Posted on 07/14/2011 9:22:57 PM PDT by NaturalBornConservative
The Two Step Plan to National Economic Reform and Recovery
Step 1: Directs the Treasury Department to issue U.S. Notes (like Lincoln’s Greenbacks; can also be in electronic deposit format) to pay off the National debt.
Step 2: Increases the reserve ratio private banks are required to maintain from 10% to 100%, thereby terminating their ability to create money, while simultaneously absorbing the funds created to retire the national debt.
These two relatively simple steps, which Congress has the power to enact, would extinguish the national debt, without inflation or deflation, and end the unjust practice of private banks creating money as loans (i.e. fractional reserve banking). Paying off the national debt would wipe out the $400+ billion annual interest payments and thereby balance the budget. This Act would stabilize the economy and end the boom-bust economic cycles caused by fractional reserve banking.
Monetary Reform Act – Summary
This proposed law would require banks to increase their reserves on deposits from the current 10%, to 100%, over a one-year period. This would abolish fractional reserve banking (i.e., money creation by private banks) which depends upon fractional (i.e., partial) reserve lending. To provide the funds for this reserve increase, the US Treasury Department would be authorized to issue new United States Notes (and/or US Note accounts) sufficient in quantity to pay off the entire national debt (and replace all Federal Reserve Notes).
The funds required to pay off the national debt are always closely equivalent to the amount of money the banks have created by engaging in fractional lending because the Fed creates 10% of the money the government needs to finance deficit spending (and uses that newly created money to buy US bonds on the open market), then the banks create the other 90% as loans (as is explained on our FAQ page). Thus the national debt closely tracks the combined total of US Treasury debt held by the Fed (10%) and the amount of money created by private banks (90%).
Because this two-part action (increasing bank reserves to 100% and paying off the entire national debt) adds no net increase to the money supply (the two actions cancel each other in net effect on the money supply), it would cause neither inflation nor deflation, but would result in monetary stability and the end of the boom-bust pattern of US economic activity caused by our current, inherently unstable system.
Thus our entire national debt would be extinguished – thereby dramatically reducing or entirely eliminating the US budget deficit and the need for taxes to pay the $400+ billion interest per year on the national debt – and our economic system would be stabilized, while ending the terrible injustice of private banks being allowed to create over 90% of our money as loans on which they charge us interest. Wealth would cease to be concentrated in fewer and fewer hands as a result of private bank money creation. Thereafter, apart from a regular 3% annual increase (roughly matching population growth), only Congress would have the power to authorize changes in the US money supply – for public use -not private banks increasing only private bankers’ wealth.
Support the Monetary Reform Act – write your Congressman today!
Read the full version of the Monetary Reform Act here.
If not now, when?
The Secret of Oz - Winner, Best Documentary of 2010
Source:
Related:
Monetary Reform, Part I | End the Debt
Monetary Reform, Part II | Lending and Interest
Debt Mayhem | End Fractional-Reserve Banking
The whole national debt is 13 trillion. What is the current money supply? I think it is considerably less.
Not all the debt is held by Americans.
Most is held by banks and insurance companies for a reason.
Does this propose to forcibly extinguish the debt?
How would a citizen go about cashing in his Reserve Notes? (Yes, I can prove where they came from)
“Step 2: Increases the reserve ratio private banks are required to maintain from 10% to 100%, thereby terminating their ability to create money, while simultaneously absorbing the funds created to retire the national debt.”
And I bet you think you are a conservative and this is not a parody?
So you would at the stroke of a pen expropriate the wealth of every stockholder in banks in the United States. Are you sure you are not Obama?
The banks of course would shut down since they can not earn a profit if they can not make loans. Listen Obama I knew profit was a dirty word to you but this is extreme even for you.
With no banks to make business loans to existing small businesses, the economy would implode, unemployment would rise to 1930s levels. But then again Obama we have long suspected this was your goal for the US economy.
But NaturalBornConserative aka Obama, real conservaties will not fall for your plan to expropriate stockholder wealth, drive banks out of existence and implode the economy.
“How would a citizen go about cashing in his Reserve Notes? (Yes, I can prove where they came from)”
Read the bill, watch the flick. Only 3% of the money supply is in paper form, the other 97% is in electronic format stored in computers (scary huh?). The bills will simply be converted dollar for dollar. No one will even notice.
“The whole national debt is 13 trillion. What is the current money supply? I think it is considerably less.”
More like 14.5 trillion now.
“Not all the debt is held by Americans.”
It doesn’t matter. All we would be doing is exchanging money we’re paying interest on for debt-free money.
“Most is held by banks and insurance companies for a reason.”
It doesn’t matter, everyone will get the same money they have now.
“Does this propose to forcibly extinguish the debt?”
Yes. The debt and the $400 billion per year we pay on it in interest will both go away.
It’s the same thing Abe Lincoln did when he came out with the greenback just before the civil war, after bankers offered to loan the government the money at 36% interest. I believe he was a Republican too. Most Americans don’t even know the history, but that’s on you.
