GLOBAL MONETARY FORUM Newsletter                                   March, 2015                        

INTRODUCTION

For those who would hear it, this first issue of the Global Monetary Forum newsletter is, or represents, one of the most important things happening in the world of economic journalism this week. Why?  In these dozen pages, a dozen highly influential monetary experts – some with recent books on every Economics bookshelf and some with organizations making a stir among government leaders across the globe – here join as members of a united international movement.  Many forecasters predict a global recession this year will drag the US into it along with other advanced nations with much more painful senses of déjà vu.  This time, we have the makings of a political “perfect storm” in that patience has run out with what we all know have been past unnecessary mistakes in the financial system, unnecessarily uncorrected.   This time, our most aware and purposeful thinkers are no longer of a mind to tolerate what history shows us to be unnecessary debts and austerities in the face of increasing challenges to our basic securities in a time of climate change, multiple cases of infrastructure failure, global terrorism and the inability of the middle class to sustain its standard of living, let alone keep open the path to progress that makes a free economy work.  Those who jauntily suggest new austerities (Europe), taxes (Japan) and budgetary sleights of hand (the US)… so that ways can be found to lavish new payments on lenders for money the government can just as easily issue debt-free for itself… are not finding the same sanguine reception as in the past when they are encountered by monetary experts current in their field, increasingly aware politicians, and citizens who now know better.

In order to be prepared for the more focused questions now arising in this realm of public debate, let’s preview what the core of this debate will not involve…the old, casual throw-away lines: 

 

IT WILL NOT INVOLVE INFLATION.  In its simplest and most easily-implemented form, we have a proposition before us of using historically familiar government-issued rather than government-borrowed money to fund some or all of our already-approved budget deficits.  This would not involve governments spending one cent more and thus would not have any inflation-causing effect whatsoever. In fact, by generally accepted economic theory, it would limit inflation if our governments avoid raiding the capital markets.

IT WILL NOT INVOLVE WEAKENING OF OUR CURRENT CENTRAL-BANK SYSTEMS.  If the US federal government spends the same amount of money whether it borrows money it or issues it, then the Federal Reserve system can issue the same amount of money and credit either way, business as usual.  There are some who would like to ultimately reform the Fed using some or all of the ideas of the Chicago Plan, but we can solve enormous immediate crises today without making that part of the core debate.  As Scarlet O’Hara so well said in Gone With The Wind: “Tomorrow is another day!”

Government-issued money (United States Notes) were issued in the US from 1862-1971.  Canada’s version was last issued in 1974.  With the exception of a brief respite in the US during the 1990’s, both nations have endured increased peacetime debts ever since.  Who financially benefits from the selling of government debt paper?  In many cases it is the banks now licensed to create the government’s money “out of nothing” the way the government used to.  In other cases, it’s everyday bond sellers.  The tax-paying public gets no dividend, the way it used to, only ever-increasing debt burdens.  If we’re smart enough to see the present system for what it is, then we are smart enough to understand what the experts writing here point out is a way to escape what economics writer Ellen Brown famously refers to as the Web of Debt.  That is our view, but we welcome all future opinions and questions from any not-yet-persuaded readers as well as those quite ready to join forces and do it now.

Keith Rodgers, Editor, Global Monetary Forum Newsletter

E-mail:  KLRodgers1@aol.com    Tel.:  703-203-1680 (US)

                

GATHERED COMMENTS, SECTION I:  REGAINING BASIC FREEDOM

Comment of Prof. Timothy Canova

Timothy Canova, Esq., Professor of Law and Public Finance at Nova Southeastern University, has practiced law on Wall Street, served as an aide to Sen. Paul Tsongas and served on a committee on Federal Reserve reform.  His writings include publications of The American Prospect, Dissent, New America Foundation, Oxford University and others - see bio at https://www.nsulaw.nova.edu/faculty/profiles.cfm?pageid=361

