HR 2990 - The National Emergency Employment Defense Act of 2011 could be the catalyst for a global renaissance. The NEED Act eliminates private control of the monetary system and restores the government's Constitutional authority to create money without creating debt and spend it into circulation to rebuild the productive economy.
With all the hysteria about government debt and deficit spending, ostensible pretexts for annihilating the public sector, why is no one scrutinizing the source of the problem ~ the monetary system?
Our economy has been running on credit since 1913 when Congress forfeited its sovereign authority to create the nation's money supply and gave that privilege away to a cartel of private banking corporations ~ the Federal Reserve System. What passes for money (Federal Reserve notes) is actually bank credit that enters circulation through private bank loans as interest bearing debt. Credit is not money. Credit is debt.
Not only did Congress forfeit its Constitutional authority to create money without incurring debt, it simultaneously gave private bankers the power to control the whole economy by dictating where credit flows ~ to Wall Street or Main Street. The bankers who control the credit supply, control both realities. They can arbitrarily expand credit exponentially to create a housing bubble or $600 trillion mortgage derivatives casino, and they can also starve the PRODUCTIVE economy by contracting the credit supply - at will. Wall Street corporations are sitting on $2 trillion in cash reserves and executive bonuses are soaring while millions of Americans are losing their jobs and homes through no fault of their own.
Federal Reserve chairman, Ben Bernanke, admitted that the Federal Reserve caused the Great Depression, known to bankers as the Great Contraction. The same credit contraction of the productive economy is happening again today. This is why hospitals and schools are closing, businesses are collapsing, the job sector is shrinking, and municipalities have insufficient revenue ... why every part of the productive economy is contracting. The domino effect of contraction increases as people have less to spend and can't support local business that in turn must lay off workers. Unemployed workers have no income to pay taxes. Decreased tax revenue starves federal, state and local governments, which in turn lay off more workers and cut spending. Spending cuts and layoffs further contract the economy. Is the productive economy being deliberately destroyed or are these people really stupid?
(See this stunning graphic ~ the geography of recession.)
Why is no one publicly questioning the power banks have to contract the economy with their monopoly control over credit? Why don't we reinstate sovereign money instead that is issued by the federal government, per US Constitution Article 1, Section 8? We wouldn't have a national debt because the government wouldn't have to borrow. We wouldn't be at the mercy of banks that withhold credit and contract the economy because our government could inject liquidity directly into the PRODUCTIVE economy. This basic truth is so obvious, there must be an unspoken agreement that explains why governments everywhere continue to borrow credit instead of originating the national money supply without incurring public debt.
Large corporations and ultra wealthy individuals theoretically pay 35% in taxes, but in reality from 17% to zero, compared to 50% and 91% respectively, in 1960. Today, the federal government borrows from these two extremely affluent groups instead of taxing excessive wealth. The public pays them back, plus interest ~ an arrangement that fosters income inequality, concentration of wealth, federal debt and deficits. Why not reform the tax code? Concentrated wealth buys political influence to dictate tax policy.
Who else benefits? The military siphons off 58% of the visible federal discretionary budget. The invisible Pentagon budget, in excess of one trillion annually is unknown to Congress because the Pentagon has never passed an audit. Pentagon contractors, DHS and the "security" industry have sucked up $7.5 trillion since 9/11. The corporate war and national "security" industries are financed with borrowed credit that goes on the taxpayer tab for future generations. If this government spending had to be financed through direct taxation do you think Americans would refuse to pay $6 trillion for illegal wars in Iraq, Afghanistan, Pakistan and Libya and $7.5 trillion for so-called "offensive security"? The cost of this antisocial spending is so excessive it would consume the entire annual income of most workers. Rebellion would surely derail the corporate war and national "security" gravy train.
Here are some other big beneficiaries of government debt ... Wall Street financial institutions, transnational investment banks and members of the Federal Reserve System that derive billions of dollars in interest payments provided by American taxpayers. Government debt is a lucrative commodity. (Student debt soared from $200 billion in Y2000 to a whopping $830 billion in Y2010, surpassing the nation's total credit card debt of $800 billion.) Just to give you a sense of how cavalier the transnational bankers are that gamble with our lives, ICE US Trust LLC, a Federal Reserve member, is a multi-trillion dollar credit default swaps casino that accepts only two forms of collateral to place a bet ~ cash and G-7 government debt.
