How to Save the Planet

The Problem

A tiny segment of society has the quasi-legal, exclusive right to create money from nothing and use it to their own advantage, placing other members of the community at an extreme disadvantage.

When bankers make loans, they create money from nothing by typing numbers in a bank account. With this fictional money they gain the ability to collect interest...often usurious interest... and if the borrower fails to make payments on time, the bank can take possession of the borrower's collateral: their house, their car, whatever...

On a grander scale, members of the international banking cartel create money from nothing, and use it to buy US bonds. These bonds are sold on the open market, but the lion's share are snapped up by central banks, primarily our own Federal Reserve. Many people are under the illusion that the Federal Reserve is a government agency, but this is easily shown to be false. What sense does it make for the US to sell itself IOUs? What sense does it make to borrow from ourselves, incurring a debt so huge that we can't even make the interest payments?

As Thomas Edison pointed out, long ago:

“If our nation can issue a dollar bond, it can issue a dollar bill. The element that makes the bond good, makes the bill good, also. The difference between the bond and the bill is that the bond lets money brokers collect twice the amount of the bond and an additional 20%, whereas the currency pays nobody but those who contribute directly in some useful way.

It is absurd to say that our country can issue $30 million in bonds and not $30 million in currency. Both are promises to pay, but one promise fattens the usurers and the other helps the people.” ~ Source

The truth is: the Federal Reserve is a private banking cartel with a government granted exclusive right to issue the medium of exchange, commonly known as "legal tender." This is a collusive, symbiotic relationship between those who are skilled in creating the illusion of wealth, and those who are skilled in creating the illusion of democracy. It is a highly immoral, unfair, and destructive system that only persists because most people do not understand it and are not aware of the alternatives. As Henry Ford pointed out:

"It is well enough that 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."

Since the creation of the Federal Reserve in 1913, all administrations, both republican and democrat, have been derelict in their constitutional duty to "coin Money and regulate the Value thereof" on behalf of the sovereign people of the United States. With a few noble exceptions, like Wright Patman, Dennis Kucinich, Bernie Sanders, and Ron Paul, every Congress since the creation of the Fed has allowed this system to persist in its exploitation of the real producers of the US economy. In exchange for their complicity in this system, Congress and its corporate masters receive a wide variety of financial advantages.

Recently, for example, the Federal Reserve was required by law to say what it did with several trillion dollars of bailout money, and it is now a matter of public record that a small group of unelected bankers, operating in secret, gave away 16 trillion dollars worth of low cost loans and other benefits to some of the world's richest and most powerful corporations and banks. That amounts to $40,000 for every man, woman, and child in America. There were no strings attached to these handouts. No requirement that any of this money be used to undo the damage done by the predatory lenders and Wall Street gamblers who decimated pension funds and destabilized the global economy. ~ Source | Update

As this money streams into the system, it will increase the money supply and dilute the value of each individual dollar. Since it is not being spent productively, prices will rise because more dollars are chasing fewer goods and services. Some of this largess is being used to speculate in the commodities market, putting further upward pressure on prices. The only ones to benefit from this system will be those who spend the money in advance of inflation, namely, the beneficiaries of the bailout: the usual suspects: corporate polluters, war profiteers, the opponents of organized labor, and their financial backers.

Without economic democracy, political democracy is just a pleasant fiction. If we don't take control over how our money is spent, war profiteers and polluters will continue to spend it on the pathological exploitation of land and labor. Those who are opposed to such exploitation are placed at an extreme disadvantage by our money system. Isn't it time for social justice and environmental activists to prioritize the problem that is at the root of so many other problems?

In the words of Bernard Lietaer:

"Greed and competition are not a result of immutable human temperament... Greed and fear of scarcity are in fact being continuously created and amplified as a direct result of the kind of money we are using... We can produce more than enough food to feed everybody, and there is definitely enough work for everybody in the world, but there is clearly not enough money to pay for it all. The scarcity is in our national currencies. In fact, the job of central banks is to create and maintain that currency scarcity. The direct consequence is that we have to fight with each other in order to survive."

Although I'm not sure I fully agree (I think selfishness and competition are more deeply rooted in human nature); nevertheless, it is certainly true that these traits are greatly magnified by our money system. Social and environmental activists would do well to make the reform of this system a top priority.

