Young people expose money creation myth


An Open Letter to the Dean of SBE and all Economics Professors at Maastricht University (UM)

Young people are increasingly stepping up to demand systemic change on many fronts — not just ecological but economic.

Here, it’s economic students blowing a hole into arguably THE greatest financial myth of all time — that banking corporations only lend money that they have. Total and complete BS. They create it out of thin air as debt. Why does this matter? When you add the fact that most money creation in our society originates from financial institutions as debt and that corporate money creation is THE greatest example of corporatization/ privatization in our society (a mammoth corporate coup since Art 1, Sec 8 of the U.S. Constitution gives Congress the power to coin money), what we have is a political and financial system controlled by financial corporations.

We’re all in debt to financial corporations — individuals, governments, even non-financial corporations. That means we’re all serfs to financial institutions. Even if you personally have no debt, a portion of everything you buy is priced to account for the debt of the producer.

Democratizing our money system goes hand-in-hand with democratizing our political system and Constitution. Good luck trying to having a real political democracy when banking corporations can create money out of nothing and convert their financial power into political power. The FIRE (Finance, Insurance, Real Estate) industry remains #1 in legalized bribery (political donations) and right up there in lobbying. It’s been this way (sometimes dropping all the way down to #2) for a long time.

It’s also is directly connected to saving the planet. How? Under the current debt-based corporate money system, the only way to collectively to pay off debt (not just the principle, but interest — which wasn’t created by financial corporations) is to race and compete with one another in a system where there isn’t enough money to pay off our loans. We must race as fast as possible to earn as much as we can in competition with others, which for many in our economy means working at jobs which convert natural resources into stuff that can be sold/consumed as quickly as possible, which of course results in massive amounts of ecological “externalities” (trash, garbage, pollution). We absolutely MUST plunder the planet to collectively pay off our debts. Of course, it’s in the end a losing proposition for the losers of this race. The result — like addicts, more debt to pay off past debt (which of course means more interest payments due which weren’t created). It’s why we have cyclical financial bubbles and bursts of those bubbles when people/governments/non-financial corporations see more of their debt payments going to pay just the interest.

We’re now in the midst of the mother of all bubbles (what some call “the everything bubble” — the bursting of which in the next year or two will be devastating.

The alternative is publicly-created debt-free and inflation-free money. WE decide how much is created and where it should be spent, not financial corporations. Human and physical infrastructure is the priority. It’s how to fund any real Green New Deal. It’s what the NEED Act of a few years ago was all about.

Of course, we don’t have the people power to force the end of the banking coup of money creation. That must be the first step. And that’s where the #WethePeopleAmendment sponsored by #MovetoAmendcomes in. We have to take charge of our political system.

It won’t be easy.

The Second National Bank of the U.S. threatened to cause a financial depression (by calling in all their loans) when their corporate charter was not going to be renewed in the 1830’s. Cleveland’s banks threatened default of the city (and followed through) when then Mayor Dennis Kucinich refused to sell the city’s public electrical utility to CEI, the private electric utility (tied to the banks). By the way, Kucinich was the main sponsor of the NEED Act when in Congress. He gets it. We must too.

Financial corporations have the most to lose to democratize our political and monetary systems. They will both push (lobbying and political investments/contributions) and pull (call in loans) as means to disrupt, demean and distract.

What choice to we have?


Don’t Pursue Rogue Alternatives to Fund Federal Infrastructure Plan


“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.

Response to PD OpEd, “Let’s debate getting our fiscal house in order”


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…

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

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.

Governing Under the Influence – Increasing Jobs & Ending Debt


Presented by the American Friends Service Committee, East Central Iowa Move To Amend, and Iowa City Climate Advocates

This May 23rd presentation features Greg Coleridge, a principal of the national Program on Corporations, Law & Democracy (POCLAD), recipient of the national Common Cause Public Service Achievement Award, member of the American Monetary Institute, coordinator of the Move to Amend Ohio Network, and Director of the Northeast Ohio American Friends Service Committee (AFSC).

Using the Public Power to Create Money to Create Jobs, Repair Infrastructure & Reduce Debt

Audio of AFSC Monthly Conference Call Conversation


Speaker: Joe Bongiovanni — Co-Director of the Kettle Pond Institute, second generation monetary reformer, annual speaker at the American Monetary Institute national conference.

Joe discussed the topics of money and how it’s created by banking corporations, how monetary policy connects to the economy and our lives, and why it’s important to become monetarily literate, He talks and answers questions about the National Emergency Employment Defense (NEED) Act, which if enacted would infuse debt-free money into our economy to meet our basic physical and human needs, create jobs and reduce our national debt.

11 Talking Points of President Obama’s Speech Today in Cleveland


These should be the 11 “Talking Points” of the President when he speaks at the Cleveland City Club this afternoon. Of course, he won’t say any of this, but, hey, we can only dream…

1.    Our democracy is near death I. Money is pouring in from the super wealthy and corporations in historic sums – to by Republican friends and to my own party. Most elected officials, including me, aren’t hearing the voices of people without money – except at photo ops when we drop into local eateries to buy a hamburg. I encourage Congress to pass the Move to Amend constitutional amendment to abolish corporate personhood and the doctrine that money equals speech.

