How America Became an Oligarchy

The politicians are put there to give you the idea that you have freedom of choice. You don’t. . . . You have owners.                                                                                                — George Carlin, The American Dream

According to a new study from Princeton University, American democracy no longer exists. Using data from over 1,800 policy initiatives from 1981 to 2002, researchers Martin Gilens and Benjamin Page concluded that rich, well-connected individuals on the political scene now steer the direction of the country, regardless of – or even against – the will of the majority of voters. America’s political system has transformed from a democracy into an oligarchy, where power is wielded by wealthy elites.

“Making the world safe for democracy” was President Woodrow Wilson’s rationale for World War I, and it has been used to justify American military intervention ever since. Can we justify sending troops into other countries to spread a political system we cannot maintain at home?

The Magna Carta, considered the first Bill of Rights in the Western world, established the rights of nobles as against the king. But the doctrine that “all men are created equal” – that all people have “certain inalienable rights,” including “life, liberty and the pursuit of happiness” – is an American original. And those rights, supposedly insured by the Bill of Rights, have the right to vote at their core. We have the right to vote but the voters’ collective will no longer prevails.

In Greece, the left-wing populist Syriza Party came out of nowhere to take the presidential election by storm; and in Spain, the populist Podemos Party appears poised to do the same. But for over a century, no third-party candidate has had any chance of winning a US presidential election. We have a two-party winner-take-all system, in which our choice is between two candidates, both of whom necessarily cater to big money. It takes big money just to put on the mass media campaigns required to win an election involving 240 million people of voting age.

In state and local elections, third party candidates have sometimes won. In a modest-sized city, candidates can actually influence the vote by going door to door, passing out flyers and bumper stickers, giving local presentations, and getting on local radio and TV. But in a national election, those efforts are easily trumped by the mass media. And local governments too are beholden to big money.

When governments of any size need to borrow money, the megabanks in a position to supply it can generally dictate the terms. Even in Greece, where the populist Syriza Party managed to prevail in January, the anti-austerity platform of the new government is being throttled by the moneylenders who have the government in a chokehold.

How did we lose our democracy? Were the Founding Fathers remiss in leaving something out of the Constitution? Or have we simply gotten too big to be governed by majority vote?

Democracy’s Rise and Fall

The stages of the capture of democracy by big money are traced in a paper called “The Collapse of Democratic Nation States” by theologian and environmentalist Dr. John Cobb. Going back several centuries, he points to the rise of private banking, which usurped the power to create money from governments:

The influence of money was greatly enhanced by the emergence of private banking.  The banks are able to create money and so to lend amounts far in excess of their actual wealth.  This control of money-creation . . . has given banks overwhelming control over human affairs.  In the United States, Wall Street makes most of the truly important decisions that are directly attributed to Washington.

Today the vast majority of the money supply in Western countries is created by private bankers. That tradition goes back to the 17th century, when the privately-owned Bank of England, the mother of all central banks, negotiated the right to print England’s money after Parliament stripped that power from the Crown. When King William needed money to fight a war, he had to borrow. The government as borrower then became servant of the lender.

In America, however, the colonists defied the Bank of England and issued their own paper scrip; and they thrived. When King George forbade that practice, the colonists rebelled.

They won the Revolution but lost the power to create their own money supply, when they opted for gold rather than paper money as their official means of exchange. Gold was in limited supply and was controlled by the bankers, who surreptitiously expanded the money supply by issuing multiple banknotes against a limited supply of gold.

This was the system euphemistically called “fractional reserve” banking, meaning only a fraction of the gold necessary to back the banks’ privately-issued notes was actually held in their vaults. These notes were lent at interest, putting citizens and the government in debt to bankers who created the notes with a printing press. It was something the government could have done itself debt-free, and the American colonies had done with great success until England went to war to stop them.

President Abraham Lincoln revived the colonists’ paper money system when he issued the Treasury notes called “Greenbacks” that helped the Union win the Civil War. But Lincoln was assassinated, and the Greenback issues were discontinued.

