Thank you, and Merry Christmas to you and to all. Coming from you, that's a real compliment.
Frankly, I think that the people who continue to post here fairly regularly constitute a bit of a brain trust. I'm not buttering people up but simply want to be sure that no one thinks I'm discounting anyone here, even though my comments might come across as pointed and tough.
From an immediate, practical standpoint, you are correct that the bill will not pass and that getting state-owned and county-owned banks is certainly a path of less resistance (for now). However, we are planting seeds here in anticipation of when panic sets in and people need more solutions and pronto. The more all of these things are discussed now, the easier it will be for people to wrap their minds around the BND, etc. and to support such banks springing up all over and the more prepped everyone will be to discuss the radical measures I've identified, which are every bit as valid and forward thinking as were Soddy's in his day.
As for your statement that credit-money is the best thing the banks ever did, you are speaking of course within the context of private banking. In contrast, if there were no private banks at all and the sovereignty were in the hands of all the people equally as opposed to what we have now, which is criminogenic and plutocratic, then the people could simply issue all the interest-and-debt-free money they want simply as a way of keeping track of public projects (the only kind). Money as we know it, as a medium of exchange, would eventually disappear, which would be a good thing.
Ellen, the bankster types who own Congress already see what's good with the NEED Act and will seek to never let it receive a hearing even in subcommittee. That's why we need a better plan to get it out there in the alternative news where it can get traction with the masses.
Your banking work has already gotten quite a bit of attention via that route. Talking up United States Money and Notes right along side public banking would go a long, long way.
Ben has the right idea. Talk it up! Repeat, repeat, repeat! United States Money, United States Notes, no taxes (inherent if done right), public banking (natural monopoly), ....
Ellen, you brought up "social credit." That's a huge discussion. I do not believe the cause-and-effect of "socialism" and the promotion of laziness. I believe in the cause-and-effect of bad educations. As I mentioned previously in this discussion, there are plenty of examples of people living communistically where it works well – better than not.
I'm fond of pointing to the Hutterites. They did so well that a province in Canada, I believe Alberta, made it illegal for them to acquire any more land. Fortunately, that anti-Christian law was overturned. The one and only reason the Hutterites hadn't done extremely well in Europe was deadly persecution against them. They are not the perfect example of how things could be, but they are living proof that communism works well if done reasonably right.
Moving on, "The NEED Act would choke credit..." but not money/funding if the people made the choices that are now made by banksters and kleptocrat corporatists, who bring us the Military Industrial Complex and now the endless-war "battle field" America.
None of what we are addressing here may be divorced from any other issue. If you look at "social credit," you see that they get the interconnectivity somewhat (certainly not enough). Distributism isn't good enough. It doesn't go far enough. It's a way for professing Christians to feel better about themselves without doing what Jesus actually said needs doing. It's a way for the rich to share the wealth but not go all the way yet still feel "saved," or at least safer, even though they really know they are stopping short. It's a dangerous position. The more you know, the more is required of you. I like that.
You also wrote, "...public banking system would allow credit to expand and contract naturally in response to demand." Is it public demand or private demand? It's mostly private demand: private, special advantage and privilege based upon what, merit? The Koch Brothers have had nothing but harebrained ideas that I can see. The same applies to Monsanto, who is busy destroying the planet along with the other greedy warmongers.
I like Public Banking, but why can't you make it better, Ellen, rather than just cookie-cutting BND? You're smart enough. You care about the poor and downtrodden. You believe in fundamental fairness.
Who will own the public banks? Who will work them? Now, explain to me why your idea for public banking is better than someone's idea for public water systems or public television or public radio (100%, not the stuff beholden to corporate sponsors; stealth advertisers) or nationalized anything for that matter? Why are toll roads good and public banks good at the same time? Freeways owned and operated by (and built by) the people (their government) are better than privately owned and operated and built toll roads. So, where's the line drawn and why? I see zero need for any line.
You see, in my eyes, everyone here is right but so far simply not willing to go far enough.
Off with the banksters' heads? Yikes. Steady there, Robespierre. George Washington was off in his accounting of the war in his handwritten ledger by 50 cents. He should have been rewarded with beheading? I ask as a pacifist.
"What is left unsaid in the bill is what the interest rate will be for borrowing from this central computer, and whether all banking institutions will have access to it at the same rate and at all times." That's correct, with some qualifications. Joe has explained the lending facility (Revolving Fund) as for emergencies only. The bill makes that intent clear. More over though, why is a bank privileged over you to borrow during an emergency or not and lend again at higher interest? Who the Hell made them the money stewards over the masses? I think "Hell" is the operative word there.
Has someone who has worked at Goldman Sachs proven himself meritorious over you or over me such that he can borrow at the discount window and re-lend for his personal/corporate profit (such hard work, wow), which window would still obviously have to exist if only for emergencies. It is nothing but parasitic. It comes out from the dark side. It is not God's work!
Joe is differentiating between the MA and the Revolving Fund proper. The MA isn't doing the lending directly. He knows what you mean though (I hope). Call it nick picking because it's inconsequential. Nothing rides or falls on whether it's the MA or Revolving Fund. His more focused point is that no lending will occur except in an emergency/liquidity crisis. How a crisis occurs under 100% reserves is proof that the bankers should not have had a license to steal via usury in the first place. I mean one has to be really incompetent at that point – even worse than Alan Greenspan.
Joe is right, as I've mentioned here, that "Neither the MA nor the Treasury creates debits and credits on its books in making new money. New money creation happens when Treasury electronically PAYS money for goods and services received or provided by the government." The only time when accounting matters in the way you are thinking is during the transition period between Federal Reserve Notes and United States Money/Notes and if and when a bank or the system gets into trouble (which should be all but impossible if banks become well-regulated again).
Ellen, you wrote to Joe:
"Joe -- the NEED Act says at Sec. 402(e):
"United States Money as Source of Loans- After the effective date, all lending by depository institutions may be accomplished only by the lending of actual United States Money that is--
(1) owned by the depository institution from earnings and or capital contributions by investors;
(2) borrowed at interest from the Federal Government; or
(3) borrowed at interest through the issuance of bonds or other interest-bearing securities by the lending bank, to the extent that such bonds or securities are structured in a manner consistent with the purposes of this Act.
