Monday, May 5, 2014

Borrowers Now Renting - Take Back the Fed!

United Front Against Austerity
Progressive Gazette
May 5, 2014
Photo: In our current economic depression, proposals for monetary reform and money creation abound. Ranging from the serious (ie State Banking) to the dangerous (an international Gold Standard) to the absurd (the OWS rolling debt jubilee), these ideas all miss the biggest, lowest-hanging fruit of all: the Federal Reserve System.

The first major act of the US Congress was to establish the First Bank of the United States. On the design of Alexander Hamilton, the bank created credit out of thin air, and issued it for matters of the "general welfare" – mostly public infrastructure.

This system was highly successful, taking our fledgling country from an international basket-case after the American Revolution to an international powerhouse in innovation, industry and agriculture. America's rise was no accident of nature, but the conscious plan of the founders, built on the power of credit-creation. While Europe had to borrow their own money from private bankers, we created it.

National banking was a source of great political turmoil throughout the 19th century. Destroyed by Andrew Jackson (resulting in a deflationary crash and long depression), and resurrected by Abraham Lincoln (resulting in the Union's great advantages in technology and productive capabilities over the Confederate slave economy), 1913 was a great defeat for the nation when central banking was seized by Wall Street through the imposition of the Federal Reserve System.

The problem with the Fed is not that it's a "central bank" nor that it creates credit without reserves – but that the credit is issued only for the purposes of Wall Street! The Fed buys $85 billion every month in toxic bank debt, and lends emergency credit to Wall Street (~$27 trillion in the 2008 bailout) while offering NOTHING to the real economy.

This huge "magic money machine" that can create tens of trillions out of thin air musn't be shut down, but SEIZED by the US Congress, to whom it rightly belongs, as written in the Constitution.

As Ellen Brown wrote in a recent article for Counterpunch,

"The funds can be provided interest-free; and because they represent an investment in productive capital, the debt itself can be repaid with the fruits of the investment – the jobs that create the salaries that generate taxes and consumer demand."

What we want the Fed to do, starting NOW, and what any honest political candidate or legislator must demand:

• An improved version of Elizabeth Warren's Bank On Students Loan Fairness Act, which would compel the Fed to refinance ALL $1 trillion in student loans at 0.75%, and make this financing available in the years ahead.

• $3.6 trillion in public infrastructure bonds (the recommendation of the ASCE), issued by states and regional authorities, and bought by the Fed, with 100 year maturities, and ZERO interest.

• Closing the windows for bankrupt zombie banks, and opening new windows for US manufacturers, family farms, certain small businesses and distressed mortgages.

When it comes to monetary reform, there are too many smart, well-intentioned individuals chasing ideas that are either inadequate, misguided or just plain stupid. We challenge all persons of good will to make Taking Back the Fed (#TakeBackTheFed on twitter) their top priority for economic recovery!

More at
Good – now all those "underqualified borrowers" can rent overpriced slums (sometimes including their own homes) from the Blackstone Group.

If there was ever a case to fight usury with a national bank, this is it. See Alternet's
"The Coming Nightmare of Wall Street-Controlled Rental Markets."

Whether you're paying a mortgage or renting, up to half of your hard-earned pay is enriching hedge fund predators, who use most of it to snort cocaine off the backsides of hookers on yachts in Saint-Tropez.

The total amount of primary mortgage debt in the US (not including interest) is roughly ~$10-15 trillion. 

The Iraq war cost about $6 trillion. 

Why would we not use our new National Bank (the Federal Reserve, minus its leadership) to refinance that mortgage debt (up to some common denominator) at zero or near-zero, simple interest rates?

"Experts" will protest that the government will take on a tsunami of bad debt. 

That means your bad debt.

 But if you can afford to pay exorbitant interest on your mortgage to a zombie bank, why could you not afford to pay modest fees to a national bank (with the loans serviced through your own local credit union or non-zombie bank)?

We could destroy Wall Street overnight and make all our lives much easier, which is why you'll never hear any of this on your nightly news.