Thanks for replying.
You responded above:
"...on Tom's points for clarifying the conversion process to a permanent money system, and including the ending of fractional-reserves and bank-credit money.
"The existing language provides the same results - the bank credits that are converted to real US Money must be borrower-returned to the government's fund in order to keep the same quantity of money in existence when the loan is repaid."
That said, I understand that the issue is whether the banks are stripped of funds needed to carry on and more so, whether they are hit twice for the same dollars. This is a two-fold issue of ambiguity, which I will attempt to express below.
In addition to needing clarifying language in the bill concerning Ellen's concern, which I believe I see, there is also the original problem of ambiguity I pointed out to you, Joe, in particular concerning the actual definition of Transaction Accounts. Transaction Accounts are defined twice, differently in each place. The first concerns all money. Concerning that first bit of Ambiguity, I did not attempt to supply even the beginnings of edited language. The second, which you mentioned above, concerns only the sweep apparently of demand-money and into the Revolving Fund. I made some hand notes on the subject, which notes I may yet post to this thread (probably), and am convinced that the first ambiguity and the ambiguity Ellen (and I?) sees can be cleared up rather easily.
The worst thing that can happen to such legislation is that any "pride of authorship" enter in. If it is going to have any possibility of success, it will be modified (and hopefully improved). If the language is at all unclear to reasonably intelligent people, Joe, you should be the first person championing revisions for clarity sake. Clarity will make selling the whole thing to the people that much easier, and this sort of reform is not going to come from the top down.
Of course, I'd like to see the whole MA simply be the Treasury (and excellent computer network and opensource software). I really don't want to use a 1933-9 buggy whip or souped-up Model A to attempt to accelerate and regulate engines to go to Mars and well beyond. (In addition, I believe Scott and I have expressed well enough in this thread why we have strong reservations about the people who would be the Kucinich MA.) The bill reflects 1930's technological thinking. It is ahead of mainstream economic thinking but not cutting-edge economic and/or technological thinking, far from it. Let's accomplish what the bill wants in spirit but well exceed it.
You know, I'm moving to a new rack of servers running Debian. I use Ubuntu a bit and have had experience with other Linux installs, plus I go all the way back to 1980's Unix. Well, I wanted get a quick overview of Debian, and believe it or not, I always find Wikipedia helpful in addition to looking at the main site for any software package. On the Wikipedia, it said something that all the more convinces me that the opensource community could write the software for the people. If you will recall, that concept was to sum all of the transactions and values from day-to-day or hour-to-hour or even instantly to minimize the oscillations and to bring the economy under control and humming exactly to feed the targeted real (not finance but industrial) productivity goals of the people.
"The cost of developing all the packages included in Debian 5.0 lenny (323 million lines of code), using the COCOMO model, has been estimated to be about US$ 8 billion." http://en.wikipedia.org/wiki/Debian
Debian is just a part of the opensource-community effort. I have complete faith in American and even non-American programmers (plenty of them volunteering openly for opensource/free software) in being able to develop the programs needed and simply for the love of it – all open and transparent.
1) The Kucinich bill (it has lots of very good infrastructure language)
2) Language tweaks to remove all, or at least the most egregious (afterall, Ellen's no slouch in the brains department, and if she's not convinced by a straight reading of the bill, I say it needs tweaking), difficulty in interpretation
3) A public banking section
4) Real-time fund-and-flow control pegged to real productivity in lieu of the Kucinich MA
5) Ground-up decision making with feedback loops at the top, across, and down again (the area that would require the most work; vastly increasing local and overall democracy)
6) Paying off the National Debt with United States Money as United States Notes and/or cyber dollars (USD) credits with the Treasury, and
7) A Call for a Constitutional Amendment to end governmental borrowing (outside the Kucinich bill)
Then I think we'd have the makings for not only saving the US and global economy but making it the tool for eliminating poverty and for raising the standard of living and quality of life to yet unimaginable levels of bounty for all.
Oh, and I think Bill Still can only benefit by all the comments on this discussion and the whole Monetary Reform Movement benefit by it too – cross pollination, you know.
Are you concerned that I'm diluting your bill? I hope not.
My understanding is that reserves swell in direct proportion to that of which they are a fraction. The reserves are supposed to be 10%, as I cited/quoted in this discussion thread and directly from the Fed. It is true that the ratio has fallen in some cases to over 60:1 that I've seen. However, the Fed is not being transparent about it, so we're deliberately kept in the dark (ostensibly to avoid runs and panic). It's my thinking that the 1 in that 60:1 was/is also inflated by toxic "money." The reserves were, and still are, holding toxic so-called assets. Bernanke has been trying to keep the junk CDS's, etc., from having to be completely written off or marked to market. He claims that real estate is really under valued, but it's wishful thinking and I believe at least more than a bit disingenuous. The market was grossly inflated via junk securities. It has not seen bottom yet in my estimation.
When a bank takes in a demand deposit, it can lend against it as reserves. It must (supposed to) hold back the reserve at the Fed. But, it creates new debt-money whether there are other sources of new money or not and whether those other sources come after deposits or not (answering Steve Keen; although I know he knows more than I do on that non-fractional-reserve money). There is no way though that fractional-reserve debt-money does not exist at all. It's only a question of how much; and what with how stealthy the Fed is, I doubt if more than a small handful of people know even a reasonable estimate. I don't believe the Fed knows all the money-laundered and other dollars.
I remember when it was exposed that bankers in Europe can create money that is incapable of being audited. They had private banking with the banks where departments within did not know and could not know who had what money. I also know that the story was flushed down the memory hole after one news cycle. I have a reference to it somewhere on my blog. Of course, what they were able to do in Europe to hide money isn't anything that can't be done in the US.
They now have air gaps and other measures in their own systems such that money can be hidden right in the bank on bank computers in totally encrypted, invisible virtual disks. Even the NSA wouldn't be able to see them if given direct access. I know firsthand that it can be done.
So, that's why we need to shoot for complete daylight in banking and the whole economy.