There's absolutely no historical evidence to support the concept that he's economically doing anything right.

And the military is still getting bigger. I have a very dark feeling about all of this.

I look forward to all of your articles, videos, etc.

Have you ever looked into the fundamental reason why this nation and many, many others can't provide for the "Commons" without incurring extraordinary debt? And this debt dosen't have to happen.

Check this out.

President Obama’s Only Way Out of Crushing Infinite Debt

It's time to cut to the chase on resolving the issue of reducing the burden of public debt in this society. In a Washington Post editorial, "No Laughing Matter," 6/5/2009, the editor wrote, "If government borrowing costs continue to accelerate, they could kill economic growth for years to come." All, with common sense, agree.

What's the best strategy we can think of to remedy this seemingly obvious and inevitable spiral into the abyss of endless debt? This nation has a “tried and true” solution but not the political will or patriotism to inform Americans that there is indeed a solution. If the American Middle Class knew how money and banking operated in this country they would create a populist revolution overnight. It’s no surprise that the Administration is silent on the issue of how money and banking actually operate to smother real economic and social progress in eternal debt.

The President's economic advisors have been cravenly disingenuous about the best strategies through which to curb the constant growth in debt and debt service payments. If they’ve told him about all of his options and he has rejected the one that will resolve our descent into debt hell, then he has no claim to being a change agent for this nation. If they did not present all of the alternatives, then they have obviously violated their oath of office because they do not serve the President or the Nation.

What Does The President Know About Debt Free Currency?

So far his economic team has demonstrated its adherence to and reliance on conventional wisdom. As we have seen it is more of the same "drip-drip-drip" water torture used over the past, nearly, 100 years. They only reiterate the mantra, legislate tax hikes and belt tightening reductions in social programs.” At the same time, create trillions of dollars in new debt by bailing out institutions that have failed and should have been placed into receivership. There just is no validity to the mantra “…they are too big to fail because if they do the entire financial system will come crashing down.”

The remedy for their dissolution would have been to issue new money to hundreds of new smaller banks and financial firms, rather than rescue the failed banks and financial houses which then would give them free reign to continue with “business as usual” knowing that when they fail, the government will just bail them out again.

However, reviving these failed institutions was to be expected given their recent history, particularly, the two major recipients of TARP tax dollars. Citibank became insolvent in 1989 and was quietly bailed out with the help of the Federal Reserve, and JP Morgan Chase (JPM) followed suit in 2002. These are the two largest banks in America. Both were overexposed in guess where, the derivatives market. What should happen is that banking institutions supported by taxpayer money can and should be made public institutions operated for the benefit of the taxpayer.

One of many fundamental problems with America’s monetary system is the absence of effective oversight of banks and the Federal Reserve System. Over the past ten years the tiny Office of Thrift Supervision was selected by over fifty of the country's largest banks including global insurer AIG, to be their regulator. That’s right the banks get to choose who regulates them because the banks have to pay the regulators. OTS regulators then surreptitiously, disavow any real intent to regulate, thus currying favor with the banks which earns OTS lots of income. Because all banks want to keep the regulators out, and as long as the regulators go along to get along, everyone smiles all the way to the bank.

The Experts Agree, Speak Out, and Only Some Are Punished

But I digress. Who really cares about the ineffective regulation of banks? Americans don’t understand how and why banks function as they do. Well, let’s see how the following grabs you!

“…international bankers have succeeded in doing more than just controlling the money supply. Today they actually create the money supply, while making it appear to be created by government. This devious scheme was revealed by Sir Josiah Stamp, Director of the Bank of England and the second richest man in Britain in the 1920s. Speaking at the University of Texas in 1927, he dropped this bombshell:

“The modern banking system manufacture’s money out of nothing. The process is perhaps the most astounding piece of sleight of hand that was ever invented. Banking was conceived in inequity and born in sin….Bankers own the earth. Take it away from them but leave them the power to create money, and, with a flick of a pen, they create enough money to buy it back again….Take this great power away from them and all great fortunes like mine disappear, for then this would be a better and happier world to live in… But, if you want to continue to be the slaves of bankers and pay the cost of your own slavery, then let bankers continue to create money and control credit.””¹