In every presidential election between 1872 and 1896, there was a third national party running on a platform of financial reform. Typically organized under the auspices of labor or farmer organizations, these were parties of the people rather than the banks. They included the Populist Party, the Greenback and Greenback Labor Parties, the Labor Reform Party, the Antimonopolist Party, and the Union Labor Party. They advocated expanding the national currency to meet the needs of trade, reform of the banking system, and democratic control of the financial system.

The Populist movement of the 1890s represented the last serious challenge to the bankers’ monopoly over the right to create the nation’s money.  According to monetary historian Murray Rothbard, politics after the turn of the century became a struggle between two competing banking giants, the Morgans and the Rockefellers.  The parties sometimes changed hands, but the puppeteers pulling the strings were always one of these two big-money players.

In All the Presidents’ Bankers, Nomi Prins names six banking giants and associated banking families that have dominated politics for over a century. No popular third party candidates have a real chance of prevailing, because they have to compete with two entrenched parties funded by these massively powerful Wall Street banks.

Democracy Succumbs to Globalization

In an earlier era, notes Dr. Cobb, wealthy landowners were able to control democracies by restricting government participation to the propertied class. When those restrictions were removed, big money controlled elections by other means:

First, running for office became expensive, so that those who seek office require wealthy sponsors to whom they are then beholden.  Second, the great majority of voters have little independent knowledge of those for whom they vote or of the issues to be dealt with.  Their judgments are, accordingly, dependent on what they learn from the mass media.  These media, in turn, are controlled by moneyed interests.

Control of the media and financial leverage over elected officials then enabled those other curbs on democracy we know today, including high barriers to ballot placement for third parties and their elimination from presidential debates, vote suppression, registration restrictions, identification laws, voter roll purges, gerrymandering, computer voting, and secrecy in government.

The final blow to democracy, says Dr. Cobb, was “globalization” – an expanding global market that overrides national interests:

[T]oday’s global economy is fully transnational.  The money power is not much interested in boundaries between states and generally works to reduce their influence on markets and investments. . . . Thus transnational corporations inherently work to undermine nation states, whether they are democratic or not.

The most glaring example today is the secret twelve-country trade agreement called the Trans-Pacific Partnership. If it goes through, the TPP will dramatically expand the power of multinational corporations to use closed-door tribunals to challenge and supersede domestic laws, including environmental, labor, health and other protections.

Looking at Alternatives

Some critics ask whether our system of making decisions by a mass popular vote easily manipulated by the paid-for media is the most effective way of governing on behalf of the people. In an interesting Ted Talk, political scientist Eric Li makes a compelling case for the system of “meritocracy” that has been quite successful in China.

In America Beyond Capitalism, Prof. Gar Alperovitz argues that the US is simply too big to operate as a democracy at the national level. Excluding Canada and Australia, which have large empty landmasses, the United States is larger geographically than all the other advanced industrial countries of the OECD (Organization for Economic Cooperation and Development) combined. He proposes what he calls “The Pluralist Commonwealth”: a system anchored in the reconstruction of communities and the democratization of wealth. It involves plural forms of cooperative and common ownership beginning with decentralization and moving to higher levels of regional and national coordination when necessary. He is co-chair along with James Gustav Speth of an initiative called The Next System Project, which seeks to help open a far-ranging discussion of how to move beyond the failing traditional political-economic systems of both left and Right..

Dr. Alperovitz quotes Prof. Donald Livingston, who asked in 2002:

What value is there in continuing to prop up a union of this monstrous size? . . . [T]here are ample resources in the American federal tradition to justify states’ and local communities’ recalling, out of their own sovereignty, powers they have allowed the central government to usurp.

Taking Back Our Power

If governments are recalling their sovereign powers, they might start with the power to create money, which was usurped by private interests while the people were asleep at the wheel. State and local governments are not allowed to print their own currencies; but they can own banks, and all depository banks create money when they make loans, as the Bank of England recently acknowledged.

