Sovereign Debt Jubilee, Japanese-Style

Japan has found a way to write off nearly half its national debt without creating inflation. We could do that too.

Let’s face it. There is no way the US government is ever going to pay back a $20 trillion federal debt. The taxpayers will just continue to pay interest on it, year after year.

A lot of interest.

If the Federal Reserve raises the fed funds rate to 3.5% and sells its federal securities into the market, as it is proposing to do, by 2026 the projected tab will be $830 billion annually. That’s nearly $1 trillion owed by the taxpayers every year, just for interest.

Personal income taxes are at record highs, ringing in at $550 billion in the first four months of fiscal year 2017, or $1.6 trillion annually. But even at those high levels, handing over $830 billion to bondholders will wipe out over half the annual personal income tax take. Yet what is the alternative?

Japan seems to have found one. While the US government is busy driving up its “sovereign” debt and the interest owed on it, Japan has been canceling its debt at the rate of $720 billion (¥80tn) per year. How? By selling the debt to its own central bank, which returns the interest to the government. While most central banks have ended their quantitative easing programs and are planning to sell their federal securities, the Bank of Japan continues to aggressively buy its government’s debt. An interest-free debt owed to oneself that is rolled over from year to year is effectively void – a debt “jubilee.” As noted by fund manager Eric Lonergan in a February 2017 article:

The Bank of Japan is in the process of owning most of the outstanding government debt of Japan (it currently owns around 40%). BoJ holdings are part of the consolidated government balance sheet. So its holdings are in fact the accounting equivalent of a debt cancellation. If I buy back my own mortgage, I don’t have a mortgage.

If the Federal Reserve followed the same policy and bought 40% of the US national debt, the Fed would be holding $8 trillion in federal securities, three times its current holdings from its quantitative easing programs.

Eight trillion dollars in money created on a computer screen! Monetarists would be aghast. Surely that would trigger runaway hyperinflation!

But if Japan’s experience is any indication, it wouldn’t. Japan has a record low inflation rate of .02 percent. That’s not 2 percent, the Fed’s target inflation rate, but 1/100th of 2 percent – almost zero. Japan also has an unemployment rate that is at a 22-year low of 2.8%, and the yen was up nearly 6% for the year against the dollar as of April 2017.

Selling the government’s debt to its own central bank has not succeeded in driving up Japanese prices, even though that was the BoJ’s expressed intent. Meanwhile, the economy is doing well. In a February 2017 article in Mother Jones titled “The Enduring Mystery of Japan’s Economy,” Kevin Drum notes that over the past two decades, Japan’s gross domestic product per capita has grown steadily and is up by 20 percent. He writes:

It’s true that Japan has suffered through two decades of low growth . . . . [But] despite its persistently low inflation, Japan’s economy is doing fine. Their GDP per working-age adult is actually higher than ours. So why are they growing so much more slowly than we are? It’s just simple demographics . . . Japan is aging fast. Its working-age population peaked in 1997 and has been declining ever since. Fewer workers means a lower GDP even if those workers are as productive as anyone in the world.

Joseph Stiglitz, former chief economist for the World Bank, concurs. In a June 2013 article titled “Japan Is a Model, Not a Cautionary Tale,” he wrote:

Along many dimensions — greater income equality, longer life expectancy, lower unemployment, greater investments in children’s education and health, and even greater productivity relative to the size of the labor force — Japan has done better than the United States.

That is not to say that all is idyllic in Japan. Forty percent of Japanese workers lack secure full-time employment, adequate pensions and health insurance. But the point underscored here is that large-scale digital money-printing by the central bank used to buy back the government’s debt has not inflated prices, the alleged concern preventing other countries from doing it. Quantitative easing simply does not inflate the circulating money supply. In Japan, as in the US, QE is just an asset swap that occurs in the reserve accounts of banks. Government securities are swapped for reserves, which cannot be spent or lent into the consumer economy but can only be lent to other banks or used to buy more government securities.

The Bank of Japan is under heavy pressure to join the other central banks and start tightening the money supply, reversing the “accommodations” made after the 2008 banking crisis. But it is holding firm and is forging ahead with its bond-buying program. Reporting on the Bank of Japan’s policy meeting on June 15, 2017, The Financial Times stated that BoJ Governor Kuroda “refused to be drawn on an exit strategy from easy monetary policy, despite growing pressure from politicians, markets and the local media to set one out. He said the BoJ was still far from its 2 per cent inflation goal and the circumstances of a future exit were too uncertain.”

