How Can Obama Invest in the Economy, Create Jobs, and Not Raise the Debt? Use Government Issued Debt Free Money

by Stephen Zarlenga and Greg Coleridge

President Obama presented worthy economic goals during his State of the Union address of investing in our physical and social infrastructure and increasing employment. Absent was any specific plan of how to achieve these ends without further increasing the national debt.

We have a specific plan President Obama. Take public control of our money system.

A bill was introduced at the end of last year that can put people to work by building and repairing our nation’s infrastructure without adding to the debt. The details are contained in the National Emergency Employment Defense (NEED) Act (HR 6550 in the last Congress) by Rep. Dennis Kucinich (D-OH).

While the bill focuses on the unemployment crisis, it contains the three essential monetary measures proposed by the American Monetary Institute in the 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 U.S. money under our constitutional system of checks and balances.

The three essential monetary measures of the NEED Act are:

1. Incorporate the mostly private Federal Reserve System into 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.

2. End the banking systems “fractional reserve” accounting privilege in a gentle, elegant way. Fractional reserve lending allows banks to lend many times more than they possess, thereby issuing our money supply as interest bearing debt and dominating the financial system, taking wild risks as they did in creating the crisis. Instead, we should use our Government’s Constitutional power (Art. 1 sec. 8) to provide the nation’s money supply as interest free money, not interest bearing debt. This has immense benefits.

3. Use the US governments 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 advanced system dynamics computer model shows that basing the system on money instead of debt will allow the national debt to be repaid and the funding of infrastructure (thereby solving the unemployment crisis) without inflation! (see

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. And that the government creates our money. Wrong on all counts.

Decades of distortion and deception can be remedied by this bill.

Public control of money is not a new practice. The American colonists issued “Continentals” and the Lincoln administration “Greenbacks” to fund the Revolutionary and Civil Wars respectively — all debt and interest free. More than 200 prominent economists during the Great Depression of the 1930s developed and endorsed “The Chicago Plan” — which declared that only the government should create money — to address that crisis.

Ask your US representative to cosponsor the NEED Act when it is reintroduced. Ask your two US Senators to contact Rep. Kucinich about becoming a Senate sponsor. Last year’s bill can be read at

This bill alone cannot solve all our current economic problems. But it will end the private/corporate control of what should profoundly be a public democratic function of any society — issuing the nation’s money. Maybe more importantly, the Act will serve as a beacon of hope to a beleaguered citizenry who are seeking long term solutions to unemployment, debt, crumbling infrastructure, and need to take power over their lives and their society.

Zarlenga is Director of the American Monetary Institute and author of The Lost Science of Money. Coleridge is Director of the Northeast Ohio American Friends Service Committee.



“The Nation magazine was the only public organ so far as I can find out which printed out that the issue of the money of the U.S. was being turned over to a body of men who were neither elected nor answerable to elections.”


The income tax provides a guaranteed and consistent source of income for the payment of any federal government function, including payment of interest on national debt. It was ratified earlier in the same year as passage of the Federal Reserve Act which turned over the nation’s money power to a private central bank. Many economists believe the dollar holds its value better than the Euro in times of economic crisis since US interest payments from debt can be covered by US income taxes. There is no equivalent European income tax to cover Euro debts. This provides investors greater confidence in the dollar over the Euro.

“Some of the biggest men in the United States in the field of commerce and manufacture are afraid of something. They know that there is a power somewhere so organized, so subtle, so watchful, so interlocked, so complete, so passive, that they had better not speak above their breath when they speak in condemnation of it.”

“A great industrial nation is controlled by its system of credit. Our system of credit is privately concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men who, even if their action be honest and intended for the public interest, are necessarily concentrated upon the great undertakings in which their own money is involved and who necessarily, by very reason of their own limitations, chill and check and destroy genuine economic freedom. (1911)
[Note: Despite such misgivings, Wilson signed the Federal Reserve Act two years later]


Why this calendar? Many people have questions about the root causes of our economic problems. Some questions involve money, banks and debt. How is money created? Why do banks control its quantity? How has the money system been used to liberate (not often) and oppress (most often) us? And how can the money system be “democratized” to rebuild our economy and society, create jobs and reduce debt?

Our goal is to inform, intrigue and inspire through bite size weekly postings listing important events and quotes from prominent individuals (both past and present) on money, banking and how the money system can help people and the planet. We hope the sharing of bits of buried history will illuminate monetary and banking issues and empower you with others to create real economic and political justice.

This calendar is a project of the Northeast Ohio American Friends Service Committee. Adele Looney, Phyllis Titus, Donna Schall, Leah Davis, Alice Francini and Greg Coleridge helped in its development.

