Monetary reform: why it is essential to the sustainability of the economy and of society

John Howell – presenting

See the letter below, which has been sent to our senators and congressman.

According to Senator Sanders, speaking on the Senate floor, Mr. Lloyd Blankfein, CEO of Goldman-Sachs, and his Wall Street colleagues are lobbying Congress hard to avoid the “fiscal cliff” by cutting social service benefits. These are the guys who caused the recession we are in, through their irresponsible actions, were bailed out by the government (by us), and now want to solve the problem they created by cutting social services! Lloyd Blankfein was paid $16.1 million in 2011, a 14 percent increase while earnings fell 47 percent. During the financial crisis, Goldman Sachs received a total of $814 billion in virtually zero interest loans from the Federal Reserve and a $10 billion bailout from the U.S. Treasury. Goldman Sachs received a $278 million refund from the IRS in 2008, even though it earned a profit of $2.3 billion that year. (http://www.sanders.senate.gov/newsroom/media/view/?id=55a0f9e5-5c9e-42ad-b451-dc037215e022)

As naïve as it may sound, there is a bill before this Congress, H.R. 2990, which would solve the current fiscal problem. It provides a way for Congress to increase infrastructure and social service spending while reducing the federal debt, all with reduced taxes. H.R. 2990 changes the way money is created.

Since the 1913 Federal Reserve Act all money, except coins, is created by the member banks of the Federal Reserve System; it is created as debt, when banks loan money – to individuals, to businesses and to the government. Although the Board of Governors of the Fed is federally appointed, the member banks, which do the business of the Fed, are privately owned. The Federal Reserve Act privatized the creation of money, terminating the issuance of “greenbacks,” government money, first issued during the Lincoln administration.

Why should any particular group of businessmen, namely bankers, be given the very lucrative authority to create money? Why should any group be given that authority, when Article 1, section 8, of the Constitution gives it to Congress?

H.R. 2990 returns the creation of money, and its lucrative benefits, to the Federal government – to the people. Under 2990, instead of borrowing money to cover the difference between tax revenues and expenditures, the government uses the money it creates. There is nothing to be paid back to private sources and no interest payments due.

H.R. 2990 is based on the Chicago Plan, originally proposed by distinguished economists during the 1930’s. The Plan has now been quantitatively analyzed by economists, including from the International Monetary Fund (IMF), using modern analytical techniques, and shown to be feasible and to be without inflationary or deflationary effects. (http://www.imf.org/external/pubs/ft/wp/2012/wp12202.pdf)

So with H.R. 2990 everyone is a winner! How can that be? There must be losers. The only losers are the central bankers, the Mr. Blankfeins of Wall Street. They lose this extraordinary privilege they have enjoyed, namely the authority to create money, which has made them wealthy and powerful, a privilege which they have badly abused. Isn’t this really who should lose, rather than you and your constituents?

If you or your staff would like more information about this, I would be happy to meet with you.

John Howell, 12/2/12

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