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May 28, 2009 at 11:40:19
Promoted to Headline (H2) on 5/28/09:
The Way Out
by Richard Distelhorst
www.opednews.com
Here's a truly progressive proposal to reform the privately-owned,
debt-based monetary system. Two time presidential candidate
Congressman Dennis Kucinich (D-OH) will soon be introducing this
legislation which truly is the way out of recession and back to
prosperity. The following article summarizes the legislation and also
provides a link where the proposed American Monetary Act can be read.
THE WAY OUT
The primary cause of a recession is a shortage of money in the hands of
the American people, the way out of recession is to put more money in
their hands. Under the present monetary system this can only be done by
borrowing more and going deeper in debt. It is difficult for people
to understand that we have no money, instead we circulate bank-created
interest-bearing debt as a "substitute money."
The American Monetary Act takes three simple steps to correct this debt
problem.
(1) Incorporate the Federal Reserve Banks into the U. S. Treasury where
all new money is created by government as real money, not
interest-bearing debt, and spent into circulation to promote the general
welfare; monitored to be neither inflationary nor deflationary.
(2) Eliminate Fractional Reserve Banking in a manner that makes the
federal government the only entity with the power to create, issue and
regulate our money, as Article I, Section 8, Clause 5 of the United
States Constitution mandates.
(3) As the "debt-money" created by the privately owned Federal Reserve
System and the commercial banks disappears when debts are paid, it will
be replaced with real money spent into circulation to rebuild our badly
decayed public infrastructure, which includes roads, bridges, dams,
water and sewage plants, mass transit, schools, etc. It also includes
universal health care and education for all. This will create
millions of high paying jobs. Also a substantial stimulus check will be
sent out to immediately put money back in the hands of the American
people. We don't need to "get credit flowing," we need to get real
money flowing. All of this will be an interest-free, debt-free,
inflation-free dividend to the American people.
What the so-called "too big to fail" banks don't want you to know is
that all of their money was created in the form of debt, and when they
can no longer create more "debt-money" it will disappear as the debts
are paid or defaulted, which means we will have to replace their debt
money by spending real U. S. dollars into circulation. Then we will
finally get the benefits we should have received in the first place -
and all these benefits come without debt, without taxes, and without
inflation. It will be a permanent money supply, not temporary as the
present bank-created "debt-money" which disappears when debts are paid.
The real money we will need to spend into circulation to replace this
"debt-money" is literally trillions of dollars. And it all will appear
as a bonus or dividend for the people. This will be permanent money
with no debt or interest charges attached.
To allow this recession or depression to continue when the way out is
well known is inexcusable. The American Monetary Act IS the way out of
the present recession.
Click the link below to read the American Montary Act
http://www.monetary.org/
HERE IS HOW THIS "DEBT-MONEY" CREATION PROCESS WORKS - HOW THE FED AND
THE BANKS CREATE MONEY "OUT OF THIN AIR."
Step 1: The Federal Reserve Bank of New York "buys" assets, normally
government securities for sale on the open market, by creating the
"money" to buy them out of thin air, and, in the process, the big banks
are given, free of charge, an equal amount of new, so-called "reserves."
These "reserves" become the basis for a 10 to 33 fold expansion of
"debt-money" which will be loaned into existence by the banking system -
with an interest charge attached. We must all realize that, as
Congressman Kucinich says, "The Federal Reserve is no more Federal than
Federal Express." It is privately owned and controlled by the "too
big to fail" banks.
Step 2: Based on new "reserves" just created out of thin air and given
to the big banks free of charge, the banking system uses the Federal
Reserve's Fractional Reserve System to expand or multiply those
"reserves" by 10 to 33 times. These so-called "reserves" are
sometimes called "high-powered dollars" because of their multiplier
effect. The required reserve on demand deposits is presently 10% for
big banks and 3% for smaller banks. So, for the big banks, if they
received, for example, one million of new "reserves" just created out of
nothing by the Fed, they can create out of nothing, and loan out at
interest, ten times that amount. If and when any of these new
"reserves" trickle down from the big banks to the small banks, those
banks, with a 3% reserve requirement on demand deposits, can create out
of nothing, and loan out at interest, 33 1/3 times the amount of new
"reserves" just received.
That's the whole process as simply as it can be stated. The end
result is that, using the example of one million of new "reserves", our
people and their government and businesses are deeper in debt, interest
bearing debt, not one million dollars deeper, but someplace between $10
million and $33 million deeper. The more "debt-money" we have, the
deeper in debt we are.
The American Monetary Act eliminates this debt-based system and takes
back the power to create, issue and regulate our money. This
legislation is the way out of recession and back to prosperity.
The banking system presently holds over $7 trillion of deposits.
These are all in the form of interest-bearing "debt-money." When
banks can no longer create money and loan it into circulation with an
interest charge attached, all $7 trillion will disappear as debts are
paid or defaulted. But we need this $7 trillion in our economy, so
the government, under the American Monetary Act, will replace the
"debt-money" as it disappears with real U. S. money spent directly into
circulation as a tax-free, debt-free, interest-free dividend to the
American people.
