on behalf of the United States all net assets in the Federal Reserve System, including the Federal reserve banks, according to the rules specified in the Federal Reserve Act (12 U.S.C. 288) for this purpose.

(b)

Repayment of Reserves

Any reserves of any member bank that is held by any Federal reserve bank shall be returned to the member bank in the form of United States Money, subject to the provisions contained in sections 401 and 402(b).

302.

Establishment of the united states monetary authority

(a)

Monetary Authority

(1)

Establishment

(A)

In general

There is hereby established the Monetary Authority as an authority within the Department of the Treasury under the general oversight of the Secretary of the Treasury.

(B)

Autonomy of monetary authority

The Secretary of the Treasury may not intervene in any matter or proceeding before the Monetary Authority, unless otherwise specifically provided by law.

(C)

Independence of monetary authority

The Secretary of the Treasury may not delay, prevent, or intervene in the issuance of any regulation or other determination of the Monetary Authority, including the determination of the amounts of money to be originated and most efficient method of disbursement consistent with the appropriations of Congress and the statutory objectives of monetary policy as specified in this Act.

(2)

Membership

(A)

In general

The Monetary Authority shall consist of 9 public members appointed by the president, by and with the advice and consent of the Senate.

(B)

Terms

(i)

In general

Except as provided in subparagraph (E), each member of the Monetary Authority shall be appointed to a term of 6 years.

(ii)

Continuation of service

Each member of the Monetary Authority may continue to serve after the expiration of the term of office to which such member was appointed until a successor has been appointed and qualified.

(C)

Political affiliation

Not more than 4 of the members of the Monetary Authority may be members of the same political party.

(D)

Vacancy

(i)

In general

Any vacancy on the Monetary Authority shall be filled in the manner in which the original appointment was made.

(ii)

Interim appointments

Any member appointed to fill a vacancy occurring before the expiration of the term for which such member’s predecessor was appointed shall be appointed only for the remainder of such term.

(E)

Staggered terms

Of the members first appointed to the Monetary Authority after the enactment of this Act—

(i)

1 shall be appointed for a term of 2 years;

(ii)

2 shall be appointed for a term of 3 years;

(iii)

2 shall be appointed for a term of 4 years;

(iv)

2 shall be appointed for a term of 5 years; and

(v)

2 shall be appointed for the full term of 6 years.

(3)

Chairperson

One of the members of the Monetary Authority shall be designated by the President as the Chairperson of the Monetary Authority.

(4)

Duties

The Monetary Authority shall—

(A)

establish monetary supply policy and monitor the Nation’s monetary status; and

(B)

carry out such other responsibilities as the President may delegate to the Monetary Authority or that may be provided by an Act of Congress.

(5)

Governing principle of monetary policy

The Monetary Authority shall pursue a monetary policy based on the governing principle that the supply of money in circulation should not become inflationary nor deflationary in and of itself, but will be sufficient to allow goods and services to move freely in trade in a balanced manner. The Monetary Authority shall maintain long run growth of the monetary and credit aggregates commensurate with the economy’s long run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates.

(6)

Meetings

The Monetary Authority shall meet on a regular basis subject to the call of the Chairperson, the Secretary, or a majority of the members.

(7)

Pay

The members of the Monetary Authority shall receive a salary at annual rates equal to the annual rate determined under section 5 of title 28, United States Code, for an associate justice.

(8)

Staff

The Monetary Authority may appoint and establish the pay of such employees as the Monetary Authority determines is appropriate to assist the Monetary Authority to carry out the duties imposed under this section.

(b)

Responsibility of Secretary

The Secretary shall regulate the monetary supply in reasonable accordance with targets established by the Monetary Authority.

(c)

Reports on Discrepancies

The Secretary shall report to the Congress any discrepancy between any monetary target and the monetary supply in excess of 0.5 percent at the end of each quarter.

303.

Establishment of the bureau of the federal reserve

(a)

In General

Subchapter I of chapter 3 of title 31, United States Code, is amended by adding at the end the following new section:

314.

