How Congress Could Fix Its Budget Woes, Permanently

As Congress struggles through one budget crisis after another, it is becoming increasingly evident that austerity doesn’t work. We cannot possibly pay off a $16 trillion debt by tightening our belts, slashing public services, and raising taxes. Historically, when the deficit has been reduced, the money supply has been reduced along with it, throwing the economy into recession. After a thorough analysis of statistics from dozens of countries forced to apply austerity plans by the World Bank and IMF, former World Bank chief economist Joseph Stiglitz called austerity plans a “suicide pact.”

Congress already has in its hands the power to solve the nation’s budget challenges – today and permanently. But it has been artificially constrained from using that power by misguided economic dogma, dogma generated by the interests it serves.  We have bought into the idea that there is not enough money to feed and house our population, rebuild our roads and bridges, or fund our most important programs — that there is no alternative but to slash budgets and deficits if we are to survive. We have a mountain of critical work to do, improving our schools, rebuilding our infrastructure, pursuing our research goals, and so forth. And with millions of unemployed and underemployed, the people are there to do it. What we don’t have, we are told, is just the money to bring workers and resources together.

But we do have it! Or we could.

Money today is simply a legal agreement between parties. Nothing backs it but “the full faith and credit of the United States.” The United States could issue its credit directly to fund its own budget, just as our forebears did in the American colonies and as Abraham Lincoln did in the Civil War.

Any serious discussion of this alternative has long been taboo among economists and politicians. But in a landmark speech on February 6, 2013, Adair Turner, chairman of Britain’s Financial Services Authority, broke the taboo with a historic speech recommending that approach. According to a February 7th article in Reuters, Turner is one of the most influential financial policy makers in the world.  His recommendation was supported by a 75-page paper explaining why handing out newly-created money to citizens and governments could solve economic woes globally and would not lead to hyperinflation.

Our Money Exists Only at the Will and Pleasure of Banks

Government-issued money would work because it addresses the problem at its source. Today, we have no permanent money supply. People and governments are drowning in debt because our money comes into existence only as a debt to banks at interest. As Robert Hemphill of the Atlanta Federal Reserve observed in the 1930s:

We are completely dependent on the commercial banks. Someone has to borrow every dollar we have in circulation, cash or credit.  If the banks create ample synthetic money, we are prosperous; if not, we starve.

In the U.S. monetary system, the only money that is not borrowed from banks is the “base money” or “monetary base” created by the Treasury and the Federal Reserve (the Fed). The Treasury creates only the tiny portion consisting of coins. All of the rest is created by the Fed.

Despite its name, the Fed is at best only quasi-federal; and most of the money it creates is electronic rather than paper. We the people have no access to this money, which is not tur ned over to the government or the people but goes directly into the reserve accounts of private banks at the Fed.

It goes there and it stays there. Except for the small amount of “vault cash” available for withdrawal from commercial banks, bank reserves do not leave the doors of the central bank. According to Peter Stella, former head of the Central Banking and Monetary and Foreign Exchange Operations Divisions at the International Monetary Fund:

[I]n a modern monetary system – fiat money, floating exchange rate world – there is absolutely no correlation between bank reserves and lending. . . . [B]anks do not lend “reserves”. . . .

Whether commercial banks let the reserves they have acquired through QE sit “idle” or lend them out in the internet bank market 10,000 times in one day among themselves, the aggregate reserves at the central bank at the end of that day will be the same.

Banks do not lend their reserves to us, but they do lend them to each other. The reserves are what they need to clear checks between banks. Reserves move from one reserve account to another; but the total money in bank reserve accounts remains unchanged, unless the Fed itself issues new money or extinguishes it.

The base money to which we have no access includes that created on a computer screen through “quantitative easing” (QE), which now exceeds $3 trillion. That explains why QE has not driven the economy into hyperinflation, as the deficit hawks have long predicted; and why it has not created jobs, as was its purported mission. The Fed’s QE money simply does not get into the circulating money supply at all.

What we the people have in our bank accounts is a mere reflection of the base money that is the exclusive domain of the bankers’ club. Banks borrow from the Fed and each other at near-zero rates, then lend this money to us at 4% or 8% or 30%, depending on what the market will bear.  Like in a house of mirrors, the Fed’s “base money” gets multiplied over and over whenever “bank credit” is deposited and relent; and that illusory house of mirrors is what we call our money supply.

We Need Another Kind of “Quantitative Easing”

 The quantitative easing engaged in by central banks today is not what UK Professor Richard Werner intended when he invented the term. Werner advised the Japanese in the 1990s, when they were caught in a spiral of “debt deflation” like the one we are struggling with now. What he had in mind was credit creation by the central bank for productive purposes in the real, physical economy. But like central banks now, the Bank of Japan simply directed its QE firehose at the banks. Werner complains:

[A]ll QE is doing is to help banks increase the liquidity of their portfolios by getting rid of longer-dated and slightly less liquid assets and raising cash. . . . Reserve expansion is a standard monetarist policy and required no new label.