Please forward this to others and encourage them to subscribe. To subscribe/unsubscibe or to comment on any entry, contact

For more information, visit

Campaign Financing after Citizens United v. Federal Elections Commission

Community Forum, First Unitarian Church of Cleveland, Shaker Heights, Ohio
January 23, 2011

Citizens United vs Federal Elections Commission is one of the worst decisions ever rendered by the US Supreme Court – right up there with upholding that slaves are property in Dred Scott (1857), asserting African Americans could be treated as separate but equal in Plessey vs Furguson (1896) and declaring money is speech in Buckley vs Valeo (1976).

It was a political decision trumped up as law rendered by five activist appointed-for-life justices based on a fraudulent, baseless, and bizarre notion that corporations are people possessing inalienable First Amendment Bill of Rights protections that were intended by this nation’s founders only for human beings – natural persons, real people.

The controversial decision permits corporate treasury funds to be spent for or against specific political candidates. Four times more money was spent in the 2010 midterm elections from outside groups than in the 2006 midterm elections ($296 million to $68 million – according to the Center for Responsive Politics). Much of this can be attributed to the decision.

I don’t particularly feel we had four times more democracy as a result. What we had instead were the election of more corporate friendly candidates who support the Republican Pledge to America and other corporate friendly rules, laws, budget giveaways and tax breaks.

Many claim the decision didn’t change very much. I actually tend to agree.

Corporations have been dominating our political system prior to Citizens United. The political speech of corporate PACs and lobbyists has drowned out the voices of people without money for decades.

Prior to Citizens United, did We the People control our elections? Our health care? Energy policies? Trade policies? Environmental policies? Our money and banking system? Were communities able to keep big box chain stores, cell phone towers or gas drillers out of our communities? Or toxic trash from being imported into our communities?

President Obama’s 2008 campaign raised $745 million under the old campaign finance rules. Among his largest contributors (or investors – depending on your perspective) was the FIRE (Finance, Insurance and Real Estate) industry. Wall Street gave $14.9 million to Obama’s election campaign, the most for any campaign in history, with Goldman Sachs alone chipping in $1 million. Nineteen of 22 members of the Senate Banking Committee of both major political parties received donations/investments from Wall Street in 2009. Each of those up for reelection in 2010 received large political investments.

In just the past two years, corporate cash accounted for watering down consumer and environmental protections and diluting health-care and financial reform. Remember Sen. Dick Durbin’s comment about the power of the big banks in the financial reform debate last year? “They frankly own the place,” he asserted. Though troubling, it was refreshingly honest.

Corporations have been largely running the place economically and politically for more than a century prior to Citizens United.

This is not to diminish the impact of the decision. Citizens United has reduced what was already more or less our democratic theme park – with many of the trappings of a real democracy but just not much substance.

Citizens United was not the first time corporations achieved the ridiculous distinction of having inherent constitutional rights – on par with human beings.

The Revolutionary War was in no small part a reaction against the Crown’s chartered corporations. The most (in)famous incident was the dumping of goods, including tea, in the colonies by the British East India Company.

Thomas Jefferson thought ill of corporations: “I hope we shall crush in its birth the aristocracy of our monied corporations which dare already to challenge our government to a trial of strength, and bid defiance to the laws of our country.”

Corporations were intended by the nation’s founders to be an artificial creature of the law, with no additional powers than what its charter granted.

US Supreme Court Chief Justice John Marshall wrote in an 1819 case, “A corporation is an artificial being, invisible, intangible…It possesses only those properties which the charter of its creation confers upon it.”

Nowhere in the constitution are corporations mentioned. Nowhere. We the People were sovereign. Corporations were created to be subordinate to humans. The nation’s founders feared corporations gaining too much power. That’s why they placed the defining powers to control them at the state level.

Charters were democratic instruments, issued by state legislatures one at a time. They rigidly established what corporations could and could not do. It was focused on business, period. Political or inalienable rights weren’t granted. Those were reserved solely for people.

Corporations couldn’t claim as they do now both constitutional rights of human beings as well as the special corporate privileges unavailable to human beings – such as limited liability.

The notion that corporations are people is a radical concept concocted by the Supreme Court based on a fraud.

The 1886 Santa Clara vs Southern Pacific Supreme Court decision is often attributed as the foundation, the pillar that all subsequent corporate rights case are built upon. Yet the court in its ruling never actually concluding that corporations were people. Chief Justice Morrison Waite (from Ohio) said at the time that the case had settled no constitutional issues. Nevertheless, that conclusion was placed by the Court Reporter in the headnotes, or brief summary, at the very beginning of the case. Many members of the court at the time agreed with the sentiment that corporations were persons but the text itself did not actually address corporate personhood. The case only dealt with the issue of taxes on railroad fences.