The federal government could take back the power to create the national money supply by issuing its own Treasury notes as Abraham Lincoln did. Alternatively, it could issue some very large denomination coins as authorized in the Constitution; or it could nationalize the central bank and use quantitative easing to fund infrastructure, education, job creation, and social services, responding to the needs of the people rather than the banks.

The freedom to vote carries little weight without economic freedom – the freedom to work and to have food, shelter, education, medical care and a decent retirement. President Franklin Roosevelt maintained that we need an Economic Bill of Rights. If our elected representatives were not beholden to the moneylenders, they might be able both to pass such a bill and to come up with the money to fund it.


Ellen Brown is an attorney, founder of the Public Banking Institute, and author of twelve books including the best-selling Web of Debt. Her latest book, The Public Bank Solution, explores successful public banking models historically and globally. Her 300+ blog articles are at Listen to “It’s Our Money with Ellen Brown” on

94 Responses

  1. Reblogged this on Palanthir and commented:
    “Att göra världen säker för demokrati” var president Woodrow Wilsons motiven för första världskriget, och den har använts för att rättfärdiga amerikansk militär intervention sedan dess. Kan vi justera skicka trupper till andra länder för att sprida ett politiskt system som vi inte kan hålla sig hemma?
    Magna Charta, anses vara den första räkningen av rätter i västvärlden, etablerade rättigheter adelsmän som mot kungen. Men läran att ” alla män är skapade lika “- att alla människor har” vissa oförytterliga rättigheter “, inklusive” liv, frihet och strävan efter lycka “- är en amerikansk original. Och dessa rättigheter, förmodligen försäkrad av Bill of Rights, har rätt att rösta på sin kärn. Vi har rätt att rösta, men väljarnas kollektiv kommer inte längre råder.
    I Grekland, den vänsterpopulistiska Syriza Partiet kom från ingenstans att ta presidentvalet med storm; och i Spanien, verkar det populistiska Podemos partiet redo att göra detsamma. Men i över ett århundrade, har ingen tredje part kandidat hade någon chans att vinna ett amerikanskt presidentval. Vi har ett tvåpartisystem vinnaren tar allt systemet, där vårt val står mellan två kandidater som båda nödvändigtvis tillgodoser stora pengar. Det tar stora pengar bara för att sätta på massmediekampanjer som krävs för att vinna ett val som omfattar 240 miljoner människor av rösträttsåldern.

    • What are you trying to say?

      • I didn’t write it but was able to translate it from Swedish:

        Reblogged this on Palanthir and Commented:
        “To make the world safe for democracy” was President Woodrow Wilson’s motives for the First World War, and it has been used to justify US military intervention since. Can we justify sending troops to other countries to spread a political system that we can not stay at home?
        Magna Carta, considered the first Bill of Rights in the Western world, established rights of nobles against the king. But the doctrine that “all men are created equal” – that everyone has “certain inalienable rights,” including “Life, Liberty and the pursuit of happiness” – is an American original. And these rights, probably insured by the Bill of Rights, the right to vote at their core. We have the right to vote, but voters’ collective will no longer apply.
        In Greece, the left-wing populist party SYRIZA came from nowhere to take the presidential election by storm; and in Spain, it seems populist Podemos party ready to do the same. But for over a century, no third party candidate had no chance of winning a US presidential election. We have a two-party winner-take-all system, where our choice is between two candidates, both of which necessarily cater to big money. It takes a lot of money just to put on mass media campaigns needed to win an election which covers 240 million people of voting age.

        – – – – – – – –
        As I said I did not write the above. But I would like to add since pres Wilson started fed income tax, and then approved the fed reserve, and then got us into a world war – what has changed since then? Ans: more debt, more wars, just look at the MIC annual budget. Wilson is my vote for our worst president.

        In web of debt the very end of chapter 14 says lots.

        • Wilson kept the US out of much of a war that bled most of Europe and Russia white, and for this difficult task during such a jingoistic atmosphere deserves credit. He was not “bought and paid for” as were the Presidents in the last third of the 20th century. It was, however, with the 38 rounds released when Gavrelo Princip pulled the trigger against the Archduke that the world changed yielding the current state of global terrorism.