The QE he recommended was more along the lines of the money-printing engaged in by the American settlers in colonial times and by Abraham Lincoln during the American Civil War. The colonists’ paper scrip and Lincoln’s “greenbacks” consisted, not of bank loans, but of paper receipts from the government acknowledging goods and services delivered to the government. The receipts circulated as money in the economy, and in the colonies they were accepted in the payment of taxes.

The best of these models was in Benjamin Franklin’s colony of Pennsylvania, where government-issued money got into the economy by way of loans issued by a publicly-owned bank. Except for an excise tax on liquor, the government was funded entirely without taxes; there was no government debt; and price inflation did not result. In 1938, Dr. Richard A. Lester, an economist at Princeton University, wrote“The price level during the 52 years prior to the American Revolution and while Pennsylvania was on a paper standard was more stable than the American price level has been during any succeeding fifty-year period.”

The Inflation Conundrum

The threat of price inflation is the excuse invariably used for discouraging this sort of “irresponsible” monetary policy today, based on the Milton Friedman dictum that “inflation is everywhere and always a monetary phenomenon.” When the quantity of money goes up, says the theory, more money will be chasing fewer goods, driving prices up.

What it overlooks is the supply side of the equation. As long as workers are sitting idle and materials are available, increased “demand” will put workers to work creating more “supply.” Supply will rise along with demand, and prices will remain stable.

True, today these additional workers might be in China or they might be robots. But the principle still holds: if we want the increased supply necessary to satisfy the needs of the people and the economy, more money must first be injected into the economy.  Demand drives supply.  People must have money in their pockets before they can shop, stimulating increased production.  Production doesn’t need as many human workers as it once did. To get enough money in the economy to drive the needed supply, it might be time to issue a national dividend divided equally among the people.

Increased demand will drive up prices only when the economy hits full productive capacitys. It is at that point, and not before, that taxes may need to be levied—not to fund the federal budget, but to prevent “overheating” and keep prices stable. Overheating in the current economy could be a long time coming, however, since according to the Fed’s figures, $4 trillion needs to be added into the money supply just to get it back to where it was in 2008.

Taxes might be avoided altogether, if excess funds were pulled out with fees charged for various government services. A good place to start might be with banking services rendered by publicly-owned banks that returned their profits to the public.

Taking a Lesson from Iceland: Austerity Doesn’t Work

The Federal Reserve has lavished over $13 trillion in computer-generated bail-out money on the banks, and still the economy is flagging and the debt ceiling refuses to go away. If this money had been pumped into the real economy instead of into the black hole of the private banking system, we might have a thriving economy today.

We need to take a lesson from Iceland, which turned its hopelessly insolvent economy around when other European countries were drowning in debt despite severe austerity measures. Iceland’s president Olafur Grimson was asked at the Davos conference in January 2013 why his country had survived where Europe had failed.  He replied:

I think it surprises a lot of people that a year ago we were accepted by the world as a failed financial system, but now we are back on recovery with economic growth and very little unemployment, and I think the primary reason is that . . . we didn’t follow the traditional prevailing orthodoxies of the Western world in the last 30 years.  We introduced currency controls; we let the banks fail; we provided support for the poor; we didn’t introduce austerity measures of the scale you are seeing here in Europe.  And the end result four years later is that Iceland is enjoying progress and recovery very different from the other countries that suffered from the financial crisis. [Emphasis added.]

He added:

[W]hy do [we] consider the banks to be the holy churches of the modern economy? . . . The theory that you have to bail out banks is a theory about bankers enjoying for their own profit the success and then letting ordinary people bear the failure through taxes and austerity, and people in enlightened democracies are not going to accept that in the long run.

The Road to Prosperity

We are waking up from the long night of our delusion. We do not need to follow the prevailing economic orthodoxies, which have consistently failed and are not corroborated by empirical data.  We need a permanent money supply, and the money must come from somewhere. It is the right and duty of government to provide a money supply that is adequate and sustainable.

It is also the duty of government to provide the public services necessary for a secure and prosperous life for its people. As Thomas Edison observed in the 1920s, if the government can issue a dollar bond, it can issue a dollar bill. Both are backed by “the full faith and credit of the United States.”  The government can pay for all the services its people need and eliminate budget crises permanently, simply by issuing the dollars to pay for them, debt-free and interest-free.

______________

Ellen Brown is an attorney and president of the Public Banking Institute.  In Web of Debt, her latest of eleven books, she shows how a private, privileged banking oligarchy has usurped the power to create money from the people themselves, and how we the people can get it back. Her websites are http://WebofDebt.com, http://EllenBrown.com, and http://PublicBankingInstitute.org.  Don’t miss the Public Banking Institute conference June 2-4, 2013! Click here.

50 Responses

  1. A shocking article that completely ignores the fundamental fact that money is simply labour and property in a form that is easy to trade. And when you ignore this simple fact it is possible to go off on wild tangents which imply that increasing the amount of money increases the physical resources of a country or increases the amount of labour hours available in a country.

    • Money is money. Labor is labor. Propety is property. When you confuse these basic concepts with false equivalencies you baffle all attempts at reason. I’d rather be dazzled by Ellen.

      • William – “Money is money. Labor is labor. Propety is property. When you confuse these basic concepts with false equivalencies you baffle all attempts at reason.” This is getting ridiculous. I think you might be baiting me but Ill bite anyway.