“Professor Henry C. K. Liu is an economist who graduated from Harvard and chaired a graduate department at UCLA before becoming an investment adviser for developing countries. He calls the current monetary scheme a “cruel hoax.” When we (Americans)
wake up to that fact, he says, our entire economic world view will need to be reordered, “just as physics was subject to reordering when man’s world view changed with the realization that the earth is not stationary nor is it the center of the universe.”²

The hoax is that there is virtually no “real” money in the system, only debts. Except for coins, which are issued by the government and makes up only about one one-thousandth of the money supply, the entire U.S. money supply now consists of debt to private banks, for money they created with accounting entries on their books. It is all done by sleight of hand; and like a magician’s trick, we have to see it many times before we realize what is going on. But when we do, it changes everything. All of history has to be rewritten.”³

“At one time, the right to issue money was the sovereign right of the king; but that right got usurped by private moneylenders. Today the sovereigns are the people, and the coins that make up less than one one-hundredth of the money supply are all that are left of our sovereign money. Many nations have successfully issued their money, at least for a time; but the bankers’ debt-money has generally infiltrated the system and taken over in the end. These concepts are so foreign to what we have been taught that it can be hard to wrap our minds around them, but the facts have been substantiated by many reliable authorities. To add a few more –

Robert H. Hemphill, Credit Manager of the Federal Reserve Bank of Atlanta, wrote in 1934:

“We are completely dependent on commercial banks. Someone has to borrow every dollar we have in circulation, cash and credit. If the Banks create ample synthetic money we are prosperous; if not, we starve. We are absolutely without a permanent money system. When one gets a complete grasp of the picture, the tragic absurdity of our hopeless position is almost incredible, but there it is. It is the most important subject intelligent persons can investigate and reflect upon.”4

Graham Towers, governor of the Bank of Canada from 1935 to 1955, acknowledged:

Banks create money. That is what they are for…The manufacturing process to make money consists of making an entry in a book. That is all…Each and every time a Bank makes a loan…new Bank credit is created – brand new money.’5

“Today, Federal Reserve Notes and U.S. dollar loans dominate the economy of the world; but this international currency is not money issued by the American people or their government. It is money created and lent by a private cartel of international bankers, and this cartel has the United States itself hopelessly entangled in a web of debt. By 2006, combined personal, corporate and federal debt in the United States had reached a staggering 44 trillion dollars – four times the collective national income, or $147,312 for every man, woman and child in the country.”6

“The United States is legally bankrupt, defined in the dictionary as being unable to pay one’s debts, being insolvent, or having liabilities in excess of a reasonable market value of assets held.”7

“By October 2006, the debt of the U.S. government had hit a breathtaking $8.5 trillion. Local, state and national governments are all so heavily in debt that they have been forced to sell off public assets to satisfy creditors. Crowded schools, crowded roads, and cutbacks in public transportation are eroding the quality of American life. Since state and local governments everywhere, except North Dakota, are in debt, who are they in debt to? The answer is that governments are in debt to private bankers. The “cruel hoax” is that governments are in debt for money created on a computer screen, money these governments could create themselves.”8

Today the “money” banks use to lend to the American borrower is indeed created by a computer operator who operates a software accounting program to credit and debit the banks accounts. When the Federal Government needs money it must borrow it from the Federal Reserve which charges the government 1%, 2%, 3%, or more, for access to "fiat money.”

Executive Order 11110 Current Authority to Create Debt Free Currency

The Fed, could if it was told to do so, issue debt free currency. Or, if elected officials had the courage they could insist that the President use existing authority under Executive Order 11110, to take control of issuing currency and issue U.S. Silver Notes and drive out Federal Reserve Notes. We've been there three times; Colonial Scrip, Lincoln's Greenbacks, and JFK's Silver Notes. And in each instance the bankers bought there way back (through national and state legislators) into the monetary system to ensure that they received their unearned payday from income tax revenue.

