Formulations of the Three-Point Policy Proposal for Monetary Reform

Introduction.

Modern monetary reform aims at three inter-connected changes of the monetary system, which unity is essential and therefore for many non-negotiable.

This is a compilation of different formulations of essentially the same three points. Most formulations are intentionally triple-pointed and some are differently constructed even while more or less covering the same proposals. This list is of course not exhaustive and is meant to function as a very loose template for monetary reformers to pick and choose terms, formulations and sources they would be most comfortable with.

A. Short formulation on AMI-Facebook (here)

B. 32-Page AMI brochure “Presenting the American Monetary Act” (here)

C. Distelhorst’s Speech Template for Citizens Speaking on Monetary Reform (here)

D. Nick Egnatz’ article “Linking Social Justice to Monetary Reform” (here)

E. The “Greening of the Dollar” by the Green Party USA  (here)

F. As formulated by the Chicago Teachers Union (here)

G. As found on site of Bryan Witt (here)

H. Covered in six points by Rev. Delman Coates (here)

I. As formulated by Robert Poteat (here)

J. As formulated on Ulrich Kortsch’s Real Money Economics web site (here)

K. In “One Page Summary of What Hr 2990 Will Do” (here)

L. In AMI’s “The Need for Monetary Reform” (here)

M. In Dr. Lucille Eckrich’s  “Monetary Transformation and Education” (here)

N. In the “Statement of Purpose” of the International Movement for Monetary Reform (here)

O. In Dr. Huber’s presentation “It’s a Banks’ World” (here)

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A. Short formulation on AMI-Facebook

1) Incorporate the private Federal Reserve System into the U.S. Treasury.

2) Nationalize the currency and end the practice by banks to create bank credit money when originating loans.

3) Create an independent Monetary Authority which decides the amount of money in circulation and let the U.S. Congress decide how to spend its allowance of debt-free money.

Source: Schuller, Govert. 2017. “Regarding short accurate formulations of AMI’s monetary reform proposals”.   3 Oct 2017.

B. 32-Page AMI brochure “Presenting the American Monetary Act”

Monetary reform is achieved with three elements which must be enacted together for it to work. Any one or any two of them alone won’t do it, but could further harm the reform process. The reform has its best chance of passage in this severe monetary crisis created by the banking system using debt in place of money! Considering that the same establishment controls our weapons systems, this may be humanities only chance for reform, to stop the now obvious slide of our middle class into slavery or some form of “Disney Fascism.”

1). First, it incorporates the Federal Reserve System into the U.S. Treasury where all new money would be created by government as money, not interest-bearing debt; and be spent into circulation to promote the general welfare. A Monetary Authority monitors the money system to be neither inflationary nor deflationary.

2). Second, halt the bank’s privilege to create money by ending the fractional reserve system in a gentle and elegant way. All the past monetized bank credit would be converted into U.S. government money. Banks would then act as intermediaries accepting savings deposits and loaning them out to borrowers. They would do what people think they do now. This Act nationalizes the money system, not the banking system. Banking is not a proper function of government, but only government should provide the nation’s money supply!

3). Third, spend new money into circulation on 21st century eco-friendly infrastructure and energy sources, including the education and healthcare needed for a growing and improving society, starting with the $2.2 trillion that the Civil Engineers estimate is needed over the next 5 years, for infrastructure repair; creating good jobs across our nation, re-invigorating local economies and re-funding local government at all levels.

Source: Zarlenga, Stephen. 2011. “Presenting the American Monetary Act”. Valatie, NY: American Monetary Institute.

C. Dick Distelhorst’s Speech Template for Citizens Speaking to their City Councils and Civic Organizations

1). It incorporates the Federal Reserve into the U.S. Treasury where all money is created by the government as actual money, not interest-bearing debt, and is spent into circulation to promote the general welfare; monitored to be neither inflationary nor deflationary.