Bureau of the Federal Reserve

(a)

Establishment

There is hereby established the Bureau of the Federal Reserve as a bureau within the Department of the Treasury (hereafter in this section referred to as the Bureau).

(b)

Management

(1)

Commissioner

The management of the Bureau shall be vested in a Commissioner who, with the assistance of the Deputy Commissioner and such staff as the Commissioner may appoint, shall carry out the duties vested in the Bureau and the Commissioner.

(2)

Deputy commissioner

There is hereby established within the Bureau the position of Deputy Commissioner.

(3)

Appointment

The Commissioner and the Deputy Commissioner shall be appointed by the president, by and with the advice and consent of the Senate.

(4)

Terms

(A)

In general

The Commissioner and the Deputy Commissioner shall each be appointed to a term of 7 years.

(B)

Staggered terms

Notwithstanding subparagraph (A), the person first appointed Deputy Commissioner shall be appointed to a term of 4 years.

(5)

Vacancy

(A)

In general

Any vacancy on the Bureau shall be filled in the manner in which the original appointment was made.

(B)

Interim appointments

Any member appointed to fill a vacancy occurring before the expiration of the term for which such member’s predecessor was appointed shall be appointed only for the remainder of such term.

(c)

Duties

(1)

Monetary policy

The Bureau shall—

(A)

administer, under the direction of the Secretary, the origination and entry into circulation of United States Money, subject to the limitations established by the Monetary Authority; and

(B)

administer lending of United States Money to authorized depository institutions, as described in section 403 (Revolving Fund) to ensure that—

(i)

money creation is solely a function of the United States Government; and

(ii)

fractional reserve lending is ended.

(2)

Transferred functions

After the effective date, the Bureau shall exercise all functions consistent with this Act which, before such date, were carried out under the direction of the Board of Governors of the Federal Reserve System.

(3)

Itemization by secretary

Not less than 90 days before the effective date, the Secretary and the Monetary Authority shall itemize—

(A)

the functions of the Board of Governors of the Federal Reserve System that are transferred to the Bureau pursuant to paragraph (2); and

(B)

the provisions of the Federal Reserve Act and other provisions of Federal law, relating to the functions so transferred, in the application of which the termBureau (as established under this section) shall be substituted for the termBoard of Governors of the Federal Reserve System or Board, as the case may be.

.

(b)

Clerical Amendment

The table of sections for subchapter I of chapter 3 of title 31, United States Code, is amended by adding at the end the following new item:

314. Bureau of the Federal Reserve.

.

(c)

Role of Board After Enactment

With effect on the effective date, the Board of Governors of the Federal Reserve System shall be dissolved.

304.

Forecasting of disbursement requirements

The Secretary shall—

(1)

forecast disbursement requirements on a daily, monthly, and annual basis;

(2)

provide such forecasts to the Congress and the public;

(3)

integrate forecasts with the Federal budget process;

(4)

maintain a sufficient research capability to continuously and effectively assess the impact of disbursement of United States Money on all aspects of the domestic and international economies; and

(5)

report to the Congress and the public regularly on the economic impact of disbursements of United States Money and the status of the monetary supply.

305.

Lender of last resort; emergency procedures

(a)

Recommendation of the President Upon Recommendation of Emergency Board

The Monetary Authority may not exercise any authority under the 3rd undesignated paragraph of section 13 of the Federal Reserve Act unless—

(1)

the Emergency Board established under subsection (b) recommends, upon a vote of 2/3 of the members, to the House of Representatives and the Senate, that the House of Representatives and the Senate adopt a concurrent resolution calling on the President to certify that a national emergency exists which requires the exercise of such authority;

(2)

the House of Representatives and the Senate each adopt, by a vote of 2/3 of the members present, a concurrent resolution calling on the President to certify that a national emergency exists which requires the exercise of such authority; and

(3)

the President issues a certification that a national emergency exists which requires the exercise of such authority by the Monetary Authority.

