Best of the Week
Most Popular
1.The Gallery of Crowd Behavior: Goodbye Stock Market All Time Highs - Doug_Wakefieldth
2.Tesco Meltdown Debt Default Risk Could Trigger a Financial Crisis in Early 2015 - Nadeem_Walayat
3.The Trend Every Nation on Earth Is Pouring Money Into - Keith Fitz-Gerald
4.Do Tumbling Buybacks Signal Another Stock Market Crash? - 26Mike_Whitney
5.Could Tesco Go Bust? How to Save Tesco from Debt Bankruptcy Risk - Nadeem_Walayat
6.Gold And Silver Price - Respect The Trend But Prepare For A Reversal - Michael_Noonan
7.U.S. Economy Faltering Momentum, Debt and Asset Bubbles - Lacy Hunt
8.Bullish Silver Stealth Buying - Zeal_LLC
9.Euro, USD, Gold and Stocks According to Chartology - Rambus_Chartology
10.Evidence of Another Even More Sweeping U.S. Housing Market Bust Already Starting to Appear - EWI
Last 5 days
Stocks Bear Market Crash Towards New All Time Highs as QE3 End Awaits QE4 Start - 31st Oct 14
US Mortgages, Risky Bisiness "Easy Money" - 30th Oct 14
Gold, Silver and Currency Wars - 30th Oct 14
How to Recognize a Stock Market “Bear Raid” on Wall Street - 30th Oct 14
U.S. Midterm Elections: Would a Republican Win Be Bullish for the Stock Market? - 30th Oct 14
Stock Market S&P Index MAP Wave Analysis Forecast - 30th Oct 14
Gold Price Declines Once Again As Expected - 30th Oct 14
Depression and the Economy of a Country - 30th Oct 14
Fed Ends QE? Greenspan Says Gold “Measurably” “Higher” In 5 Years - 30th Oct 14
Apocalypse Now Or Nirvana Next Week? - 30th Oct 14
Understanding Gold's Massive Impact on Fed Maneuvering - 30th Oct 14
Europe: Building a Banking Union - 30th Oct 14
The Colder War: How the Global Energy Trade Slipped From America's Grasp - 30th Oct 14
Don't Get Ruined by These 10 Popular Investment Myths (Part VIII) - 29th Oct 14
Flock of Black Swans Points to Imminent Stock Market Crash - 29th Oct 14
Bank of America's Mortgage Headaches - 29th Oct 14
Risk Management - Why I Run “Ultimate Trailing Stops” on All My Investments - 29th Oct 14
As the Eurozone Economy Stalls, China Cuts the Red Tape - 29th Oct 14
Stock Market Bubble Goes Pop - 29th Oct 14
Gold's Obituary - 29th Oct 14
A Medical Breakthrough Creating Stock Profits - 29th Oct 14
Greenspan: Gold Price Will Rise - 29th Oct 14
The Most Important Stock Market Chart on the Planet - 29th Oct 14
Mysterious Death od CEO Who Went Against the Petrodollar - 29th Oct 14
Hillary Clinton Could Be One of the Best U.S. Presidents Ever - 29th Oct 14
The Worst Advice Wall Street Ever Gave - 29th Oct 14
Bitcoin Price Narrow Range, Might Not Be for Long - 29th Oct 14
UKIP South Yorkshire PCC Election Win is Just Not Going to Happen - 29th Oct 14
Evidence of New U.S. Housing Market Real Estate Bust Starting to Appear - 28th Oct 14
Principle, Rigor and Execution Matter in U.S. Foreign Policy - 28th Oct 14
This Little Piggy Bent The Market - 28th Oct 14
Global Housing Markets - Don’t Buy A Home, You’ll Get Burned! - 28th Oct 14
U.S. Economic Snapshot - Strong Dollar Eating into corporate Profits - 28th Oct 14
Oliver Gross Says Peak Gold Is Here to Stay - 28th Oct 14
The Hedge Fund Rich List Infographic - 28th Oct 14
Does Gold Price Always Respond to Real Interest Rates? - 28th Oct 14
When Will Central Bank Morons Ever Learn? asks Albert Edwards at Societe General - 28th Oct 14
Functional Economics - Getting Your House in Order - 28th Oct 14
Humanity Accelerating to What Exactly? - 27th Oct 14
A Scary Story for Emerging Markets - 27th Oct 14
Could Tesco Go Bust? How to Save Tesco from Debt Bankruptcy Risk - 27th Oct 14
Europe Redefines Bank Stress Tests - 27th Oct 14
Stock Market Intermediate Correction Underway - 27th Oct 14
Why Do Banks Want Our Deposits? Hint: It’s Not to Make Loans - 26th Oct 14
Obamacare Is Not a Revolution, It Is Mere Evolution - 26th Oct 14
Do Tumbling Buybacks Signal Another Stock Market Crash? - 26th Oct 14
Has the FTSE Stock Market Index Put in a Major Top? - 26th Oct 14
Christmas In October – Desperate Measures - 26th Oct 14
Stock Market Primary IV Continues - 26th Oct 14
Gold And Silver Price - Respect The Trend But Prepare For A Reversal - 25th Oct 14
Ebola Has Nothing To Do With The Stock Market - 25th Oct 14
The Gallery of Crowd Behavior: Goodbye Stock Market All Time Highs - 25th Oct 14
Japanese Style Deflation Coming? Where? Fed Falling Behind the Curve? Which Way? - 25th Oct 14
Gold Price Rebounds but Gold Miners Struggle - 25th Oct 14
Stock Market Buy the Dip or Sell the Rally - 25th Oct 14
Get Ready for “Stupid Cheap” Stock Prices - 25th Oct 14
The Trend Every Nation on Earth Is Pouring Money Into - 25th Oct 14 - Keith Fitz-Gerald
Bitcoin Price Decline Stopped, Possibly Temporarily - 25th Oct 14