"So ALL loans will come either from the bank's own capital (not much of that), or interest-bearing securities issued by the bank, or MONEY BORROWED AT INTEREST FROM THE FEDERAL GOVERNMENT."
When you say, "(not much of that)," I'm sure you're aware that the stock market will still exist under the act (too bad in my view, but it will). Raising capital to lend at interest is a business that makes a profit. Buying stocks in banks is a choice. Since banking will become vastly more stable, so will the stocks, all other things being equal – it's still Wall Street with its inherent moral hazards. That should be cleaned up too. Frankly, this NEED Act needs to be a New, New Deal on steroids and refined to match current technology and hindsight.
Your observations to Joe about all the other funny money (derivatives, etc.) is right on. It does need to be addressed in this, what should be, overarching legislation. We don't have time to waste. FDR had his 100 days. We should have already done that, but Barack Obama is both slow on the uptake and too beholden to his "finance capitalist" background and too afraid to laud FDR because FDR was the best and the predatory capitalist scream in pain the most when FDR is mentioned even slightly as a model of the right kind of President. I'm not sanctifying everything FDR did in the lead up to WWII, etc. and he didn't go far enough when he had the chance, but he did head further in the right economic direction in Presidential history for sure. His biggest mistake was in waiting for military Keynesianism to do the job (it worked completely to end the national-macroeconomic remnants of the Depression) that could have been done by declaring war on poverty with as much effort as the nation exerted in fighting the Axis Powers. That's what we need to do and can do with this bill as a platform.
You also wrote, "If, on the other hand, banks can't "borrow short to lend long," they'll have to find people willing to give up their money for 30 years to make 30 year loans for homes. There won't be many of those." Why make that assumption? And I don't know that I care, not about what you think about it but about whether banks can make mortgage loans. Why do we need debt-housing? In the final analysis, its' the same question as to why we need debt-money?
"SEC. 501. DIRECT FUNDING OF INFRASTRUCTURE IMPROVEMENTS.
"(a) Report Required on Opportunities for Direct Funding- Before the effective date, the Secretary, after consultation with the heads of Executive branch departments, agencies and independent establishments, shall report to the Congress on opportunities to utilize direct funding by the United States Government to modernize, improve, and upgrade the physical economy of the United States in such areas as transportation, agriculture, water usage and availability, sewage systems, medical care, education, and other infrastructure systems, to promote the general welfare...."
You see there at the end, "and other infrastructure systems, to promote the general welfare...." When it says "and other infrastructure systems," it does not preclude public housing, and it shouldn't!
You are still saying that "Banks ALREADY have to borrow every penny they lend."
Okay, so you're saying that fractional-reserve banking exists, but the reserves are for check-clearing purposes only and money is not created "out of thin air" by commercial banks creating debt-money via computer entries. They don't originate an increase in the money supply. They have to borrow or earn preexisting dollars created via the Federal Reserve/Treasury nexus.
Even so, are 10% reserves adequate and why should we allow some folks to be in that business over public-banking only?
Bankers claim they create added value (wealth translatable into non-borrowed money) via innovative derivatives, regardless of whether you agree with me that most of it is garbage, the result of smoke and mirrors. There are tens of trillions of dollars worth of derivatives out there not the total result of interbank borrowing but that can be used, and have been used, as the basis for underwriting loans, as bank and other institutional funds/assets against which credit is extended. It's beyond shadowy and shady. It's insane. Frankly, you can't draw the line around banks, what with all of the deregulation that's gone on and that Henry Paulson and Ben Bernanke, with the wave of their hands, allowed investment "banks" to become regular banks overnight to escape having to pay for their own musical-chairs gambling addictions.
The banks borrow low and sell/rent high. They have historically created houses of cards. They have not been beneficial in the aggregate. They have been retarding, usually funding/laundering monstrous enterprises, including black-market. They have exclusive borrowing capacity at the whim of the Fed. (their Big Brother), an evil. It has done great harm the vast majority of which would have been adverted had the system been open and transparent and citizen owned and operated and not via autonomous boards or committees but public employees directly responsible and accountable to the grassroots via the most direct democratic processes devisable.
I don't care a tinker's damn what the "Founding Fathers" thought about that either. They got it wrong following Montesquieu and others (private-estate builders; aristocrat wannabes); and besides, they didn't have the benefit of computer networking.
I'm not saying all of my comments here are directly addressing points you raised. I'm speaking to a broader audience here. There are "Patriot Movement" members who are into monetary reform, so I'm bringing up the Founders they laud as demigods over current brains.
Scott, you are gaining encyclopedic knowledge -- a real sponge. I agree with GIGO; however, we aren't, or at least I'm not, talking about a commercial endeavor but an opensource project that would definitely attract the best of the best. It would be looked over and looked over and looked over and tested repeatedly. How hard would it be to do an all-items PI and to regulate it to real productivity? Why would the programs be susceptible to what politicians cave into now? I don't see that happening with opensource now, even though billions of dollars, even tens of trillions of dollars ride on opensource-software-running servers, including governmental.
I understand the concerns; but if we are going to have any new approach, we must admit that Georgism is not immune to corruption. People can, and do, lie about land values just as easily as most everything else. On Georgism, the thing about it is that it's taxes; whereas, my plan does away with taxes completely (the NEED Act can, even as currently written). On a very fundamental level, let me say that I'm a Commonsperson (no sexist). I totally reject the "conservatives'" (only some) Tragedy of the Commons theory. The only tragedy of the Commons was when the greedy nobility (hardly noble) took the Commons away -- stole it, in fact. If we tax only the land, I don't see how we will then be in a position to reintroduce more and more Commons -- the food-crisis antidote to agro-corporatism/privatization.