“Central bankers today impose an austerity model that hampers governments from long-term investments and putting unemployed resources back to work.  Reforming central bank governance to include more diversity of perspectives and interests could prod these institutions away from the austerity path and allow elected governments to once again use active fiscal policies, such as public infrastructure and jobs programs.  But the central bankers claim that such strategies only add to public borrowing, thereby contributing to potentially higher interest rates and future sovereign debt crises.  One solution to this austerity trap is to break the monopoly of central banks in the issuance of currency by funding some government operations with money created and issued by treasuries and finance ministries — money that would not add a penny to public debt.  This is what President Abraham Lincoln did by issuing more than $400 million in U.S. Notes, the so-called Greenback, to pay the huge costs of the American Civil War and national economic development programs.  A century earlier, colonial Pennsylvania enjoyed 52 years of non-inflationary growth by issuing and lending its own currency into circulation, thereby financing major development of infrastructure without incurring debt or high tax burdens.  Adam Smith, in his classic work Wealth of Nations (1776), praised Pennsylvania’s success with government-issued money.  Such proposals have been introduced in Congress over the years, but Wall Street lobbying has prevented such legislation from getting out of committee.”

Comment of Prof. Steven Keen

Steven Keen is Head of the School of Economics, History and Politics at Kingston University, London.  He was formerly Professor of Economics at the University of Western Sydney.  For information on his 2011 book, Debunking Economcs-The Naked Emporer Dethroned? see http://www.amazon.com/Debunking-Economics-Revised-Expanded-Dethroned/dp/1848139926. He blogs at www.debtdeflation.com/blogs and is Chief Economist for IDEA Economics (www.ideaeconomics.org). 

 “Governments are one of the three institutions that can create money in our modern world;  the other two are private banks, and a country’s international trade position if a trade surplus is monetized by a country’s central bank. The latter necessarily sums to zero across the planet; private bank credit creation can be positive, but comes with the liability of increased private sector debt. By putting the entire burden of money creation on the private sector over the last 40 years, we have allowed private debt levels to grow to unsustainable levels. So yes we should consider the reintroduction of government issued money, since its absence in many ways helped contribute to the debt and austerity crises we now face.”

Comment of BILL STILL    

Bill Still (www.billstill.com) is a former newspaper editor, author, and documentary film director. He has written for USA Today, The Saturday Evening Post and the Los Angeles Times Syndicate, OMNI magazine. His latest book is titled: No More National Debt (2011). In 2011-12 he ran for the nomination of the Libertarian Party for President of the United States.

Yellen Maintains Confusion

There is a single central question that looms over the money system of every flavor of democratically-elected governance on earth – but it was not part of the discussion in the U.S. Senate Banking Committee interrogations of Federal Reserve Chairwoman Janet Yellen Feb. 25-26 in Washington.

In stark contrast to an excellent discussion by a few well-informed members of the British Parliament last November, the newly-elected Republican majority wasted little time transmitting the anger of their constituents towards the Federal Reserve Chair, but seemed clueless on the nature of the core problem as they attacked on three main lines that range from moderately-germane to inane.

Let’s start with least relevant of these lines:

1. Auditing the Fed

Ms. Yellen was well prepared for the Ron and Rand Paul line of thinking:

She deftly brandished a copy of the Fed’s audited financial statements before the committee to make the point that the central bank was already thoroughly audited annually by Deloitte & Touche.

Senator Rand Paul insists that there is much to be gained by allowing the GAO, the Government Accountability Office, to audit the Fed’s monetary policy and report to Congress.

I disagree.  Despite the fact that a few additional scandalous hand-outs might be uncovered, so WHAT? The numerous scandals uncovered from 2008 to date have brought no convictions of major bank players and will continue to have near-zero effect on the ONE CORE problem.

The Audit-the-Fed issue is one Senator Paul uses because it helps him raise money, when he knows it is as useless as rubber lips on a woodpecker.

2. Interest Rate Debate

This is the core of Central Bank monetary policy. The Fed has been holding interest rates at near zero for years. This floods money into the economy – but primarily one section of economy – the top 1%.

It’s been great for the stock market, great for the biggest banks; but not so good for the rest of us.

The problem is, this money is all being added as debt – interest-bearing debt. In a debt-money system where banks create all money as debt, raising interest rates will have a direct impact on the amount of money in the nation – greatly reduce it.

The Fed has done a pretty good job of keeping the public mesmerized by debate over this shady carnival trick, but underneath it all the debt is growing exponentially and so is the interest. This is a dangerous and ever-growing drag on the economy.

                                                                                                                                                               

Nothing the Fed can do will impact this underlying debt balloon significantly.