(b)

Emergency Board

There is established for purposes of this section the Emergency Board which shall consist of the following members:

(1)

The President.

(2)

The Secretary of Commerce.

(3)

The Secretary of Energy.

(4)

The Secretary of Labor.

(5)

The Secretary of the Treasury.

(6)

The Speaker of the House of Representatives.

(7)

The minority leader of the House of Representatives.

(8)

The majority leader of the Senate.

(9)

The minority leader of the Senate.

(10)

The chairpersons and ranking members of the Committee on Financial Services and the Committee on Oversight and Government Reform of the House of Representatives.

(11)

The chairpersons and ranking members of the Committee on Banking, Housing, and Urban Affairs and the Committee on Homeland Security and Governmental Affairs of the Senate.

(c)

Rule of Construction

Except as provided in subsection (a), no provision of this Act shall be construed as affecting the authority of the Monetary Authority under the 3rd undesignated paragraph of section 13 of the Federal Reserve Act.

306.

Savings provisions and transfer provisions

(a)

Savings Provisions

(1)

Existing rights, duties, and obligations not affected

The establishment of the Bureau of the Federal Reserve shall not affect the validity of any right, duty, or obligation of the United States, the Bureau (as the successor to the Board of Governors of the Federal Reserve System or any Federal reserve bank), or any other person that—

(A)

arises under any provision of law relating to any function of the Board of Governors of the Federal Reserve System transferred to the Bureau by this title and amendments made by this title; and

(B)

existed on the day before the effective date.

(2)

Continuation of suits

This Act shall not abate any proceeding commenced by or against the Board of Governors (or any Federal reserve bank) before the effective date with respect to any function of the Board of Governors (or any Federal reserve bank) transferred to the Bureau by this title, except that the Bureau shall be substituted for the Board of Governors (or Federal reserve bank) as a party to any such proceeding as of the effective date.

(b)

Transfer of Certain Personnel

(1)

Identifying employees for transfer

The Secretary and the Chairman of the Board of Governors of the Federal Reserve System shall—

(A)

jointly determine the number of employees of the Board necessary to perform or support the functions of the Board of Governors that are transferred to the Monetary Authority (if any) and the Bureau of the Federal Reserve pursuant to a provision of or amendment made by this title; and

(B)

consistent with the number determined under subparagraph (A), jointly identify employees of the Board of Governors for transfer in a manner that the Secretary and the Board of Governors of the Federal Reserve System, in their sole discretion, determine to be equitable.

(2)

Identified employees transferred

All employees of the Board of Governors of the Federal Reserve System identified under paragraph (1)(B) shall be transferred to the Monetary Authority or the Bureau of the Federal Reserve, as the case may be, for employment.

(3)

Federal reserve bank employees

Employees of any Federal reserve bank, as of the day before the transfer date for any employees of the Board of Governors of the Federal Reserve System, shall be treated as employees of the Board of Governors for purposes of paragraph (1) and (2).

IV

Transitional Arrangements

401.

Conversion of federal reserve notes

(a)

In General

Before the end of the 120-day period beginning on the date of the enactment of this Act, the Secretary shall establish the rules and procedures for converting outstanding Federal reserve notes to United States Money of equal face value.

(b)

Provision of Supply Sufficient for Conversion and Issuance

Before the end of the 150-day period beginning on the date of the enactment of this Act and as Federal reserve notes are converted to United States Money, the Secretary shall begin providing a sufficient quantity of United States Money to the domestic banking system to allow for conversion of all outstanding Federal reserve notes and the issuance of additional currency as required.

(c)

Disbursal of Funds

After the end of the 180-day period beginning on the date of the enactment of this Act, all financial institutions within the United States shall only disburse funds in United States Money, whether as currency, an addition to an available account balance, or other instrument.

(d)

Disposal of Obsolete Currency

The Secretary shall promptly dispose of (in the manner provided under section 5120(b) of title 31, United States Code, for the disposal of obsolete United States currency) all Federal reserve notes as they are returned in exchange for United States Money.

