Part 17: Monetary Reform: Series 1

Hi John Hermann,

Brokered CD's offer the bank a spread. Some banks also own brokerages. Brokered CD's are not always instruments that have been broken up into smaller instruments. Brokered CD's also are not obtained solely for purposes of excess reserves.

John, outline the flow-of-funds in an endogenous-only system (sans the government creating money). I don't see it.

I think your answer to Joe of 2 days ago probably laid out your view. What I see there is where what I've said and where Hummel agrees (I came to it independently – never heard of Hummel before I had already arrived at one bank) but absent any further socialism and rather an unbridled capitalism. Will you clarify? After the one bank is created that neither borrows nor lends (my position, and apparently Hummel's too), then what level of Adam Smith's invisible hand is responsible for all funding versus what I advocate, which is local, democratic council consensus-building and decision-making with governmental funding via United States Money/Notes?

It seems that your second reply of 2 days ago further clarified (in your mind) by stating that you had not intended to suggest that the money creation would not be governmental. Nevertheless, please address the laissez-faire versus socialist approach.

Tom Usher


Hi Scott Baker,

I agree that the Soviets planned their way into a mess. I'm not for what they did at all either.

The idea of "crowding out" though is not an issue. The idea behind Dennis Kucinich's thinking is to create huge new productivity, which I am completely in agreement with. It's only the MA and quibbling about/avoiding the term "socialism" that are the real problems there.

Tom Usher


Hello Joe Bongiovanni,

You wrote to me about the particular ambiguity I showed everyone here: " is not that you are seeing things that are not there, it is that you are not seeing things that ARE there."

Were it that simple. No, you didn't show me anything I missed.

Look, I have come to the conclusion that you have taken up the cause that "not one jot or tittle" shall change in the NEED Act as-is no matter how easy the change would be or how much the change would help to clarify and to avoid ambiguities.

Contrary to your defense of the bill concerning the ambiguity, the parts of the bill that you cited have zero control over the single-section (SEC. 402) definition I cited. That section definition says in so many words that regardless of any other definition in this bill or in the whole body of law, this section's definition shall be the one and only definition. In fact, the further down into the bill one drills down in law, the more controlling the language (except for constitutional issues). That's why it makes the Act ambiguous.

This is how contract-law cases are won and lost, by knowing this sort of stuff and how to work it – been there, done that more times than I care to remember – won them all. I say this as an old contract administrator and as one who has had a hand in crafting legislation that has become law. As one drafting legislation, unless one has some sinister plan, one doesn't leave such ambiguities. A bank will enter into a contract citing SEC. 402's definition of "Transaction Accounts" where the other party knows how to work the angle. It's not good, period; and I can see you have not been down these roads. Your job should be to work things out with me, not tell me that issues of the mixed economy are not up for discussion and such.

Now, whether you like it or not, that's a mistake in the bill! Okay? I don't care whose feelings it hurts. I have no idea who penned that section, and no one should have any pride of authorship such that he or she would block the process of clearing away that ambiguity. That's just how it is.

If it is your intention to continue in this mode of yours, from which you have not deviated in the least, then what are you doing here other than trying to sell the unsalable? The bill as it stands will never get through. The better it is before it is reintroduced, the better its chances of getting a hearing anywhere.

I am right about the ambiguity. Furthermore, Ellen does have a point.

The Revolving Fund just sits there unless and until someone spends it. The MA is ultimately responsible as the arbiter of the means of accomplishing no inflation or deflation even while full employment is the goal. How long will that money sit there with no velocity (Irving Fisher)? The banks won't have it. Until it is put back into a moving economy, it may as well not exist. Also, with what funds do those banks pay what those banks owe based upon the banks set up where they took on liabilities of whatever kinds based upon being able to keep the money returned by borrowers rather than having to give it over to the government? Ellen Brown's point is valid.

My plan, as stated earlier on in this whole discussion thread addresses Ellen's concerns, but my plan require vast changes to the NEED Act, which every change you have rejected without well-reasoned or compelling arguments. When I then stated quite rightly and as a compromise among all of us that the bill could simply state that the banks would not be liable for anything caused by the confiscation of the funds that would otherwise not occur, you had nothing constructive to offer -- nothing. This is not why I'm here, to be endlessly blocked by obstructionism in face of needing to improve the proposed legislation. It is not good enough!

It is not that the money is created and/or destroyed by lending and being repaid. It is a matter of whether or not the power to create cash flow remains. Under the current system, including with the MMT system, the banks have a certain potential that they either manage well in the ups and downs or not; but it's still potential upon which they may grow or at least survive. Under your language, one whole entire side of the banking system's potential for sustained cash flow will be gone. It is true that not all of the target for that flow will remain, as much of it will be dissipating loans those banks themselves owe; but until cash is flowing via the Revolving Fund and others by the government spending into the economy money that will be deposited also in time-deposits with those banks in question, the banks will be in a very strange, tight, possibly deadly situation that could be avoided by proper changes to the NEED Act. I believe that is Ellen's point, and I have never completely disagreed with it. I have only seen and offered various ways of handling it. You, Joe, however insist wrongly that the problem isn't real for the banks. It's real absent any of my offered solutions or some other similar avenue. Doing nothing, which is your position, will not work.