President Kennedy recognized that our financial system was flawed. He planned to eliminate the Federal Reserve's contrived control mechanism on our future. He signed executive order 11110 as a first step.
Executive Order 11110 issued on June 4, 1963 gave the President the Authority to order the United States Treasury "to issue silver certificates against any silver bullion, silver, or standard silver dollars in the Treasury." For every ounce of silver in the U.S. Treasury's vault, the government could introduce a certificate or warehouse receipt to be used as money. This followed IMO the constitution's requirement that the government provide the medium of exchange and it follows the coinage act requirements. Basing the monetary system on silver and not gold was also very important because silver is abundant and very difficult to control.
Kennedy issued nearly $4.3 billion in U.S. notes and was introducing them into circulation, with a plan to continue until sufficient currency was in circulation to manage the flow of goods and services. The ramifications of this bill are enormous. President Kennedy was on his way to putting the Federal Reserve Bank of New York out of business. When enough of his United States Notes were in circulation he would eliminate the Federal Reserve notes.
Executive Order 11110 could have prevented the national debt from reaching its current level. The government would not have been able to increase debt and this would have curtailed its growth.
Kennedy was assassinated just five months after installing this EO.
EO 1110 was never repealed and is still valid. If we had started or continued Kennedy's Plan the debt would be nowhere near the current level, and we would have a financial system that would increase currency levels without increasing the debt and its inflationary interest. We would escape the trap of the irreversible transfer of wealth from the debtors to the lenders giving up all our assets to the Federal Reserve.

Perhaps the assassination of JFK was a warning to future presidents who would think to eliminate the U.S. debt by eliminating the Federal Reserve's control over the creation of money. Mr. Kennedy challenged the government of money by challenging the two most successful vehicles that have ever been used to drive up debt - war and the creation of money by a privately owned central bank.
Until, the Treasury, through the authority of the President and the Congress, is authorized to issue debt free currency with which to fund public sector needs we will, as a Nation, be debt slaves to the usurious system called the Federal Reserve, which is neither Federal nor does it hold reserves. It just creates debt, not money, just debt.

Basic Components and Benefits of a Monetary System Based on Debt Free Currency

With such a system we could do the following over the next 12-24 months:

• Monetize the debt,
• Liquidate debt instruments to eliminate the threat of inflation,
• Require a 100% reserve for all banks, which eliminates creeping inflation,
• Develop a national price to cost out public sector programs. GDP/Annual hours worked by labor force,
• Issue U.S. Dollar Notes, withdraw Federal Reserve Notes
• Recall all Federal Reserve/Treasury debt instruments,
• Liquidate those debt instruments upon redemption and never issue them again, and
• Repeal income and corporate tax laws and regulations since there will no longer be a need for interest payments on debt.

With a monetary system based on debt free currency every public program with merit can be budgeted and funded without concern for deficits, or inflation. Idle productive assets would be brought back into production. Money supply growth would be based on GDP or population growth rates. This society could:

• Cross-train displaced workers without fear of creating deficits,
• Implement universal health care and education.
• Rehabilitate our infrastructure,
• Pour millions into cancer and autism research,
• Finance the deployment of renewal energy technologies,
• Build a national “smart” grid,
• Clean up all toxic waste sites,
• Train thousands of doctors, nurses and medical technicians,
• Build state of the art hospitals and clinics throughout the nation.

And much, much more can be achieved, all without incurring one penny of debt or an increase in the rate of currency inflation. For example;

“Assume that the Federal Reserve had used its new Greenback issuing power to buy back the entire outstanding federal debt, and that it had acquired enough bank branches (either by purchase or by FDIC takeover in receivership) to service the depository and credit needs of the public. What impact would those alterations have on the federal income tax burden? To explore the possibilities, we’ll use U.S. data for FY 2005 (the fiscal year ending September 2005), the last year for which M3 was reported:

• Total individual income taxes in FY2005 came to $927 billion.