2.    Our democracy is near death II. Gerrymandered political districts in Ohio and across the nation drawn by winning political parties marginalizes and weakens all other political parties. Voter ID laws disenfranchising “minorities” (which soon will become the majority demographically), seniors and students harken back to the days 50 years in places like where I just visited – Selma, Alabama – and other communities in the South. We need legislation making it easier for all citizens to register to vote and to vote. Maybe the right to vote needs its own constitutional amendment.

3.    The “middle class” in this nation is hurting…and declining. It actually should be called the “working class, ” members of whom earn less, have less wealth, are in more debt and face uncertain time in an economic “recovery” that’s more mirage than real. Too many of the jobs being created don’t pay a living wage and/or are part time.

4.    The “workless class” is really hurting…and growing. The “labor participation rate” has dropped. Poverty levels are a disgrace. Federal spending, tax and monetary policies don’t help working class and workless class people enough. The minumum wage should be increased to become a “living” wage.

5.    Income equality is scandalous, shameful and unsustainable. Time to end the Bush era tax cuts and dramatically increase, at the very least, inheritance taxes. How does receiving huge inheritances to from one generation to the next encourage innovation, creativity and work?

6.    I challenge the nation to become more monetarily literate. We’ve been hoodwinked by economists for generations into believing we should leave the issue of creating and circulating money alone to bankers and financiers. That has only resulted in depressions, recessions, growing inequality, exploding debt, and a rapid economic and political concentration benefiting financial corporations – the most powerful subset of all corporations. Stop watching the monetary propaganda on commercial TV, which only confuses and distracts. I propose funding a national program of monetary literacy in all schools and throughout society developed by real monetary reformers, including those at the American Monetary Institute.

7.    Exploding national debt has been used as the excuse to slash federal social and economic development programs. So how exactly has austerity been working in Greece, which has followed the austerity measures of the European Central Bank and IMF over the last few years? Public debt is fundamentally different than private debt in that the federal government can wipe it away by creating its own money (vs you and I who are not allowed to print money in our basements). I proposed that Congress pass the National Emergency Employment Defense (NEED) Act, introduced in the last 2 congresses by Representative John Conyers and Dennis Kucinich. The Act would move the private and misnamed Federal Reserve Bank under the Treasury Department, end the ability of banks to create money out of thin air as debt, prohibit banks from loaning money that they don’t have as reserves and introduce US money (just like what Republican President Lincoln did in creating “Greenbacks”) to hire millions of citizens repairing our nation’s physical and human infrastructure.

8.    The “defense” budget is out of control. Check that, I mean the “military” budget is out of control – since most of the money spent on planes, tanks, bombs, bullets and soldiers doesn’t “defend” our shores. The Pentagon hasn’t been audited in years. Billions are spend on weapons we don’t need, don’t work and can’t afford. We spend more money that the rest of the world combined. Half of the budget needs to be cut – for starters. Workers will be retrained building goods and services that are economically useful and environmentally sustainable – like alternative energy technologies

9.    It’s time to end the US military empire. We need to shut down hundreds of military bases and installations; stop launching wars and occupations and end the practice of install dictators and puppets; cease being the world’s policeman. We need to let people determine their own policies, politicians, and practices. We will reverse course especially in Ukraine – a nation that we stuck our nose into and toppled their leader, replaced with extremists and now are using as a surrogate to weaken Russia economically and militarily and seek to break the growing alliance between Russia and Europe, which threatens US superiority.

10.    I no longer support Fast Track legislation in Congress, which would weaken their ability to oversee and amend so-called “trade” legislation like the Trans Pacific Partnership (TPP) and Transatlantic Trade and Investment Partnership (TTIP) deals. These deals would weaken US labor, environmental and consumer laws and empower transnational corporations to circumvent national laws via judicial “Tribunals” made up of unelected trade attorneys.

11.    Go Cavs!

Democratizing the FED

A nifty graph showing the correlation between the private Federal Reserve system printing money out of thin air via their Quantitative Easing (QE) program and the stock market. The connection comes from Fed money at dirt cheap interest rates being used by corporations to buy back their own stocks — giving the impression that companies are doing well when demand for their stuff is down since people aren’t buying (due to low wages, rising debt, fear of job loss, etc.). The fact that the Fed has almost ended QE while the stock market is down is no coincidence.


The fundamental problem of the Fed is that it’s beholden to the corporate crowd, especially financial corporations. Whatever will most benefit financial corporations is the road map of its future actions, rather than serving the public good. Providing cheap money for banks to speculate and corporations to buy back its own stock — thus deceiving investors that companies are stronger than they actually are — is politically and economically detrimental.

It’s time to democratize the Fed, placing it under public control. This is one of the core proposals of previously proposed legislation called the National Emergency Employment Defense (NEED) Act.