So, in the end, the monetary policy debate – is a non-sequitur at best – mere academic meat to keep the economics chattering class employed and diverted.

3. End the Fed

Ending the system of the Fed altogether is certainly the most germane of the three issues, but still woefully inadequately framed.

This, of course was Congressman Ron Paul’s issue.  To Ms. Yellen, this, or even any further expansion of Congressional oversight of the Fed’s monetary policy is the ultimate in crazy talk.  Even Republican Senator Bob Corker of Tennessee has criticized this as allowing Congress to meddle with monetary policy.

 

There are good arguments on both sides of this issue.  Giving Congress the monetary power gives them too much power to spend more to get themselves re-elected.  But continuing to leave this in the hands of the Fed is not the answer.

Truth is that the Fed is a private corporation.  Its only stockholders are the commercial banks. The Fed can never serve the interests of We, the People.  As a corporation, the Fed can only serve the interests of the banks, and that is exactly what they have been doing.

But here is the problem.  If you ended the Fed tomorrow, with what would you replace it? Some version of Congressional authority?   Would that fix the problem? No.

The Problem

The problem is too much debt – too much personal debt, too much corporate debt, and most significantly, too much government debt

.

Ending the Fed would cure none of this.

To the surprise of most, virtually ALL our national money is created as an interest-bearing debt. Banks create virtually all money when they make loans.  Banks do NOT loan money they have – they create money at the instant the loan is issued – quite literally out of nothing – out of thin air.  

Would ending the Fed end this practice? Not in a million years.

As Professor Milton Friedman explained to me upon reviewing my 1996 documentary, The Money Masters:

“If you end the Fed and do nothing about fractional reserve lending, you’ve done nothing.”

Why is the debt money system bad? Well, first, it is counterfeiting.  Counterfeiting national money is illegal.

Would ending the Fed stop the counterfeiting?

Second, the debt money system gives the banks the power to decide who wins and who loses economically. This is counter to the incentive-driven society we all know works best.

Would ending the Fed end this?

Third, in the case of lending to governments – sovereign lending – it gives the bond buyers (the majority of whom are the biggest banks and related financial entities) a subtle but powerful influence over all the carefully-separated powers of sound self-governance.

Ending the Fed would accomplish none of these necessary goals to effect true economic reform.

Nothing Radical

The solution is not radical. We need legislation to slowly increase debt-free, government-issued money into the system and gradually decrease bank-created money.

The necessary instruments are at hand. They are called U.S. Notes, as opposed to Federal Reserve Notes.

Fed Notes are created as an interest-bearing debt by banks buying government issued bonds.

U.S. Notes – are simply created without such debt and spent into existence by the government for the benefit of all citizens equally.

As we gradually change the ratio of U.S. Notes to Federal Reserve Notes over the years, we will eventually find a balance point – between the monetary powers of the Congress and those of the banks that will maximize prosperity equally for all our citizens – all nations, worldwide.

In short, eventually we must start talking about THE core issue of our time – the re-introduction of some portion of our national money supply as debt-free, government-issued U.S Notes, and eliminating the notion of sovereign debt all together.

Comment of Ellen Brown, Esq.

Ellen Brown is the founder of the Public Banking Institute and the author of 12 widely-read books including the classic Web of Debt.  One of America’s most influential writers on monetary and banking reform, her investigative articles have broken vital stories on banking and monetary practices throughout the global financial system.  Her web site is found at:   http://ellenbrown.com/

“Yes, the government should issue money -- and could do it without creating price inflation, up to the point of full employment. The Milton Friedman dictum that “inflation is always and everywhere a monetary phenomenon” is not true (or true only in the obvious sense that inflation is phenomenon involving money).  Adding money to the real economy -- as opposed to merely swapping it for assets on bank balance sheets in the sort of “quantitative easing” done today -- creates “demand”, which prompts the creation of “supply” to meet it. The shoe salesman blessed with new customers does not raise his prices; he clears his unsold inventory and puts in orders to the manufacturer for more shoes. The manufacturer hires more workers, who have more money to spend on other goods and services; and this demand too is accommodated by increased production.  The overall effect is simply to stimulate the economy.  Only when the economy is at full employment, or when resources or supplies are scarce, are prices driven up. Congress has the power under the Constitution to “coin” money (including trillion dollar platinum coins, if need be); but the amount is limited by the budget, which is determined by congressional vote.” 

