The Three Prongs of Monetary Reform

By Dr. Lucille Eckrich, Associate Professor, Illinois State University


While there remains much educational, organizing, coalition-building, and lobbying work to do in the United States, technically monetary reform efforts are as advanced here as anywhere. Monetary reform legislation is already written and was first introduced as H.R. 2990 on September 21, 2011, by Representatives Dennis Kucinich (OH) and John Conyers (MI) during the 112th Congress. Called the National Emergency Employment Defense Act (the NEED Act), this bill addresses many of the objectives of the Occupy movement and may be further strengthened when reintroduced. When passed, this macro-level monetary reform legislation not only will enable the creation of direly needed public infrastructure, valuable jobs, and public goods like education and health care, it will fundamentally change the U.S. monetary system through the following three mechanisms. My summary is based on those of Zarlenga (2011, 2014) who founded the American Monetary Institute (AMI), which was instrumental in the research behind the NEED Act (Zarlenga, 2002).

Federal Reserve System under the U.S. Treasury

First, the NEED Act (or whatever its successor legislation is titled) disentangles the Federal Reserve System (a set of private banks that together comprise our central bank) 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.

No More Bank Credit Money

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. Banks then act as intermediaries, accepting checking and savings or time deposits, and loaning the latter out to borrowers—doing what people think banks now do—but doing so with already existing money and in the same manner as any other commercial entity does its business: by charging a fee for goods or services the price of which revolves around their cost of producing them.

Spending Debt-free Money into Circulation

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 (probably in large measure as digital dollars) 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 (like fixing bridges, roads, bike paths, clean water, sewage, levees, high speed public transportation, public utilities and facilities, recycling, conservation, etc.). The jobs created through doing all this, and other democratically determined investment in the public interest over time, will re-invigorate regional and local economies without new debt and improve the lives of families and communities as well as their tax-base.


In short, the NEED Act nationalizes the money system, not the banking system. Banking is not a proper function of government, but only government can and must be responsible to provide and secure a nation’s money supply. Inflation is avoided because real material or cultural wealth is created in the process and the total quantity of money can be known and monitored in real time. Research and development of superior pollution-free, environmentally sustainable, and humanizing, rather than dehumanizing, technologies is facilitated. At long last, we the people and our elected officials will no longer be subservient to and working for the banks to whom a prior generation of insufficiently educated or conscientious lawmakers ceded our government’s money power and responsibility.


National Employment Defense Act of 2011, H.R. 2990, 12th Congress.

Zarlenga, S. (2002). The lost science of money: The mythology of money—the story of power. Valatie, NY: American Monetary Institute.

Zarlenga, S. (2011). One page summary of what HR 2990 will do. Valatie, NY: American Monetary Institute. Retrieved from

Zarlenga, S. (2014). Presenting the AMI monetary reform manual. Valatie, NY: American Monetary Institute. (2010 and 2016 editions retrievable from


Excerpt from pp. 236-237 of: Eckrich, L. L. T. (2017). Monetary transformation and public education. In N. D. Hartlep, L. L. T. Eckrich, & B. O. Hensley (Eds.), The neoliberal agenda and the student debt crisis in US higher education (pp. 233-250). New York & London: Routledge. Posted with permission of the author. 


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3 Responses to “The Three Prongs of Monetary Reform”

  1. numerosdetelefono

    The mere suggestion of an iconic aircraft like the 182 potentially being at risk is truly saddening. To me, the gorilla in the room is the lack of an adequate, sustainable pilot-customer base to support the GA industry. The FAA continues to keep many aspiring pilots out of the air with baseless requirements (and wildly expensive costs for additional testing and special issuances) preventing acquisition of a medical. Just the cost involved in some areas to earn a PPL and Instrument Rating are now on par with the purchase of a small car. It is ironic that the ALPA had much to do with the watering down of what was initially a robust driver’s license certification proposal (Class III medical reform) and now is facing a pilot shortage in the near future. And when we hear about pilots collapsing in the air the majority are airline pilots with Class I medicals. Can’t have this both ways. We need to find solutions to increase access to aviation across the board. Inflation and other monetary adjustments aside, the costs involved now are prohibitive (as far as owning a new or even slightly “pre-owned” aircraft) for all but the extremely well-off. While flying was never for the “faint of wallet,” it was not like the present. Flying clubs fractional ownership wonderful ideas but we need to go a lot farther here if GA is going to survive on any meaningful level. We need more pilots in the GA population. Best regards.

  2. Nick Egnatz

    Thank you Dr. Eckrich for a concise description of the monetary reform that many of us have been struggling to bring to the attention of the American people and the entire world. A better country and better world is possible, but not without a better and more democratic system of money.


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