Let’s debate getting our fiscal house in order: Sandy Cutler and Maya MacGuineas (Opinion)
This was my posting at the end of yesterday’s opinion piece on cleveland.com…
Why is it they everyone who talks about the debt only considers spending and/or tax policies as possible alternatives? There is an entire third arena that is constantly ignored: monetary policy. Namely, the power and authority of government to create its own debt-free and inflation-free money. This is, incidentally, what the father of the Republican Party, Abraham Lincoln, did in the 1860’s when “Greenbacks” were printed and circulated. Rather than be fleeced by bankers and their incredible interest rates, Lincoln simply encouraged what the US Constitution (Art 1, Sec 8) empowers and authorizes Congress to do: “to coin Money.” That means to print. Not banks (which create the vast quantity of our nation’s money as debt). Not the bankers bank — the Federal Reserve. But, rather, our government.
US money created for productive purposes (vs speculating — which banks are masters at doing — leading to perpetual booms and busts) is not inflationary. Many top global economists have documented this.
We need Sovereign money. Democratic money. That is exactly the plan of the National Emergency Employment Defense (NEED) Act, which was introduced in the last Congress. A political independent publicly accountable body would determine the quantity of money needing to be created and Congress, like now, would decide how to spend it. The plan is at https://www.congress.gov/bill/112th-congress/house-bill/2990
The NEED Act would make the largely private and misnamed Federal Reserve system accountable to the public, not their investors (all banking corporations); end the ability of banks to create money out of thin air and leverage their loans (called “fractional reserve lending”); and create several trillion dollars hiring millions of people to repair our nation’s infrastructure. Federal bonds, bills and notes would be redeemed when they came due with US money — thereby overtime ending the anti-democratic addiction of debt and dependency to creditors. It also could reduce overtime taxes.
Republican candidates for President in Cleveland should be asked whether they support creation of a new “Greenback” program similar to their party’s founder, Abe Lincoln, as a means to reduce the national debt, increase jobs, repair our nation’s infrastructure (mandatory for any economic expansion), reduce the economic and political power of banks (the #1 sector contributor/investor in federal elections) AND to expand democracy?
I would love to hear their responses.