        Money in itself, is something on a computer screen, zeros and ones in a database, pieces of paper with pretty pictures, pieces of metal cut into discs. In short money has no intrinsic value.

        You do not accept money as payment because you want to zeros on your computer screen or because you like the look of 100 dollar bills. You accept money because it buys you labour and/or property now or sometime in the future. ie money is a representation of something else.

        Let me say it again. Money has no intrinsic value. And money has no value if your print trillions of dollars of it everyday.

        For money to have value it has to be limited in supply because it is a representation of something that is limited in supply ie labour/property whether the property be a mine, a machine, land whatever.

        And yes money is debt, it is a promise to pay. Either with labour or property.

        Niall Ferguson has written and excellent book http://www.amazon.com/Ascent-Money-Financial-History-World/dp/0143116177

        And TV program based on the book

        Like I said, I’m positive your baiting me but anyway……

        • What did you bring the book I don’t like you to read to me out of up for.

    • Richard, what you say has nothing to do with reality. LOOK at what happens in the real world. Money is mainly credit. Like Ellen and Ben Franklin say, money is credit. That is the FACT. Banks create it when they extend “loans.” The Fed creates it with keystrokes on its computer keyboards. Are they creating labor and property? Hell no. You have a theory in which you choose to consider money a form of labor and property, but this is a false-to-fact consideration.

      • So your point is that allowing only the rich access to cheap credit while restricting access to the poor should remain out Nation’s policy? When Mark Zuckerberg went for a home mortgage he got a 1.75% multimillion dollar loan with no money down because he’s rich, not because he earned it or deserved it. Any American would love to get a rate of 1.75% and have banks throw money at them to play markets but we live in an aristocracy so 90% will never have any opportunities like our special class gets.

      • ErnieM – Everything you say is obviously correct up to “You have a theory in which you choose to consider money a form of labor and property, but this is a false-to-fact consideration.” it is not a “theory” it is a reality. Feel free to share what you think money is a representation of.

        • That money is a form of labor and property is a factual reality? I don’t think so. Much of it is obviously and pointedly not so– the opposite in fact. When the Fed and the banks create money for themselves it represents NON-labor, anti-labor. You are assuming I think money is a representation of something — a thing — which I do not. It’s similar to Wittgenstein’s early theories about language: at first he assumed that words represent things; later he switched to thinking that words have many different functions other than representation, and are often like tools. I think money functions to give permission and power. It has the power of command inherent in it, based on acceptance and agreement; it is CREDIT. Back to Wittgenstein, he said the meaning of a word is found by LOOKING at how it is used in every day language: look at real world usage; be extensional rather than postulating a priori intensional definitions.

          • ErnieM – I dont disagree with anything you said

            And to say something else.

            “When the Fed and the banks create money for themselves it represents NON-labor, anti-labor.” – Exactly. Money has been abused. or to put in another way, the people have been and are being abused.

          • I agree that money has many functions.
            It’s social, public utility, very much similar as language.
            Like language, money has been evolved through the history.
            Current fiat money is based on legal system.
            So, congress – court – executor all three parts of the government must cooperate to restore money as ‘should be’.
            We must figure out how much is the total legal tender of US dollar at this moment and how it will change in the future. WE must establish a new authority to control the whole process of managing legal tender with clear purpose of promoting prosperity of people including coming generations.

            • We need only to fix where we allowed ourselves to go wrong. We must take back our Central Bank and made it OPERATE as the banking arm of this SGB (social governing body), not for the betterment of Private For Profit Banks (PFPB) rather its purpose should be to provide through the redistribution of the wealth of the nation for the betterment of equality and happiness for all its citizens with the social goal ” “to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity,…”

    • Your confusion lies in the fact that real money is merely a medium or conduit for wealth, labor and services and not these things in themselves. Interest free currency allows wealth to be exchanged freely everywhere for everyone without onerous restrictions, taxes (usury), or manipulations(derivatives, shorting, ect). Commodities as currencies allow for all of these abuses, and then some.

      • I agree that money is not commodity.
        Legal tender must be clearly distinguished from commodity.
        Anything negotiable is commodity.
        Non-negotiable fixed value items of asset or liability, only these we can called money or legal tender.
        However, people tend to think otherwise. They think some kind of commodity like gold is non negotiable. They remind of Deuche Mark in the year of 1923 too often.
        Yes, it was a clear failure for the nation, or society to keep the unit value of their currency.
        Keeping the unit value of currency – this is just as important as keeping the national sovereignty.
        In order to keep the value of legal tender, each branch of government must do its best.
        Especially, treasury securities are future legal tender.
        Therefore keeping the value of this future money is also important.
        How much is the present market price of treasury bond of 10 year maturity $100,000 face value without coupon today?
        The price gap between present and future value must be controlled within the target rate of inflation.
        This is enough cause for the notion that government should have the full power to issue currency and or national bond.

        • Youg Kim – “I agree that money is not commodity.
          Legal tender must be clearly distinguished from commodity.
          Anything negotiable is commodity.” Eh? You do not think you can negotiate the price of something with the seller? You have not heard of salary negotiations?