Where did sixteen trillion dollars in taxpayer loans come from to bail out corporations and domestic and foreign banks that crashed the global economy with their mortgage derivatives casino? That credit was generated by the Federal Reserve to save the banks that created the crisis from well-deserved bankruptcy. Their liabilities were transferred to taxpayers and bailout funds were used to expand their monopolies. The US Treasury is their ATM and we, the taxpayers, supply the cash.
Another major beneficiary is the World Bank-IMF syndicate of predators that engineer government debt as a weapon of mass destruction. The "sovereign debt crisis" being used in Europe as a pretext for "austerity" is classic IMF "structural adjustment" (economic train wreck) and has its counterpart in the US, masquerading as government deficit reduction. Neoliberal privateers follow a predictable blueprint: deregulate to clear a path for criminals, drive a nation into debt to confiscate state assets, privatize the public sector, loot the treasury, slash wages, destroy unions, steal pensions, cut social spending, raise taxes on workers and cut taxes on the wealthy. Sound familiar? The IMF has been using this blueprint since WWII to loot the world.
The Occupy Movement has a stunning opportunity to halt and defeat this global attack on the public by restoring sovereign monetary systems worldwide.
Occupy the Treasury ~ Transform the monetary system
In the United States, Congressman Dennis Kucinich has introduced a bill that could be replicated in other countries -- HR 2990 The National Emergency Employment Defense Act of 2011. The NEED Act restores the constitutional prerogative of the federal government to create the national money supply -- without incurring debt - and ends "fractional reserve' lending, the accounting device that banks use to arbitrarily create credit with a computer keystroke. Henceforth, ONLY the US Treasury's Monetary Authority would have the legal authority to create US money. Banks would only be able to lend US money they actually have on deposit or borrow from the Monetary Authority. Implementation of The NEED Act would pay off federal debt with US Money as it comes due until it is permanently retired.
Money would initially enter circulation by federal spending to promote the general welfare, for example on public infrastructure ($2.2 trillion needed, creating 7 million jobs); underwriting the public education system from kindergarten through college; stabilizing social security and state pensions; funding federal mandates; making grants and interest-free loans to states for public infrastructure, education, health care and rehabilitation. In addition, the Monetary Authority would give 25% of money created to the states, and a tax-free dividend to all US citizens to inject liquidity into the economy. All without incurring one penny of debt.
Passing this legislation would give the PUBLIC control over creating the money supply and the MEANS to expand the PRODUCTIVE economy. People who are employed have money to spend which increases the number of customers for small (and large) businesses which can then hire more workers. Greater employment and increased productivity creates more state and local tax revenue which can then be spent on funding public services. In other words, the NEED Act reverses the cycle of economic contraction engineered by private banks withholding credit -- permanently.
The NEED Act nationalizes the monetary system ~ not the banking system. Serious financial regulations, Wall Street reforms and prosecutions for fraud are still in order. Immediate withdrawal from the World Trade Organization 1999 Financial Services Agreement is a critical prerequisite for reinstating regulations that protect the public. The 1999 WTO FSA mandated massive deregulation of the financial sector in 105 countries and forbids sovereign governments to EVER roll back these destructive mandates. By what authority? Add the unaccountable, unelected WTO tribunal to the list of transnational predators sabotaging financial integrity and monetary sovereignty.
Who wouldn't want a public monetary system that serves the whole society? The beneficiaries of a debt scheme that siphons off our nation's resources to finance antisocial pursuits and concentrate wealth in the hands of a few. Their lobbyists will descend on Congress. This bill will die a quiet death in the House Committee on Financial Services and never be brought to the floor for a vote unless we -- the 99% - make it visible and demand its passage.
The Occupy Movement has enormous potential to transform the structural inequality built into our monetary, economic and political system. Superficial "reforms" are meaningless. Please devote yourself to building public momentum to demand passage of this bill. If we reach critical mass, we just might "form a more perfect union, establish ECONOMIC justice, ensure domestic tranquility, promote the general welfare and secure the blessings of liberty to ourselves and our posterity.'
Restoring sovereign monetary systems worldwide could spark a Global Renaissance .