(e)

Technical and Conforming Amendment

Effective at the end of the 150-day period beginning on the date of the enactment of this Act, section 16 of the Federal Reserve Act is amended by striking the 8th, 9th, 10th, 11th, and 12th undesignated paragraphs (12 U.S.C. 418, 419, 420, 421, and omitted, respectively).

402.

Replacing fractional reserve banking with the lending of united states money

(a)

Conversion Process

(1)

Deposits

(A)

In general

All deposits at any depository institution shall be designated as and treated as United States Money (either cash or an electronic equivalent) and as transaction accounts.

(B)

Prohibitions

In addition to subsection (d), the following provisions shall apply with respect to United States Money on deposit in a transaction account at any depository institution:

(i)

Interest

No interest may be paid or may accrue on any United States Money on deposit in a transaction account at any depository institution.

(ii)

Deposits as bailment

Any United States Money on deposit in a transaction account at any depository institution shall—

(I)

be treated as a bailment for the mutual benefit of the parties and terminable at will; and

(II)

as property held in trust as bailed property, not be treated as an asset of the depository institution or as a source of credit.

(C)

Exception for long-term savings not subject to deposit insurance

(i)

In general

Subparagraph (B) shall not apply to any liability of depository institution to a customer for any amount in an account at the depository institution pursuant to a contract that restricts the availability of any such amount for a fixed term and does not permit amounts to be transferred in any manner for the benefit of a third party.

(ii)

Fixed-term savings not insured

Any account described in clause (i) may not be treated as a deposit, for purposes of the Federal Deposit Insurance Act, or as a share draft account, for purposes of the Federal Credit Union Act.

(2)

Outstanding credit

Any asset of a depository institution that results from credit extended against, is attributable to, or has been accounted for with respect to, amounts described in paragraph (1)(A) shall, as of the effective date—

(A)

be a liability of the depository institution to the Federal Government; and

(B)

as the outstanding balance is repaid pursuant to its terms, shall be paid over to the Federal Government.

(3)

Deposit in revolving fund

The monies paid to the Federal Government shall be deposited into the Revolving Account established in section 403.

(4)

In general

Before the effective date and subject to the requirements of this section, the Monetary Authority shall establish and publish the accounting rules, pricing, and processes which will convert all bank credit in circulation as of the date of such conversion, into United States legal tender money.

(5)

Retention of interest payments

A depository institution may keep as income, any interest payment made by a customer to a depository institution on an outstanding loan for which the depository institution became indebted to the Federal Government under paragraph (2).

(b)

Treatment of Amounts on Reserve at a Federal Reserve Bank

The Monetary Authority shall determine, by the effective date, how the reserves of a depository institution at a Federal reserve bank pursuant to section 19 of the Federal Reserve Act shall be treated, so as to promote a seamless transition to the new system.

(c)

Accounts in General

Before the effective date, the Monetary Authority shall prescribe new lending and accounting regulations for various types of accounts including transaction accounts and time deposit accounts described in subsections (d) and (e).

(d)

Transaction Accounts

(1)

Fractional reserve banking ended

The regulations prescribed under subsection (c) shall provide that—

(A)

any depository institution shall have a fiduciary responsibility for the money of any depositor on deposit in a transaction account which—

(i)

shall be held for the exclusive use of the account holder; and

(ii)

may not be used by a depository institution to fund loans or investments;

(B)

a dollar of United States Money shall be on hand or in a Federal Government account for each dollar in a transaction account; and

(C)

a depository institution may charge a reasonable fee for providing transaction account services.

(2)

Transaction account defined

For purposes of this section, the term, transaction account—

(A)

means a deposit or account on which the depositor or account holder is permitted to make withdrawals by negotiable or transferable instrument, payment orders of withdrawal, telephone transfers, or other similar items for the purpose of making payments or transfers to third persons or others; and

(B)

includes demand deposits, negotiable order of withdrawal accounts, savings deposits subject to automatic transfers, and share draft accounts.