2). The Act eliminates Fractional Reserve Banking in a manner that would make the Federal Government the only entity with the power to create, issue and regulate our money, as Article I, Section 8, Clause 5 of the U. S. Constitution already mandates.

3). As the “debt-money” created by the privately owned Federal Reserve and commercial banks disappears as those debts are paid, it must be replaced with real money spent into circulation. This money will be used to rebuild our badly decayed public infrastructure, which includes roads, bridges, dams, water and sewage plants, mass transit, schools, etc. This will create millions of high paying jobs. Also included in Public infrastructure is universal health care and education for all. Also a stimulus check of at least $5,000 should be sent out to start getting us out of this recession by immediately putting money back in the hands of the American people.

Source: Distelhorst, Dick. 2011. “Dick Distelhorst’s Speech Template for Citizens Speaking to their City Councils and Civic Organizations”. Valatie, NY: American Monetary Institute. http://www.monetary.org/wp-content/uploads/2011/10/City-Council-Speech.pdf

D. Nick Egnatz’ Article “Linking Social Justice to Monetary Reform”

The NEED Act is a comprehensive monetary reform which was written by the Congressional Legislative Counsel as a non-partisan bill. Its three simple, but necessary, reforms are:

1). The Federal Reserve System is federalized. It becomes part of our government, exactly what most citizens mistakenly think it is now.

2). The banks’ ability to create what we use for money is decisively ended. The banks are not nationalized, but money creation is. In the future when banks make loans, they will be loaning money that already exists, not creating it. Exactly what most citizens mistakenly think they do now.

3). New US Money is created by our federal government and spent, not loaned, into existence, debt-free, for the needs of the nation and its people as determined by our elected, representative Congress. By charter the Monetary Commission, charged with determining how much money to create, will do so in a non inflation/deflationary manner.

Source: Egnatz, Nick. 2014. “Linking Social Justice to Monetary Reform”. Alpheus. 25 Dec 2014.

E. The “Greening of the Dollar” by the Green Party USA

1). Nationalize the 12 Federal Reserve Banks, reconstituting them and the Federal Reserve Systems Washington Board of Governors under a new Monetary Authority Board within the U.S. Treasury. The private creation of money or credit which substitutes for money, will cease and with it the reckless and fraudulent practices that have led to the present financial and economic crisis.

2). The Monetary Authority, with assistance from the FDIC, the SEC, the U.S. Treasury, the Congressional Budget Office, and others will redefine bank lending rules and procedures to end the privilege banks now have to create money when they extend their credit, by ending what’s known as the fractional reserve system in an elegant, non disruptive manner. Banks will be encouraged to continue as profit making companies, extending loans of real money at interest; acting as intermediaries be- tween those clients seeking a return on their savings and those clients ready and able to pay for borrowing the money; but banks will no longer be creators of what we are using for money.

3). The new money that must be regularly added to an improving system as population and commerce grow will be created and spent into circulation by the U. S. Government for infrastructure, including the “human infrastructure” of education and health care. This begins with the $2.2 trillion the American Society of Civil Engineers warns us is needed to bring existing infrastructure to safe levels over the next 5 years. Per capita guidelines will assure a fair distribution of such expenditures across the United States, creating good jobs, re-invigorating the local economies and re-funding government at all levels. As this money is paid out to various contractors, they in turn pay their suppliers and laborers who in turn pay for their living expenses and ultimately this money gets deposited into banks, which are then in a position to make loans of this money, according to the new regulations.

Source: Green Party US. 2014. “Monetary Reform (Greening the Dollar)”. July 2014.

F. As formulated by the Chicago Teachers Union

1). The NEED Act puts back the money creation power under public checks and balances thorough their Congressional representative

2). The NEED Act puts any necessary functions of the Federal reserve under public administrations to be in alignment with the U.S. Constitution

3). The NEED Act uses the money creation powers to give millions of people at all governmental levels work to improve the infrastructure of the country

Source: Chicago Teachers Union. 2012. ”Resolution to Support: The National Employment Emergency Defense (NEED) Act, H.R. 2990”. 9 Jan 2012.