Rather than unwinding their securities purchases, the other central banks might do well to take a lesson from Japan and cancel their own governments’ debts. We have entered a new century and a new millennium. Ancient civilizations celebrated a changing of the guard with widespread debt cancellation. It is time for a twenty-first century jubilee from the crippling debts of governments, which could then work on generating some debt relief for their citizens.

_________________________

Ellen Brown is an attorney, founder of the Public Banking Institute, a Senior Fellow of the Democracy Collaborative, and author of twelve books including Web of Debt and The Public Bank Solution. She also co-hosts a radio program on PRN.FM called “It’s Our Money.” Her 300+ blog articles are posted at EllenBrown.com. <https://ellenbrown.com/&gt;.

300+ blog articles are posted at EllenBrown.com.

300+ blog articles are posted at EllenBrown.com.

54 Responses

  1. OK; FINALLY, two real solutions to the obvious mess of the “so-called” national debt which should have never been ! … My version would include separating out parasitic debt and cancelling/jubileeing it first and watch for any problems like inflation, counter-suits by malfeasants, etc. and then paying some of the rest, especially if the original investments were of the personal retirement type, even to the corporation level…if reasonable. Notice I’m not speaking about any actionable items for those investing against the constitutional general welfare of the nation nor article 1, section 8. paragraph 6…counterfeiting….YET !

  2. As if this was unknown all these years!
    It appears too simplistic. It may end up with the Japanese central bank becoming irrelevant?

    • And what would be wrong with that?
      Unless, of course, you enjoy your enslavement.

  3. 95% OF ALL NATIONAL DEBTS SHOULD BE ERASED!!!….. because NATIONAL DEBTS ORIGINATE FROM LENT OUR FICTITIOUS NON-EXISTENT CAPITAL made with ”fractional reserve banking”, and not out of REAL SAVED UP CAPITALS by pension funds and saving accounts. Consequently all interests calculated retroactively for the part of the NON-EXISTANT -VIRTUAL CAPITAL LENT OUT SHOULD BE ERASED…. or be repaid also with fictitious capital. For the loan part made out of real capital,the interests are legitimate.

    This controversial theory explained in detail in ECONOMIC ENGINEERING in our book CAPTALlessISM.com, by Dr. Anthony Horvath, would permit us to envision even the invalidation of 95 percent of all national debts that presently suffocate national economies on the basis that in reality these “alleged” loans were only nonexistent, valueless, Monopoly-game-type monies since there were no real capital reserves existing to lend out to begin with. These “virtual credit” creations by private banks to governments in reality were only make-believe loans on paper, because no real capital reserves were available in the banks to loan out. But nobody ever asked about their validity because people and governments were desperate for money. So everybody trusted this virtual capital because governments guaranteed the banks with our taxes. What was really “lent out” to governments was only AN INVENTED ARTIFICIAL COLLECTIVE TRUST SYSTEM, QUANTIFIED AND ACTUARIAL, IN A MONEY-LIKE SYSTEM DESIGNED TO SUSTAIN URGENT NEED FOR ARM PRODUCTION AND TO ASSURE THE TRADE EXCHANGES AND ALSO MAINTAIN A PRODUCTION/CONSUMPTION EQUILIBRIUM, AND GUARANTEED BY THE GOVERNMENT (i.e., taxpayers).
    Thank you for your opinion.

    • This is total rubbish. See my reply below for the reality.

  4. Ignoring the rather childish language in the comment above, can you respond to this, and Modern Monetary Theory’s approach to debt?

  5. In the Modern Money Theory government debt is not considered to be a problem. Michael Hudson wrote this.

    However, the one kind of debt we are not worried about is government debt. That’s because governments have little problem paying it. They do not need to balance their budget with tax revenue, because their central bank can simply print the money. On balance, the overall public debt rarely needs to be paid down. As Adam Smith noted in The Wealth of Nations, no government in history ever has paid off its public debt.

