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.

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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?

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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? 

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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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