HERE IS WHAT REPLACING $7 TRILLION OF "DEBT-MONEY" WITH REAL U. S. MONEY
OVER THE NEXT FEW YEARS CAN MEAN TO YOU AND YOUR COMMUNITY.
While the final decision on how to spend this $7 trillion will be made
by Congress and the President, here are some definite possibilities.
The dividend check and the program to rebuild the infrastructure are
the first two programs suggested by the American Monetary Act.
$825 billion to issue a check for $5,000 to every person on the Social
Security rolls, both those working and paying in, and those retired and
receiving benefits. This is as much as the whole Stimulus Plan passed
by Congress but, instead of borrowing the money, it is spent into
circulation as a dividend to the American people. $5,000 in the hands
of all American workers will go a long way towards ending the current
recession.
$300 billion to rebuild and improve the public infrastructure - schools,
bridges, roads and streets, water and sewage plants, mass transit, etc.
This will be $300 billion a year for at least eight consecutive years.
This money is spent, not borrowed, into circulation in replacement of
the old bank created "debt-money." Direct grants will be given on a
per capita basis in all 435 Congressional Districts. Here's what this
would mean in a city with a population of 27,000, a county with a
population of 40,000 and a school district with an enrollment of 4,100.
THE COUNTY: $7.4 million - an 8 year total of $59.2 million.
THE CITY: $13.5 million - an 8 year total of $ 108.0 million
THE SCHOOL DISTRICT: $8.2 million - an 8 year total of $65.6 million
That adds up to a combined $29.1 million a year - an 8 year total of
$232.8 million.
THESE ARE DIRECT GRANTS, NOT LOANS. Think how much the public
infrastructure and the economy of that city and county will improve with
these funds available.
You can figure how much your city and county would receive each year.
The formula used to distribute the $300 billion a year is: Your
City or town will receive its population times $505 per person. Your
County will receive its population times $175 per person. Your
Schools will receive $2,000 per student enrolled. And your State will
receive its population times $90 per person.
This program will put millions of people to work at high paying
construction and manufacturing jobs. Just the dividend check and this
program together will end the present recession and return us to
prosperity.
$300 billion to provide full employment for all at a living wage. The
government would become the employer of last resort. The living wage
would be $10.00 per hour plus health care benefits. This program
would be similar to the WPA (Works Progress Administration) and the CCC
(Civilian Conservation Corps) of the 1930s.
$100 billion to Save Social Security as it is and, at the same time,
exempt the first $25,000 of earned income from the 6.2% employee share
of the Social Security tax - resulting in a $1,550 pay raise for
everyone earning $25,000 or more a year. The current "cap" on
earnings subject to the Social Security tax is $102,000 per year. That
cap will be removed and the Social Security tax, like the
Medicare/Medicaid tax, will apply to every dollar earned (after
exempting the first $25,000).
Universal Health Care. We will finally have universal health care
like almost all industrialized countries in the world. We presently
pay 17% of GDP for health care and over 45 million people are not
covered. The other countries cover all of their people and spend 10%
of GDP or less. We're already paying for universal health care, we're
just not getting it. Legislation to do this has already been introduced.
It is the Conyers/Kucinich bill, H. R. 676.
$50 billion to guarantee a college education to all who meet specified
criteria, mainly that their grades indicate that they are serious
students. A well educated population is critical to the future of our
country.
Monetary grants to the states. Each year the Monetary Authority will
instruct the U. S. Treasury to disperse per capita grants evenly over
a 12 month period to the 50 states equal to 10% of the money created
under Title V the preceding year. The states will use these funds in
broadly designated areas of public infrastructure, health care and
paying for unfunded Federal mandates.
Last, but certainly not least, we will pay off the privately held
portion of our National Debt as it comes due. This is simply a matter
of replacing interest-bearing government securities with non-interest
bearing U. S. money. The portion of the current National Debt held by
the government will simply be cancelled. When we create, issue and
regulate our own money we cannot owe money to ourselves. Thus the
entire National Debt will be paid off, saving the interest charges now
paid to the holders of the national debt.
These are the kinds of benefits we can receive when, instead of letting
the privately owned banking system loan our "debt-money" into
circulation as interest bearing debt, we, instead, create, issue and
regulate our own money. In the process we receive the benefits we
would have received in the first place if we had always issued our own
money.
The American Monetary Act is the only way out of this recession and back
to prosperity. The time to pass it is now.
Dick Distelhorst, Chairman
Burlington, Iowa Chapter
American Monetary Institute
www.monetary.org
I am a veteran of World War II. I served with the First Marine Division
on Guadalcanal. My working life was in the supermarket field in the
executive area. My purpose in life now is to get our privately owned,
debt-based monetary system replaced. (more...)
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