Comment of Scott Baker

Scott Baker is Economics editor for Opednews, NY Coordinator for the Public Banking Institute, President of the Georgist advocacy group Common Ground (NYC), a participating scholar in the World Economics Association, and an advocate for monetary reform in TV, radio, web and print media.  His recent book, America Is Not Broke, is reviewed at http://bit.ly/1AjREpQ.

“Money should exist in sufficient quantity to meet the productive capacity of the nation.  If private financial entities won't create debt-money in sufficient quantities, then government must step in to create debt-free money. aka Sovereign Money, instead, as it has in the past such as with Lincoln Greenbacks, and as it is allowed to do under the coinage clause of the constitution, upheld by the Supreme Court in Julliard v. Greenman (1884).

Banks must convince us of the scarcity of money, or else we would not pay for the use of it.  But Congress and Treasury can create debt-free money at any time, for any reason, in any amount, and this new money need not be inflationary if it is used to create the things that represent actual wealth (e.g. infrastructure).

History shows it is government, not the private banking system, which has been the more responsible and least inflationary money-issuer. “

Comment of Prof. Ronald Davis

Ronald Davis is an Associate Professor at San Jose State University, teaching topics in management science and decision analysis which he has applied to the subject of monetary reform.  A detailed legislative proposal to re-introduce government-issued money including multiple modeling and policy integration procedures to safeguard against inflation are found on his web site, http://www.monetaryreform-taskforce.net/. 

“As soon as the Treasury Department would start reissuing debt free (and interest free) money, whether in the form of Legal Tender "greenbacks" or US Notes, or in the form of modern electronic bank account credits, there will be knee-jerk objections that this new government created money will be inflationary and should therefore be stopped.  Therefore, in order that the experiment with government created money be successful in the long run, it is necessary to couch the legislation providing for the reissue of debt free money within an institutional structure and a theoretical framework that will have as its purpose the prevention of inflation, or, what is the same thing, the stabilization of the purchasing power of the dollar. 

For this purpose we propose that a new Monetary Control Authority be created to set monetary aggregate targets as well as monetary creation rates for both the Federal Reserve System and the Treasury Department so that expected total money supply growth rates stay below upper limits chosen to keep inflation rates down to approved inflation tolerance levels.  This new institution would be comprised of experts who are independent of political pressures as well as insulated from the private profit motive, so that they can make recommendations based on the premise that their purpose is to promote the general welfare by stimulating employment and real growth while keeping inflation within explicitly stated limits. 

These monetary authorities will make informed policy decisions supported by the results of scientifically constructed and empirically validated optimal control models that include the "inflation prevention inequality" presented in my white paper that is derived using the methods of calculus.  For more details on how money creation policy can be put on a scientific basis guided by the twin economic goals of full employment and stable prices, go to monetaryreform-taskforce.net. “

GATHERED COMMENTS, SECTION II:  POTENTIALS TO GO FURTHER

Comment of Ben Dyson

Ben Dyson is the founder of Positive Money, a rapidly-growing monetary reform group based in the UK and active internationally.  His bio is found at www.bendyson.com/about/, which includes a link to the Positive Money web site.  He has co-authored the highly influential book, Modernizing Money, about which information is found at https://www.positivemoney.org/modernising-money/.

“To the question, ‘Under any set of limitations or restrictions, should we consider the re-introduction of government-issued money? ‘:

Yes, we should urgently re-introduce government-issued money. The creation of money through Quantitative Easing shows that the government can create money. However, this money was wasted when it was injected into the financial markets instead of being injected into the real economy. As a long term measure, Positive Money argues that the power to create money should be removed from the banks that caused the financial crisis, and transferred to a democratic, transparent and accountable body that works in the public interest. Banks would still exist, and would still make loans, but they would not have the power to create 97% of the money we use. This would prevent future debt-fueled bubbles and remove the need for taxpayer funded bailouts. In time, this change would lead to a significant fall in the amount of household debt, a smaller (and less dangerous) banking sector, and the direction of more money into the real economy rather than financial markets and bubbles. If money is power, then should we really leave that power in the hands of the large banks?”

