Tuesday, December 13, 2011

GOVERNMENT CAN NEVER HAVE A MONEY SHORTAGE


GOVERNMENT CAN NEVER HAVE A MONEY SHORTAGE

Marriner S. Eccles and the Federal Reserve Policy, 1934-1951

Eccles believed that the only institution that would be capable
of turning the [economic] cycle around was the government. In particular, he argued that only the federal government had the capacity to increase debt without going bankrupt. In his own words:

“If a man owed to himself he could not be bankrupt, and neither can a
nation. We have got all the wealth and resources we ever had, and we
do not have the sense, the financial and political leadership to know
how to use them.

We are trying to apply a theory of economy as
obsolete as the Ark. (…) If the Government in order to finance the
War [World War I] could spend billions of dollars in order to give
protection to life and property, and not have a single thing to show for
it when it is over but the destruction of the flower of the youth of the
nation, then certainly the Government is justified in supplying
sufficient credit or money to take care of the unemployed through
public works, or an unemployment wage or a combination of both”
(Marriner S. Eccles Papers, Box 74, Folder 2).


I first wrote this essay for my  Facebook Community page  -   Pax Village Voice. 

Sunday, November 13, 2011

Now Is the Time for an Economic Bill of Rights | Truthout


                 Now Is the Time for an Economic Bill of Rights | Truthout



Now Is the Time for an Economic Bill of Rights
Friday 11 November 2011
by: Ellen Brown, Truthout | News Analysis

We are beginning to understand that our money is not created by the federal government, but by banks. (Photo: photobunny / flickr)

Henry Ford said, "It is well enough that the people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning."

We are beginning to understand, and Occupy Wall Street looks like the beginning of the revolution.

We are beginning to understand that our money is created, not by the government, but by banks. Many authorities have confirmed this, including the Federal Reserve itself. The only money the government creates today are coins, which compose less than one ten-thousandth of the money supply. Federal Reserve Notes, or dollar bills, are issued by Federal Reserve banks, all 12 of which are owned by the private banks in their district. Most of our money comes into circulation as bank loans, and it comes with an interest charge attached.

According to Margrit Kennedy, a German researcher who has studied this issue extensively, interest now composes 40 percent of the cost of everything we buy. We don't see it on the sales slips, but interest is exacted at every stage of production. Suppliers need to take out loans to pay for labor and materials before they have a product to sell.

For government projects, Kennedy found that the average cost of interest is 50 percent. If the government owned the banks, it could keep the interest and get these projects at half price. That means governments - state and federal - could double the number of projects they could afford, without costing the taxpayers a single penny more than we are paying now.

This opens up exciting possibilities. Federal and state governments could fund all sorts of things we think we can't afford now, simply by owning their own banks. They could fund something Franklin D. Roosevelt and Martin Luther King dreamt of - an Economic Bill of Rights.

A Vision for Tomorrow

In his first inaugural address in 1933, Roosevelt criticized the sort of near-sighted Wall Street greed that precipitated the Great Depression. He said, "They only know the rules of a generation of self-seekers. They have no vision, and where there is no vision the people perish."

Roosevelt's own vision reached its sharpest focus in 1944, when he called for a Second Bill of Rights. He said:

This Republic had its beginning, and grew to its present strength, under the protection of certain inalienable political rights.... They were our rights to life and liberty.

As our nation has grown in size and stature, however - as our industrial economy expanded - these political rights proved inadequate to assure us equality in the pursuit of happiness.

He then enumerated the economic rights he thought needed to be added to the Bill of Rights. They included:

The right to a job;

The right to earn enough to pay for food and clothing;

The right of businessmen to be free of unfair competition and domination by monopolies;

The right to a decent home;

The right to adequate medical care and the opportunity to enjoy good health;

The right to adequate protection from the economic fears of old age, sickness, accident, and unemployment;

The right to a good education.