Banks are not businesses. They merely buy and sell debt. They would have all went bankrupt in 2008 had the government who already owed them the debt we had, bailed them out. The Fed is not even a part of the government, it simply loans the dollar bills in your pocket to the government @ 6%. But the government could be printing this money debt free. That’s the deal.
And lest we all forget, it’s not about the debt ceiling, it’s about what the debt-to-GDP ratio will be after it’s raised.
Bump.
Who cares about the banks, they would have all went bankrupt in 2008 without massive bailouts, anyway. The system failed. Repeat, the present monetary system failed. I would rather invest in stocks or private arrangements than let the banks pay me 0.25% interest while they collect 30% on credit card debts. We forget that we don’t make any money off of banks, all they do is buy and sell debt, we are not prohibited from investing our own capital directly into profit making enterprises or other profit sharing arrangements. We don’t need banks to loan us money they create out of thin air at interest. We can do better.
“Who cares about the banks,”
Right Obama who care about banks, the car industry, private jet builders. You are going to get all of them for us, aren’t you?
“... than let the banks pay me 0.25% interest while they collect 30% on credit card debts.”
Ok Obama you have made it abundantly clear that you don’t like profit. That is you are an anti-capitalist.
“We can do better.”
You are so right Obama. The countries without banks and other developed financial markets do so much better than us. Just the other day, i was saying to my buddies wouldn’t it be great to be like some Mali or Yemen or Burma or someplace else with poorly developed financial institutions. Their economies produce so much more per capita than ours.
One political warning Obama. Islam and the Koran prohibit interest and at one time or another various Islamic countries have tried going away from lending to individuals directly purchasing stock in organizations. There are still a few Americans who worry that you are a secret believer in Islam and while I clearly know this is not your reason for this proposal Obama, others might be fooled into thinking this is an attempt on your part to force us into a little Sharia law, ie no interest. Of course the Islamic countries that have tried this are so much better off than ours, right Obama, that it would be good to follow their lead.
Who cares about the banks, they would have all went bankrupt in 2008 without massive bailouts, anyway. The system failed. Repeat, the present monetary system failed. I would rather invest in stocks or private arrangements than let the banks pay me 0.25% interest while they collect 30% on credit card debts. We forget that we don’t make any money off of banks, all they do is buy and sell debt, we are not prohibited from investing our own capital directly into profit making enterprises or other profit sharing arrangements. We don’t need banks to loan us money they create out of thin air at interest. We can do better.
I’ll stand on my own words, thanks.
Sure Obama Sharia for all of us.
There is no way for the US government to unilaterally abrogate the debt. It would be a violation of law so massive that the whole nature of the society would be altered forever.
“It’s the same thing Abe Lincoln did when he came out with the greenback just before the civil war, after bankers offered to loan the government the money at 36% interest.”
It isn’t even close.
Of course, banks are debt they are an extension of the division of labor necessitated by the complicated financing attendant to modern capitalist development.
Any profit the Fed makes is surrendered to the US Treasury and it amounts to tens of billions every year. Its semi-private nature is intended to protect it from insane political schemes.
Gee, you would think more people would be interested in saving the world in five easy steps.
Good point.
“Any profit the Fed makes is surrendered to the US Treasury and it amounts to tens of billions every year. Its semi-private nature is intended to protect it from insane political schemes.”
So the fact that the government is $14.5 trillion in debt proves that the Fed has protected us from insane political schemes? The interest paid on the bonds that the federal government exchanges for Federal Reserve Notes is paid by US taxpayers. Since part of the money the Fed makes is given back to the government (note: not all of it is surrendered), then why does the government continue to pay interest on the debt issued? Once the Fed sells the bonds to other banks or private investors, taxpayers are on the hook for indefinitely.
Regarding Lincoln: Yes he did create debt-free United States Notes (i.e. greenbacks) which were issued by the U.S. Treasury, not by a central bank. It worked well until he was assassinated. Before that the US had experimented with Colonial Script, Continentals, bank notes etc... Coins issued by the Treasury today are still issued debt free. We don’t need to pay interest just to have a currency.
“There is no way for the US government to unilaterally abrogate the debt. It would be a violation of law so massive that the whole nature of the society would be altered forever.”
Not exactly. During the Nixon Shock of 1971, the government declared that the dollar was no longer convertible to gold. Prior to that it was declared that US Citizens could no longer exchange dollars for gold. No one is talking about abrogating debt. We are talking about changing our currency from one which may only be issued through debt, to debt-free.
Changes in currencies have occured throughout world history. Calling a new law a violation of the law only works if you can say it is unconstitutional. I don’t believe it is. If anything, the system we have today is what I would call unconstitutional.
This is an original greenback from 1917, and not meant to be a prototype of what would replace Federal Reserve Notes. I looked for that too, and couldn't find it, but what does our current monetary system have to do with God anyway? I think the only reason it's on there now is to keep the folks from finding out what's really behind it.
This doesn't exactly compute: "Render unto Caesar the things which are Caesar’s, and unto The United States the things that are the Federal Reserve Bank’s."
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