          “Non-negotiable fixed value items of asset or liability, only these we can called money or legal tender.” – Fixed value in terms of what?

          “In order to keep the value of legal tender, each branch of government must do its best.” – Excellent idea. Put responsibility for the value of a currency in the hands of people who must do their best. Thats worked out well since the end of the Gold standard has it not?

          “Therefore keeping the value of this future money is also important.” – Again, value in terms of what?

          • Stop watch is a tool to measure time.
            Fiat money is social invention to measure or represent value.
            Non-negotiable means same value.
            Your $100 bill in your pocket;
            $100 of certified cheque from a bank chartered in US;
            $100 of balance in your checking account at Bank of America
            among these three no negotiation is necessary. This is common sense.
            HOWEVER, if you have $100 of balance with a Chinese bank, its value may not be considered as same as that with BoA.
            Keeping the value of future money:
            Consider your retirement income.
            You’ve been paying social security tax for years expecting being paid back from the government in the amount calculated mathematically.
            HOWEVER, government has been cheating people, the tax payers, by manipulating the official statistics, to cover up their failure to keep the value of money.
            GDP deflator is the evidence.
            Measuring rule must not be allowed to change itself.
            Even if you could fly to London from New York in 5 minutes, the running speed of your wrist watch is the same as that in 100 years ago.

            How can we keep the value of money(legal tender)?
            I’m sure we can establish a reliable plat from for this purpose.
            My suggestion:
            set up a new statistical table for recent 10 years.
            Average disposable income of the lower 80% of the population.
            Average land value of 10 square meter nationally.
            Energy price for KWh.
            Average hourly wage for those employed, etc.
            Why lower 80%? Because they are the followers, the ruled, those who deserve supportive cares from the SGB.

      • pm – ” that real money is merely a medium or conduit for wealth, labor and services and not these things in themselves.” i dont know, maybe we are agreeing with each other. If I work 8 hours, the money I get represents the work I carried out. I can then use my 8 hours of labour to purchase labour/property at some point in the future. That is what you mean?

        “Interest free currency allows wealth to be exchanged freely everywhere” Sure, if deflation were allowed to happen I can see interest free money.

        “onerous restrictions, taxes (usury),” – you wont hear any complaints from me on this

        “manipulations(derivatives, shorting, ect).” if I want to use my labour/ property to invest in derivatives or to short something, I want to be able to. And I do not expect me or anyone else to be forcing the public to bail us out if things go wrong.

        “Commodities as currencies allow for all of these abuses” – I do not think so. Someone would have to corner the gold and/or silver markets and/or any other commodity money was based on. Which is impossible. With regards to abuse. Go back to the days of the gold standard and tell me how much manipulation we had then.

        • What i meant was that interest free fiat money is not a commodity or anything produced from labor. In and of itself in only represents these things. As such it cannot be traded or manipulated , unlike gold or silver, which as commodities are always subject to market forces and hostile predatory groups extrinsic to its domestic monetary worth.

          interest free money does not cause deflation (or inflation), unless govt does not print enough to meet demand. And this is an easy adjustment to make by govt, whether that be on the state or federal level.

          Derivatives should be outlawed. They used to be illegal until the 1980s. If you think otherwise you don’t understand what they are and how they financially ruined the global economy. Btw, If the public doesnt bail your fraudulent speculative bet out, then how are you to be paid? Having the general public as a backstop is how that collossal scam works.

          Name one economy that has not eventually resulted in financial insolvency? I can name many instances in which interest free fiat has resulted in seemingly endless properity: ancient rome with copper fiat coins, 700 hundred years of tally sticks in england, colonial script, Lincoln greenbacks. All were discontinued due to banker lobby or sabotage — not depressions or crashes.

          Large private institutions may not own all of the gold but they can possess enough to have a large impact on national and global economies. For instance, George Soros crashed the pound sterling not too long ago. There have never been good old days for gold money unless you were a banker. Fractional lending came into existence with receipts issued for stored gold and it has been an inherent problem in interest drivin banking ever since.

  2. [...] CONTINUE READING HERE! [...]

  3. Congress effectively abdicated the People’s sovereignty to the Federal Reserve bank in 1913 and that financial squid of a system has had 100 years to consolidate its hold on the levers of power and control in America. The Congress that sits today is totally beholden to the corporate interests that keep them in their privileged positions. They are not going to willingly undermine the source of their support by breaking them up. So: by what legal or legislative action do you propose to implement such banking reforms as you propose (and I think we all support) ?

    I see it as a constitutional issue. I don’t think Congress had constitutional authority to delegate money-creation in the first place, but the US Constitution isn’t clear on either money OR the legal status of incorporated entities. The only solution I see to eliminating the conflicts of interest in DC and Wall Street is to separate the rightful functions of a representative government from the rightful functions of a free market economy. We limit the powers of government with a constitution; we must likewise limit the powers of centralized financial institutions with equally restrictive charters. There needs to be a legal firewall between both interests to keep the one from corrupting the other.