Times have changed since the first Bill of Rights was added to the Constitution in 1791. When the country was founded, people could stake out some land, build a house on it, farm it and be self-sufficient. The Great Depression saw people turned out of their homes and living in the streets - a phenomenon we are seeing again today. Few people now own their own homes. Even if you have signed a mortgage, you will be in debt peonage to the bank for 30 years or so before you can claim the home as your own.

Health needs have changed, too. In 1791, foods were natural and nutrient rich, and outdoor exercise was built into the lifestyle. Degenerative diseases such as cancer and heart disease were rare. Today, health insurance for some people can cost as much as rent.

Then there are college loans, which collectively now exceed a trillion dollars, more even than credit card debt. Students are coming out of universities not just without jobs, but carrying a debt of $20,000 or so on their backs. For medical students and other post-graduate students, it can be $100,000 or more. Again, that's as much as a mortgage, with no house to show for it. The justification for incurring these debts was supposed to be that the students would get better jobs when they graduated, but now jobs are scarce.

After World War II, the GI Bill provided returning servicemen with free college tuition, as well as cheap home loans and business loans. It was called "the GI Bill of Rights." Studies have shown that the GI Bill paid for itself seven times over and is one of the most lucrative investments the government ever made.

The government could do that again - without increasing taxes or the federal debt. It could do it by recovering the power to create money from Wall Street and the financial services industry, which now claim a whopping 40 percent of everything we buy.

An Updated Constitution for a New Millennium

Banks acquired the power to create money by default when Congress declined to claim it at the Constitutional Convention in 1787. The Constitution says only that "Congress shall have the power to coin money [and] regulate the power thereof." The founders left out not just paper money, but checkbook money, credit card money, money market funds, and other forms of exchange that make up the money supply today. All of them are created by private financial institutions, and they all come into the economy as loans with interest attached.

Governments - state and federal - could bypass the interest tab by setting up their own publicly owned banks. Banking would become a public utility, a tool for promoting productivity and trade rather than for extracting wealth from the debtor class.

Congress could go further: it could reclaim the power to issue money from the banks and fund its budget directly. It could do this, in fact, without changing any laws. Congress is empowered to "coin money," and the Constitution sets no limit on the face amount of the coins. Congress could issue a few one-trillion dollar coins, deposit them in an account and start writing checks.

The Fed's own figures show that the money supply has shrunk by $3 trillion since 2008. That sum could be spent into the economy without inflating prices. Three trillion dollars could go a long way toward providing the jobs and social services necessary to fulfill an Economic Bill of Rights. Guaranteeing employment to anyone willing and able to work would increase gross domestic product, allowing the money supply to expand even further without inflating prices, since supply and demand would increase together.

Modernizing the Bill of Rights

As Bob Dylan said, "The times they are a-changin'." Revolutionary times call for revolutionary solutions and an updated social contract. Apple and Microsoft update their programs every year. We are trying to fit a highly complex, modern monetary scheme into a constitutional framework that is 200 years old.

After President Roosevelt died in 1945, his vision for an Economic Bill of Rights was kept alive by Martin Luther King. "True compassion," King declared, "is more than flinging a coin to a beggar; it comes to see that an edifice which produces beggars needs restructuring."

King, too, has now passed away, but his vision has been carried on by a variety of money reform groups. The government as "employer of last resort," guaranteeing a living wage to anyone who wants to work, is a basic platform of Modern Monetary Theory (MMT). An MMT web site declares that by "[e]nding the enormous unearned profits acquired by the means of the privatization of our sovereign currency ... [i]t is possible to have truly full employment without causing inflation."

What was sufficient for a simple agrarian economy does not provide an adequate framework for freedom and democracy today. We need an Economic Bill of Rights, and we need to end the privatization of the national currency. Only when the privilege of creating the national money supply is returned to the people can we have a government that is truly of the people, by the people and for the people.



This work by Truthout is licensed under a Creative Commons Attribution-Noncommercial 3.0 United States License.

