U.S. Green Party takes historic monetary step!

8 Responses

1. Can you provide some explanation

   Reply

2. I see this as a positive step. Of course, the chance of this happening is as close to zero the sun failing to rise tomorrow. However, it is time for a public debate of monetary economics. People on the left and right know that something is rotten, but just about no one has any clear idea of what that actually is.

   Predictably, the far right wants to end the Fed and government money creation, and go straight to private banks issuing their own currency, while the far left want to end the Fed and private banking. And everything in between. There is actually a lot of buzz on the net about this, with various proposals floating around, and there are vids on YouTube about it, too.

   There is definitely a great deal of interest and that can only benefit MMT. I see this as an opportunity for MMT’ers to enter the fray and get the word out to those who are rightly concerned and wrongly informed.

   Whatever one thinks of Zarlenga’s proposals, he has had the ability to both construct a rival monetary theory and shop it politically. No mean achievement. He is right up there with Lyndon LaRouche.

   Reply

   1. It does make MMT look like the moderate alternative. :o)

      They’re going about it the wrong way of course. The only way Congress can pull off dramatic changes in monetary policy is to defuse the inevitable Tsy opposition by framing the bill as a delegation of authority to the President. Tsy officials always thinks the President (all presidents except Hamilton, wait, he was never president) is an idiot, but they’re not allowed to use that as a argument against a bill in Congress.

      Exhibit A: The Economic Stabilization Act of 1970. The Democratic Congress gave President Nixon authority to impose price and wage controls (more to embarrass him than anything else). Nixon signed it into law only because it didn’t make him do anything, and Dick Nixon was smart enough to never turn down a blank check. However, no one was more surprised than him that a year later, he cashed it.

      Reply

   2. I also see this as extremely positive and think any discussion that also educates is worthwhile.

      I have been in the Zarlenga-Soddy-Simon camp since 2003-4 after reading the series of articles original American thinker, mentor and friend Charles Walters did on Zarlenga’s work. Highly recommended read: http://www.acresusa.com/toolbox/reprints/History%20of%20Money_CW.pdf

      However, I have come to see the pragmatic wisdom embedded in the Mosler-Mitchell-Wray-Auerback proposals especially after realizing that the Federal government already creates all net new money, something that somehow eluded my understanding for years. I see now that private created money is not inherently evil assuming proper handcuffs are applied as Warren has proposed to prevent the utility-maximizing (aka sociopathic) tendencies inherent in giving someone a license to create money.

      The opinion that things would be improved if the government created all the money is dependent on the belief that it will always act in the best interests of the majority of Americans, something increasingly unlikely in the (hopefully soon to be changed) age of unlimited corporate political contributions. The possibility of even more corporatism or fascism certainly exists.

      Issuing money as money instead of as debt (bonds) as both Warren and Stephen propose would clear up a lot of confusion for the average citizen and hopefully prevent the demagogues from wailing about selling their grandchildren into slavery.

      Go Zarlenga! Go Mosler!

      Reply

      1. not quite.

         he didn’t get the part about interest rate support function of ‘bonds’/paying interest on fed balances last I checked.

         the problem is fed operations people know what he’s saying is lacking, but they won’t say anything, just (rightly) dismiss it.

         On the other hand, they know mmt (fed operations) implicitly and are currently producing papers to that effect such as the Seth Carpenter paper on this website and others from the NY fed as well.

3. Having just returned from the AMI Annual Conference where Keen, Hudson and Yamaguchi presented, I have to chuckle a little that the truly best argument that MMTers can come up with against a Constitutional money system – yes, where the government creates ALL the money for commercial exchange – is that it will never happen.

   This, from those willing to propound on an easily understood construct – the government neither has, nor doesn’t have, any money.

   I still say the AMI and 1939 Programs are a better and more progressive solution – Only the Congress shall have power to create the nation’s money, to regulate the value thereof and of foreign monies.
   http://www.economicstability.org/history/a-program-for-monetary-reform-the-1939-document

   Reply

4. Those people are not MMT and hopefully did not represent themselves as such.

   The govt, and/or it’s designated agents, the member banks, already do create ‘all the money’ as defined as bank deposits.