(e)

United States Money as Source of Loans

After the effective date, all lending by depository institutions may be accomplished only by the lending of actual United States Money that is—

(1)

owned by the depository institution from earnings and or capital contributions by investors;

(2)

borrowed at interest from the Federal Government; or

(3)

borrowed at interest through the issuance of bonds or other interest-bearing securities by the lending bank, to the extent that such bonds or securities are structured in a manner consistent with the purposes of this Act.

(f)

Encouragement of Private, Profit-Making Money Lending Activity

The regulations prescribed and actions taken under this section shall be established and taken in a manner that—

(1)

encourages private, profit-making money lending activity by banking institutions; and

(2)

prohibits the creation of private money through the establishment of lending credit against depository receipts, sometimes referred to as fractional reserve banking.

403.

Establishment of federal revolving fund

(a)

Revolving Loan Fund

Subject to provision in advance in an appropriation Act, there is hereby established a revolving loan fund in the Treasury of the United States where amounts received from depository institutions under terms specified in section 402 of this Act shall be deposited and made available for relending to banking institutions and for other purposes.

(b)

Administration

The Revolving Fund shall be administered by the Bureau under such terms and conditions as the Secretary shall prescribe consistent with the purposes of this Act.

(c)

National Emergency

In the event of a finding by the President that a National Emergency exists, and with the concurrence of the Congress in accordance with the emergency procedures specified under section 305, the Secretary, on the advice of the Monetary Authority, may draw upon up to 80 percent of the funds on deposit in the Revolving Fund. Such funds shall be returned to the Revolving Fund within 3 years of the date of initial disbursement, either through repayment of loans or through an Appropriation Act, unless the Secretary receives from the Congress specific authorization to extend the term of the loans. The authorization of Congress shall be given by joint resolution.

V

Additional Provisions

501.

Direct funding of infrastructure improvements

(a)

Report Required on Opportunities for Direct Funding

Before the effective date, the Secretary, after consultation with the heads of Executive branch departments, agencies and independent establishments, shall report to the Congress on opportunities to utilize direct funding by the United States Government to modernize, improve, and upgrade the physical economy of the United States in such areas as transportation, agriculture, water usage and availability, sewage systems, medical care, education, and other infrastructure systems, to promote the general welfare, and to stabilize the Social Security retirement system.

(b)

Broad Equitable Dispersion of Funding

Generally, any program recommended for direct funding shall be undertaken throughout the Nation based on per capita amounts and other criteria to assure equity as determined by the Monetary Authority.

502.

Interest rate ceilings

(a)

Limit on Amount of Financing Fees

The total amount of interest charged by a financial institution on any extension of loans (other than a mortgage) to any individual borrower through amortization, including all fees and service charges, shall not exceed the total amount of the loan extended.

(b)

Limit on Rate

The annual percentage rate applicable to any loan of money may not exceed 8 percent on unpaid balances, inclusive of all charges.

503.

Authority of FDIC

Except as provided in section 402 and the amendment made by section 3(b), no provision of this Act shall be construed as altering or affecting any authority or function of the Federal Deposit Insurance Corporation. No later than 12 months after the date of the enactment of this Act, the Chairperson of the Board of Directors of the Federal Deposit Insurance Corporation shall study and make recommendations to the Congress regarding any changes in authorities, including expanded supervision and monitoring, required to enhance the oversight and regulatory roles of the Federal Deposit Insurance Corporation under this Act.

504.

Monetary grants to states

(a)

In General

Each year, the Monetary Authority shall instruct the Secretary to disperse grants over a 12-month period to the States equal to 25 percent of the money created under this title in the prior year. In the first year the amount of such grants shall be 25 percent of the anticipated money creation in that first year.

(b)

Use of Grants for Broad-Based Purposes

The States may use such funds in broadly designated areas of public infrastructure, education, health care and rehabilitation, pensions, and paying for unfunded Federal mandates.

505.