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

Stocks Epic Bear Market

Time for an Economic Bill of Rights

Politics / US Politics Nov 13, 2011 - 05:44 AM GMT

By: Ellen_Brown

Politics

Best Financial Markets Analysis ArticleHenry Ford said, “It is well enough that the people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.”

We are beginning to understand, and Occupy Wall Street looks like the beginning of the revolution. 


We are beginning to understand that our money is created, not by the government, but by banks.  Many authorities have confirmed this, including the Federal Reserve itself.  The only money the government creates today are coins, which compose less than one ten-thousandth of the money supply.  Federal Reserve Notes, or dollar bills, are issued by Federal Reserve Banks, all twelve of which are owned by the private banks in their district.  Most of our money comes into circulation as bank loans, and it comes with an interest charge attached. 

According to Margrit Kennedy, a German researcher who has studied this issue extensively, interest now composes 40% of the cost of everything we buy.  We don’t see it on the sales slips, but interest is exacted at every stage of production.  Suppliers need to take out loans to pay for labor and materials, before they have a product to sell.

For government projects, Kennedy found that the average cost of interest is 50%.  If the government owned the banks, it could keep the interest and get these projects at half price.  That means governments—state and federal—could double the number of projects they could afford, without costing the taxpayers a single penny more than we are paying now. 

This opens up exciting possibilities.  Federal and state governments could fund all sorts of things we think we can’t afford now, simply by owning their own banks.  They could fund something Franklin D. Roosevelt and Martin Luther King dreamt of—an Economic Bill of Rights. 

A Vision for Tomorrow

In his first inaugural address in 1933, Roosevelt criticized the sort of near-sighted Wall Street greed that precipitated the Great Depression.  He said, “They only know the rules of a generation of self-seekers.  They have no vision, and where there is no vision the people perish.” 

Roosevelt’s own vision reached its sharpest focus in 1944, when he called for a Second Bill of Rights.  He said:

This Republic had its beginning, and grew to its present strength, under the protection of certain inalienable political rights . . . . They were our rights to life and liberty.

As our nation has grown in size and stature, however—as our industrial economy expanded—these political rights proved inadequate to assure us equality in the pursuit of happiness.

He then enumerated the economic rights he thought needed to be added to the Bill of Rights.  They included:

The right to a job;

The right to earn enough to pay for food and clothing;

The right of businessmen to be free of unfair competition and domination by monopolies;

The right to a decent home;

The right to adequate medical care and the opportunity to enjoy good health;

The right to adequate protection from the economic fears of old age, sickness, accident, and unemployment;

The right to a good education.

Times have changed since the first Bill of Rights was added to the Constitution in 1791.  When the country was founded, people could stake out some land, build a house on it, farm it, and be self-sufficient.  The Great Depression saw people turned out of their homes and living in the streets—a phenomenon we are seeing again today.  Few people now own their own homes.  Even if you have signed a mortgage, you will be in debt peonage to the bank for 30 years or so before you can claim the home as your own. 

Health needs have changed too.  In 1791, foods were natural and nutrient-rich, and outdoor exercise was built into the lifestyle.  Degenerative diseases such as cancer and heart disease were rare.  Today, health insurance for some people can cost as much as rent. 

 Then there are college loans, which collectively now exceed a trillion dollars, more even than credit card debt.  Students are coming out of universities not just without jobs but carrying a debt of $20,000 or so on their backs.  For medical students and other post-graduate students, it can be $100,000 or more.  Again, that’s as much as a mortgage, with no house to show for it.  The justification for incurring these debts was supposed to be that the students would get better jobs when they graduated, but now jobs are scarce.