Comment of Uli Kortsch

Uli Kortsch, German-born international finance expert and president of Global Partners Investments, Ltd, is a director of Real Money Economics, a research and advisory initiative growing out of a 2013 Global Interdependence Center sponsored conference attended by a group of leading economists titled Fixing The Banking System For Good.  He compiled the proceedings in The Next Money Crash and How to Avoid It.  See http://www.amazon.com/dp/1491739509/ and http://realmoneyecon.org/

Infrastructure Without Debt

President Obama said ‘infrastructure’ five times in his 2015 State of the Union address.  Both sides of the aisle continue to acknowledge capital underinvestment in U.S. infrastructure and tout the importance of capital investment in U.S. infrastructure.  To date, legislators and the president have been unable to agree on long-term federal transportation funding. (Wells Fargo Securities, Municipal Securities Research, 01-26-15)

1.       Explanation

Treasury (not the Fed) would issue money value-matched to the cost of infrastructure construction and repair, both federally and by direct payment for states’ infrastructure projects.  This has multiple advantages over our current system: (a) this is money not originated through debt-matching issuance as 100% of our money currently is, (b) it is value-matched to real production, (c) it is controllable in real time, versus the current system’s long lead times (up to two years) by varying the aggregate money supply through Fed interest rate changes, and (d) it is counter-cyclical, meaning that it will reduce the swings of the business cycle creating a more stable national production.

2.       Political Aspects

a.       The title is a simple and easily understood phrase.

b.      It provides jobs and GDP growth.

c.       It does not increase the federal debt and will decrease the deficit

d.      It backs onto a previous congressional bill introduced by Rep. Ray LaHood, who later became Pres. Obama’s Sec. of Transportation, in spite of being a republican.  The bill had more than 20 co-sponsors from both sides of the aisle.

e.      The unions would be in favor of this bi-partisan initiative

f.        The governors would back this in a heartbeat as it would fund many of their infrastructure funding needs

g.       It is broadly known that QE was used to help get the general economy back on its feet after the 2007/2008 Great Recession.  What is less understood is that this was the biggest cause of the increase in inequality in about 100 years.  The general population “feels” this and is angry.  Here is a “QE-type” program which will go toward reversing some of this as the effects will benefit all, especially the middle class.

3.       Infrastructure Aspects

a.       These benefit all residents

b.      Provide long-term growth and efficiency aspects to the national economy

c.       The American Society of Civil Engineers has given the US a grade of D+ for deteriorating infrastructure

d.      “Infrastructure” needs to be carefully defined so that money does not get splashed around carelessly.  Specifications would need to include suggested items such as:

                                                               i.      Overhead limited to 5% of each project;

                                                             ii.      Copayment by state/municipality of 20% of each project to minimize profligacy.

4.       Economic Aspects

a.       100% of the money would be matched to infrastructure value instead of the current system in which it is all issued through the creation of debt.

b.      This action would naturally become a teaching session on how money is created, what the negative aspects of the current system are, and what better methods can be used to stimulate and stabilize our economy.

  c.       The amount of money issued would be automatically limited to a small part of the $18 Trillion economy, so limiting the overall impact

d.      It would provide good academic study material for further actions

e.      We have a unique time window now to enact this due to the QE programs during which the Fed created $3 trillion worth of reserves.  If desired, up to $3 trillion could be matched by this program and the Fed could sterilize these funds through the sale of its currently enlarged portfolio of paper assets by selling these back into the market.

f.        Our economy continues to exhibit strong deflationary properties making this action easily sustainable for the next several years.

5.       Actions

a.       For questions and further input please contact Uli Kortsch at ukortsch@global-partners.com

b.      For a more detailed discussion of the principles behind this approach, read my book: The Next Money Crash—And How to Avoid It

Comment of Prof. Nicolaus Tideman

Nicolaus Tideman (PhD, Chicago) is a professor of Economics at Virginia Tech.  He started his career as an Assistant Professor of Economics at Harvard, served as Senior Staff Economist of the President’s Council of Economic Advisors and served as a consultant at the Bureau of the Budget and at the Treasury’s Office of Tax Analysis.  At Virginia Tech since 1973, he has published some 100 articles and the book, Collective Decisions and Voting:  The Potential for Public Choice.      