"It would be an unearned enrichment TO these undeserving people, amounting to Hundreds of $Billions, if not $Trillions of dollars. That would be the harm of it." Look, you're idea will put them out of business if the MA doesn't fill them, which isn't guaranteed. If it does fill them, they are still going to be the banking elite! Who are you kidding?

In addition though, there are many lower-level staff members at those banks who would be suddenly jerked around and without any clear language in the NEED Act in anticipation thereof and what steps to take, even if in only general terms. That is rather needlessly callous. My plan deals with it. Yours does not.

Contrary to your plan, my plan puts them out of business but doesn't put them in a hard spot, far from it.

"I do understand and appreciate the work that went into crafting the Kucinich Bill. All of the necessary governmental agencies reviewed earlier drafts and all necessary scientific and professional disciplines were allowed to criticize it before final drafting. The last thing that would happen is creating double-jeopardy (or even single-jeopardy) to the banking system we are trying to save from itself."

Oh my, now that's just arrogance, Joe.

"All of the necessary governmental agencies reviewed earlier drafts and all necessary scientific and professional disciplines were allowed to criticize it...."

Oh, really? Where's the list? If what you are saying is true, then the list should be out there. Why haven't I seen it? Why haven't I even heard of it? I don't live under a rock on these things. Wow!

So what you are saying is exactly what I was saying you've been saying: "Not one jot or tittle." When did these so-called experts of yours become perfected? I'm very interested in that process. I've never met anyone who gets everything perfect the first time through before on something so momentous. Please tell me where I may find these infallible economic/political gurus of yours.

Really Joe, the haughtiness is rather rank. I think you've been brainwashed by your "elitists" who crafted the bill.

You really expect the common people to genuflect before the NEED Act as-is? You're dreaming. You're hurting your own cause. You're in your own way.

If what you say is right, then the bill should sail through unchanged. Not only will it not sail, it will sink right where it is for exactly the reasons I've said. So we shall see who's who in political savvy on your team. So far, I have not been impressed, even though I like many things about Dennis Kucinich.

"Re No 2 above – WOW, how quickly we got to "bailout or die" again.

"There is no bailout. There is no insurance. If banks lend poorly, they are GONE. Just where they should be."

That's not necessarily true. There is an express lending facility in the NEED Act. The banks can borrow from the government. Why would the MA put people out of business and work only to have to turn around and balance the impact manually, at best, to avoid rising unemployment and deflation or inflation? Do you really think that a board under a new George W. Bush would handle it? I think Scott and I have been exactly right about the MA and you've been naive on it.

Scott's thing is Henry George, who was an admittedly impressive thinker – many things I like about him. My answer is real-time, opensource, free, high-performance computing (very doable and hardly likely to be able to be manipulated what with being right out in the open where anyone and everyone may look right at it in action).

"Same goes to Tom and his penchant for assimilating socialism into the discussion of monetary reform. This is a subject I learned at my Daddy's knee and he always said that Marx didn't really understand the true architecture and mathematics of money any better than Adam Smith. I DON'T WANT TO ARGUE THAT."

Who's talking Marx or Marxism? I specifically said that I am not a Marxist. If you don't want to discuss things, then don't. Your approach proves much of Ellen's reasoning as being valid that she had attempted to avoid the whole discussion but was sucked in because someone had leaked a private conversation. Anyway, I'm glad she joined in here because publicly owned banks are socialist banks whether they are market-oriented or not. They are still socialist, just like the local police and fire departments and the public sidewalks and roads – thank God? To Hell with toll roads where they came from – the selfish hearts of greedy, covetous, usurpers.

Joe, you don't own monetary reform. Monetary Reform is not some proprietary thing that some clique owns. As Scott has made quite clear here in this thread, there are many discussions on-going elsewhere, many of which are actually closer to making headway because the people involved are likely, sad to say, more collaborative. I would be there only I thought that this thread had great potential to bring together more disparate ideologies. You aren't being helpful to show the rest of the people out there how people can come together to improve a thing. You're showing them the exact opposite.

I'm not here to hear myself talk. I'm here to get the NEED Act to be really salable. Right now, it is not. That's why it hasn't gone anywhere. It won't go anywhere until the people behind it get out of the 1930's. We have to be better than that, much better and whether you worship the memory of your father or not (no offense intended with that either).

Tom Usher

Monetary Reform: Series 1


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  • Tom Usher

    About Tom Usher

    Employment: 2008 - present, website developer and writer. 2015 - present, insurance broker. Education: Arizona State University, Bachelor of Science in Political Science. City University of Seattle, graduate studies in Public Administration. Volunteerism: 2007 - present, president of the Real Liberal Christian Church and Christian Commons Project.
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