“Rogue One” is not simply the title of the latest Star War film due out this week. It’s also a dead-on accurate description of the institution being suggested as the go-to source to fund President-elect Trump’s $1 trillion proposal to repair, modernize and expand our nation’s infrastructure. The institutional Rogue, Darth Vader, Death Star or Dark Side (take your pick among Star Wars metaphors) that some are seriously suggesting to provide the stimulus to our economy are super duper big banking corporations directly responsible for the financial implosion a few years ago, instead of We the People and our public power to create debt-free and interest-free money to meet our basic needs.
There’s no debate on the following:
- Our roads, bridges, water and sewer systems, public transit systems, schools and other basic physical public structures are rapidly crumbling,
- Bi-partisan political will exists to address infrastructure needs across the country, and,
- President-elect Trump and his advisors, specifically Treasury Secretary nominee Steven Mnuchin and chief advisor Stephen Bannon say they are open to exploring literally all solutions to fund the program over 10 years — an approach described by Bannon as “We’re just going to throw it up against the wall and see if it sticks.”
Many claim, including the prestigious American Society of Civil Engineers, that $3.6 trillion (as estimated in 2013) is needed by 2020 to serious address our infrastructure needs. Whatever the amount, the question of how it’s going to be paid for is central.
No one supports raising taxes. This is a political non-starter.
Several of Trump’s economic advisors proposed several months ago providing tax credits to private investors. This and other ideas fall into the category of Public-Private Partnerships, which have a demonstrated history of being ineffective and expensive.
Ellen Brown in a recent article commenting on Trump’s infrastructure plan correctly asserts, “net new spending requires net new money.” There simply isn’t enough money in the current money or monetary system to fund even $1 trillion without taking it from somewhere else and, thus, causing economic pain — a “robbing Peter to pay Paul” dilemma.
The question is who, or what, should create the needed new money? That would be money created “out of this air,” which is how most new money in our society is created — not simply by printing paper notes, but by crediting a sum to a borrower in their account by computer key strokes (97% of our nation’s money is created in this way).
The U.S. Constitution allows for the public creation of money. President Lincoln took this very step to pay for the Civil War. Several hundred prominent economists urged the same strategy in their “Chicago Plan” during the 1930’s to President Roosevelt as a means to stimulate the economy out of the depression/recession (sound familiar?).
A more up-to-date and complete version of the Chicago Plan was introduced twice in Congress over the last few years — the National Emergency Employment Defense (NEED) Act, which has three critical and inter-related components:
- Making the Federal Reserve a public agency and no longer influenced by banking corporations,
- Ending the ability of banks to create money “out of thin air” — only able to lend what they have in their vault or able to borrow (called “fractional reserve lending”),
- Empowering the federal government as affirmed in Article I of the U.S. Constitution to create and distribute U.S. money — specifically several trillion dollars to repair, modernize and expand our nation’s physical and human infrastructure, which would result in the employment of millions of people and paid with interest- and debt-free money.
Brown assesses in her Trump’s infrastructure article the public money option the following:
“But the current conservative Congress is likely to balk at that solution. A more acceptable alternative in that case could be to borrow from banks. Ideally, this would be the central bank, since the loan would be interest-free and could be rolled over indefinitely. But borrowing from private banks would also work, since they too simply create the money they lend on their books.”
Of course Congress is going to balk at creating public money. Banking corporations have hijacked for decades the political process via lobbyists galore and campaign contributions/investments as high as the Washington Monument. It’s a major part of the political “swamp” that Trump railed against during his campaign and that his supporters applauded.
Instead, what’s proposed is the “more acceptable alternative…to borrow from banks,” which also creates money out of thin air as debt and which, by the way, also charge interest. It’s acceptable to banking corporations all right. It should be unacceptable, though, to the millions of Americans whose futures, neighborhoods and communities were killed by the too-big-to-fail Death Star banking corporations that became even too-bigger-to-fail by profiting from home foreclosure schemes and from all taxpayers who bailed them out. There would be nothing more to the liking of the big banks that to come across as the white knights that came to the rescue of the U.S. economy when We the People could have saved ourselves.
Thomas Edison once said:
“If our nation can issue a dollar bond, it can issue a dollar bill. The element that makes the bond good makes the bill good… If the Government issues bonds, the brokers will sell them. The bonds will be negotiable; they will be considered as gilt edged paper. Why? Because the government is behind them, but who is behind the Government? The people. Therefore it is the people who constitute the basis of Government credit. Why then cannot the people have the benefit of their own gilt-edged credit by receiving non-interest bearing currency… instead of the bankers receiving the benefit of the people’s credit in interest-bearing bonds?”
Needed are the vision, energy and commitment to resist the current corrupt and undemocratic financial and monetary institutional rogues as hard, long and deeply as possible. We shouldn’t give up or give in to the financial Dark Side when the struggle has barely begun. Needed is a positive, potent and diverse economic and political movement to demand that the NEED Act be “thrown against the wall.” Any bill that is just, sensible, practical and all-inclusive like the NEED Act should certainly stick.
We the People should alone possess the authority to create and distribute our nation’s money as we collectively decide, not banking corporations.
Keep the fictional Darth Vaders on the movie screens and financial ones out of our monetary system.