Education funding program

Before the end of the 120-day period beginning on the date of the enactment of this Act, the Secretary, in cooperation with the Secretary of Education, shall provide recommendations to the Congress for a program to help fund our educational system that will put the United States on par with other highly developed nations, and to sufficiently provide for universal pre-kindergarten, fully funded State programs for elementary and secondary education and universal college at every 2- and 4-year public institution of higher learning and create a learning environment so that every child has an opportunity to reach their full educational potential.

506.

Social security trust funds

The Secretary in consultation with the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds shall submit to the Monetary Authority any requests to cover impending deficits in Social Security Trust Fund accounts.

507.

Initial monetary dividend to citizens

(a)

In General

Before the effective date, the Secretary, in cooperation with the Monetary Authority, shall make recommendations to the Congress for payment of a Citizens Dividend as a tax-free grant to all United States citizens residing in the United States in order to provide liquidity to the banking system at the commencement of this Act, before governmental infrastructure expenditures have had a chance to work into circulation.

(b)

Study of Effects of Citizens Dividend

The Secretary shall maintain a thorough study of the effects of the Citizens Dividend observing its effects on production and consumption, prices, morale, and other economic and fiscal factors.

508.

Universal health care funding

The Congress shall be aware that funding through this Act is available for a universal health care plan as may be enacted by Congress.

509.

Resolving the mortgage crisis

The Congress shall be aware that funding through this Act is available for Congressional enactments for resolving aspects of the mortgage crisis.

510.

Interest free lending to local governmental bodies

Before the end of the 180-day period beginning on the date of the enactment of this Act, the Secretary shall provide recommendations to the Congress for a program of interest-free lending of United States Money to State and local governmental entities, including school boards and emergency fire services for infrastructure improvements under their control and within their jurisdictions, based on per capita amounts and other criteria to assure equity as determined by the Monetary Authority.

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The Fed, The Housing Crises and How to Fund Sustainable Housing

What is Sustainable Housing? 

There are two components: physically sustainable and financially sustainable. Physically sustainable means our housing stock renewal is in line with resource renewal and that it is energy-efficient.

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The materials part can be achieved by reducing, re-using and recycling building materials and using materials obtained from renewable sources.  The energy part can be achieved by retro-fitting existing buildings to meet much higher energy-efficiency standards and by ensuring that all new buildings are built to the highest energy-efficiency standards.  The Leadership in Energy and Environmental Design (LEED) systems developed by the U.S. Green Building Council (USGBC) are an example of what can be done.

green energy playground

Financially sustainable means our housing is affordable and that housing options are available to suit everyone’s budget, on an ongoing basis.

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There are two basic ways this can be achieved:

1) Decrease the price of housing; 2) Increase people’s incomes.

1) and 2) can be done at the same time.  Housing prices can be decreased by decreasing housing costs.  This can be achieved by various means, including reducing housing costs to homeowners by modifying mortgages, making sure that these savings are passed on to renters in the form of lower rents, and directly providing more affordable public, social and community housing options to keep downward pressure on overall housing market costs.

To solve the housing crises we need to make sure everyone has a good living environment and can afford to live in it.  An obvious first step is to make sure that people can stay in the homes they’re in, and those that have been foreclosed on can get back into good homes.  This requires resolving the mortgages crisis.  The National Emergency Employment Defense (NEED) Act provides for investment priorities in Title V, including for resolving the mortgage crisis in Section 509:

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SEC. 509. RESOLVING THE MORTGAGE CRISIS. 

The Congress shall be aware that funding through this Act is available for Congressional enactments for resolving aspects of the mortgage crisis.”

In addition, the NEED Act provides debt-free grants and interest-free loans to State and local governments which can go toward funding sustainable housing infrastructure and affordable housing solutions in local communities:

SEC. 504. MONETARY GRANTS TO STATES. 

(a) IN GENERAL.—Each year, the Monetary Authority shall instruct the Secretary to disperse grants over a 12-month period to the States equal to 25 percent of the money created under this title in the prior year. In the first year the amount of such grants shall be 25 percent of the anticipated money creation in that first year.