“There are two main areas in which monetary reform is needed.  The first is to end fractional reserve banking.  Fractional reserve banking leads to instability as banking fluctuate in their beliefs about the levels of reserves that they need.  It also misleads customers who commonly do not understand that they cannot all retrieve the money they put in the bank.  It leads to systemic risk when bankers make correlated errors, as with the sub-prime mortgage crisis, generating a combination of massive failures and costly bail-outs.  We need to require that money that banks accept either stays in the vaults or is invested in mutual funds, so that banks simply cannot fail and money deposited in a bank account really is in the bank.

We should also reform the way money is created.  Now money is created predominantly by the loans that banks make.  This source of money creation would be eliminated if fractional reserve banking is ended.  While money could instead be created by governments, replacing taxes and borrowing, I favor a system in which money is created by having the central bank (the Federal Reserve Bank in the U.S.) lend money to all taxpayers.  These loans would be partly a uniform amount of all taxpayers, and partly "tax-deferral" loans that would have a magnitude of a specified fraction of the taxes that the taxpayer had paid over a period such as the last five years.  The use of this mechanism for money creation could be expected to make long recessions a thing of the past, since stimulation of any desired magnitude could be instantaneous.  It would also permit the money supply to shrink in a reasonably comfortable way, when necessary, by telling taxpayers, with some notice, that they would be required to make additional repayments on their tax-deferral loans.”

Comment of Kaoru Yamaguchi

Kaoru Yamaguchi (PhD, Economics - Berkeley), is the Director of the Japan Futures Research Center, which is devoted to policy development for a more complete economic recovery in Japan.  He has served as a professor at the Graduate School of Business, Doshisha University, Kyoto, Japan and has developed new macroeconomic models based on accounting system dynamics for monetary reform (which are available from his Web site: www.muratopia.org).

“The current monetary and financial system is not working, and is indeed heading toward a dead end (or, as we might say, ‘debt end’!). 

 To address our current dilemma, Lord Adair Turner, former chairman of the UK Financial Services Authority, has written of ‘overt money finance’ (OMF) in his paper: Debt, Money and Mephistopheles, Occasional Paper 87, May, 2013, by the Group of Thirty, Washington, DC.  The Group of Thirty is a core supporting group of the current financial system.  OMF is similar to the Chicago Plan monetary reform in 1930s suggested by eight University of Chicago economists,

Prof. Irving Fisher of Yale and others, except that it would not go to the extreme 100% reserve system as the Chicago Plan did.

In action, the OMF plan would be like running water from two faucets; a government printing faucet and bank faucet of credit creation. Accordingly, it could over-flood the economy, if implemented.

Yet, Turner played the important role of bringing the Chicago Plan of monetary reform out of the “taboo box”.

Comment of Prof. Mark Joób

Mark Joób (PhD, Zurich) is an Economics Professor at West Hungarian University and a Researcher at the University of St. Gallen, Switzerland, Institute for Business Ethics.  He is a co-founder and member of the managing committee of the Swiss Association for Monetary Modernization (MoMo), and co-author of the Swiss Sovereign Money Initiative launched in June 2014. His summary "10 Reasons for Reforming the Current Monetary and Banking System" can be found on his web site: www.joob.org    

Sovereign Money, Democracy and Private Property

With evermore complex regulations, governments have been trying to compensate for the fact that electronic money is outside their monopoly on issuing money. These regulations consist of the fractional reserve system, deposit insurance and equity rules (Basel I-III).  Instead of establishing a transparent, well -ordered system, governments are attempting to straighten out the existing bad system with a multitude of rules. The results have been modest.

Now, only cash is legal tender for all of us except banks.  In contrast, electronic money is only a substitute for money, a legal promise to pay the bank customers cash on demand.  If bank customers deposit cash in their accounts they exchange legal tender for private substitute money.  In other words, they lend their money to the banks and their money becomes the possession of the banks.  The credit to their accounts is nothing but a confirmation by the banks that they owe the customers that amount of money.  So there is a fundamental legal difference between electronic money and cash.

It is clear from this background that the replacement of cash by electronic money is not simply a question of technical development.  Ninety percent of the money circulating in the economy is electronic. This undermines private property and therefore our individual autonomy.  It also undermines democracy, our collective autonomy.  Electronic money gives the banks power over our private and government finances. The keywords are indebtedness and "too big to fail". These are dangerous tendencies.