By the way, have you ever read about Gerrard Winstanley and the True Levellers/Diggers? If you're into the land and the Commons understanding, you should appreciate some of it. I don't agree with his tactics. I'm for buying the land. That's why I'm not for taxing it – not for selfish reasons but for the exact opposite. I'm for land reform but not for coercion.
As for Steven Zarlenga, I think he's just more capitalistic yet.
Bill Still has no aversion to public banks. He's concerned though with being labeled a socialist, though I don't know if he's ever had the full discussion on it. One of our mutual acquaintances attempted to get the two of us to debate whether the Bank of North Dakota is socialism. This other fellow asked me on one of Bill's posts. I said that of course it is. Bill had chimed in on other things I'd said before but not that. Nevertheless, he continued publicly advocating for publicly owned banks. Maybe he'll start saying what he really is that is a mixed-economy adherent. How one can run for the Libertarian nomination and do that to any significant degree escapes me though.
"I'd rather prove to the bond markets that we are not out to subvert the act of loaning money to the U.S. by simply printing away our debts...." Why? They'd get the cash. What are they going to get now? Hmmm?
As for Lincoln, whose idea was it to exclude using United States Notes from paying off the debt? The time to care about what the bond tyrants and banksters think is when they start giving a damn about the people. You know, one of Obama's big problems is that he runs from FDR. It's been the biggest mistake of the Democratic Party. The Republicans want to put Reagan on Mount Rushmore, and Obama has to summon courage to mention the "National Security State," atom-bomb dropping Truman?
You supplied a link to www.monetary.org/american-money-scene-5-august-16-2009/2009/08 so we could see the stated objections of the AMI to Ellen's work. That post was off-putting/un-collaborative. I don't understand the approach so early in the game. Because they see what they believe are some potential negatives with state banks, all publicly owned banking is a farce. That's verging on being arrogantly dismissive without substance. Publicly owned banks is a great idea. I happen to disagree about usury, but.... The whole monetary system should be publicly owned. It should carry no interest. It should not be about loans but rather funding. That part of the article I agree with. I said as much before.
I really dislike the all-or-nothing approach on the current iteration of the NEED Act. I'm getting the sense that "Monetary Reform" is some sort of proprietary field in the eyes of some, belonging solely to them because they simply say so. Well, I don't buy it. In case anyone hasn't figured it out yet, no one person or one group owns monetary reform. It is as much mine as anyone else's here or at the AMI, and I consider public ownership of banking to be a hugely important part of needed monetary reform, from the international level down and back up again. If Trotsky had, had enough brains, he wouldn't have had to fire a shot (wrong spirit). I'm not trying to make enemies of the AMI, but I won't accede to dispensing with publicly owned banking. It's a crucial aspect of what we need to do.
On China, it was easy to call the Real Estate bubble there, just the way it was easy over here. The Chinese made a huge error under Deng Xiaoping, just as the Soviets erred with Yeltsin. "Market forces" are only correct when they are fully democratized via equal votes. We don't have equal votes. We have the rich, and then we have the ballot box.
You said to Joe that you don't trust pretty much everyone except those who oversee, or would, land. That's arbitrary. You wrote, "C) directly to the people (see: constituents, judgment-poor)," meaning a group you don't trust. Well, the only problem is that the information is withheld. It is not that their judgment would remain bad. The whole informed people can make great decisions. It's people who fool the people with half-truths who are culprits. Sure, it's bad judgment to trust those people who dish out half-truths, but we need a system that precludes those greedy monsters. Opensource is the key.
"...the Greenbacking part of the bill I like, and would support independently of the rest of it." Same here. As with you, I think more is needed. You think it's Georgism. I do not. He wants to tax the inheritance of all. I want to completely free the people from taxes.
"I, and I believe Ellen, have the same interpretation of the K-Bill, and of the shortage of available money to lend if we had a 100% reserve banking system. A growing economy, by definition, needs more money, in the form of credit, than exists in Depositor accounts." No, that's not right. The NEED Act calls for direct public spending into the economy debt-free. That will increase the money supply. It will be deposited in checking and savings. The banks will lend the increase. The MA's job is anti-deflationary. The bill calls for productivity. Insufficient lending is to be met by issuance. Watch out. It's socialism (the big, bad boogieman). However, it is on a government-contractor basis (awarding contracts to capitalists) -- so not full socialism, just more than now. In addition though, I mentioned above introducing more liquidity than human kind has ever known (retiring the National Debt) – no credit crunch there possible.
Speaking of FDR, where's the section in the bill dealing with full-employment? It says it's a goal, but it doesn't mention public employment. Why not? It doesn't because its authors and sponsors are afraid of being Franklin D. Roosevelt (on steroids), who was wildly popular with the common people and hated by the banksters more than any other President including Jefferson, Jackson, Lincoln, and Kennedy.
"I support government issuance of debt-free money to pay for specific government enterprises, starting with infrastructure - U.S. Notes - but am luke-warm, at best on the rest of the K-bill." Well, infrastructure spending is the best part of the bill: paying for all sorts of things with debt-free money! The MA is your beef and mine. You can't see opensource as the solution though, for reasons that escape me, since garbage is always detected and fixed in the best opensource efforts (and this would be the granddaddy of them all to-date).
On Alex Jones, the post was from theeconomiccollapseblog.com/archives/debt-free-united-states-notes-were-once-issued-under-jfk-and-the-u-s-government-still-has-the-power-to-issue-debt-free-money, which I read from time to time. The post would have been better had it named more names, but there are many names. The important thing is that since Jones and others picked it up, if you Google "Debt-Free United States Notes Were Once Issued Under JFK," you see it spread across many other sites.
Was that your comment 1260044? If so, they didn't approve it or they killed it. If it was your comment and you saved it, I'd like to see what you posted.
The best thing about having "Debt-Free United States Notes" spread all over, which I have hammered in my blog and on Twitter and Facebook for years now (it has helped in my small way – everyone needs to do it – that's what I've been saying), is that it runs contrary to the Gold Standard. I believe that's one of the reasons it's been hard to get rolling; but by repeating it over and over and telling others to think about it and to also spread it, it has started spreading as never before (thanks to the Internet).
