I’ve been sort of mulling things over concerning our current economic state of affairs and reading some blogs. I came across this piece by Stephen Zarlenga co-founder of the American Monetary Institute concerning some legislation being introduced, for the second time, by Rep. Dennis Kucinich to make some much needed reforms in our monetary system. To reduce our debt and improve our jobs outlook.
The basis of the bill are three essential monetary measures proposed by the American Monetary Institute in their American Monetary Act (AMA). The AMA’s recommendations are based on decades of research and centuries of experience; are designed to end the current fiscal crisis in a just and sustainable way, and are aimed to place the U.S. money system under our constitutional system of checks and balances.The three essential measures include:
- Moving the mostly private Federal Reserve System under the US Treasury Department. The Fed would no longer be a virtual fourth branch of government, unaccountable to the public. Their important financial research functions would continue. But the Fed would no longer make unilateral monetary policy decisions beyond the reach of We the People.
- Making the power to issue money a public function — bypassing the current system which invited the careless and risky lending that led to the global economic crisis. The U.S. government would be authorized to issue dollars debt free. This power would replace the current undemocratic and unstable “fractional reserve” system in which money is created as debt through loans by financial corporations who lend many more times what they possess. Banks would no longer have this privilege to create our money supply!
- Enabling the U.S. government to use its money power — creating and spending money into circulation — to address pressing infrastructure needs such as repairing our crumbling roads, bridges, rails and highways. The government also would be enabled to invest in health care and education. These projects would provide a huge numbers of jobs without going into debt and having to repay interest on debt to financial institutions. Economist Kaoru Yamaguchi’s computer model has shown that a public-based money system and spending government money on jobs fixing our infrastructure is the best form of economic growth.
The irony is that these three provisions would institutionalize what most Americans falsely believe already exists: That the Federal Reserve is public. That banks only loan money that they possess. That the government creates our money. Wrong on all counts.
This to me sounds like an idea whose time has come.