   Only the govt. decides what it will accept for payment of taxes, and it has allowed bank deposits of it’s member banks to be acceptable for payment of taxes.

   get over it. all you are doing is making it clear you don’t understand mmt.

   Reply

5. Just noticed my comments had been left out. Will redo here, in CAPS:

   1. Nationalize the 12 Federal Reserve Banks,

   THEY ALREADY ARE, FOR ALL PRACTICAL PURPOSES. ALL THEY DO IS CLEAR CHECKS.

   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.

   THE BANKS THAT ‘CREATE MONEY’ (BANK DEPOSITS) ARE ALREADY PUBLIC PRIVATE PARTNERSHIPS UNDER THE FULL AND DIRECT REGULATORY OF THE GOVT. ALL THAT’S NEED TO ACCOMPLISH THE ABOVE IS ALTER THE REGS ACCORDINGLY.

   2. Create a Monetary Authority, which will, with assistance from the FDIC, the SEC, the U.S. Treasury, the Congressional Budget Office, and others, redefine bank lending rules and procedures to end the privilege banks now have to create money when they extend their credit, by ending what is known as the fractional reserve system in an elegant, non disruptive manner.

   THAT FRACTIONAL RESERVE SYSTEM WENT OUT WITH THE GOLD STANDARD. IT’S INAPPLICABLE. TODAY RESERVES ARE A RESIDUAL ONLY, AND OF NO ECONOMIC OR MONETARY CONSEQUENCE. NOTE THAT QE DOES NOTHING APART FROM MODIFYING THE TERM STRUCTURE OF RATES. THERE IS NO QUANTITY CHANNEL

   Banks will be encouraged to continue as profit making companies, extending loans of real money at interest; acting as intermediaries between those clients seeking a return on their savings and those clients ready and able to pay for borrowing the money;

   RIGHT NOW ASSETS = LIABILITIES, SO THAT’S THE SAME

   but banks will no longer be creators of what we are using for money.

   THERE PROPOSAL ACTUALLY CHANGES NOTHING OF CONSEQUENCE. IF A BANK WITH NO RESERVES MAKES A LOAN, AND THE BORROWER KEEPS THE FUNDS IN THAT BANK, THAT BANK HAS A NEW LOAN ON ITS BOOKS, A NEW DEPOSIT FROM THE BORROWER, AND THE RESERVES ARE STILL THERE. LOANS DON’T USE UP RESERVES.

   Many new forms of banks will be encouraged such as community banks, credit unions, etc., see 11 and 12 above)

   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.

   THEY ALREADY DO EXACTLY THIS, IT’S CALLED DEFICIT SPENDING.

   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.

   YES, FUNCTIONALLY NOTHING MORE THAN 2.2 TRILLION OF DEFICIT SPENDING.

   As this money is paid out to various contractors,
   THEIR BANK ACCOUNT IS CREDITED

   they in turn pay their suppliers and laborers

   CONTRACTORS ACCTS DEBITED, SUPPLIERS AND LABORER’S ACCOUNTS CREDITED

   JUST LIKE IT IS NOW

   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.”

   AND, AS ABOVE, THE NEW LOANS STILL CREATE NEW DEPOSITS. NOTHING CHANGES.

   IT’S MUCH ADO ABOUT NOTHING

   NO BONDS JUST MEANS THE EXCESS RESERVES SIT IN BANK ACCOUNTS. AND RESERVES ARE FUNCTIONALLY NOTHING MORE THAN ONE DAY BONDS. SO TO SUPPORT INTEREST RATES AT SOMETHING HIGHER THAN 0 (WHICH i DON’T RECOMMEND, BUT THAT’S A DIFFERENT STORY) THE FED WOULD HAVE TO PAY INTEREST ON RESERVES AT ITS TARGET RATE.

   AS I SAID, BAD DAY FOR THE GREEN PARTY TO GET SUCKED INTO THIS.

   Reply