After World War II, the G.I. Bill provided returning servicemen with free college tuition, as well as cheap home loans and business loans.  It was called “the G.I. Bill of Rights.”  Studies have shown that the G.I. Bill paid for itself seven times over and is one of the most lucrative investments the government ever made. 

The government could do that again—without increasing taxes or the federal debt.  It could do it by recovering the power to create money from Wall Street and the financial services industry, which now claim a whopping 40% of everything we buy.

An Updated Constitution for a New Millennium

Banks acquired the power to create money by default, when Congress declined to claim it at the Constitutional Convention in 1787.  The Constitution says only that “Congress shall have the power to coin money [and] regulate the power thereof.”  The Founders left out not just paper money but checkbook money, credit card money, money market funds, and other forms of exchange that make up the money supply today.  All of them are created by private financial institutions, and they all come into the economy as loans with interest attached. 

Governments—state and federal—could bypass the interest tab by setting up their own publicly-owned banks.  Banking would become a public utility, a tool for promoting productivity and trade rather than for extracting wealth from the debtor class.

Congress could go further: it could reclaim the power to issue money from the banks and fund its budget directly.  It could do this, in fact, without changing any laws.  Congress is empowered to “coin money,” and the Constitution sets no limit on the face amount of the coins.  Congress could issue a few one-trillion dollar coins, deposit them in an account, and start writing checks.    

The Fed’s own figures show that the money supply has shrunk by $3 trillion since 2008.  That sum could be spent into the economy without inflating prices.  Three trillion dollars could go a long way toward providing the jobs and social services necessary to fulfill an Economic Bill of Rights.  Guaranteeing employment to anyone willing and able to work would increase GDP, allowing the money supply to expand even further without inflating prices, since supply and demand would increase together. 

Modernizing the Bill of Rights

As Bob Dylan said, “The times they are a’changin’.”  Revolutionary times call for revolutionary solutions and an updated social contract.  Apple and Microsoft update their programs every year.  We are trying to fit a highly complex modern monetary scheme into a constitutional framework that is 200 years old. 

After President Roosevelt died in 1945, his vision for an Economic Bill of Rights was kept alive by Martin Luther King.  “True compassion,” King declared, “is more than flinging a coin to a beggar; it comes to see that an edifice which produces beggars needs restructuring.” 

MLK too has now passed away, but his vision has been carried on by a variety of money reform groups.  The government as “employer of last resort,” guaranteeing a living wage to anyone who wants to work, is a basic platform of Modern Monetary Theory (MMT).  An MMT website declares that by “[e]nding the enormous unearned profits acquired by the means of the privatization of our sovereign currency. . . [i]t is possible to have truly full employment without causing inflation.”  

What was sufficient for a simple agrarian economy does not provide an adequate framework for freedom and democracy today.  We need an Economic Bill of Rights, and we need to end the privatization of the national currency.  Only when

Ellen Brown developed her research skills as an attorney practicing civil litigation in Los Angeles. In Web of Debt, her latest book, she turns those skills to an analysis of the Federal Reserve and “the money trust.” She shows how this private cartel has usurped the power to create money from the people themselves, and how we the people can get it back. Her earlier books focused on the pharmaceutical cartel that gets its power from “the money trust.” Her eleven books include Forbidden Medicine, Nature’s Pharmacy (co-authored with Dr. Lynne Walker), and The Key to Ultimate Health (co-authored with Dr. Richard Hansen). Her websites are www.webofdebt.com and www.ellenbrown.com.

Ellen Brown is a frequent contributor to Global Research.  Global Research Articles by Ellen Brown

© Copyright Ellen Brown , Global Research, 2011

Disclaimer: The views expressed in this article are the sole responsibility of the author and do not necessarily reflect those of the Centre for Research on Globalization. The contents of this article are of sole responsibility of the author(s). The Centre for Research on Globalization will not be responsible or liable for any inaccurate or incorrect statements contained in this article.


© 2005-2014 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

Ernie Messerschmidt
14 Nov 11, 09:26
Ellen Brown is right

Ellen Brown is right.

Plutocracy is not democracy, but slavery. The people didn't want the wars, the people didn't want the bailouts -- hell no! But the people have very little voice because of the lopsided distribution of wealth and therefore political power in our moribund society. All of society is tilted in favor of the hyper-wealthy and their usury banking/corporate predation system. The proposals Ellen Brown makes are modest and would establish a base of decency. Full employment is completely doable and only humane. The need for austerity is a sick hoax. One thing I would add to her list of economic rights is letting workers, the people who produce the goods and services in corporations, be their own boards of directors, as advocated by Richard Wolff in Capitalism Hits the Fan. No democracy in the workplace means no democracy.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Free Report - Financial Markets 2014