    Today, governments do not even have to pay interest on money their central banks create. (Think of the Civil War greenbacks.) Even for borrowing from bondholders, Treasury borrowing costs are now the lowest in history. As for the monetary effect of governments running budget deficits, there is little threat of commodity-price inflation. Price rises are concentrated where special interests are able to indulge in monopoly pricing and rent extraction.

    http://neweconomicperspectives.org/2013/03/government-debt-and-deficits-are-not-the-problem-private-debt-is.html

  6. Geez, so much misinformation!!! Government debt, or Sovereign debt, is a debt in the same way your deposit in your bank is a debt. To you it’s your asset, while in the banks its a debt because it owes it to you, to be refunded at your wish.
    Well, the Fed holds these bonds and treasuries on the investor’s account. The investors purchased bonds auctioned by Treasury and the interest they receive is a benefit provided as an incentive to buy. The interest costs are zero to the fed as it creates them from thin air.
    The whole scheme is a monetary operation, to soak up excess assets the private sector is not using. It’s also the safest place to park these assets, being guaranteed by the government.
    When the bonds mature the Fed refunds the sum to the investor. Or he can roll it over. The important thing is that the government does not use the money. It has no need of it.
    It’s amazing this is so misunderstood. People are fooled by the term “debt” which is just accounting terminology.

    • Hello my friend if according to you
      the U.S. PUBLIC DEBT OF 20 TRILLION DOLLARS ARE JUST AN ACCOUNTING TERMINOLOGY HOW DO YOU EXPLAIN THAT THE AMERICAN PEOPLE HAVE TO SLAVE TO REPAY INTEREST on mere accounting terminology BEFORE ANYTHING ELSE AT THE EXPENSE OF SOCIAL-EDUCATIONAL-HEALTH-CARE PROGRAMS. PLEASE EXPLAIN WHY GREECE HAS TO BEG HUNDREDS IF BILLIONS ON ITS KNEES because the I.M.F. wants GUARANTEES THAT INTEREST WILL BE PAID BEFORE PENSION ….. BUT THANK YOU FOR YOUR STIMULATING COMMENT … Dr. Anthony Horvath

      • Because the government creates the money to pay the interest at its central bank. Treasury bonds are issued so the central bank can adjust overnight interest rates. The tax payer is not burdened but it is a free giveaway do the rich and a better system should be found. Treasury bonds are a good risk free investment for pensions.

        Bill Mitchell, Professor of Economics

        Another shocking truth is that a sovereign government does not need to “borrow” its own currency in order to spend. Indeed, it cannot borrow currency that it has not already spent! This is why economists such as Mitchell see the sale of government bonds as something quite different from borrowing.

        When government sells bonds, banks buy them by offering reserves they hold at the central bank. The central bank debits the buying bank’s reserve deposits and credits the bank’s account with treasury securities. Rather than seeing this as borrowing by treasury, it is more akin to shifting deposits out of a checking account and into a saving account in order to earn more interest. And, indeed, treasury securities really are nothing more than a saving account at the Fed that pay more interest than do reserve deposits (bank “checking accounts”) at the Fed.

        MMT recognizes that bond sales by sovereign government are really part of monetary policy operations. While this gets a bit technical, the operational purpose of such bond sales is to help the central bank hit its overnight interest rate target (called the fed funds rate in the US). Sales of treasury bonds reduce bank reserves and are used to remove excess reserves that would place downward pressure on overnight rates. Purchases of bonds (called an open market purchase) by the Fed add reserves to the banking system, prevent overnight rates from rising. Hence, the Fed and Treasury cooperate using bond sales/bond purchases to enable the Fed to keep the fed funds rate on target.

        You don’t need to understand all of that to get the main point: sovereign governments don’t need to borrow their own currency in order to spend! They offer interest-paying treasury securities as an instrument on which banks, firms, households, and foreigners can earn interest. This is a policy choice, not a necessity. Government never needs to sell bonds before spending, and indeed cannot sell bonds unless it has first provided the currency and reserves that banks need to buy the bonds.

        https://www.ineteconomics.org/perspectives/videos/demystifying-modern-monetary-theory?p=ideas-papers/interviews-talks/demystifying-modern-monetary-theory

      • Dear Dr Horvath, you are a bit out of the loop! Have you explored MMT [Modern Monetary Theory/mechanics]? It’s all there. I just pass on the data. The $20 trillion is not a public debt. It is public assets stored on bond accounts in the Fed. It has zero relevance to other government spending.
        Here a brief introduction, 6 minutes, to get you started. Once you know you will feel embarrassed at what you have been saying up till now.