The fraudulent Santa Clara decision was consecrated in 1889 when the court cited the case as a precedent for corporate personhood in Minneapolis & St. Louis Railway Company v. Beckwith.

All subsequent corporate personhood cases are built on Santa Clara.

However in 1906 the court ruled in United States v. Detroit Timber and Lumber Co. that headnotes did not carry any legal weight.

This makes Santa Clara, the rock solid pillar of corporate constitutional rights, nothing more than a fraud and illegitimate — a legal house of cards build on a pile of sand. By extension, Citizens United is a fraud and illegitimate.

Justice John Paul Stevens, dissenting in Citizens United, said, “… corporations have no consciences, no beliefs, no feelings, no thoughts, no desires. Corporations help structure and facilitate the activities of human beings…But they are not themselves members of “We the People” by whom and for whom our Constitution was established.”

Retired Supreme Court Justice Sandra Day O’Connor stated, “Citizens United has signaled that the problem of campaign contributions in judicial elections might get considerably worse and quite soon.”

What sounds more reasonable? The above opinions of Stevens and O’Connor or these, the majority views from the Roberts court: “The fact that speakers may have influence over or access to elected officials does not mean that these officials are corrupt,” and the “appearance of influence will not undermine public faith in (American) democracy.”

“Only if we pretend that corporations are ‘persons’ under the Constitution, is limiting corporate ‘speech’ a constitutional infringement,” says corporate anthropologist Jane Anne Morris

Only if we pretend that corporations are persons under the constitution are we faced with the dilemma that many of us many feel, as Morris explains: “Must we limit speech in order to have free and fair elections? Or, must we accept corporation-dominated political debate in order to preserve free speech? This false dilemma disappears if we reject corporate personhood.”

Slavery is the legal fiction that people are property. Corporate personhood is the legal fiction that property are people. The first was abolished. The second one needs to be.

Free speech is for people. Not corporations. Period.

Abolishing corporate political speech is essential. Overturning Citizens United…and in fact, all so-called inherent corporate constitutional rights, the goal of the Move to Amend campaign, is also essential to protect what little is left of our democratic republic.

While this decision was a democratic disaster, its blatant overreach presents a unique opportunity to seek profound change.

An August 2010 Survey USA poll found that 77 percent of all voters – including 70 percent of Republicans and 73 percent of independents – view corporate spending in elections as akin to bribery. Broad majorities favor limiting corporate control over our political lives.

A coordinated effort can unite progressives, good-government reformers and conservative libertarians in a fight to restore democracy.

But it’s not enough. Even without corporate constitutional rights, campaign financing would be skewed. We can’t have a political democracy is a nation that defines money as speech. Defining money as speech means those with the most money have the most speech. Elections have become sales. That’s not a prescription for democracy but of a plutocracy.

According to sociologist William Domhoff, as of 2007, 1% of people in this country possess 43% of its financial wealth, the next 4% – 29%, the next 5% – 11%, the next 10%, 10%. That leaves the bottom 80% owning a mere 7% of the wealth in this country.

Ours is much closer to a plutocracy than democracy. The only way out is to break the link between economic and political inequality is to abolish the doctrine that money is speech. Without it, campaigns like voluntary systems of public financing or limiting the size of individual contributions, while helpful, are mere examples of triage. They keep what’s left of our democracy barely alive but little more.

Is all this radical? Is democracy radical? People in this nation fought a revolution for real self-governance. People of color and women organized social movements to drive themselves into the constitution to be recognized as persons. All this now is fundamentally at risk is in a political system were money is speech, elections are for sale, and corporations are people.

It’s time once more to become part of a social movement for real self-governance. What’s left of our democracy is at stake.

ODNR tries to reassure; crowd wary

I testified last night at this event — making 3 points.

1. The issue of hydrolic fracking has been framed as a state issue. Yet for years, the decision to drill was a local issue. It was only when local communities began resistance that the oil and gas corporations ran to the state level, contributed/invested in state politicians and passed a law, House Bill 278 in 2004, which stripped local control. [This was quite ironic since many of those in Stark Co and elsewhere who voted for the bill are generally big “local control” advocates.] Corporations don’t like people flexing their democratic muscles. HB 278 is illigimate.