    You’re going to have a problem “selling” decentralized banking under government control because nobody trusts government to maintain a stable currency; having been corrupted by private interests. Nobody trusts the Federal Reserve any more because it has been so corrupted by Wall Street. The interdependent corruption of both central banking and federal government gives us a political system that’s neither constitutional nor representative; and an economic system that’s neither free-market nor prosperous. They need to be separated and reformed forcefully, simultaneously, and in the same legal action – firewalled from each other. Is there ANY other way than this:

    28th Amendment
    “Corporations are not persons in any sense of the word and shall be granted only those rights and privileges that Congress deems necessary for the well-being of the People. Congress shall provide legislation defining the terms and conditions of corporate charters according to their purpose; which shall include, but are not limited to: 1, prohibitions against any corporation becoming so large its failure would pose a threat to national security or harm the general economy; 2, prohibitions against any form of interference in the affairs of government, education, and news media; and 3, provisions for civil and criminal penalties to be paid by corporate executives for violation of the terms of a corporate charter.”

    • There are groups already working in this direction. Here is a link to “Move to Amend”: https://movetoamend.org/wethepeopleamendment

      • MoveToAmend Corporation is promoting nothing more than a cloud of legal smoke designed to actually strengthen the death grip Wall Street holds on our government. Read it carefully; the actual wording belies the preamble’s firey rhetoric and usual corporate hype. The amendment itself is pure lawyereze hogwash. If ratified, it would change absolutely nothing. The problem goes far deeper than election reform. There was never any discussion about wording. Their way or the highway is how they’re operated, and like all the other “movement” websites, the thing they’re most concerned with is collecting donations. #Occupy suffered the same fate; as will anyone else that seeks to organise on-line. All we can do is pass the word and work toward “critical mass” in the form of public opinion (not as hard as I once thought). So pass the word. It CAN be done.

        • Thank you for clarifying this. I like your wording of the 28th amendment.

        • Is this what is called a red herring, only more demonic in its deceptive word manipulation? It seems more diabolic than I had first thought. But again, thanks for clarifiying and I agree with your ideas and conclusions about passing on what we see as the truth. People will read and think about it.

      • Anyone concerned with America’s downward spiral from constitutional republic to corpocratic police state should be aware that MoveToAmend’s lame idea for an amendment to end corporate corruption has reportedly been introduced to the House of Representatives last Monday. For all their fiery rhetoric and strongly worded hype, the actual amendment, where the rubber meets the road, it says absolutely nothing and, if anything, substantiates the legal status that corporations already have.
        In making the announcement, lead sponsor Rep. Rick Nolan (DFL-Minnesota), said: “It’s time to take the shaping and molding of public policy out of corporate boardrooms, away from the corporate lobbyists, and put it back in city halls – back with county boards and state legislatures – and back in the Congress where it belongs.”
        This is how it reads:
        We The People Amendment
        Section 1. [Artificial Entities Such as Corporations Do Not Have Constitutional Rights]
        The rights protected by the Constitution of the United States are the rights of natural persons only.
        Artificial entities established by the laws of any State, the United States, or any foreign state shall have no rights under this Constitution and are subject to regulation by the People, through Federal, State, or local law.
        The privileges of artificial entities shall be determined by the People, through Federal, State, or local law, and shall not be construed to be inherent or inalienable.
        Section 2. [Money is Not Free Speech]
        Federal, State, and local government shall regulate, limit, or prohibit contributions and expenditures, including a candidate’s own contributions and expenditures, to ensure that all citizens, regardless of their economic status, have access to the political process, and that no person gains, as a result of their money, substantially more access or ability to influence in any way the election of any candidate for public office or any ballot measure.
        Federal, State, and local government shall require that any permissible contributions and expenditures be publicly disclosed.
        The judiciary shall not construe the spending of money to influence elections to be speech under the First Amendment.

        And this is what their amendment means in plain English:
        “We The People Amendment
        Section 1. [Artificial Entities Such as Corporations Do Not Have Constitutional Rights]
        The rights protected by the Constitution of the United States are the rights of natural persons only.”
        A remarkable statement of the obvious. This changes nothing; it was already understood to apply to natural persons. To say “only” just means fictitious persons will no longer be protected by the Constitution. It doesn’t mean that fictitious persons will no longer have inordinate privileges under case law and precedent.

        “Artificial entities established by the laws of any State, the United States, or any foreign state shall have no rights under this Constitution and are subject to regulation by the People, through Federal, State, or local law.”
        Again: corporations’ privileges never were constitutionally guaranteed rights, they were privileges granted as a legal convenience (and because corporations lobbied real hard to get them) And they’ve always been subject to regulation “by the People” (on K St.) through the appropriate jurisdiction, said jurisdiction being blatantly corrupted by the regulated – for the regulated . This changes nothing, but re-states the status quo.

        “The privileges of artificial entities shall be determined by the People, through Federal, State, or local law, and shall not be construed to be inherent or inalienable.”
        Once again, nothing new: simply a third re-statement of the status quo. Corporate privileges are determined by what corporate attorneys can get away with in court. Whether those privileges are construed to be inherent or inalienable is irrelevant.