        Re Greece, its problem stems from giving away its monetary sovereignty. All its finances are in a foreign currency. This was a diabolically stupid decision. It’s paying heavily for that blunder now.

        • While there was some good info in that video, it was a clearly biased cheerleading piece basically saying that govt (US) and its econometricians can manage/optimize the economy via “Modern Monetary Policy,” and that those of us who aren’t economists should sit back and let the good times roll. Unless you happen to be one of the ones w access to that free “issued” currency, thing aren’t rolling very good. We poor currency users who have to work for a living are fucked via real inflation that doesn’t show up in govt published numbers, due to hedonistic deflators. This is the classic fatal conceit that Hayak warned about. I guess you’ll next tell me that the Great Recession would have been so much worse if not for the magic monetary policy of the econometricians funneling liquidity to Lloyd Blankfein and Jamie Dimon, and that the economy would have really suffered if their net worths had been allowed to fall. The idea that issued currency is somehow different from used currency is ludicrous. Only an econometrician could think that.

          • Excellent summation!

          • Well, “They” spent $28Trillion [yes 28Trillion dollars] on the banks between 2008 and 2010. What does that tell you?

            • Where did you get that number?

              • there’s a short video clip by W Randy Wray saying Congress couldn’t get the Fed to say how much it was. They got an FOI and the Fed produced a wad of paper with 29 thousand pages. Adding it up from 2008 to 2010 came to $29Trillion. I can’t locate that video at the moment unfortunately.

                • any “industry” (which produces nothing but debt for its own benefit) that needs this much support from the state should be nationalized.

  7. […] Ellen Brown Writer, Dandelion Salad The Web of Debt Blog June 27, […]

  8. Reblogged this on Dreams of Liberty and commented:
    The only thing stopping this from happening is the greedy elites…

  9. […] Sovereign Debt Jubilee, Japanese-Style […]

  10. Acontece que o Federal Reserve é um banco particular… não vai dar este Jubileu para o povo norte-americano… vai continuar a aumentar o débito do Governo, com responsabilidade para o povo pagar… sionista máfia khazarian articula desde 1913 tomar todos os ativos do povo… usam USA como braço militar para expansão de Israel e formação de Governo Mundial, controlado pelo”povo escolhido por Deus” para dirigir os destinos da humanidade… os não-jews (goyns) serão lacaios a seu serviço… benvindos à Nova Ordem Mundial, escravos !!!

  11. […] Sovereign Debt Jubilee, Japanese-Style […]

  12. […] Brown Global Research, June 28, 2017 Web of Debt Blog 27 June […]

  13. The National Debt: A THING OF BEAUTY.
    When a Monetary Sovereignty spends more money than that which it has taken out of its own currency circulation: it must “borrow” (as per US Constitution). This creates the debt of the entire sovereignty,that debt being in that currency.When a Monetary Sovereignty has a debt in its own currency that debt is a deposit in its Central Bank. The owner of the “Debt Deposit” may withdraw upon demand; however the owner then loses the protections and safety of the credit of the sovereignty.
    Debt is not a problem—INTEREST IS !
    Stop paying interest on bank reserves, and stop issuing Treasury bills and bonds with interest payments attached.
    Issue USTBB,(US Treasury Bearer Bonds @ 0%) allow the holders the safety of the American Dollar being held for them until they seek redemption.
    Then proceed to pay off the entire Federal Debt?
    $20 trillion of US Treasury Bonds @0% interest with a mandatory coupon of 1% redemption per year.

    • Nonsense. I have seen you bat with Rodger Mitchell. You just don’t comprehend reality economics. Perhaps you think it can blend with the mainstream, but that is a dead end.

      The debt [so called ] in the central bank is a] depositor/ investor savings and b] of no use to the bank as they do not use the deposits. They pay interest and that encourages investment. The bank only benefits to the tune of its monetary operations, because the deposited money is out of circulation at the time. The whole debt could be refunded to depositors in one day. It’s just a book keeping operation.

