Ellen Brown has written a great crystal clear synthesis about the alternative to the deficit hysteria, an alternative to the monopoly power private commercial banks have over money creation.
Send this article to your friends. It is short and concise enough or most to be able to understand how contrived, how little reality underlies the deficit-as-all-consuming-concern argument.
She mentions that Adair Turner, chairman of Britain’s Financial Services Authority, wrote a 75 page paper showing that there is ample empirical evidence that (below a certain factory utilization rate) a government can directly print money to buy the goods and services that it needs without causing hyperinflation, and she points out what economist Richard Werner really intended when he recommended Quantitative Easing to Japan had nothing to do with what Geitner has done here.
The QE he recommended was more along the lines of the money-printing engaged in by the American settlers in colonial times and by Abraham Lincoln during the American Civil War. The colonists’ paper scrip and Lincoln’s “greenbacks” consisted, not of bank loans, but of paper receipts from the government acknowledging goods and services delivered to the government. The receipts circulated as money in the economy, and in the colonies they were accepted in the payment of taxes.
The best of these models was in Benjamin Franklin’s colony of Pennsylvania, where government-issued money got into the economy by way of loans issued by a publicly-owned bank. Except for an excise tax on liquor, the government was funded entirely without taxes; there was no government debt; and price inflation did not result. In 1938, Dr. Richard A. Lester, an economist at Princeton University, wrote, “The price level during the 52 years prior to the American Revolution and while Pennsylvania was on a paper standard was more stable than the American price level has been during any succeeding fifty-year period.”
What she does not mention is that for every episode of commodity inflation caused by government money printing, there are many caused by commercial banks loaning to speculators.
TIAA There IS and alternative.
Title updated to make clear it does not refer to Teachers Anuity
2:49 PM PT: This diary does not refer to the Teacher's Insurance and Annuity Association, but rather to the converse of TINA, (There is No Alternative) a favorite saying of deficit hawks.