          • on Wilson.. he passed fed res act. He allowed the fed res to collect the income taxes. And we became a nation of debtors.
            From what I have read on WW I there were ads taken out in American press to not take that ship overseas as it had passengers along with ammo. Those ads were taken out by Germans.
            As that ship approached England a British commander named Churchill pulled the British navy off from protecting it. And he ordered it to go down to 3 of the 4 steam engines. That slowed it down and the smoke could be seen for miles. The German attack boats were then faster and it was a sitting duck. And we were in the war.
            Great reads on this are in shadows of power by perloff and the creature from jeckyll island by E Griffin.
            The MIC, banks, and some businesses – love war$. The sheeples fight them and pay for them. When economies are in rough shape the oligarchs manage to convince the people to dislike people in other nations and that can lead to battles.

          • W. Wilson’s slogan of Keep the World safe for democracy…was at odds with the truth since NO participant in WWI was a democracy BEFORE he engineered our entry.. How could warring royalties aided by us keep the world safe for Democracy that was not in existence any where in the governments at war?? More like keep the banks loaning $ to BOTH sides to make money by the loss of human life and weapon sales.

            • President Wilson was a good man, but not a wise president. This is my opinion after reading the historic facts.

              • One of the first things Wilson did was to re segregate the civil service. He was a rabid racist.

                I don’t feel he was a good man. Naive perhaps, much like Gorbachev. As far as the slogan “to make the world safe for democracy”, similar crap is told to the sheeple every time any nation prepares to go to war. I can’t lay that only at Wilson’s feet. In fact they still play the “democracy” card today but fewer and fewer people buy into that childish notion….thankfully.

                America has always been an oligarchy. For short periods of time people pushed back against the power of the elite but overall it has always been just what the “founding fathers” designed it to be, an oligarchy. They hated the idea of true democracy. The three institutions that organized the resistance in the thirties have been demonized and destroyed. That is why you see organized resistance (futile though it may be) in Europe but not in the US.

                • Your choice of word “Naive” better describe the person’s character. Yes I agreed that this nation for most of its history was and is an oligarchy. The people living the moment is always responsible for the future of a nation as long as in their fabric that spark is a live and the educational level is good.

  2. […] Submitted by Ellen Brown via The Web of Debt blog, […]

  3. […]…/04/06/how-america-became-an-oligar…/ […]

  4. Great article. I have read 2 of Ellen’s books – web of debt and public banking option. Both were super. She put the pieces together quite well. I had read ~20 other similar books I read before hers. I decided to shut off mindless t.v. and read just a few short years ago so I can understand at least some of what is really happening.

    The voting public has to insist that certain questions are asked to ALL politicians before elections: why isn’t there a full audit at the federal reserve? And are you for or against the public banking option?

    The public banking option has the ability to:
    drastically lower income taxes. It could result in working a 4 day week with the same take home as currently working 5 days per week at 8 hours per day. Imagine the jobs created there;
    reduce loans to 3 percent for: tuitions, car loans, condo loans, house loans, and plastic. Just imagine Americans spending those extra funds in local economies – creating jobs;
    on public works projects like building roads, bridges, schools it could reduce the payments by half – that is job creation;
    for savers it would hand them 2 percent interest which is a lot more than what they are getting now.

    The end of chapter 14 in web of debt says lots in those last 2 pages.

    When the press ridicules someone try to listen with an open mind to them for at least a few minutes. The speaker they are ridiculing might be correct. If you read the above article you now realize the press is owned by the elites. Ellen B has spoken up. Others have been speaking up too. George Carlin, Ron Paul are a couple.

    Going back ~112 years ago Baum had a message. Going back to 1913 there were 2 big things that happened that year – I don’t think that any of it was ever covered when I went to school. Recent high school and college grads have no idea.

    I have recommended web of debt to a few friends who have thanked me as their eyes are more open today.