I got Max Kaiser to have Bill Still on Max's show on RT. However, even though I was clear that the point was so Bill could talk up United States Notes, Max (a raging gold bug, but with loads of progressive sentiments) had him yak on about the gold in Fork Knox not being there – what a waste. It shows though the lengths people will go to, to avoid upsetting the gold-bug mantra.
As you know, Alex Jones' websites and many/most, if not all, libertarian-capitalist leaning websites push gold and silver. I have constantly said that, that is exactly wrong and that gold will not only not be the only safe haven, it won't be safe at all. I've also hammered away at why gold stinks as "money." It is an environmental disaster and children all over are severely exploited and injured and killed being used as miners in makeshift mines when even the so-called safe mines are very dangerous. Of course, I'm more than likely preaching to the choir in stating these things in a comment to you, but I'm mentioning it for the benefit of those who never hear about Goddamned "externalities." Man, I really despise libertarian capitalism as much as the crony variety.
So, you quoted points 1-3 and not 4 of that theeconomiccollapseblog.com post. Here's #4:
"#4) The existing national debt would be very slowly paid off with newly created United States Notes. The U.S. government spent over 454 billion dollars on interest on the national debt during fiscal year 2011, and over time this expense would go to zero.
"If the national debt is paid off slowly enough, it would not create too much inflation. I believe that it could be paid off gradually over 50 years without shocking the economy too much."
I'm not sure why you left that out. Here's what I have to say about #4:
Money created and used to swap for bonds makes the bond amounts (and accumulated interest) liquid and ready for reinvestment in a system sans new debt-based money. It could be modeled so we could see the offsets, which I'll explain momentarily. Under my real-time opensource system, we'd would pull money out of circulation to avoid price inflation and could certainly be set to do that as the bonds are paid. It could do that across-the-board because Treasury would be the bank with all-account access from M0 through MZM. Notes and coins in circulation is an area that needs work. Recycling could help, but then there are collectors, etc.
However, if quality of life is the measure, as it should be and via all-items CPI or better yet, just PI, and if we have opensource banking and move to paperless, coinless money, as we should, then those with paper and coins could and should turn them into Treasury for account credits and those with paper and coins for numismatics value could just continue on as usual; but paper and coins would be phased out as legal tender when the swap window closes, rather quickly. Who hoards cash in his mattress? It wouldn't be that big a deal. Coin and paper money vending machines would receive the government's direct assistance in transitioning, as the spirit and letter of the law should be not to ruin anyone. It would create jobs too.
We could retire the National Debt very quickly. It would stop the usury. It would stop the bond tyrants. The tyranny of the bond holders is a larger problem by far than any "unforeseen consequences" Joe worries about. Besides, with the governments ability to create money and with a mandate to see to the quality of life for everyone (full employment, social security, Medicare, etc.), what's to fear? Joe, wants you to trust, well then, Joe needs to trust.
In addition though is this as an offset, the amount of money represented by the National Debt really does need to be put into circulation, as in need to move rather than sit in Treasuries. We need to spend for all the things we need. We need more than the National Debt represents. Inflation will not be a problem, not under the MA (if it's fixed to my system)! So, there won't be confiscation via taxes and money destruction matching the amount of the National Debt at retirement. We will simply have a flood of lending and governmental spending on real productivity without fear of crashes because the government will no longer be hamstrung by neoliberal capitalists and their stupid austerity thinking.
Joe writes, "Both you and Ellen have a hard time envisioning the permanent K-Bill debt-free money system in operation." He's right about that.
You, Scott, wrote to Ben, "...I really don't believe anything but a full LVT will stop the speculative booms and busts...." Booms and bust are inflation/deflation writ large. How does my system not eliminate that? Even the MA will do better than nothing to even things out.
"Yes, Ellen has it exactly right (not that I am surprised). This is where either:
1. There is a credit choke like she worries about, or
2. There is too much credit at the wrong time and not enough at the right time, like I worry about.
Either way, this doesn't really solve the banking problem.
It DOES solve the debt problem, since under HR2990, money would be just MONEY, not debt/credit. But it only solves it for the government, which would resume its constitutional right to create MONEY, but not for banks, who no longer could, or for individuals/corporations, who would still be subject to "animal forces" that make them decide or not decide to borrow at any given time."
What Ellen and you are doing is putting way too much stock in commercial, investment banking versus government direct payments with interest-and-debt-free money for goods and services. You're being too finance-capitalist. I'm not finance capitalist at all, but still...
It works exactly the other way around. The more you put in a bill, the more you have to give away during negotiations. However, one thing you should be able to see in real politics as it is actually practiced is that those who win big, think big and then rather than compromise, stick to their guns, so to speak, and just educate, educate, educate (or in the case of the neoliberals, dupe, dupe, dupe).
We need big change, bigger than the New Deal by magnitudes of order.
We don't have the luxury of time either. We need to grease the wheels that will end this obscene, phony austerity nonsense and as quickly as possible. Thinking small, compartmentally, and incrementally is what got us into this mess, Simon.
You wrote, "Government and banking is a scary concept, just like private banks they will always want to create too much money faced with political pressure." However, if the decision-making is diffuse via more local democracy leading to local consensus, there won't be that kind of "political pressure." We'd also be taking the question "who's going to pay for it" out of the mix.
When you say that capitalism is the best system, what's your first-principle? Why is it best that only some own the means?
In addition, how do you know that the welfare state there prompts laziness? Are you sure you aren't just echoing false-propaganda of the more self-centered elements of society who want to profit off the people rather than share? I am sure of it.
The idea that pure communism equals 100% tax is Orwellian. In pure communism, there is no tax. 0 tax is communism. The state is the whole people, and each person owns the whole thing but treats every bit of it better than the most rabid capitalist treats his or her most prized acquisitions (putting it "politely").