        “Section 2. [Money is Not Free Speech]
        Federal, State, and local government shall regulate, limit, or prohibit contributions and expenditures, including a candidate’s own contributions and expenditures, to ensure that all citizens, regardless of their economic status, have access to the political process, and that no person gains, as a result of their money, substantially more access or ability to influence in any way the election of any candidate for public office or any ballot measure.”
        All citizens already have access to the “political process”; that’s nothing new. Having access to the media is a completely different thing. Regulating the expenditures of candidates doesn’t alter the outcome of elections if corporate-sponsored media are allowed to control public opinion in any way. There are so many ways for corporations, by means of content-control over sponsored media, to influence elections that limiting direct contributions or expenditures is almost irrelevant. When this phrase says : “…,and that no person gains, …..” , it should be noted that it’s not “persons” we’re talking about in an amendment to end corporate personhood. Perhaps they meant: “…, and that no corporation gains, etc…” . Once again, it doesn’t change a thing.

        “Federal, State, and local government shall require that any permissible contributions and expenditures be publicly disclosed.”
        This is my favorite ! Corporations don’t have to disclose illegal, impermissible, or shady contributions and expenditures – just the permissible ones ! ROFL !

        “The judiciary shall not construe the spending of money to influence elections to be speech under the First Amendment.”
        So, then, what IS the spending of money to influence elections? It’s not speech; OK. So it’s not protected under the First Amendment; OK. Is there some other restriction, not mentioned in this amendment, that would prohibit a corporation from rigging elections with money and media power?
        It’s rare you find so many words with so little meaning; and in this sense, the MTA amendment is a masterpiece of corporate legaleze: absolutely no change whatever in a hundred words of legal horsepucky ! Nothing to see here folks……………………move on.

        • With the system already rigged as it is, it is quite possible that this amendment will not do anything. However, it explicitly denies constitutional protections to legal entities, such as corporations. Since many of the court cases that have allowed corporations to overturn the few laws regulating them were based upon the presumption that corporations should have the same rights as natural persons, this amendment will allow congress, along with state and local legislatures, to limit and regulate corporations. Further, it will prevent the corporations from invoking constitutional protections for themselves. It also prevents judges from considering constitutional protections when deciding cases involving corporations.

          Again, this does not mean corporations will have all the powers stripped from them. Especially the economic power that comes with the wealth they currently own or control. But it *is* a step in the right direction. And many more steps must also be taken; but we have to start somewhere and this step is amongst those which must be taken to make government truly accountable to the whole population rather than just a few very rich individuals.

          • I agree, this amendment won’t do anything (I would say *probably*) but delay the remedial action needed to reverse the process of corporate “rigging” you refer to. Such delay, in itself, constitutes a further danger, in that the “rigging” will be used to make meaningful changes to the Constitution more difficult in the future. For all the effort it will require to amend the Constitution it should have more consequence than merely aiding future prosecutions; it should reverse past judgments based on the false premise of perceived constitutional rights. The horse is already outside the barn. It’s too late to simply close the door. It’s round-up time!

    • This is a truly outstanding post and 28th Amendment

  4. excellent presentation that all American’s should read to understand

  5. Why do you not wish properity for your selves and your children?
    Noble Laureate Frederick Soddy nailed it in 1926 and 1933 when he wrote “The Role Of Money” And it is a FREE read !

    http://archive.org/stream/roleofmoney032861mbp/roleofmoney032861mbp_djvu.txt

    THE ROLE OF MONEY-WHAT IT SHOULD BE, CONTRASTED WITH WHAT IT HAS BECOME.By FREDERICK SODDY READ IT and discover “What is now the role of money” Written in 1926 and 1933 IT TALKS ABOUT TODAY!!
    Read “Justaluckyfool” http://bit.ly/MlQWNs
    How as Steve Keen says the crisis today is a result of “credit expansion”, How William Black feels about banks. Most importantly, since written in 1926 and 1933, “Where we will go wrong and how we may be able to solve our flaws.” Please, please after reading***”***** “Believe nothing merely because you have been told it…But whatsoever, after due examination and analysis,you find to be kind, conducive to the good, the benefit,the welfare of all beings – that doctrine believe and cling to,and take it as your guide.”- Buddha[Gautama Siddharta] (563 – 483 BC), Hindu Prince, founder of Buddhism.
    Read how a “Quadrillion Dollar Coin” or “QE 4 The People” could not only be the solution but also pave the way to prosperity.
    Read how capitalism should work, not for the Private For Profit Banks rather for the total society.
    Please read, “They way it should be” before we discover “bad money (money created by PFPB electronically) drives good money (Money created by the sovereignty as fiat currency and coin) out of circulation.
    There are already signs on the horizon.