  5. Let’s remember that the term “Democracy” gets thrown around a lot in places it doesn’t belong, like America. Democracy is direct voting and the tyranny of the 51%. Republic is representative democracy, and it has purposeful insulation from the easily enflamed passions of the mob and it’s baby-with-the-bathwater tendencies. Republics tend to have much better political stability than the rioting and ‘new constitution every 25-50 years’ you get with the glorious democracy.

  6. I don’t think you can have debt-free money. Money, or the ability to buy, must be offset by debt, or the obligation to pay, otherwise money would be worthless. Perhaps you mean that there is no reason to go into debt to an outside party in order use our own currency? Especially since we already pay for our governments to register and protect property rights, the exchange of which is what currency is all about? The absurd notion that bankers should profit handsomely because they somehow personally guarantee that debt will be repaid should have been dealt a death blow by the public bailouts and the shenanigans since then.

    Research question: Creating an obligation to pay without a corresponding ability to buy is called Interest; creating the ability to buy without a corresponding obligation to pay is called Counterfeiting. The latter is considered one of the most serious of crimes while the former is viewed as some kind of economic miracle. Why is this?

    • Excellent. Very succinct!

      • The US Treasury issues debt free money every day. Coins, produced by the Mints operated by the US Treasury, are added to the US Treasury account at face value. The seigniorage is negative for pennies and nickels but positive for all coins of larger face value. This fact has led to the proposal to mint platinum coins with T$ face values to enable spending without borrowing/selling treasury bonds that incur debt.

      • Debt is like alcohol. A little bit of it can be a good thing for some people but staying in debt up to one’s arm pits is not a good thing.

    • Check out MMT. Sovereign governments can create the tickets called money to benefit their economies. It’s what happens. It works. It’s not counterfeiting.

      • If I’m not mistaken, in MMT governments remit taxes in exchange for the money they issued, or in other words governments take on the obligation to pay. The debt is still there. The difference is that the debt is guaranteed by mutual consent rather than someone with a bag of magic beans.

        • My understanding is that in MMT the only reason for taxes is to take money out of the economy to deal with inflation. The government spends money it “prints” into the economy or gets it into the economy by other means. Where is the debt?

          • Well, call it liability rather than debt. The government must honor the tickets it issues, no?

            I think we are in agreement, but are separated by words that have multiple meanings, which curiously are concentrated in discussions of the economy.

            “Debt” is particularly loaded with connotations of failure, inadequacy and immorality. But really debt is no more significant than an entry opposing assets in a dual entry accounting system.

            Please do not mistake me. MMT would be a vast improvement over the system under which we (literally) labor today. I only seek a clearer exposition than MMT affords.

            I prefer Mutual Credit as a model that is a good trade-off between idealism and practical necessity. The symmetry of Mutual Credit allows us to cut through the Gordian Knots that encumber many economic discussions.

            Let us all meet in the middle to discuss our wrongs, and determine together how they might be set right.

            • Thanks, I’ll check out Mutual Credit.

  7. […] The Web of Debt, by Ellen […]

  8. I am unable to locate the referenced article by John B. Cobb: The Collapse of Democratic Nation States. Could you please provide a citation? Thanks

    • Hi, it’s an unpublished article prepared for a conference Dr. Cobb is sponsoring and I’ll be speaking at in Claremont, CA, in June. I can send it to your email address if you like.

  9. How did we lose our democracy? Were the Founding Fathers remiss in leaving something out of the Constitution?………….
    They were not remiss. They were betrayed by “We the People”.
    “We the People” have legislated …”That the Private For Profit Banks
    (PFPB) can print our currency and failed to enact a control that would prevent ‘systemic failure’ of the monetary system..
    This is the flaw in our monetary system created when “We the
    people ” voted to no longer “In God We Trust” but rather “In PFPB
    We Trust”


  10. […] READ MORE HERE […]

  11. I feel the answers are rather simple. In the mid seventies for the first time since the founding of the country we did not have a labor shortage. Real wages stopped rising for the first time in our history.