G. As found on Bryan Witt’s site

1). Abolishing the privately owned FED and creating a new, non-partisan, Monetary Authority, within the U.S. Treasury

2). Nationalizing our currency by abolishing Federal Reserve Notes and creating interest-free United States Notes

[Note: Bryan Witt is a democrat running for congress in the 27th district of California]

Source: Witt, Bryan. 2017. “Witt for Progress”.

H. Covered in six points by Rev. Delman Coates

If we are to have just society, we must have a just monetary system; a money system that

1). provides for government issued, interest-free money,

2). takes banks out of the business of money creation and restricts banking to depositing savings, and lending actual savings;

3). separates investment banking from traditional banking;

4). eliminates the moral hazard of the public bailing out banks that engage in risky investment practices;

5). invests government issued money into public infrastructure (i.e. jobs, roads, health care, education, the environment, etc.); and

6). protects the right to vote and gets money out of politics.

[Note: Points 1, 2 and 5 would constitute the core of monetary reform. Missing is the fate of the FED]

Source: Coates, Delman. 2017. “ ‘The New Abolitionism’ – Monetary Reform and the Future of Social Justice”. PDF with footnotes at “The New Abolitionism: Symposium on Money Mechanics and a Moral Economy” Oct 2017.

I. As formulated by Robert Poteat

The NEED Act would:

1). terminate the power of private banks to create credit used as money;

2). restore the power to Congress to create and spend into circulation United States money debt and interest free to maintain a stable and productive economy without inflation or deflation; and

3). the present statistical data keeping, bank regulation, and institutional knowledge of the present system would be folded into the US Treasury as a new bureau.

[Note: Robert Poteat is the current director of the American Monetary Institute]

Source: Poteat, Robert. 2013. “A Viable Solution to the Economic Crisis”. Valatie, NY: American Monetary Institute.

J. As formulated on Ulrich Kortsch’s Real Money Economics web site

Real Money Economics is an economic theory which proposes to change the current monetary and fractional reserve banking system as follows:

1). change the bank depository and payment system to a “Trust Banking System”;

2). change the bank credit system to a mutual fund system;

3). to keep price stability, change the new money creation system from a deposit creation system as follows:

a) create a new entity owned by Treasury to be in charge of this, under the control of the Federal Reserve Bank, but not owned by it;

b) increase the money supply by a modified Taylor Rule

c) grant the resulting seigniorage to Treasury thus paying off the national debt and greatly lowering taxes.

[Note: This formulation is a bit technical, but still covers the same ideas]

Source: “Answers: Fixing The Banking System For Good“.

K. In “One Page Summary of What Hr 2990 Will Do”

The “NEED” Act HR 2990 solves the problem with 3 actions

1). The Federal Reserve is dismantled and good parts are placed into the US Treasury. A Monetary Authority is created which avoids an inflationary or deflationary money supply.

2). Accounting rule changes prohibit the banks from creating what we use for money- from using debt for money – what’s known as fractional reserve banking is decisively ended.

3). The Congress originates (creates) new US Money and spends it into circulation, for infrastructure, health care and education; starting for example with the $2.2 trillion the engineers tell us is needed for infrastructure over the next 5 years. Later the human infrastructure of health care and education is added. This is estimated to create over 7 million good jobs quickly.

[Note: HR2990 was the brain child of Dennis Kucinich (D-OH) with help from Stephen Zarlenga, founder of The American Monetary Institute, and many others]

Source: “HR2990

L. In AMI’s “The Need for Monetary Reform”

Monetary reform is achieved with three elements which must be enacted together for it to work. Any one or any two of them alone won’t do it, but would further harm the reform process. The reform has its best chance of passage in this severe monetary crisis created by the privatized money system. Considering that the same establishment controls our weapons systems, this may be humanities only chance for reform, to stop the now obvious slide of our middle class into slavery or some form of “Disney Fascism.”