      • hello my friend again .. mind you,… you have stimulating comments and such interesting terminology. …. I guess we are all too dumb to understand YOU. Because, the gurus of the economy are losing me and 350 million other taxpayers with all their fancy terminology …explaining the necessity for private banks to create money instead of our government. Do they really expect us to believe that they are right, because we are jobless, eating less, spending less, going into debt, 7 million families lost their home, can’t pay for medical bills or the education of our kids, our children are facing an uncertain future with pollution and wars ….. while Wall Street Bank got 800 billion dollars in relief, and while our great-grandparents raised twelve happy, fat kids without welfare, without taxes, without insurance, and without a hair-raising national debt FOR FIGHTING COSTLY DISTANT USELESS WARS that seem to benefit only the military industry. …. WE now SEE PRIVATIZATION OF SOCIAL SERVICES AND the birth of CORPORATE WELFARE FOR WALL-STREET.. so please try to explain us that the exponentially increasing national debt is for the universal good of humanity. …. and please OFFER US A SOLUTION. not just accounting terminology, with all due respect for your opinion thank you for your comments

        • You didn’t watch the video, did you! I’m not responsible for your now arrogant ignorance. I did think you might be interested in getting understanding but now you are just guilty of ignorant ranting. It’s also not just ignorant but factually wrong, arse about.MMT is not a political movement. It just sets the economic rules as they exist already, mostly unrecognised by politicians and the media, and most of us.

          • my dear friend I did watch your video, I thank you for sending it. but hundreds of other videos contradict you, about the FED and the origins of national debt. (I only send you two). Maybe I am ignorant as you say, ,but you still lose me and 350 million Americans with academics, while 7 million lost their homes, tens of millions are jobless etc.etc. … With all due respect for your ideas, you don’t give solutions to the national debt, to the problems of our economy causing immense socio-political problems. So what do you think of these videos…? … and what do you propose to the world’s 800 million people going hungry every day ….. But in the mean time what do you think of these videos?

            (1) The Biggest Scam In The History Of Mankind – Hidden Secrets of Money 4

            Published on Oct 15, 2013
            Bonus Presentation here: http://www.hiddensecretsofmoney.com WHO OWNS THE FEDERAL RESERVE? You are about to learn one of the biggest secrets in the history of the world… it’s a secret that has huge effects for everyone who lives on this planet. Most people can feel deep down that something isn’t quite right with the world economy, but few know what it is.

            (2) History of the Federal Reserve Banking system. A privatized Bank.

            Published on Feb 10, 2016
            History of the Federal Reserve Banking system. A privatized Bank.
            Did Donald Trump say AUDIT THE FED? Truth about the Federal Reserve Bank. History of the Fed and History of the Federal reserve Bank
            History of Money Control, NWO Money and Global Stock Market Crash 2016. Where and how it all started.

            thank you again your comments and your critiques are welcome … as they force all us to look for solutions.

            • I know those videos. The one I sent you is the simplest basic one which covers most of the ground. Mike Maloney is partially correct, but he doesn’t understand that Government debt is not like we automatically assume. We need to be bankers to see it how they see it. WE are deliberately NOT informed. You are, like it or not, kept in the dark, so I don’t blame you for the errors you make.It’s that the PTB want you to think, so they can do all those nasty things to us that you write about.

              Here’s a more complete booklet for you to read. Let’s see if you can get it then;
              http://moslereconomics.com/wp-content/powerpoints/7DIF.pdf

      • Your words:”The whole debt could be refunded to depositors in one day.” Yes, but please tell me why OUR GOVERNMENT will collect from each and every one of us (taxes) every year for the next 20 years.
        Just to pay the INTEREST ONLY to China and Japan an amount
        of over $5 trillion and still have a debt of $5 trillion which is owed to them today.
        How ionic is it, when we hear.. “217,000 American will die because we will not help give them ‘affordable health care’, over the next decade.
        Maybe perhaps, 500,000 over the 20 years?
        BTW you should read the U.S. Constitution: When a Monetary Sovereignty spends more money than that which it has taken out of its own currency circulation: it must “borrow” (as per US Constitution). This creates the debt of the entire sovereignty,that debt being in that currency.When a Monetary Sovereignty has a debt in its own currency that debt is a deposit in its Central Bank. The owner of the Debt Deposit may withdraw upon demand; however the owner then loses the protections and safety of the credit of the sovereignty.
        Why is there a problem?
        SO where did we go wrong ?
        “Its the INTEREST, stupid.”
        A deficit that grows exponentially MUST over time destroy the quality and quantity of the currency.Period. One can not ignore this mathematical fact this fatal flaw. With no additional spending, while asleep at the wheel the present debt will go from $19trillion to $38trillion, then to $76trillion, to $142trillion…maybe then, perhaps your great-grand children will ask, “What were you thinking?” MMTers are correct that the debt NEED NOT be paid, but we must FIRST correct the fatal “exponential flaw.” READ: National Debt becomes money deposited in the Central Bank as US TREASURY BEARER BONDS at 0% Interest (USTBB) need only be paid on demand by each holder- there is no growth of debt.
        To those who “buy” the debt, it is really just a very safe savings account, identical to a bank CD but totally safe because it is Constitutionally guaranteed.
        EXACTLY, why China will not convert its $3.5trillion and be happy with USTBB – and we will no longer have to give them @ $200billion of new money. Nor would the 10%ers that hold this ‘debt’ wish to spend it (that would be ,perhaps, maybe a great boost of income for the 90%ers), or allow the banks to hold their lifetime saving, knowing that they will be subject to risk (they know how trustworthy they are with money.).

