Ellen Brown, author of Web of Debt, has a new article in Yes Magazine entitled "Sustainable Government: Banking for a 'New' New Deal". In it she discusses the question of how Obama can fund what is necessary to fix our economy and get it moving again.
She goes back into history and Thomas Jefferson, who realized (after he was out of office as president) that there was a way to finance government without relying on debt owed to private banks.
And she suggests three approaches to Fund the "New" New deal: Nationalizing the Fed, establishing State Lending Banks, and just plain issuing debt-free currency backed by the "full faith and credit of the United States".
More below the fold.
Ellen Brown is a lawyer and the author of several books, the most important being IMHO Web of Debt, which lays out the background history of our monetary system and its history going back to Colonial days. I strongly recommend that you read the full book if you have any questions about what she is talking about here.
In this article she addresses the challenges that Obama will have to finance the bailout that has already
cost more than the New Deal, the Marshall Plan, the Louisiana Purchase, the moonshot, the savings and loan bailout, the Korean War, the Iraq war, the Vietnam war, and NASA’s lifetime budget combined.
She asks
How can the new President resolve these enormous funding challenges? Thomas Jefferson realized two centuries ago that there is a way to finance government without taxes or debt. Unfortunately, he came to that realization only after he had left the White House, and he was unable to put it into action. With any luck, Obama will discover this funding solution early in his upcoming term, before the country is declared bankrupt and abandoned by its creditors.
Banks don't actually have money to loan, they basically create the money by making the loans. Thus they are pretending to have the money they loan to us, and they have the nerve to ask us to bail them out for their gambling debts (such as derivatives) so they can continue to lend us money that they don't actually have.
Brown suggests Buying out the banks, not Bailing them out, and then funding government and the rebuilding of our infrastructure with government-issued credit.
She cites ample historical precedent for doing this, ranging from Colonial times, when a system apparently originating from Benjamin Franklin funded the prosperity of the Colonies while England was suffering in the throes of the Industrial Revolution, to Abraham Lincoln's greenbacks, to the Bank of North Dakota(still in existence).
She closes her article with advice for Barack:
Obama would do well to consider these funding solutions for his "smarter" government. He has been quick to assemble his advisers and form policy, but a fast start down the wrong road could do more harm than good. The bailout scheme of the current administration is serving merely to keep a failed banking system alive by draining assets away from the productive economy. The conventional wisdom is that we must continue down the path we are on, because the alternative means frightening, radical change. Financing a new New Deal without putting the country further into insolvency, however, would not be a radical departure from tradition but would represent a return to our roots, to the uniquely American monetary policy advocated by our venerable forebears Benjamin Franklin, Thomas Jefferson and Abraham Lincoln.
Since I read Web of Debt, I've been following this issue closely. In my opinion this is the only way our Nation can survive the situation we are in today. I believe that every Kossack and every member of Congress needs to read Web of Debt. This article is a good introduction to get started on the complicated issues surrounding the monetary reform that we need to survive.