You have been taught to worship “tree trade” as the greatest blessing for the wealth of nations. Let me show you how greatly deceived you have been.
The United States and other countries has people capable of producing most of the goods and services, the food, clothing, housing, furniture, appliances, schools, literature, art, infrastructure, machines and so forth that it needs. People are willing to work, to acquire the skills, to invent, to add to scientific knowledge, to teach, to manage, to extract resources from nature, to build, and to contribute the entrepreneurship which fits production to demand.
And with the right amount of money in the economy all of this can take place.
Unfortunately for us, however, we never have the right amount of money and the money we do have is never distributed among the people in such a way that the things that make their lives better can be produced and distributed through the people’s money demand for them.
Why is that?
Money lenders with no care about the suffering they may cause took advantage of a King named William who wanted to wage a war but failed first to amass a surplus of gold to pay for armies and navies — so he gave some money lenders a charter to create a bank with exclusive power to issue banknotes in excess of their gold and to lend those notes to provide the kingdom with its money from then on. Today that those bankers have grown so rich and powerful that they have imposed exactly that kind of bank on all nations so that today all of the money in circulation in nearly every country is money that is loaned into existence — which means that it is provided by the lender to borrowers on condition that the lender takes on the obligation to return to the lender that same amount, called the principal that is owed, plus an additional amount, called compound interest. No you need to understand how this works. An entrepreneur sees a chance to satisfy a human want at a cost of production and/or service that people will gladly pay to have that want satisfied. He knows the costs of materials, he knows the cost of labor, he knows the cost of getting the machines and input flows needed to produce for that satisfactory price — only he doesn’t have money to put this surely profitable venture into motion. So he borrows it at compound interest. The lender then co-creates a bank deposit for the entrepreneur to draw upon plus a schedule of debt payments which the borrower is obligated to make to the banker over a number of months or years. Now the question is — does this arrangement provide the country with enough money for a successful economy?
The answer is that having producers borrow money for paying for land, labor and machines to make a product to later on sell, is a seriously flawed system — because while the initial loan — the initial creation of a deposit money in an account for the borrowers — is quickly spent into circulation (paying workers and other input providers) — and everything would be fine if that was all there was too it — the fact is that when the payments on the debt begin there comes the sure and steady draining away of money (of deposits in the nation’s bank accounts) causing an insufficiency of money so that the people who produced — the entrepreneur, the skilled worker, the engineer, and the rest — do not have enough money going into their pockets to buy the things that they have produced.
Everything that was produced cost so much for manpower, for land resources, for machines and know-how — but then there is this other cost which has nothing to do with production or distribution of the good produced — it is the payment that must be made to the money provider — to the monopoly of money created by the king so he could fight that war of long ago. The banker gets his interest — and inventory goes unsold — and businesses and households default on their debts — and the lender as creditor takes the real assets that were pledged as collateral — including the unsold inventory.
This unsold inventory the money lender then arranges to sell abroad — a matter of international trade. And what if the foreign country does not want to buy the production the banker now owns? In that case the banker arranges for a war to be started in those countries destroying much of the housing and productive capacity of that country so that that country will indeed be needing to buy the surplus the International Money Power wishes to sell them. In fact the Money Power diverts production from goods for consumption and construction into instruments of destruction — because bombs and planes and tanks sent abroad to destroy — are simply another means of exporting production — and the Money Power doesn’t care whether he is exporting goods or death — in fact he may prefer exporting death, or at least destruction, because destruction means new demands for loans and foreign trade orders to reconstruct what has been destroyed.
And that is how it all works.
The solution? Easy. Have the government make up the money and distribute it free of charge to the people. Have the government distribute all of this new money exclusively through a citizen’s “new money dividend” — permanent money, supplied as a public utility, as necessary public infrastructure of the nation’s market economy. Put an end to the system created by King William which now blights the human race. Let banks no longer be the creators of money. Let all money be permanent. Let there be a separation of banking and government and of money creation from banking. Let banks be abolished and let government take over the creation of deposit money. But these deposits will not be co-created with a debt obligation to pay to the lender principal and interest. Instead of banks there will be lending clubs — where people pool their money for some lending expert to lend to worthy entrepreneurs — but only money that people with savings have turned over to the club for lending. That is real banking in a free society. That is what we need.
I have been saying this for a number of years and I know several people who agree with me — but it goes nowhere.
So tell me why you do or do not agree with this view of what the economy needs; and tell me also, why you will or will not work to spread knowledge of this solution and see it adopted by this republic which stands in dire need of it.