        • Have you read the US constitution? If you have it sounds like you don’t understand what it means. It nowhere says the government must borrow ITS OWN MONEY. In fact the government is given complete control over the currency, and that of course means an ignorant government can borrow to spend, but it’s an ignorant answer, same as putting in a debt ceiling.
          It’s all down to laws. The Constitution says one thing, the government can ignore it and do whatever it likes. However it’s not economics that causes this, it is POLITICS. All your complaints are pure politics. Economic arguments are abused to send the political message.
          My business is to relate the economics as reality says it works, like Rodger Mitchell and Bill Mitchell and everyone else who understands MMT. You haven’t separated the economic facts from political spin.

      • Your words: ejhr2015

        Have you read the US constitution? If you have it sounds like you don’t understand what it means. It nowhere says the government must borrow ITS OWN MONEY. In fact the government is given complete control over the currency, and that of course means an ignorant government can borrow to spend, but it’s an ignorant answer, same as putting in a debt ceiling.
        It’s all down to laws. The Constitution says one thing, the government can ignore it and do whatever it likes. However it’s not economics that causes this, it is POLITICS. All your complaints are pure politics. Economic arguments are abused to send the political message.
        My business is to relate the economics as reality says it works, like Rodger Mitchell and Bill Mitchell and everyone else who understands MMT. You haven’t separated the economic facts from political spin.
        My reply: “Have you read the US constitution? If you have it sounds like you don’t understand what it means. ” *** U.S. Constitution.
        ARTICLE . 1. ..SECTION. 8.
        “The Congress shall have Power …(A). To borrow Money on the credit of the United States;
        …(B).To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;
        The Congress shall have Power …(C).To provide for the Punishment of counterfeiting the Securities and current Coin of the United States;…”

        WHERE DOES IT STATE THAT INTEREST MUST BE PAID!
        WHY pay an unsustainable interest (taxation) on YOUR OWN MONEY?
        WHY pay China and Japan over $5 trillion Interest over the next
        30 years, simply because they wish U.S. to keep their money safe?

        • Taxation is not an interest payment. If you think that you are hopelessly lost, utterly out of the loop. I’m only interested in arguing with people who have some understanding. With you it’s a lost cause..

          • If you think that ,”Paying interest on your own money is Not ‘taxation’,
            “You are hopelessly lost.”

            • You Just can’t help yourself, can you? You have zero evidence for such a silly idea. Tax is a cost, with several uses for government. It doesn’t raise revenue, but it legitimizes the currency since it can only be paid in the government’s currency. It also regulates the money supply etc
              The government has no need of “interest” as it has total control of its currency and is not in the business of making a profit. It never uses its currency twice. Once tax is deducted it is taken out of service. It spends only new money, every time.

              • Dear ejhr2015,
                Why are you so aggressive in your comments to people who only try to offer some ideas as solutions to our economic problems out of control. I quote you below. We all appreciate your expertise and the information you provide us including (videos and publications) supporting your views. However, I don’t think you have the universal truths on economics. Instead of rebuffing participant people negatively, I challenge you publicly to offer YOUR SOLUTIONS for the exponentially increasing national debts, which paralyze the economies of most nations of the world. Whose interest payments to private banks suffocate all socio-economic programs, produce austerity, poverty, hunger and radicalization. We all need to put our ideas together for a harmonious solution, … respecting each other, We need SOLUTIONS before our 7 billion world population will kill each other or die of hunger. I thank you for your ideas and and even your criticism expressed with respect. … and we all wait for your SOLUTIONS.