1). First, incorporate the Federal Reserve System into the U.S. Treasury where all new money would be created by government as money, not interest-bearing debt; and be spent into circulation to promote the general welfare. The monetary system would be monitored to be neither inflationary nor deflationary.

2). Second, halt the bank’s privilege to create money by ending the fractional reserve system in a gentle and elegant way. All the past monetized private credit would be converted into U.S. government money. Banks would then act as intermediaries accepting savings deposits and loaning them out to borrowers. They would do what people think they do now. This Act nationalizes the money system, not the banking system. Banking is not a proper function of government, but providing the nation’s money supply is a government prerogative!

3). Third, spend new money into circulation on 21st century eco-friendly infrastructure and energy sources, including the education and healthcare needed for a growing and improving society, starting with the $2.2 trillion that the Civil Engineers estimate is needed for infrastructure repair; creating good jobs across our nation, re-invigorating local economies and re-funding local government at all levels.

Source: Zarlenga, Stephen. 2009. “The Need for Monetary Reform“. Valatie, NY: American Monetary Institute.

M. In Dr. Lucille Eckrich’s  “Monetary Transformation and Education” (Abbreviated. For the full excerpt see here)

1) First, the NEED Act . . . disentangles the Federal Reserve System . . . and reincorporates the money-creation and -monitoring parts into the U.S. Treasury where all new money will be created as money (not by banks as interest-bearing debt lent into circulation, as currently happens) and spent into circulation to promote the general welfare and public good, its supply monitored overtime by the governmental monetary authority to be neither inflationary or deflationary.

2) Second, through its accounting rule changes, the NEED Act halts banks’ privilege to create money by ending the fractional reserve system (which is the legalized mechanism that allows banks currently to create what we use as money every time they make a loan) in a gentle and elegant way. All past monetized bank credit is converted into U.S. government money, as are treasury securities as they come due, and banks are held accountable for this conversion. . . .

3). Finally, through the NEED Act, the U.S. government creates (originates) all new U.S. money in accord with democratic budgetary processes of Congress and spends it into circulation as needed . . . to build postmodern public infrastructure, including for public education, healthcare, and $3 trillion for work that the American Society of Civil Engineers (ASCE) estimates is needed over the next five years for infrastructure repair and development. . . .

Source: Eckrich, Lucille L. T. 2017. “Monetary Transformation and Public Education”. In Hartlep, Nicholas et al (Eds.). The Neoliberal Agenda and the Student Debt Crisis in US Higher Education. New York & London: Routledge, 233-250. 

N. In the “Statement of Purpose” of the International Movement for Monetary Reform

1). New money to be spent in to the economy by the Government.

2). A transparent and independent process for the creation of new money, which regulates the money supply according to the needs of the economy.

3). Stop the banks creating new money when they make loans (full-reserve banking).

Source:  International Movement for Monetary Reform. “Statement of Purpose”.

O. In Dr. Huber’s presentation “It’s a Banks’ World”

1). Full money monopoly

Extending the existing sovereign money monopolies on coins and banknotes to money on account, i.e. full nationalisation of the official and regular stock of money (in no way, however, nationalisation of banking).

2). Monetary authority

Conferring responsibility for the entire stock of money to an independent and impartial monetary authority, in Europe the central banks, or the ECB respectively.

3) . Phasing out bankmoney

A money reform today does with private bankmoney on account the same as was done with private banknotes in the 19th century: private banknotes were phased out and replaced with the central-bank monopoly on banknotes. Today, in an analogous way, it is about replacing bank money (demand deposits) with sovereign central-bank money.

Source: Huber, Jospeh. 2016. “It’s a Banks’ World: Functioning and dysfunctions of the present money system”. Presentation at the University of Fribourg, Switzerland, 21 April 2016.

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