What part of sharing everything do you not like? In pure communism, there is no lack of personal possessions. No one comes along and strips you. You do not go naked. Neither do you have to take clean clothes from a pool of clean clothes but can wear what you possess over again after it is cleaned. The same holds for your tooth brush and pillow and bed, etc. Your room remains your room, and it is not invaded at the whim of whoever feels like barging in. This is a mindset, just as is each individual position held by each person in this discussion thread.
"Scott - "Depositors' money will NEVER be enough to match lending necessary to fund a fully active economy."
"That's a bold statement to make, and I'm not sure it's true. In the UK over 90% of bank lending goes to non-productive activities (buying existing property, mergers and acquisitions, speculating in financial markets etc). Only about 8% goes to the real job-creating productive economy. If we can lose some of the speculation and unproductive credit and redirect it to business, then there should be more than enough funding for a fully active economy, without any need for banks to be creating new money out of nothing and distorting the economy as a result."
The Act mandates "full employment" and by any means necessary in a sense, which means are yet to be spelled out but left to the MA to write many regulations (regulatory laws). Depositor-money and commercial banks aren't the top drivers. The Treasury/MA/federal government is the top driver. I would replace that with a real-time, opensource system, automatic and economy-wide banking/transaction signals coupled with shared citizen-owner-employee decision-making.
I share your observations about the difference between finance capital versus industrial or productive capital.
You wrote, "The problem with giving banks the large degree of leverage that is necessarily associated with fractional reserve credit expansion is that they then have incentives to create bank credit money for purely non-productive purposes, and in particular for speculative financial activities."
Blame "too big to fail" for that. If the bond tyrants and others had, had to take the hits for their gambling losses, they would have been forced through bankruptcy proceedings. The right control is via governmental rather than invisible-hand, market regulations. Bill Black could have had the whole thing cleaned up by now if he had been allowed to go for it back in late 2008. Of course, if the regulations hadn't been lifted in the first place, we wouldn't be having this conversation. Put all of the New Deal and follow-on regulations back, which were killed, and couple them with 50% reserves, and the crash wouldn't have happened.
This monetary reform is about ending inflation and deflation. It's about taking the profiteers out of the monetary war. It's about ending that war. It's a good idea (not saying you disagree).
I've been in a "single national depository" camp all along. I think you can see that.
The term "bank" will become a misnomer only under my plan until the concept changes through usage. I wouldn't complain about changing the terms/names, including "Treasury," if the concepts couldn't take on new connotations and the old become historic and antiquated. As I've said, the Treasury Department should be the one and only center. There should only be publicly owned branches as needed. The whole opensource/government-driven and controlled money Internet would be part of Treasury. Every person's vote would count concerning everything: every transaction and every decision made in conjunction with other people at all levels regardless of group size. Rather than voting primarily via dollars spent, as the Ludwig von Mises types would have it, the ballots cast (without having had to earn the right by being more acquisitive) would count vastly more than now. Perhaps spending/funding would be solely a function of those group decisions – furtherance of them, since I'm talking about the most decentralized communism imaginable anyway.
You answered Joe's question as to why banks would no longer be banks: "Quite simply, because a true intermediary cannot be a depository. The essence of banking is that registered depositories - under our current system - are able to create credit money." Your position is defining away all banking that isn't credit-money creating. A bank is a hold first and foremost. Fork Knox is a bank/vault: "The United States Bullion Depository." It is a gold bank. It lends nothing. A bank is a storehouse first! You also appear to be defining "intermediary" via some very narrow canon. We're getting into my territory: Semantical Theology.
"What monetary regime will be instituted after global collapse? If its sovereign money, then every sovereign will have to do it." Sovereigns can still pool. The euro could be fixed via all the things mentioned in this discussion.
Concerning Dennis's wife, I didn't mention her; but I took everyone else's comments to be complimentary. I don't think anyone intended to suggest that she's a honey pot of sorts. Maybe I missed something though. I have seen that sort of thing suggested elsewhere.
You want to discuss whether or not ambiguities in the bill exist (your comment "Joe 103). Did you look at what I had pointed out? This is now the third time I've mentioned it. I thought I was clear.
I acknowledge that I'm the "odd man out" on some points here, and I suggest you see that about your position about the ambiguities. As far as I can tell, everyone else who has been in this thread quite a bit has seen real ambiguities. I think we are beyond debating whether any exist and should definitely be talking about how to clear up those that are clearly there. It's fine with everyone though I'm sure that you continue to debate. Some of the things you've pointed out are truly plain misreadings on other people's parts. I can see that and have supported you where you've argued that the bill is plain (where it is). Where it is not plain though, you've gone on ahead as if it is.
"3) A public banking section
What does that mean? What is the proposal? If the Bill is enacted, efforts at state banking can proceed...."
It means that the language Ellen works on nearly day-in-and-day-out can be and should be reformulated for the federal level and incorporated into the Monetary Reform bill for the next Congress. Correct me if I'm wrong, but the federal banks will still exist. Why are we to limit ourselves to state banks? Why isn't the federal government going to be a public bank defined in the bill? What becomes of the 12 regional Fed banks, are they nationalized?
It appears to me that John gets this.
Why isn't our money to be as non-privatized municipal water supplies only better? Why are we limiting the innovation here?
"The law of real money (nee-full-reserve banking) will be effective; the state will only be using ITS real money to leverage private money in public-private partnerships, or to fund public initiative."
Why is our money going to be temporarily privatized via public-private partnerships? Who are these private parties, and why do they get special advantages? Leaving that system leaves people to buy other people.
The Koch Brothers are anathemas. They talk a good "libertarian" game in public a little, but we all know that behind the scenes, they don't want the "little" people (us) to have any voice whatsoever if we don't prostrate ourselves before them. I want to go as far as possible in the direction away from what the Koch Brothers want. I want more, not less democracy. I want the purest of pure democracy. I believe it leads finally to consensus, which is what we need as a species to survive. Call it religion if you want. I'm religious and not ashamed of it at all either. I'm ready and willing to talk to atheists about monetary reform.