Francis Ayles has got it right:

"Different kinds of money do have very different properties, and one of the key properties is the level of abundance or scarcity of the item that's being used as money. If it's abundant, you will get a proliferation of trade. People will be able to exchange their goods and services fairly freely. If money is scarce, you create a very serious problem because you prevent people from actually being able to exchange goods and services.

There are different kinds of monetary systems, and some promote very socially responsible behavior, and some promote very anti-social destructive behavior."
~ Source

The US Treasury has always had the power to create money from nothing without causing inflation. There has never been a need to borrow. The medium of exchange could and should be administered like a public utility. If our elected representatives really represented us, they would provide low-cost credit for the real economy: small and medium sized businesses, housing, transportation, sustainable energy systems, health care, and education, etc. In an equitable economy, the profits from these loans would be used to reduce taxes or improve the commons.

Only one American state has a public bank operating according to these principals: the Bank of North Dakota... economically the healthiest state in the nation. This bank has been so successful that several other states are considering legislation to do the same.

When credit is used to stimulate the real economy, the quantity of money and goods and services rise together. It is only when money is spent unproductively on war and Wall Street gambling that inflation becomes a problem.

A Closer Look at the Fraud

Government borrowing, on our behalf, has resulted in an entirely unnecessary $13 trillion dollar national debt that (via sales and income taxes) drains our finances and adds to the cost of everything we buy.

The central bankers have gone to great lengths to create the illusion that the Fed is a branch of the government, indirectly controlled by the government. However, this is a transparent ruse. As Thomas Edison pointed out:

“If our nation can issue a dollar bond, it can issue a dollar bill."

And in the words of Wright Patman, former Chair of the United States House Committee on Banking and Currency, :

“I have never yet had anyone who could, through the use of logic and reason, justify the Federal Government borrowing the use of its own money... I believe the time will come when people will demand that this be changed. I believe the time will come in this country when they will actually blame you and me and everyone else connected with the Congress for sitting idly by and permitting such an idiotic system to continue.”

This "idiotic system" makes perfect sense from the point of view of the thieves who run it. As E.C. Reigel explained, this system is a result of a collusive arrangement between central bankers and big government.

"Money, beginning with private enterprise as a means of escaping the limitation of barter, soon developed the cheat to exploit the honest trader who, in an effort to protect himself, turned to government for protection, only to find that now he had two thieves, the private money changer and the political plunderer working hand in glove against him.

By this combination the money changer gained the prestige of political sanction through legislative license and the state secured a deceptive device for laying taxes upon the citizenry (by means of the hidden tax called inflation). It was and remains a vicious alliance."

The banking system in its present form is a quasi-legal counterfeiting operation:

"When plunder becomes a way of life for a group of men living together in society, they create for themselves in the course of time a legal system that authorizes it and a moral code that glorifies it." - Frederic Bastiat

The financial elite have built a pyramid in which the wealthiest get credit on easy terms, while those on the bottom pay 30% or more for the use of borrowed money. Because big government and big business are always the first to acquire and spend newly created money, they suffer least from the effects of inflation.

This system concentrates wealth and power in the hands of a few, and is the fundamental cause of the ever-widening gap between rich and poor.

"The top one percent of the population now owns over 70% of all financial assets" - Source

This "idiotic system" was devised by some of the best and brightest con artists that money can buy. In the words of the celebrated economist, John Kenneth Galbraith:

"The study of money, above all other fields in economics, is one in which complexity is used to disguise truth or to evade truth, not to reveal it." - (John Kenneth Galbraith, Money: Whence It Came, Where It Went - 1975, p15)

Following in his father's footsteps, James K. Galbraith made the following statement to members of the Senate Judiciary Committee, on May 15, 2010:

"Chairman Specter, Ranking Member Graham, Members of the Subcommittee, as a former member of the congressional staff it is a pleasure to submit this statement for your record.

I write to you from a disgraced profession. Economic theory, as widely taught since the 1980s, failed miserably to understand the forces behind the financial crisis. Concepts including "rational expectations," "market discipline," and the "efficient markets hypothesis" led economists to argue that speculation would stabilize prices, that sellers would act to protect their reputations, that caveat emptor could be relied on, and that widespread fraud therefore could not occur. Not all economists believed this – but most did.