(b) USE OF GRANTS FOR BROAD-BASED PURPOSES.—The States may use such funds in broadly designated areas of public infrastructure, education, health care and rehabilitation, pensions, and paying for unfunded Federal mandates.”

SEC. 510. INTEREST FREE LENDING TO LOCAL GOVERNMENTAL BODIES. 

Before the end of the 180-day period beginning on the date of the enactment of this Act, the Secretary shall provide recommendations to the Congress for a program of interest-free lending of United States Money to State and local governmental entities, including school boards and emergency fire services for infrastructure improvements under their control and within their jurisdictions, based on per capita amounts and other criteria to assure equity as determined by the Monetary Authority.”

Because different communities have different circumstances, State and local governments are better placed to address the specific housing needs of the communities they serve.

US Housing Misery Index
US Housing Misery Index

The NEED Act provides us with the means to provide the funding sources needed to achieve the sustainable housing we need now and need even more moving forward into the future.  See here for more background and explanation.

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How to Fund a Single Payer System

What is a Single Payer System? 

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By Jamie Walton, 11/13/2014

It is an understanding that good health care is a basic human right and that having a healthy population is essential for a healthy economy and the well-being of everyone in society.  Everyone benefits from having healthy people around them rather than sick people around them, therefore it’s in everyone’s interest to have is a health care system that treats everyone with the best possible health care.  A good health care system is a  public good like a good road system because everyone benefits simply from it being there, no matter how much they use it directly themselves.

To solve the health care crises we need to fully fund our health care system all the way from primary care to tertiary care.  The National Emergency Employment Defense (NEED) Act provides for investment priorities in Title V, including for health care in Section 508:

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SEC. 508. UNIVERSAL HEALTH CARE FUNDING. 

The Congress shall be aware that funding through this Act is available for a universal health care plan as may be enacted by Congress.”

In addition, the NEED Act provides the States with debt-free grants which can go toward funding the delivery of health care and rehabilitation in local communities:

SEC. 504. MONETARY GRANTS TO STATES. 

(a) IN GENERAL.—Each year, the Monetary Authority shall instruct the Secretary to disperse grants over a 12-month period to the States equal to 25 percent of the money created under this title in the prior year. In the first year the amount of such grants shall be 25 percent of the anticipated money creation in that first year.

(b) USE OF GRANTS FOR BROAD-BASED PURPOSES.—The States may use such funds in broadly designated areas of public infrastructure, education, health care and rehabilitation, pensions, and paying for unfunded Federal mandates.”

The NEED Act provides us with the means to provide the extra funding needed to achieve a free at source health care system so that nobody has to go into debt or go bankrupt to get the health care our modern economy needs and can provide.  See here for more background and explanation.

The Fed, Capitalism and Sovereign Currency

What is the Fed?  What is Capitalism?  What is Sovereign Currency?

By Jamie Walton, October 13, 2014

First it’s most important to define terms. What is the Fed?

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The Fed is what we call the Federal Reserve System.  It consists of a Board of Governors in Washington D.C. and 12 regional Federal Reserve Banks.  The Board of Governors is an “independent governmental agency” which comes under the Executive Branch of the U.S. Government.  The 12 Federal Reserve Banks are “nongovernmental organizations, set up similarly to private corporations” in that they have stock which is held by each of the private banks in their district that are members. (http://www.frbsf.org/education/teacher-resources/what-is-the-fed/structure)

The Fed is not owned by a few wealthy Americans and Europeans.  That is nothing more than a “conspiracy theory” and should be disregarded.  For more detailed information, see:http://www.monetary.org/is-the-federal-reserve-system-a-governmental-or-a-privately-controlled-organization/2008/02

What is Capitalism?