                YOUR COMMENTS are a bit offensive and produce a negative effect in our blog in public discussion, please try to express your differences of opinion in a more acceptable manner.
                to Justaluckyfool
                ‘’…..You Just can’t help yourself, can you? You have zero evidence for such a silly idea…’’
                ‘’…..Nonsense. I have seen you bat with Rodger Mitchell. You just don’t comprehend reality economics. Perhaps you think it can blend with the mainstream,….’’
                ‘’…..Have you read the US constitution? If you have it sounds like you don’t understand what it means….’’
                ‘’….Taxation is not an interest payment. If you think that you are hopelessly lost, utterly out of the loop. I’m only interested in arguing with people who have some understanding. With you it’s a lost cause….’’

                To Dr. Horvath Anthony,
                ‘’….. This is total rubbish. See my reply below for the reality…’’
                ‘’….. Geez, so much misinformation!!! Government debt, or Sovereign debt, is a debt in the same way your deposit in your bank is a debt …’’
                ‘’……Dear Dr Horvath, you are a bit out of the loop! … Once you know you will feel embarrassed at what you have been saying up till now. ….’’
                ‘’….. You didn’t watch the video, did you! I’m not responsible for your now arrogant ignorance. I did think you might be interested in getting understanding but now you are just guilty of ignorant ranting. It’s also not just ignorant but factually wrong, arse about MMT….’’
                thank you all.

                • It’s very frustrating to have repeatedly to restate the evidence and its consequences. You for example have been told the facts of how currency works but you show less than a glimmer of comprehension!
                  When I say you are out of the loop, I am being very kind in my criticism. It’s still criticism, but very moderate. Your super sensitivity cannot protect you when you repeat without any understanding the same nonsense you started with. What sort of qualifications have you that give you the Dr identity? Does it empower you to spout ignorant thoughts, evidence free?
                  Your partner in ignorance, Justaluckyfool, is another who is unable to understand economics and I have seem him on Rodger Malcolm Mitchell’s site for years now always mistaken in his ideas, but obdurate in not learning anything. Hallmark of a Troll.
                  I accept that it can be confusing to hear the truth, so brainwashed are we by the vested interest groups with power to hand, but if you both were making progress, there would be no need to get angry responses.
                  We see you as trolls because you behave that way, and trolls like to cause angry responses. You have set yourself the task of proving you are not a troll, either of you.

                  • Dear frustrated ejhr2015, ENOUGH …!!! … we are not your students to be told off whenever our opinions don’t fit with yours… or even worst to be insulted. Who the hell you think you are, my friend? this is a public forum by Dr. Ellen Brown FOR PEOPLE TO EXPRESS THEIR suggestions. You take on the role of INTIMIDATING people expressing their views.your criticisms are welcome but not your arrogance. IF YOU WANT SOME CREDIBILITY ….. I HAVE ASKED YOU WHAT ARE YOUR SUGGESTIONS FOR THE NATIONAL DEBTS…if you don’t have any constructive suggestions then stop intimidating good-willing people expressing their views and … please ”shut up”

                  • “We see you as trolls because you behave that way, and trolls like to cause angry responses. You have set yourself the task of proving you are not a troll, either of you.”
                    ejhr2015, Is this a self description? Do you not recognize your own actions?
                    Both you and RM have a basic flaw…
                    YOU HAVE A BELIEF.
                    Indefensible because it is a belief… not fact.
                    You BELIEVE the US gov. can “print money”
                    but you do not know what “money” is.
                    Yes, it can ‘print’ unlimited amounts of ‘colorful paper’ out of thin air backed by a belief that it has value (only as long as there is faith
                    in that belief).
                    How strong is your faith?
                    Could you withstand $20 trillion in redemption for your goods and services being taken FROM you and GIVEN to others ?
                    (CHINA-over $3.2 trillion) (JAPAN- over $2.2 trillion)
                    ‘Forgettabout’ the banks and their 97% of the trillions in circulation!
                    This time may be different- No bank run; just a computer failure!!!!
                    READ THEN VERIFY.