  6. “The Way It Should Be.”
    There must be one and only one source of issuance of the sovereign currency. Any other issuance must be considered counterfeit.
    Since ‘money’ is the physical representation of the wealth of the nation, it must always be available for redemption. This wealth is the total of the goods and services of the entire social group.
    Why not value the United States of America at $1 quadrillion as of 01-01-2013 with that amount being audited as best as possible every 10 years since it must be changeable as the wealth of any nation is.
    A capitalistic sovereignty must return the total wealth of the nation back to its citizenry in full as its bond of ‘good faith and credit’.
    Any other appropriation would be totalitarian..
    Since money is the medium of exchange of “Something” for “Anything”, NO entity may do “Fictitious Lending”. No entity may create an additional demand for redemption on currency that is available.
    But ,how do we control this currency so that only ‘real wealth’ can be exchanged while ensuring both quality and quantity ? We must attach a ways and means of control upon issuance that will not only allow the money distributed by the governing body to be returned to its rightful owners (the entire social group) but also be able to produce funding for the governing body “to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity,…”
    Read SODDY, Read “Justaluckyfool” http://bit.ly/MlQWNs
    IMPROVE, CHANGE, POST.
    Show them to be fools while at the same time, maybe,just maybe
    create a path to prosperity and happiness.”

    • JALF – And if I can add, what Ellen is condoning ie inflating away the debt is exactly what the Federal Reserve is trying to do, the exact same institution she claims she disagrees with.

  7. [...] Web of Debt [...]

  8. I say simply put Ellen Brown in charge and forget
    all about this stupid stuff. Waste of brain.

  9. Ellen, I loved this article and the suggestions that you are proposing for Congress to fix our very screwed up economy. You are so right in saying that austerity does not work. It works so very well, however, for the 1%, for our bought and paid for Congress, lobbyists, and the black hole that is our private banking system. It’s harsh and painful for the 99%, (it sucks) and we don’t want more of it – and yet more seems to be lurking in the “Sequester”.
    You are so right in saying that Congress has the power to solve our monetary problems. But I can’t imagine this Congress focusing on anything except enriching themselves at our expense.
    We have to fix and replace Congress, and then we must prod them to fix our monetary system as you suggest in your many brilliant articles. It should be a top priority to be worked on immediately. We need government issued money, as you have suggested here and elsewhere and we also need state, city, municipal and local public banks. Financial taxes and regulations are good, but they are not the deep and systemic changes that we really need to make.
    We also need economists and financial experts such as you in the treasury department and the government. And we need more people in the media to talk about your suggestions. That is how we will be able to become the country we want to live and thrive in.

  10. Finally, it came to the point: permanent money supply.
    The Iranian government announced that it would pay new year bonuses of 700,000~900,000 rials to every citizen.
    [http://www.mehrnews.com/en/newsdetail.aspx?NewsID=1814587]
    It seems to me similar to Richard Cook’s “national dividend”.

    Money should exist before it is rented out.
    Current banking practice is a swindle.
    Original money supply or money creation should be recognized as essence of national sovereignty.

    Money as legal tender should not originated from the commercial bankers. Money created by private banks as debt is not legal tender, just like casino chips.

    My suggestion: the USA needs to print new legal tender not as debt but as national equity.

    • “My suggestion: the USA needs to print new legal tender not as debt but as national equity.” Young Kim.
      Perhaps a symbolic issue of a $1 quadrillion coin electronically entered into the US Treasury as the “capitalization of the Wealth Of The United States of America” This being the value of the sovereign currency as of 2013 and no entity other than The Central Bank may issue any “new” currency.

  11. [...] Ellen Brown Featured Writer Dandelion Salad webofdebt.com February 13, [...]

  12. (posted for Ernest Huber)

    Ellen, your article is excellent as usual. I’ve similarly advocated in my Congressional candidate’s Economy and Foreign Trade planks. Inflation can be neutral when interest-free State banks null their personal, business and infrastructure loan repayments. Federal self-funding can also near inflation neutrality when fines, fees, forfeitures (including the proceeds from the Federal Reserve’s criminal activities), lottery and casino and other government enterprise profits are nulled upon receipt. But we must never forget that the massive monetary fraud is one of the most deadly crimes against humanity and the guilty deserve the most severe punishments and forfeitures. The issues are ultimately law enforcement, not economic. http://elect.ErnestHuberForCongress.com/

    (

  13. Iceland has a population of just over 300 000 and an island with an extremely isolated geographical situation. The failure of an Icelandic bank is no big deal and lesson to be learned is that tiny countries like Iceland can get away with thing that could easily be a disaster for larger, or more centrally placed, countries. Also, at a moment when the euro has survived, and is even rising in value, and as Member States are about to start coming out of bailout, it is just plain silly to speak of Europe “failing”!

  14. What if…? We were to consider The United States of America as a social governing body that has as its goal ” “to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity,…”
    What if…? We were to consider that the CEO of this Social Governing Body (SGB) was President Obama. The CEO would have the Sect of The Treasury as his CFO while at the same time have Congress and the Supreme Court as his Board of Directors.
    This magnificent SGB is capitalized by ‘the total combined wealth of the social group” and calls its means of exchange and transfer of that wealth, the US Dollar. That amount being set at $1 quadrillion as of 01-01-2013. This is the WEALTH OF THIS NATION and it belongs to the entirety of the social group even while it is in storage or being distributed. This Social Governing Body is an agent of the group that is responsible for maintaining the quality and quantity and redemption of , as well as the distribution of the wealth as represented by its currency (money) be it colorful paper, coin, or electronic digit.