Monday, November 7, 2011

Bureaucracy for Begging


http://www.alternet.org/story/152988/the_moral_force_of_ows_is_tackling_the_devastating_war_on_the_poor?page=entire




Perhaps it is time to stop helping the poor. Perhaps it is time to help everyone. We need Social Security safety net to pay for food, shelter, and healthcare for both Homeless Joe and
Big-rich Joe. We don't need a Bureaucracy for Begging .

This isn't about deciding who is poor and who is rich. This is about deciding how to protect the essentials of life[food,shelter, and health care] for ever citizen of our Nation. This is about how to do it with efficiency and without excessive bureaucracy. This is about maximum Freedom of choice in every persons life choices without Government Big Brother Agency interference.

With my total Social Security Network, we would save all the money we spend on food assistance, rent assistance and medicaid. We would save the money we spend on the Bureaucracy for Begging. The System would not require weeding.

As for Money, there is no shortage. A simple extension of FICA from the current $107,000 maximum to all income would more than double the tax income. Adding an additional 3% to the contribution of employers would generate a huge amount. A 3% tax [tariffs] on imports of goods & service] is another possibility. Transaction tax on Banks or added value tax or a dozen other possibilities exist.

If you give the benefit automatically, almost 90% of the population will receive a benefit greater than the tax they pay for it. No one would be able to say I don't want to be taxed for a bunch of free-loaders. Even the very Rich who would pay more than they receive will still get the exact same benefit.

The whole system would just be a function of society . No one is means tested to ride on the Highway. The only difference is the size of your car. No one is means tested to have service from Police or Firemen. Only the value of what needs protecting is a variable. No one is means test to go to public School. Being rich just gives you more choice. And last but not least, by 2050 production of goods & service will be done by less than 40% of the available labor because of automation, technology, and robotics. The permanently unemployed will have to be sustained or Society will be unstable. Now is the time to begin creating a distribution system of life essentials .

Sunday, August 28, 2011

Evolution Questions Christianity - On Faith

Knowledge wins the Mind  slowly but surely

Observation of facts have overwhelmingly supported the validity of the Theory of Evolution. Evolution a  subject of Science - not religion. Conservative Fundamentalist Christians fight it by saying that it is an unproven theory. They like to point out that the majority of people are opposed to the Theory of Evolution. They fail to understand that Science is not proven or discredited by popular vote. Science is proven or discredit by the observation and testing validity of facts.

No Observation of Facts can easily discredited the Belief of the Faithful.  As long as Politicians are elected by popular opinion they often have a vested interest in supporting what is observably false.  One of the dangers of Democracy is that the people often decide that what they believe has greater importance than what Science knows.  

But on balance, I would rather let the majority of people make the mistakes than give power to the few that make mistakes. It is best for freedom that our ideas fostered by science can change over time. After all - the earth is no longer flat. In time Eden will no longer be Paradise Lost.

RSA Animate - Changing Education Paradigms - YouTube


Changing is Hard Stuff




RSA Animate - Changing Education Paradigms - YouTube




We need to stop education of the Group and start education of the Person. I know that my whole agenda rest on the concept that Society is an interdependent functioning group that depend on each other. I stress that the individual is not self sufficient but must depend upon the cooperative work of the whole group.



But the primary value of the group is to enhance and preserve the intrinsic value of the individual lives. All to often Society has promoted the Value of the group. The benefits of that emphasis is to reward a few at the cost of the many. All to often the lives of the individuals at the bottom of the power and economic spectrum are consider to be expendable. 

My philosophy is that every life has an intrinsic value that should be the first priority of the Group. Extraordinary performance and achievement should be rewarded with extraordinary reward, but not at the expense of the intrinsic value of each and every life .



I recommend this :
RSA Animate - Changing Education Paradigms
as a useful presentation of changing the way we approach education of the individual.
http://www.youtube.com/watch?v=zDZFcDGpL4U&feature=uploademail