    Massive immigration and women entering the workforce in droves were part of the problem. Technology destroyed millions of jobs. Technology also made it as easy to run a plant halfway around the world as it is to run one down the block. The labor shortage is over and business has no need to pay any attention to our demands any longer. There is nothing we can do about it. We are screwed.

    • I suppose we are “screwed” here in the U.S. The French have balls and have been conducting a nation-wide strike. But Americans have been tamed. Nice slaves!

      • What happened here that didn’t in Europe is that the three institutions that provided the organization to stand up to capital were destroyed one by one.

        The New Deal was the product of pressure from below, not just FDR’s tender mercies. In those days there were two strong socialist parties, the CIO and a strong Communist party. They came together and demanded something be done else there just might be a revolution. FDR believed them. So did half the wealthy. From this we got Social Security, unemployment insurance and twelve million jobs.

        After WWII was over the wealthy set about destroying those three organizations and undoing the New Deal. They have done a fine job of it so far.

    • On “women entering the workforce” – the dollar losing value and more taxes has contributed to why some women are in the workforce. June Clever and Ozzie were home with the kids – older Americans remember that. Some households where both parents work one salary goes just for all of the combined taxes.

      Machines and computers were supposed to reduce our workweek. Sadly that has not happened.

      • We are not over taxed but we get less for our tax dollar than Europeans do. What we get is empire and the military to defend and expand it. We have nearly a thousand military bases world wide.

        • On taxes have you seen this movie? Just slide the to 7 minutes and 20 seconds and watch it a couple of minutes

          Soc sec is paying for present day retirees. Ask the young Americans if they think it will be there for them. Most of them highly doubt it. That is a hidden tax if people do not get it. While they pay 7 percent another 7 percent comes from their employer (who offsets it with lower wages). Self employed pay the full 14 percent tax. Maybe the young Americans have seen the shortfalls on the bottom line here

          Web of debt, end of chapter 14 quite interesting comments about where income taxes go.

          Collectively we are not paying over 50 percent in taxes. That is, those of us who pay taxes. There might be a limit when those who pay these taxes say “enough”. What that is is anyone’s guess, 60 70, 80 percent.

          I agree that we get less for our tax dollars – health care is one example where its free in countries paying the higher taxes (and here its much higher). I agree that the MIC is a big amount and neocons in both parties are not going to change that *and they will all be re-elected. The national debt could become huge when / if interest rates increase – and exactly who will get those payment$$$ ?

          I am not arguing with you, just expressing my thoughts. Discussion is good for all of us.

          • On the issue of SS there is a history of that argument that goes back many years. One of the main agendas of capital has been to “privatize” SS. They advanced the Ponzi scheme argument at every opportunity. That was, IMO, without merit.

            It may well be that we are about to lose SS but it is because every dime possible to pay the speculators is being taken from us. Did you see the video Ms Brown made concerning the agreement met at the G 20 meeting in Brisbane? It is scary.

            In it she says the Bank of International Settlements (the central banker’s central bank) claims that there is six hundred trillion in derivative bets circulating around the world. That is more than the GNP of every nation on earth. This can’t end well.

            I and others have believed “the end is near” for twenty years but they have managed to kick the can down the road by various means. IMO, too many events have converged lately. The end may really be near.

            Expect another war soon. That always helps bail out the military/industrial complex speculators for a while. Note too, that several countries including the Nederlands and Austria are repatriating their gold. They do not feel it is safe in vaults in London or Ft. Knox. In fact they don’t know if there is nearly enough of it if people demand physical gold rather than paper gold.

            Another thing that speaks volumes to me is the NSA spying, militarization of the police, abolishing posse commitatas, etc. The rich and corporations learned their lesson back in the thirties. They knew that FDR was not the problem. Their problem was that the working class organized. The organizing was done by three institutions. Organized labor (the CIO), two strong socialist parties and one very strong Communist party. After the war was over they set about destroying all these institutions and did so very well. All the above i mentioned is, IMO, to insure that it can’t happen again. By monitoring our every contact they can nip in the bud any organizing. With the police and the military they can control the people who go to the barricades when the hunger returns. (Yes, there really was starvation in the Great Depression)

            The best beginning economic history video I know of is the following.