    WHAT IF..? As justaluckfool has no accreditation, please challenge and improve. Post any opinion but please read, “The Role Of Money” by Frederick Soddy. You may be just that ‘fool’ that can change the world.

    • I unfortunately share your lack of accreditation so, being another fool, I started to read Soddy (just the preface and 2pages in) but saw immediately the “engineering” perspective on ecomomy that some of us approach the subject with. I can’t grasp the mechanics of it in any other terms.

      So I ask: how hard would it be to explain the importance of keeping monetary “fuel” (money) in the control of the People (gov’t) and : : :absolutely, totally, without leakage prevent the economy of private business/special interest/banking/ and everyday commerce from interfering in the administration of monetary policy?

      Likewise; government is equally forbidden to interfere in the conduct of a nation’s business. My biggest obstacle to understanding modern economics was the incomprehensible relationship between business and government/ Fed and Treasury/K Street and Pentagon/etc. It’s becoming clearer and clearer now that that relationship is the very definition of crimminal collusion. There can only be one rightful interaction, the collection of taxes and issuance of currency. In all else it should be a simple matter of following the rule of law. Government stays within the confines of the Constituion and business stays within the confines of their corporate charters (which have yet to be written by the People; on the Peoples’ terms) . With a firewall between them, and felony liabilities at stake, I think a much more “efficient” society could be philosophized.

      What better place to philosophize a new society than here?

      Actually, the Constitution we got is a great place to start, having come from the totality of political science at its creation. On the basis of our newly emerging science of economics it seems like we should be coming to some new conclusions in regards to the roles of government in relation to the role of business. Key to that relationship is the role of incorporation and the nature of corporate entities. We know a lot more about chartering governments than we do about chartering corporations. We need to correct that before the system crashes from sheer stupidity.

      • Thank you for your comment. First there was 1 fool, than 2, 4, 8,
        and because of the “most powerful force in the universe (compounding) we fool could in time become a group that could equal all of mankind.
        And what a profound reply, ” There can only be one rightful interaction, the collection of taxes and issuance of currency. In all else it should be a simple matter of following the rule of law. ”
        YES,YES, but we must take back the self imposed legality we gave to the PFPB. We, while sleeping on our rights, legislated that they (the
        private for profit banks) could not only issue their ‘counterfeit money’ but they could also tax it by charging compound interest on that same money.
        Please read:

        http://bit.ly/MlQWNs

        Read what Steve Keen has to say about “credit expansion, von Mises as to what the result of credit expansion could be, William Black has to say about banks and Michael Hudson about compound interest (excerpts are in the article). An explanation of where we went wrong with a solution to how we can fix it. Challenge it. Improve it. ” ***** “Believe nothing merely because you have been told it…But whatsoever, after due examination and analysis,you find to be kind, conducive to the good, the benefit,the welfare of all beings – that doctrine believe and cling to,and take it as your guide.”- Buddha
        Then post and post until 200 fools become 400, than 800 etc.
        With thanks to Ellen Brown who allows these posts to become free public information.

  15. [...] This piece first appeared at Web of Debt. [...]

  16. Have you all seen this video before? By Michael Rivero. It’s new to me and very impressive. I’m inclined to believe it all. Does anyone here have a rebuttal? Comments?

    • All Wars Are Bankers Wars – How true and on an even deeper level than I had seen before. It is a pretty dismal predicament we are in. Their greed is unfathomable, they are psychopaths, and we are in their bloody muzzle.. I was hacked while viewing this great video, so I had to stop and have it resuscitated. I wonder why…………………….hmmm. Virus? Coincidence??? But it is also on YouTube. Fantastic, awesome, eerie, and I think true. I would rather be depressingly informed than clueless. Thanks for the link.

  17. A question for all you economists out there: is it feasible to assess the wealth of a nation?

    Has it been done? Can it be adjusted for current market value? Can money be realistically pegged to that number and inflated in proportion to GDP? Does anybody here have those numbers?

    • GRE8888T Question. Hope for a profound answer.
      What if …The wealth of the United States Of America were as of 01-01-2013 pegged at $1,000 trillion (Love to use the word quadrillion, but it scares off too many people).
      And every 5 years there would be an audit to determine:
      What the wealth is at that time and how much of the previous wealth
      had been ‘monetized’ in circulation and held in the Central Bank.
      What if …these United States of America were capitalized at that $1 quadrillion (read $1,000 trillion) and no one, no entity could be allowed to do any transaction without using that legal tender
      as 100% security. We would be a solvent nation that would not be ‘too big too fail’ with a sovereign currency that would be acceptable even to redeem gold.
      What so you, what is the ‘intrinsic value’ of a nation that is governed “in order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity,”

      P.S. I also don’t get Frederick Soddy when he gets into Energy theory, but he is clear and understandable about- “The Role Of Money”,
      How we lost the power of true wealth that is available for all mankind and how we can get it back.
      “Justaluckyfool”

  18. [...] http://webofdebt.wordpress.com/2013/02/13/how-congress-could-fix-its-budget-woes-permanently/ [...]

  19. [...] 1. Our money IS debt [...]

  20. [...] How Congress Could Fix Its Budget Woes, Permanently [...]

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