Anyway, I digress. The absence of fractional-reserve banking, Joe, is not publicly owned banking. Publicly owned banking takes the selfish greed out of banking. Publicly owned banking is for the General Welfare -- that thing the Republicans love to hate in the Preamble of the US Constitution. Ron Paul hates it the way we use it, apply it. Bill Still said he would vote for Paul for President. I like Ron Paul's stand on the NDAA bill and some other things; but as for his monetary policy, it stinks. His definition of liberty, for all intents and purposes, is the same as the Koch Brothers'.
On your objection to the opensource-computer collection of the transactions for the day or other period and summing them and controlling new issues or destruction, I think you don't know much about opensource. I would like to get some opensource experts in here to explain how it operates. There is zero gaming of the system in true opensource. That's common knowledge in the field. You are doing a real disservice to all of the fine people who volunteer tens of thousands of hours of their lives to bring free software to the world that often far exceeds the capabilities of the systems offered by for-profit companies.
Before throwing away my idea on such an important matter, wouldn't it be wise for monetary reformers to solicit input from the opensource community as a whole as to whether or not they could see whether they could handle the task?
So far, I haven't seen you budge on anything even in the slightest. So far, your approach has been tantamount to saying that the bill is perfect as-is -- it's a perfect work of art that can't be further perfected. You'll get nowhere with that. It appears to be part of the reason Steven Zarlenga's website is quiet.
The level of democracy afforded right now to the people via the state and local governments is very poor. I see no point in an arbitrary 25% share to the states either. Money/funding needs to go where the people have good ideas, even if it's just concerning one little thing on a street corner.
I'm not interested in perpetuating the current system of facilitating and protecting private-estate builders. I'm interested in lifting the poor as never before. We need to focus on cooperation rather than competition. Dennis Kucinich has often talked about interconnectedness and interdependence. Well, why aim low?
You want to study a trans-national optimal outcome? You mean you can't see right now that eliminating all treasury bonds by paying them off with cash wouldn't be better than not and wouldn't be better than waiting at all? I can't see why you can't see it. A study? Do you think Aldrich did a study? I think he just rubbed his hands together. I think you know that too.
Your just so conservative, Joe. We need decisiveness. We need bigger. The NEED Act, as is, is not enough. It will be too little, too late.
You respect my offering ideas, but the bill is perfect? It's not perfect, Joe, far from it. How much of it did you write? Why are you so adamant that we not touch it? Have you ever followed a bill all the way through? I have.
Well, I have to say that if the bill doesn't change a lick, then "I'm agin' it!" It has at least one huge error that I pointed out; and I feel that Ellen's observation, concerning which I offer some beginning language to fix, is also valid.
The highly corruptible bureaucratic structure that people will rightly anticipate arising due to the unfortunate MA construct in the bill will doom support; whereas, my idea is with as little corruptible bureaucratic structure conceivable. Study opensource if you don't believe me. By the way, many opensource coders are libertarians.
As for your 105 comment, Joe, you jump to false conclusions. A state bank can be whatever the people of the state want. If they don't want it to be fractional-reserve, then that would be that. If at the federal level, fractional-reserves are not done away with though, then Ellen is absolutely correct that the state's (the people's government that the people own) should not be disadvantaged vis-a-vis private banksters at the state or any other level. Now, admit it. It's a logical position that Ellen is taking. She is not wholly against the Kucinich bill other than that she believes it would at least require tweaking. She believes credit-money has been a good thing, but that's because her parameters are narrower. If you want people to stop being credit/debt-based, then I really can't see why you are objecting to my views, as they are less debt-based than yours and much sooner.
Joe, in your 106, you went on to say, "Whether credit and debts expands or not is a function of the needs of commerce." You are saying that Ellen is wrong for advocating a certain kind of credit (that actually does work and could work if regulated New Deal-wise, albeit not well enough for me) while I'm saying you are wrong for advocating any credit at all, any debt at all, any interest/usury at all. I have sound reasons for why credit, debt, and interest is retarding. I have explained some of the reasoning. Do you have children or grandchildren or other relatives, etc., to whom you hold out your hand for recompense when you tell them that dinner is served? Tell me, Joe, who are your family members and who are your neighbors? Yes, that's religious. It's Christian. Would there be evil "unintended consequences" if all Americans, as the United States of America, began treating each other as harmlessly as doves? Would they suffer if they all shared in common? Are you progressive enough?
What would Soddy think if he were to have the benefit of weighing my proposals? I say he'd agree with me about opensource rather than the MA of the current iteration of the NEED Act.
You say, "...using the state’s monies kind of as ‘reserves’ to multiply the state’s own banking activity basis by ten times. That involves a form of financial risk-taking and ‘profit’-seeking that should not be a governmental function at any level." You are too concerned with defeating Ellen rather than on promoting the combination of United States Money with publicly owned banking and the complete elimination of taxes and debt/usury. I know I'm being redundant, but you are hammering your same issues without giving any sound reason why we shouldn't aim straight up.
Look at what the laissez-faire crowd does. It calls for as much anarchy as it can possibly manage to dupe the people into thinking will bring real bounty. They don't compromise. They also love to hate statists, such as Stalin rather than debate the likes of me. There's a good reason for that. Stalin is a straw man. So, let's stop holding back.
"The irony in my view is that the Kucinich Bill provides the expanding money system that enables the expanding credit system, is not private and turns the benefit of that money-expansion system to the public." There's much truth in that, but you stop way too short.
"...democratize the money-CREATION process...." Yes, but don't stop there. Democratize the decision-making process. Democratize the workplace. They never had democracy in the workplace under Lenin-Stalin. It's never been tried on a large enough scale for anyone to claim it doesn't work. It would work and will work.
The thing plaguing Simon's nation is banking, not socialism. The City of London is a disaster. Finance capitalism is what caused the problems. The young would be glad to work if they weren't crushed by the greediest of the greedy. Britain's economic problems could be fixed nearly overnight simply by implementing my proposals there. Of course, the fat cats would have to work for change, but that would be good for them -- really.