          • Taxes enable the government to move money around in the economy and taxes are a hedge against inflation But taxes have never paid for anything. Taxes make money disappear. There is no connection/interface between the IRS and the US Treasury. Pay your taxes in cash at an IRS office. Be sure to use paper money. They can’t shred coins and will not accept them. They shred the money. That is more efficient than trying to handle/store it. After all, it only costs 9.7 cents to print a $100 bill. And that is the expensive variety. Computer clicks do just as well at less cost. The idea that taxes “pay” to run the government is the biggest lie told by politicians and economists. Some economists are telling the truth. Check out MMT.

            • Your MMT depiction is mistaken, Charles. The protocol for cash handling by any government agency is described in Part 5 of the Treasury Financial Manual.



              Section 2040 – Making Deposits

              2040.10 – Deposit Reporting

              The agency must prepare an OTCnet Deposit Ticket, print it, and forward it to the financial institution along with the check or cash deposit. The deposit must reach the financial institution by its designated cut-off time. When creating an OTCnet Deposit Ticket, the agency must enter the voucher date (which shows when the deposit is created), not the date the agency expects it to arrive at the financial institution. Agencies must not post-date the voucher date, even if they are going to mail or send the deposit by courier. If the deposit arrives before the date entered on the OTCnet Deposit Ticket, the financial institution will not be able to confirm the agency’s deposit in a timely manner.

              Section 2050 – Designated FIs for TGA Deposits

              Agencies must deposit funds at their designated financial institution. Agencies must hand-deliver the deposits to their designated financial institution, or hire a courier or armored car service to make scheduled deliveries. Except as provided in section 2050.10, deposits must not be mailed to a financial institution. Agencies cannot make deposits at a Federal Reserve Bank.

              It’s long past time for MMTers, from Mosler and Kelton on down, to substantiate this shredding claim or renounce it. Federal Reserve Banks shred unfit bills, but only after crediting the reserve accounts of the commercial banks that deposit them.

  12. […] Web of Debt […]

  13. I confess I have never tried to pay my tax at an IRS office but I believed the MMT narrative because it is so logical and rational. Shredding would definitely be the most efficient way to deal with the issue. It would seem rather stupid to bundle the stuff up and haul it around when the federal government has, at its disposal, an essentially infinite supple of the stuff. I know bean counters would not agree but who has ever believed a bean counter knows anything about what is really going on?

  14. […] Ellen Brown writes for Web of Debt: […]

  15. […] This article originally appeared at […]

  16. […] beings are looted by asset-hole oligarchs literally by the trillions every […]

  17. […] beings are looted by asset-hole oligarchs literally by the trillions every […]

  18. Thank you Ellen for another insightful article. Faced with the full frontal impact of the collapse of its banking system, the tiny island state did the unthinkable: they stood up to other major and bigger nations captured by the banking interest and refused to socialize the losses incurred by its largest banks from wrong bets they made in the financial casino and put the banking executives responsible in jail. And now they are talking about a new monetary system to fix the problems once and for all. A recent report called the Sovereign Money System proposal commissioned by Iceland’s prime minister outlines the problems with our currently monetary system and proposes to reform (1) who should have the power to create money, (2) by how much, (3) where the new money goes and (4) how to isolate the payments system from investment banking. The report is a length 110 page but is a refreshing read. (I have summarized it into a 3 part series: Not sure if you have a chance to read it, and if so, whether you would like to comment on its merits and how it might work with the public banking concept you have been advocating.

  19. Perhaps land value taxation, in tandem with Public Banking, offers an additional, potentially paradigm-shifting, synergistic boost for societies around the world when focusing on real solutions:

    • The number of solutions are many but when people suggest them it reminds me of a couple of guys in front of a firing squad and one says to the other: “I’ve got a plan”.

      The entire political system has been taken over. We can’t change it by voting or by armed rebellion. Armed rebellion might have worked in the days when both sides used muskets but not now.