                    • You are not a good humourist JLF. As humour all you can say is rubbish, a confusion of unrelated bits and pieces. Really you make no case, no sense. The only thing supporting a currency is faith in it and the government behind it. The fed can trade on it and spending $29 Trillion on bank bail outs actually strengthened the dollar. Now that’s faith!

  14. […] regarding Ellen Brown’s latest blog post (which I illustrated at the top), if you start with false premises, you will proceed through false […]

    • Both you and RM have a basic flaw…
      YOU HAVE A BELIEF.
      Indefensible because it is a belief… not fact.
      You BELIEVE the US gov. can “print money”
      but you do not know what “money” is.
      Yes, it can ‘print’ unlimited amounts of ‘colorful paper’ out of thin air backed by a belief that it has value (only as long as there is faith
      in that belief).
      How strong is your faith?
      Could you withstand $20 trillion in redemption for your goods and services being taken FROM you and GIVEN to others ?
      (CHINA-over $3.2 trillion) (JAPAN- over $2.2 trillion)
      ‘Forgettabout’ the banks and their 97% of the trillions in circulation!
      This time may be different- No bank run; just a computer failure!!!!
      READ THEN VERIFY.

  15. https://goo.gl/N4HCkS Take the Magic Money Tree Quizz. The recent General Election in the UK and SUppost agreement for the Minority Government has focused on the Magic Money Tree question. The MSM continues to scoff at Antio Austerity Social Policy claiming the money will run out, for 7 years the Chant has been the same. It is giving a great opportunity to challenge the Ignorance of money Creation processes.

    • I tried it, but was told False when I ticked yes to “only the BoE can create money”. In fact the false is WRONG. Other institutions create CREDIT not money. Credit takes money available from the BOE to deposit in the loan account.

  16. […] original source of this article is Web of Debt Blog Copyright © Ellen Brown, Web of Debt Blog, 2017 Post Views: […]

  17. Ellen, a question with a hope for a profound answer.
    What would be the end result for Japan if they were to purchase
    $100 billion of US Treasuries each month ?

  18. I Made these interactive Quizzes based upon the Positive Money Quiz By David Faraday
    https://www.quiz-maker.com/QYMG3AR

    and the money creation Survey of MP´s

    https://www.quiz-maker.com/Q4FBT85

    The degree of ignorance paraded constantly since the General Election and during by Both Tory and Labour MP´s is staggering.
    What are we to do with the Wilful ignorance of the political, Media and Economics So called Elites. The Poll Snack Quiz for the MP survey I made about 4 days ago and it has been taken 25,000 times, Some people are obviously interested. The quizzes are embeddable I made them for David Malone’s Web Site. He is trying to get Monetary reform back into the Green Party Manifesto 2015´s EC661 was dropped in the 2017 manifesto. http://davidmalonegreenpartycandidate.weebly.com/magic-money-quiz-answers-and-contact-form.html The Poll Snack Quiz is a drop down menu on the home page. Let me know is you want me to e mail you HTML or JavaScript to embed the quizzes on your own Blogs or websites. rogerglewis13@gmail.com

  19. […] Source Web of Debt Jul […]

  20. […] This post was originally published on Web of Debt. […]

  21. I urge you all to google “Money creation in the modern economy.” Click on the bank of England explanation. Page 2. When I go into a commercial bank (not the banksters in Wall St or other casino banks around the world) and take out a loan the bank credits my account. Now where did this “money” come from? It was created from nothing, an entry in a “Book” or an entry in an electronic accounting system. The money supply has just been increased by a private bank. When I pay it back (if I can) the money supply decreases. Why should private banks be in control of the creation of money? Why should not the state “create” the money supply? The banks can compete for this liquidity and agree to pay the state for this money and charge a small margin. It will mean the financial system will shrink and “money” will flow to what is the most important. I an a disciple of Prof. Steve Keen and at the risk of annoying him I advocate what he proposes. His book “Debunking Economics” should be the new General Theory of Employment, Interest and Money. Why have we all become slaves to private banksters? Failure to address this will lead to a resurgent in silly solutions like socialism.

    • I don’t think socialism is any sillier than capitalism–“the astounding belief that the most wickedest of men will do the most wickedest of things for the greatest good of everyone” (Keynes). Both are one-sided.

  22. Thr problem of debt is usury!

  23. […] Sovereign Debt Jubilee, Japanese-Style […]

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