“As goes California,” says the adage, “so goes the nation.” All eyes are therefore on the Golden State as it attempts to solve its $26 billion budget deficit. The world’s eighth largest economy is not going quietly into that pit of debt and devastation that has devoured Third World countries whole. The State’s voters have drawn a line in the sand against further tax hikes, while Democratic leaders have drawn a line at further cuts in services or selloff of public assets. State legislators are deadlocked, caught between the rock of tax ceilings and the hard place of debt limits.

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10 Responses

  1. This is an excellent idea. It could work, but it would probably be necessary to educate the masses so that they could be more responsible. It is high time that ‘the People’ become more educated and responsible for themselves instead of wasting their lives away watching “American Idol” and other useless garbage masquerading as entertainment on the media airwaves. The truth is out there, but you’re going to have to expend some energy to find it. And NO, it’s not on CNN or ABC News…

  2. Brilliant Ellen! Simply brilliant. Unfortunately it will go right over the heads that most need to understand the concepts you present. That probably includes the California legislative and executive leaders, including Schwarzenegger.

    That is too bad, because there are several ways California, or any state (ND is already doing it) could and should create their own debt-free money. Regardless of whether it is called an IOU, promissory note, legal tender, bills of credit, or receipts or claims against the existing or future wealth of the state and its assets/goods/ services/resources, the state as well as the federal government should and does have the power to create money.

    To argue otherwise is to defy logic and reason, much of which you have advanced in your excellent article. It is not logical that a state would have the power to grant corporate charters to private entities that it would not first possess unto itself. Since banks chartered by states are given the power to create debt-based money, then the states must first possess that power themselves.

    And you are also correct on the historical count, that the states had the power to create (coin) money prior to delegating that power to the US Govt. Since the USGov gave that most sovereign and awesome power away (so they could borrow it back at an enormous cost to taxpayers) the states have every right to insist on taking back that authority. In the alternative, they have the right to insist that the USGov take back its own right to create money. That right and all such rights were delegated up to the states and national governments by the people.

    The US Constitution is now being “interpreted” in ways that dismantle its original democratic intent to empower the people through properly representative government. Instead of a government of, by and for the people, we now have one of/by/for the international central bankers and their multinational corporate offspring.

    The only real issue now is whether we the people can reclaim our democracy and make it truly representative or not. Is our government going to continue to serve the special interests of the bankers and corporations, or is it going to serve the interests of the people, or the common good?

    For one, I am outraged that the future of our children is being mortgaged by the international central banksters. Person by person, community by community, state by state, we are going to have to reclaim our rights, and assume our responsibilities as free citizens, or we will surely lose our cherished freedoms.

    What is now happening in California will have great import for the rest of our nation, and the world.

    Thanks for another excellent article, Ellen.

  3. I’ve sent this article to my state rep here in NC. He gets a little pious sometimes invoking the need for austerity, as though this were our sacred duty to god & country…..and all the pious bond holders. Suffer my little children……it is god’s will.

    People are all too willing to accept this harsh judgment of the lord. There was no revoluti8on in the 30’s because this country is so adamantly religious. We are good, honest peasants at heart…… or else membes of the class of duplicitous, vicious oligarchs. What ever happened to the middle class?

    Ellen keeps refining her argument, scrupulous attorney that she is, and it just keeps getting better and stronger, and one day history will anoint her Queen of the Middle Class!

    • Thanks Joseph! Queen of the Middle Class — okay!

      • One question, Ellen….I mean, your majesty…if the state bank of ND has not created inflation for their economy, why do you anticipate inflation from your proposal for CA?

        • “Ellen” works for me! I don’t anticipate inflation, particularly not now, when no amount of “quantitative easing” seems to be working to pull us out of the deflationary hole the collapse of the shadow lenders has put us into. And I was only talking about rolling over the loans indefinitely without paying them back. North Dakota I think is careful to use its loan money only for productive projects — agriculture, alternative energy, education. If the money is put into income-producing projects (such as energy generation), inflation does not result because the income can be used to pay off the original loans. Even if there is no immediate and obvious income (as with education), the money comes back to the state eventually in the form of more taxes paid by people earning higher salaries (as with the GI bill), and in greater productivity generally. Arguably, ideally, you could eliminate the taxes and still not get an inflationary result, if the loans were used to increase goods and services, causing “supply” to go up along with “demand.” What WOULD be inflationary is for the loans to be used for speculative purposes — “money making money” without producing real goods or services — as we often have with the private banking system today.

      • It’s a tough job Ellen, but someone has to do it. Thanks for stepping up to the plate.

  4. Unless Ellen or anyone else should think that my remark about her being “queen of the middle class” is flippant or demeaning in any sense, I should say it is not at all.

    Instead of “queen”, maybe “savior pf the middle class” would be more accurate. EHB’s proposal is a populist financial solution, as was the state bank of ND, when it was initiated.

    In its day, populism was a movement primarily in rural America, where most Americans lived. That is no longer true, of course, but it is true that most Americans today regard themselves as “middle class”l, even if they only aspire to that status.

    A populist movement today is a movement to protect and expand the middle class, the middle ground between poverty and extreme wealth. The middle class is under attack. by the class of the very wealthy and it is shrinking.

    It can only be nurtured and expanded with a populist economics.. EHB is tireless in her efforts to bring about a true populist financial system, one that will permit more economic justice than we currently enjoy, one that serves the needs of the greatest number of the people, not the elite minority of “money changers”..

    The middle class is a wonderful place to be. It is America’s gift to the world. because it was created first in this country. It is currently being betrayed. EHB has the solution that can save it..

    So maybe “messiah of the middle class” would be better! 🙂

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