Forum Post: Vision for America Part 2

How would this be accomplished? A quick analyzation of how money is created is required. Every one of the above problems is a direct result of not enough money. Yet, as we all know there are some people who rake in the dough regardless of how well/poor society is functioning.

I referred earlier to a major flaw affecting society. That flaw is the fact that govt has given the power to create money to banks. Govt doesn't just print it up and spend it, otherwise we wouldn't be in the predicament we're currently in.

A quick example of how banks create money: You deposit $20k into a bank. Your neighbor decides he is going to buy a car but doesn't have the money, so he borrows it from the bank. At a 10% reserve rate, the bank then lends your neighbor $18k, based on your deposit. Your neighbor then gives the money to car dealer who deposits it in the same bank you do business with. So now the bank has $38k in deposits that can all be spent at a moments notice even though you only deposited $20k. The money supply expanded by $18k through debt.

This is the exact problem we're in. Banks, who's objective is to maximize profits, have indebted us all beyond what we can collectively pay back. It's impossible for the entire country to be debt free.

How do we fix this? We institute a Public Bank model, similar to the Bank of North Dakota, but the Federal govt will have the option to print as much money as it needs for the benefit of the country. What would stop them from printing trillions of dollars? There is a maximum amount that can only be determined once we hit full employment.

Last year, total Federal, State and Local govts spent about $6.5T. If we overestimate the severity of un/underemployment and put it at 20%, then we would have to add an additional $1.3T to spending to reach full employment. A total of $7.8T to spend.

The Public Bank would lend to the various districts who need it. For example, each state would have a public bank followed by each municipality. These banks would provide lending to anyone who is willing to put comparable collateral on the line as well as maintain a 100% reserve requirement. Any private bank that wishes to obtain loans may do so by accepting certain conditions, such as maintaining a 100% reserve requirement - practically ensures financial stability - and full transparency. The Public Banks would also act as a clearing house by transferring money from one account to another.

Fractional-reserve banks may still exist, however they will not receive public funding. So as soon as one of their customers tries to cash a check that bounces, the govt has reason to investigate. If the bank has failed, then all assets will be sold off and any depositors, vendors or shareholders who are owed money will be paid back proportionately. If this means their depositors lose money, then so be it. They were willing to risk their money by depositing in a risky bank. They gambled and lost. Public banks, and those banks who accept the conditions of the Public Banks, will never risk their customers deposits on speculation.

Now as I mentioned, there would remain a property tax. This being the most ideal tax since #1 it's voluntary since you can live in govt provided housing and #2 it helps to ensure productive use of land. At about $5k/acre of private land, we could practically cover today's total expenditures of govt spending.

Property Tax + Interest (from Public Bank lending) + Well-being increase = Total Govt Expenses

The Well-being increase is to help ensure a growing money supply, say 2-3% of total Govt Expenses, so that inflation is curbed but access to money remains guaranteed.

So that is the basic layout of how this type of govt would operate. The hard part is convincing the politicians who will/are lobbied by the private banking cartel to take this approach. But one thing is for certain, the failed experiment known as the Federal Reserve Act has not been able to ensure full employment, no debt, little to no taxes, etc. In fact, it has ensured cutbacks in govt funding and unneccessary social strife.

So it will be easy to tell if we win this battle or not. If govt has the power to create money, we win. If banks retain, we lost.

Let's win the battle.