2. The Ohio Deparment of Natural Resources (ODNR), the agency established to “regulate” drilling has an inherent conflict of interest. They’re hardly a neutral or impartial player since their budget is linked to approving permits to drill — the more permits they approve, the more money they make. Their new state director, David Mustine, spent most of his career working for oil and gas corporations. He’s worked for American Electric Power and Bechtel Industries, specializing in oil and gas ventures. Besides, the solution to this problem is not to “regulate” the harms, the poisions, the threats to community health and safety — it’s to abolish it. The only way to accomplish this is to prevent this controversial and dangerous form of drilling.

3. Respect, honor and trust local communities’ right to decide. Those who are being impacted by this decision should have the major role in the shaping of the decision — not industry, not regulators, but the residents of the area.



“We are completely dependent on the commercial banks. Someone has to borrow every dollar we have in circulation, cash or credit. If the banks create ample synthetic money we are prosperous; if not, we starve. We are absolutely without a permanent money system. When one gets a complete grasp of the picture, the tragic absurdity of our hopeless position is almost incredible, but there it is. It is the most important subject intelligent persons can investigate and reflect upon. It is so important that our present civilization may collapse unless it becomes widely understood and the defects remedied…”


“The challenge remains. On the other side are formidable forces: money, political power, the major media. On our side are the people of the world and a power greater than money or weapons: the truth. Truth has a power of its own. Art has a power of its own. That age-old lesson – that everything we do matters – is the meaning of the people’s struggle here in the United States and everywhere. A poem can inspire a movement. A pamphlet can spark a revolution. Civil disobedience can arouse people and provoke us to think, when we organize with one another, when we get involved, when we stand up and speak out together, we can create a power no government can suppress. We live in a beautiful country. But people who have no respect for human life, freedom, or justice have taken it over. It is now up to all of us to take it back.”


Commenting on the value of colonial-issued money, the “Continental”…
“Every stone in the Bridge, that has carried us over seems to have a claim upon our esteem. But this was a corner stone, and its usefulness cannot be forgotten.”

“The whole aim of practical politics is to keep the populace in a continual state of alarm (and hence clamorous to be led to safety) by menacing them with an endless series of hobgoblins, all of them imaginary.”


Three years earlier, Jackson called for an end to the Second National Bank of the United States by calling on Congress not to renew its charter. He vetoed a bill to renew the bank’s charter, saying the bank was guilty of fraud, corruption, controlling the money supply (expanding and contracting the supply of money to economically and politically benefit the bank) and because “beyond question…this great and powerful institution had been actively engaged in attempting to influence the elections of the public officers by means of its money.” Jackson ordered the US government to move its money out of the Second Bank. In response, the bank called in all its loans and ceased issuing new loans. An economic panic followed. In 1835, Richard Lawrence fired 2 guns at Jackson but both misfired. He claimed his assassination attempt was because, in part, “money would be more plenty.”

“the real truth is…that a financial element in the large centers has owned the government ever since the days of Andrew Jackson.”


Why this calendar? Many people have questions about the root causes of our economic problems. Some questions involve money, banks and debt. How is money created? Why do banks control its quantity? How has the money system been used to liberate (not often) and oppress (most often) us? And how can the money system be “democratized” to rebuild our economy and society, create jobs and reduce debt?

Our goal is to inform, intrigue and inspire through bite size weekly postings listing important events and quotes from prominent individuals (both past and present) on money, banking and how the money system can help people and the planet. We hope the sharing of bits of buried history will illuminate monetary and banking issues and empower you with others to create real economic and political justice.

This calendar is a project of the Northeast Ohio American Friends Service Committee. Adele Looney, Phyllis Titus, Donna Schall, Leah Davis, Alice Francini and Greg Coleridge helped in its development.

Please forward this to others and encourage them to subscribe. To subscribe/unsubscibe or to comment on any entry, contact

For more information, visit

Ohioans Banner, Rally and March for Real Democracy on Citizens United Anniversary

Ohio Actions on Anniversary of the Citizens United vs FEC Supreme Court decision

MEDIA coverage (Athens, Columbus, Cleveland and Akron)

Protesters: Real citizens’ names don’t end in ‘Inc.’
Athens News, Monday, January 24, 2011

Citizens United Still Dividing
Columbus Dispatch, January 21, 2011

Rush hour drivers see protest banner
WEWS TV, Cleveland, January 20, 2011

Pic of the Day: Protest Banners for Rush Hour
Cleveland Scene, January 20, 2011

Election Forum
Akron Beacon Journal, January 17, 2011


PHOTOS (Cleveland highway banners and Columbus march)!/media/set/?set=t.100001055953397
[please send additional photos to We’ll add them to the website]