• Taxpayers paid $352 billion in interest that year on the federal debt. If the debt had been paid off, this interest could have been cut from the national budget, reducing the tax burden by that sum.

• Total assets in the form of bank credit for all U.S. commercial banks in FY2005 were reported at $7.4 trillion. Assuming an average collective interest rate on bank loans of about 5%, approximately 370 billion dollars were thus paid in interest that year. If roughly half this sum had gone to a newly-formed national banking system – for loans made at the federal funds rate to private lending institutions, interest on credit card debt, loans to small businesses, and so forth – the government could have earned around $185 billion in interest in FY2005.

• Adding these two adjustments together, the public tax bill might have been reduced by around $537 billion in FY2005.

• Deducting this sum from $927 billion leaves $390 billion. This is the approximate sum the government would have had to generate in new Greenbacks to eliminate federal income taxes altogether in FY2005.

• What would adding $390 billion do to the money supply and to consumer prices?

• In 2005, M3 was $9.7 trillion. Adding $390 billion would have expanded M3 by only 4 percent – Milton Friedman’s models target rate, and far less than the money supply actually grew in 2006. That was the year the Fed quit reporting M3, but the figures have been calculated privately by other sources.

• Economist John Williams has a website called “Shadow Government Statistics,” which exposes and analyzes the flaws in current U.S. government data and reporting. He states that July 2006, the annual growth in M3 was over 9 percent. We’ve seen that this growth must have come from fiat money created as loans by the Federal Reserve and the banks. Thus if new debt-free Greenbacks had been issued by the Treasury instead, inflation of the money supply could actually have been reduced – from 9 percent to a modest 4 percent – without cutting government programs or adding to a burgeoning federal debt.

• New Greenbacks in the sum of $390 billion would have been enough to eliminate income taxes, but according to Keynes, the government could have issued quite a bit more than that without significantly inflating prices. He said that if the funds were used to put the unemployed to work making new goods and services, new currency could safely be added up to the point of full employment without creating price inflation. The gross domestic product would increase by the value of newly-made goods and services, keeping supply and demand in balance.”9

Debt Free Currency for State and Local Governments

In the interest of preserving a single national currency, state and local governments would not be able to issue new Greenbacks to fund their programs (although they could issue other forms of credit, such as tax credits, for fuel efficiency, etc.). The federal government could offer loans to state and local governments interest-free and these governments could pledge repayment to the federal government in exchange for federally-issued Greenback dollars.

Relieving state and local governments of the burden of paying interest would give a major boost to local economies. Today local governments often pay more in interest on loans for local projects than they pay for labor and materials. State and local governments are good credit risks and do not need the prod of interest charges to encourage them to make timely payments on their loans. To discourage local officials from borrowing “free: money just to speculate with it, the funds could be earmarked for specific approved purposes, and a strict repayment schedule imposed.

How would the loans be repaid? The money could come from taxes; but again, a more satisfying solution would be for state and local governments to raise revenue through fee-generating enterprises of various sorts, turning local economies into sort of cooperative profit-generating endeavors implied in the term “Common Wealth.”

I challenge the print media to have one or more of its economic/ financial writers/editors write a column or two about the efficacy of debt free currency. They can get deep background from E. H. Brown's, "The Web of Debt" or visit http://www.webofdebt.com.

Robert Bostick
Robbrian_06@yahoo.com
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¹Quoted in U. Ibrahim-Morrison, et al., “Building Sound Economic Foundations,” Alarm Magazine (May 1995)

²Henry C K Liu, “The Global Economy in Transition,” Asia Times (September 16, 2003).

³E. H. Brown, “The Web of Debt,” p 2, 2007

4 Ibid, “The Web of Debt,” p 2-4, 2007

5 Quoted in “Someone Has to Print the Nation’s Money…So Why Not Our Government?”, Monetary Reform Online, reprinted from Victoria Times Colonist (October 16, 1996).

6 E. H. Brown, “The Web of Debt”, p. 5

7 Ibid, p.6

8 Ibid p. 6

9 Ibid, p. 428