"The Bill provides a framework for an agency of government that is as independent and autonomous as can be legally constructed." It's not true, but what's good about that anyway? I see nothing good in that at all. Checks and balances and their complete opposites (such as the current Fed; it's not "politicized"; the President appoints the person recommended by the Fed/banksters) are a complete waste of time. Afterall, we're all human beings and where asking each other to check and balance each other. It's mass insanity. We need the constitution to be amended to say what we need, and that's no government debt, period. We need legislation clarifying what we need and want, and that's United States Money/Notes. We need the best and most transparent method of regulating inflation and deflation in real-time. I've already offered how, and it's completely doable. All of this would be an expression of a new spirit and letter. Having an MA board/committee/whatever is not the best approach. It's the part of the bill I dislike the most. It's the weakest link. It promotes the wrong mentality, and I don't care if Irving Fisher or anyone else liked the idea or not. No one has a monopoly on brains.
"To me, to say you do not trust an independent and autonomous monetary authority is to say that you do not trust yourself." You see, that's you saying the right thing but only up to a point where you stop wildly short of what we actually need. We need to trust the Treasury, and that would be exceptionally easy if it were completely open and transparent and developed by totally opensource people.
"You might consider public-fund risk-aversion in your plan for publicly funded fractional-reserve banking.
I support public banking only on the basis of real-money investment.
"Fractional-banking is public folly."
The reason for getting rid of fractional-banking is not to reduce risk. With a sovereign, non-debt money regulated for inflation/deflation, ultimately there is no risk of the type you think you're seeing. Bad banks get nationalized. Under a hyper-New Deal, banks get examined by real examiners with real power and clout to prevent banks from going bad. Reserve requirements of 60, 70, 90 percent are options; and you would be hard pressed to conjure up a crash at 50% reserves. The reason for getting rid of fractional-banking is only as a part of getting rid of the private, special privileges and advantages of usurers.
"The MA’s partiality should be, and as a matter of fact can only be, to the good of the country." That's absolutely wrong. The NEED Act leaves huge swaths of regulatory law yet to be devised. It's one of my main criticisms, although I hadn't voiced that as such until just now. The lack of having the details worked out though is exactly what I've been talking about all along concerning the lack of clarity (the need to clean up ambiguous language, definitions, cross-references), etc. The MA could devise very bad regulatory law to the benefit of whomever whether wittingly or unwittingly.
Have you looked at the Code of Federal Regulations? That's what Dennis's bill says is completely left undone in his bill. That's a very bad idea to leave all of that up in the air. It's completely unnecessary too.
"It will be functionally impossible for the MA to ‘stifle credit’." That's on paper, and it's provided they write the regulations properly and micromanage the supply and flow of funds, etc. It's also dependent upon where they understand how to make the whole thing work with Dennis's infrastructure-targeting and real-productivity growth. Are you sure you have your mind wrapped all the way around all of that. I sense that you don't. I sense that you are severely underestimating the complexity of bringing together that type of board to model the whole economy and get it right and understand the nuts and bolts rather than ending up having to delegate to people who will speak a different academic/high-tech language such that many board members will end up to those bureaucrats much the way the Senators and Representatives were toward Alan Greenspan – "just trust us" even though the people couldn't, and can't even under the NEED Act, see a thing and aren't allowed to without an FOIA request that may or may not be honored. My opensource method does away with all of that. Let the American people be their own technocrats. Let the open-coders do what they do best, better than anyone.
You can read every line of code in opensource. You don't ask anyone's permission. You can run it and test it all you want. If the US Treasury is open and fully transparent, as it should be, then all the hocus-pocus will be over and done with: Good bye banksters. Get a real job. Your local committee will be happy to help you. That room needs sweeping and the trash needs to be taken out, and by the way, we all do windows and toilets around here.
"The government’s role is to spread that new-money, wealth-generating potential around. That potential – for creating wealth and for achieving economic growth – can only be met by the activities of markets in commerce." May I say, "Bull"? You're a capitalist. "...only be met by the activities of markets in commerce...." You sound like Murray Rothbard. That ain't Progressivism! Your real credentials are showing. So, no wealth is created without capitalists buying and selling of goods and services? Have you heard of the "Gift Economy"? That's the spirit we need again, not competition for recompense. Competition for recompense is reactionary! It's anti-progress. The retarders brought us capitalism with all of its unavoidable, concomitant ills.
"in a permanent money system, there will always be more money than debt." That is not necessarily so under the NEED Act as it stands. There is no prohibition on other types of currencies, such as Credit Default Swaps (CDS's). CDS's trade like commercial paper. They are debt just waiting. AIG could not cover. They are convertible into USM under the NEED Act. People buy and sell them for Federal Reserve Notes and/or other stores of wealth such as other Swaps and other derivatives. Don't tell me that Fisher handles all of this via the NEED Act. They are part of the finance capitalism false productivity model that the NEED Act does nothing to correct. Real productivity, industrial productivity, net-gain-only productivity (no externalities) is not defined in the Act. There is no prohibition on banks/investment houses, whatever, creating crap M? money. Bernanke knows this only too well.
Sorry, (to use your mode of expression) but AIG creates bank-credit money when it creates CDS's that end up inflating GDP in one way or another or another or another. It's very roundabout, but it does happen.
"...the rate at which banks borrow from savers MUST be low enough so that the bank could still lend to borrowers and make a spread. Nothing wrong with that. That is real, honest to goodness capitalism as it should be." There's nothing wrong with some US citizens being able to borrow that way and not others? Why isn't that evil? You say there's nothing wrong with it. What's money, nuclear weapons that shouldn't fall into the "wrong" hands until it's been marked up for some people's private profit? That's your progress? It's backwards, Joe. That's not what the OWS is all about, far, far from it.
OWS was started by anarchists, and I don't mean bomb throwers (in case some people think they are all automatically bomb throwers). I happen to love government – good government. Anarchists have a problem with it, but they aren't capitalists!
Your video appealed on a progressive level. What's Progressivism? Where does it lead? It doesn't lead to capitalism. Ron Paul is no Progressive.