      Voting is an exercise in futility and I think most of us know this at some level.

      IMO the only hope we have is that the mid level officers will join us when the hunger comes and people go to the barricades. There is a precedent for this. It happened in East Germany not too many years ago.

      No one wants to hear the above and I don’t either but it is the only conclusion my analysis can support. Even then we might well end up with the same thing in the long run.

      I feel the long term solution is to work toward changing the operation of enterprises to transform them to the Mondragon model. It is the only large scale (an entire city) example of what Marx advocated. If we get busy today then maybe in a hundred years it just might happen.

    • why is the answer always more taxes?
      On land one does not really own it as property taxes are paid.

      Usury hurts the poor and middle class and some of the upper income. Look where that usury goes today – few people realize it, very few. If that usury were to come back to govt *and spent wisely* it would reduce income taxes. Less taxes = more money spent in local economies which would grow jobs.

      I see other options:
      Plan B is debt jubilee wiping out all debts and investments (stocks, bonds, retirements).
      Plan C is world wide currency with a revaluation of all fiat currencies. It could be SDR controlled by the elites.
      Plan D – kick the can down the road and force future workers to pay for the overspending and borrowing of today. I would call this child abuse..

      Here is one example of the oligarchy

  20. […] Ellen Brown Writer, Dandelion Salad The Web of Debt Blog April 6, […]

  21. Reblogged this on Kent's space.

  22. […] Web of Debt – by Ellen Brown […]

  23. […]   How America Became an Oligarchy   What Happens When You Hand Over Your Gold To The Bank Of England For “Safekeeping” […]

  24. […] How America Became an Oligarchy […]

  25. Reblogged this on necltr and commented:
    Needed (and available, but not publicized) information, but how do we get Congress to get us back to printing our own money? And how do we establish forty-nine more state banks?

    • after reading quite a few books I feel that the public needs to be informed as to what is happening.

      And the way to get the info out there is to insist on an audit at the federal reserve. And let the public see who owns the fed res, who is allowed to create money (ones and zeros), and who is actually collecting the interest on the house and college and car and plastic loans. In future elections make it a known point that we will NOT vote for anyone *regardless of party* unless they are for an audit at the federal reserve. This is NOT a party thing – this is a thing for the 99.99 percenters.

      • Auditing them will do no good. They keep their books correct at all times. It is the process that needs to be changed.

        • IMO an audit would show the public where the profits go.

          The way I interpreted web of debt and public banking solution – Public banking would be the taking of those profits.

          Some of what I have read are: creature from jeckyl island, shadows of power, secrets of the federal reserve, the own everything including you, leverage – how cheap money will destroy you, the politics of money, end the fed, and a few others. A lot of this comes down to whom is allowed to create money and should it be governments or private bankers.

          If anyone has read any of the books I mentioned I would certainly like to discuss them.

          I feel that this thread is a great discussion as the posters are putting on their thinking hats.

          • The process I referred to is how money is issued. You are correct that; is the big issue. At present the government issues coins and the banks issue currency and the Fed via the FOMC controls the quantity of money in the economy. That is the present process. The government should stop the process of borrowing money and pay off all who hold Treasuries. That has been possible since FDR ended the gold standard. The government should issue all money into the economy and control inflation as well. The Fed’s tools for controlling the money supply and inflation are very weak compared to the federal government’s power to tax and to spend. The Fed should be reduced to clearing checks and holding reserves for commercial banks.

            • agree with all that you said. I would add that congress has the power to change things. Congress is supposed to be representing the people in “a govt of the people”. This is not a democrat vs republican issue – its a people issue.

              Once again there is a bill to audit the fed in congress.

              If the working people who are paying taxes were to realize that if the policy were changed and their taxes went down a lot – they might be able to work one day less per week and have the same take home pay.

  26. […] How America Became an Oligarchy […]

  27. […] How America Became an Oligarchy […]

  28. […] VISAS SRAIPSNIS […]

  29. […] — source […]

  30. […] Source: […]

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