This is exactly what the sovereign money concept wants to change.  We want electronic money to be declared legal tender and remain in the possession of the bank customers.  Thus a sovereign money reform would strengthen private property.  We also want the central bank to have the exclusive power to issue electronic money as it has the monopoly over the issuance of cash today.  This way the monetary system could serve democracy and the common good with the possibility of reducing national debt and financing the social safety net.

For further information see:  http://sovereignmoney.eu/chapter-1-intro-to-cnm

GATHERED COMMENTS, SECTION III:  FOSTERING A PUBIC DEBATE

Comment of Prof. Richard Striner

Richard Striner, Professor of History at Washington College, is an authority on the history of government-issued money.  His ten books include Lincoln’s Way:  How Six Great Presidents Created American Power, which deals with the history of the Greenbacks.  His latest book, How America Can Spend Its Way Back To Greatness:  A Guide To Monetary Reform, is described at:

 http://www.abc-clio.com/Praeger/PrintProduct.aspx?pc=A4804C

Statement by Richard Striner

Those of us who understand the possibilities of government money-creation are revolutionaries.

We can see and understand things that other people don’t, which puts us for a while on the margin of things until we find ways to teach what we know.  And it appears to me at this point that the advocates of our method in America are far behind their British and European counterparts in this respect.

As an American, I find this distressing.  So I devote some time in my forthcoming book How America Can Spend Its Way Back to Greatness to the issues of advocacy.  Here in the United States, a great many of the transforming movements in our history —— both good and bad —— achieved their political power over time through a fundamental and indispensable method:  grass-roots organizing.  The anti-slavery movement, the labor movement, the civil rights movement arose through the work of gifted mass-organizers who fanned out and brought their ideas, their proposals, their methods, their strategic concepts to people in different walks of life. 

In our own day and age, reformers often turn to the digital media.  That’s fine, but only up to a point.  When the subject matter is monetary reform, the overwhelming challenge is teaching:  intelligent laymen need to

have the subject explained.  And for this purpose there is no substitute in my opinion for a hands-on

workshop.  YouTube performances are all very well, but they can never be as good, as definitive, as convincing as face-to-face encounters through which spontaneous questions can elicit targeted answers.

So in my book I challenge America’s philanthropic super billionaires:  I challenge them to get out their checkbooks and fund such a movement.

We advocates of monetary reform understandably debate with each other to a certain extent since we represent different schools of thought.  But there are certain things we all have in common.  One of them is our common commitment to the principle of state-issued money.  But there’s something else that we obviously share, something almost as basic:  a desire to change the course of history.

And I lay it down as a proposition that to change our world we must find a way to enlighten (and energize) the better part of populations.

Without that, all the theoretical, conceptual, and legislative action in the world will simply go in circles.

CONCLUDING REMARKS

There is an apt expression - “stand up and be counted.”  It applies even to those not yet arrived at a position on the core issue discussed here.  Consider the alternative:  Behind closed doors, Congress is being lobbied every day about how “hard choices” must be imposed on our still-struggling real economy so that payments can be made for government-borrowed rather than government-issued money…money to fund every penny of the budget deficit Republicans as well as Democrats have voted into place.  Those of us who have walked down the halls of Congress a few times and seen the aftermath of confusion left by those lobbyists cannot help but be aware of the reality of their presence, nor who really plays that role these days.  But the world is not comprised only of faceless people quickly darting away to shun civilized discussion.

Because of such groups it took centuries to outlaw slavery even when it made no economic sense for society at large, and it took 50 years to get seat belts installed in cars for allegedly “economic” reasons.  The elite could have changed things, but they so often didn’t say a word.  When Michael of Edwardian Downton Abbey is killed in a car crash at the end of one episode, do we consider it unrealistic that the gentry of the house don’t passionately discuss the need for seat belts in the next?  No, we see the depiction of their reactions as completely authentic.  Is it that because they are so much like us, or because we so aspire to be like them?

Those who have written here do so out of concern for the public good. They are the graying William Wilberforce’s and the young Ralph Nader’s of our day.  It is right for them to know that they are reaching their colleagues rather than an unknown void of cyber-space.  There is, therefore, a practical reason for asking our readers to respond by affirmatively requesting to be put on the regular mailing list for this complimentary newsletter.  We invite our future readers to respond with questions or comments, noted as for sharing in print or not.  Our contact information is provided on the first page of this newsletter. -Ed.