"...tribute is “earned” by good business. Again, credit unions, cooperative banks and other limited purpose institutions are what will keep that spreads as low as possible." Jamie Dimon will still get a cut rate. Give me one good reason he gets that and I don't. Explain to me why he deserves a spread on money between the government creating it and my having it via Citibank. Where's the section of the bill dealing with Bill Black-type investigators/prosecutors clawing back before Citi gets to roll it's "paid off" toxic loans into United States Money. They do get to do that, don't they? Isn't that what it says (notwithstanding the various ambiguities in the bill).
You wrote to Scott:
"And, just in case the terminology is getting in the way, it is perhaps worth mentioning at least once that what we WILL have is not really a 100-percent reserve, nor full-reserve, system, BECAUSE the concept of any ‘reserve’ relationship will not exist in reality in the system.
"The problem is that we have a tradition of reference in the money and banking system to relationships between HPM or reserves and the money supply.
They will not exist.
"We will have what is more closely described as the ‘dollar-of-capital’ system of money.
When all money is real money, is permanent money, there are no reserves.
This is NOT a zero reserve system.
The real-money status of all real money requires NO backing, thus, NO RESERVE relationship.
That reality should provide a new understanding."
I have to fully agree. I saw this and anticipated trouble with it when I was contemplating the ambiguity with the various definitions and cross-references concerning "Transaction Account" money. I raised it when I asked about 1:1 lending, but you didn't address it. What you've done is spell it out fairly well and to the degree that you've shown here yourself exactly what I've been saying (you've proved my point) that the bill needs work before it is reintroduced (as it must needs be – it will not pass! but must be submitted again and again if necessary). There is zero reason that your explanation (with minor edits) not be in the bill to clarify exactly what's really going on. I congratulate you for justifying much of what I been writing in this thread and even vindicating Ellen's trouble with the language.
As for Zarlenga, et al., don't take no for an answer. No one owns the Act. Ask Dennis Kucinich directly about that if you doubt me. He is not of the proprietary mind-set. That's one of the things I like about him most. We all know he's the best Congressperson in general in terms of heart for the people as a whole and individually, and he's far from stupid.
Joe, you are doing what the bill needs to do. You are educating people about the mechanics of the bill. All of the whereas's and wherefore's in the bill could cover some of the fundamentals you've expressed. Doing so would help in the development of the regulatory law as well. If the Act isn't changed properly, the MA members are going to be spinning. It's going to take them a while just to wrap their minds around the Act. Will there be confirmation hearings? Oh LORD!
Unlike the way things are usually done in Washington, Dennis needs to go back to the drawing board. He needs to focus on this for the rest of his career until it's done and done right. He needs cosigners and to get them in on the drafting now before it's resubmitted.
He needs to hold his own "hearings" where every issue in this discussion thread is given full consideration and where nothing will be considered impossible for reasons of "politics as usual."
"2. Banks do NOT now get their new money from the Fed. The Fed only provides RESERVES to the banks. It is the ’expansion’ of the Fed-provided reserves that provides the new ‘credits’ in the economy." Take it easy on Scott, Joe. You are not doing a very good job there explaining what you're getting at: why the distinction matters.
"3. There is no ‘lender-of-last-resort’ provision in the K-Bill, except that which requires an Act of Congress." Really, what's the difference? There isn't any in terms of being a bank and getting money from the government. Why are you nit-picking using the mechanics when the practical outcome is the same? This is not a helpful approach. You will leave people cold with it. You're making it sound as if it's much more important than it is. They are the "lender of last resort." Spinning via the mechanics does not alter that fact. You know this.
"And just-in-case this just-in-time money is not available, ANY bank can borrow and repay from the government’s REAL reserves of REAL money." However, you aren't going to get to a just-in-time full system unless you employ exactly what I've been advocating that you've been fighting against for reasons of ignorance and lack of appreciation regarding opensource-software-development group dynamics and already highly develop software-developmental policies and procedures.
I talked earlier about CDS's being toxic, still hiding (in plain sight to those of us who've been paying attention since well before 2008). I talked about the Fed and Bernanke vis-a-vis this toxic sludge. Well, here's a great article that nails it.
You need to read this: "Bank Of America Dumps $75 Trillion In Derivatives On U.S. Taxpayers With Federal Approval" seekingalpha.com/article/301260-bank-of-america-dumps-75-trillion-in-derivatives-on-u-s-taxpayers-with-federal-approval
Anyone who doesn't care about it is dead from the neck up and has a small, cold, and hard heart.
The article's timing is uncanny in terms of my larger points for the purposes of this discussion thread.
Where does money come from? Those toxic instruments are money in that they are traded and convertible to Federal Reserve Notes.
We have to clean up the whole system, not pick at it a little here and a little there via endless incrementalism while Rome burns.
Broad, Rough-Outline Platform Update:
A. The NEED Act
B. Language tweaks to remove all ambiguities
C. Public banking
D. Treat Treasury as the only bank and as a free public utility
E. Free Banking (not to be confused with laissez-faire): Charge no fees for "checking"
F. Do away with coins (metal) and paper money
G. Real-time, opensource, automatic, economy-wide banking/transaction fund-and-flow control pegged to real productivity and in lieu of the NEED Act MA
H. Ground-up decision making with feedback loops at the top, across, and down again (vastly increasing local and overall democracy; shared citizen-owner-employee decision-making; democracy in the workplace)
I. Pay off the National Debt with United States Money as United States Notes and/or cyber dollars (USD) credits with the Treasury
J. Constitutional amendment to end governmental borrowing (to be done outside the Kucinich bill) and to clear up all confusion regarding the meaning/scope of the expression "coin money."
K. New, New Deal-plus, refined to match current technology and hindsight and that addresses Wall Street abuses but is not limited to such
L. Issue Treasury Cards
M. Full-employment via public employment
N. Free, public high-skills training
O. Free, public education through whatever level students are capable of accomplishing
P. Free, public continuing education structured to allow full-time and/or part-time work depending upon individual capabilities and desires