CapitalismRocks

Capitalism is what we call the economic system that we say we live under.  Wikipedia defines Capitalism as “an economic system in which trade, industry, and the means of production are largely or entirely privately owned and operated for profit.”  Investopedia defines Capitalism as a “system of economics based on the private ownership of capital and production inputs, and on the production of goods and services for profit.”  A central characteristic of Capitalism is capital accumulation.  There are two fundamental types of capital: real capital (factories, machinery, etc.), and financial capital (financial assets or the financial value of assets, such as cash, i.e., money).  In practice, capital accumulation means financial capital accumulation, i.e., the accumulation of money.  But where does that money come from?  Under the present monetary system, all money is created or controlled by the banking system.  All deposits in bank accounts are created by banks when they make loans or purchases.  Even physical cash has to initially be withdrawn from a pre-existing bank account, meaning someone had to go into debt to a bank or sell something to a bank before even a penny can get into circulation.

Thus, what we call Capitalism could be called “Bankism” since the whole economic system is subject to the banking system, because in a monetary economy, nothing moves without money, and all the provision of money is completely controlled by the banking system.

What is Sovereign Currency? 

soverignNEEDActCurrency

Sovereign Currency is Sovereign money: “Sovereign money is legal tender (lawful money) issued by a state [national] authority” (http://sovereignmoney.eu).  Sovereign money is legal tender, on hand as well as on account or mobile storage device. It contrasts with commercial bank money, i.e. demand deposits, also called sight deposits, as currently used for cashless payment.  As to the wording, there are alternatives such as safe, sound or stable money (in various connections), liquid money (M. Schemmann), plain money (J. Huber / J. Robertson), chartal money (derived from chartalism), state money (R. Werner), public money (K. Yamaguchi), constitutional money (R. Morrison) and, specifically in the United States, U.S. money (S. Zarlenga). Sovereign money seems best to encapsulate what it is all about. Beyond descriptive aspects, the notion of sovereign money also conveys the constitutional dimension of the monetary prerogative which is one of the most important sovereign rights.  For more detailed information, see: http://sovereignmoney.eu/what-is-sovereign-money

Note that Sovereign Currency is Constitutional and legal/lawful, and can be issued without any associated debt or interest.  In the U.S., coins issued by the U.S. Mint since 1792 are Sovereign Currency and are an asset to the holder and a liability (debt) to nobody.  What that means is it provides spending power without owing anything.  Sovereign Currency is accompanied by a special advantage called seigniorage, which creates net income:

Seigniorage and Net Income

Seigniorage is the difference between the face value and cost of producing circulating coinage. The Mint transfers seigniorage to the Treasury General Fund”

(U.S. Mint 2013 Annual Report, page 6: http://www.usmint.gov/downloads/about/annual_report/2013AnnualReport.pdf)

Seigniorage enables us to receive public goods and services without taxing or borrowing.  This is a very important thing to know.  It can solve most of the problems in each country.

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How does the NEED Act fit in?

The National Emergency Employment Defense (NEED) Act, introduced as H.R. 2990 in the 112th Congress, fully restores the Constitutional power of Congress over money in the U.S. (Article 1, Section 8, Clause 5).

The NEED Act abolishes the Board of Governors of the Federal Reserve System and establishes a Monetary Authority to conduct monetary policy in accordance with the law.  The NEED Act nationalizes the 12 Federal Reserve Banks by buying back their stock from their member banks and incorporates them as a bureau of the U.S. Treasury alongside the U.S. Mint and Bureau of Engraving and Priniting.

The NEED Act removes the power from banks to create and control our money supply and places it within the checks and balances of our democratic representative government.   The NEED Act makes all U.S. money sovereign currency: an asset to the holder and a liability to nobody.  It ends the system of creating our money with debt and interest.

The NEED Act enables the Congress to promote the General Welfare and approve spending on much needed infrastructure, education, health care, grants for state governments and an interest-free loan facility for local governments, mortgage relief, social security assurance, pays off the national debt as it comes due, and much much more – all without taxing or borrowing a dime, and all without causing inflation. For more information, see: http://www.monetary.org/wp-content/uploads/2013/01/HR-2990.pdf

What kind of economic system will we have with the NEED Act?  Perhaps a new name will have to be coined.  Whatever we decide to call it, it will be Constitutional and democratic.

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