Thus the study of financial fraud received little attention. Practically no research institutes exist; collaboration between economists and criminologists is rare; in the leading departments there are few specialists and very few students. Economists have soft-pedaled the role of fraud in every crisis they examined, including the Savings & Loan debacle, the Russian transition, the Asian meltdown and the dot.com bubble.

They continue to do so now. At a conference sponsored by the Levy Economics Institute in New York on April 17, the closest a former Under Secretary of the Treasury, Peter Fisher, got to this question was to use the word "naughtiness." This was on the day that the SEC charged Goldman Sachs with fraud." - Source

According to Reed Simpson, M.Sc., author of the preface to Ellen Brown's book Web of Debt, and a graduate of the School of Banking, American Bankers Association, and the London School of Economics:

"The process by which money comes into existence is thoroughly misunderstood, and for good reason: it has been the focus of a highly sophisticated and long term disinformation campaign that permeates academia, media, and publishing. The complexity of the subject has been intentionally exploited to keep its mysteries hidden."

One of the most lucid expositors of the money fraud is Ellen H. Brown. I highly recommend her book, Web of Debt, to anyone who wants to understand how the financial system really works. However, much of the material in Web of Debt can also be found on her website . For example:

"When the government is short of funds, the Treasury issues bonds and delivers them to bond dealers, which auction them off. When the Fed wants to “expand the money supply” (create money), it steps in and buys bonds from these dealers with newly-issued dollars acquired by the Fed for the cost of writing them into an account on a computer screen. These maneuvers are called “open market operations” because the Fed buys the bonds on the “open market” from the bond dealers. The bonds then become the “reserves” that the banking establishment uses to back its loans...

In another bit of sleight of hand known as “fractional reserve” lending, the same reserves are lent many times over, further expanding the money supply, generating interest for the banks with each loan." (Who Owns the Fed? )

"Fed apologists today argue that since [most of] the interest [on government bonds] is now rebated to the government, no net advantage has accrued to the Fed... But that argument overlooks a far greater windfall to the banks that are the Fed’s owners and real constituents. The bonds that have been acquired essentially for free become the basis of the Fed’s “reserves” – the phantom money that is advanced many times over by commercial banks in the form of loans" (Web of Debt, Copyright 2007, 2008, p.162)

According to Bill Still, in the The Secret of Oz .

"When a US bank buys a US bond, it gets to loan out 10 times that amount. So, the bank not only gets back the $100 plus interest from the Federal government, it gets to loan out another $1000 it doesn't have, and charge additional interest. Banks are allowed to create this extra money out of thin air, so banks aren't making only 6% interest, for example, they are really making over 1000% interest (1,166%)...

This system of lending way more than you have is called fractional reserve lending. Almost all our money is created by banks lending it to people, to companies, or to governments. As we'll see, there is a better way for a government to get money. Simply issue it without debt for the benefit of all citizens equally. Abraham Lincoln did it; Ben Franklin did it; Jefferson wanted to do it. Honest Americans have fought against this bank controlled debt money system throughout American history."

And in the words of Ed Griffin, author of The Creature from Jekyll Island:

"[T]he Fed takes all the government bonds which the public does not buy and writes a check to Congress in exchange for them. There is no money to back up this check. These fiat dollars are created on the spot for that purpose. By calling those bonds “reserves,” the Fed then uses them as the base for creating 9 additional dollars for every dollar created for the bonds themselves. The money created for the bonds is spent by the government, whereas the money created on top of those bonds is the source of all the bank loans made to the nation’s businesses and individuals. The result of this process is the same as creating money on a printing press, but the illusion is based on an accounting trick rather than a printing trick." (Griffin, The Creature from Jekyll Island, p. 193)

For greater detail, read: Banks Create the Money They Lend and Dollar Deception: How Banks Secretly Create Money . In the first article Brown also answers the question: If the banks can create credit simply by writing numbers into the accounts of borrowers, how can there be a credit crunch? What is limiting bank lending? Read the article to find the answer. In her conclusion, she points out that:

"We the people and our representatives in Congress have allowed Wall Street to call the shots because we think we are dependent on their credit system, but we aren’t. There are other ways to get credit -- ways that are fair, efficient, transparent, and don’t encourage greed. Public credit could be generated by a system of public banks. Precedent for this solution is to be found in the state-owned Bank of North Dakota, which has been generating credit for North Dakota since 1919, keeping the state fiscally sound when other states are floundering.

The credit crunch could be avoided by “going local” not just in the United States but around the world. Countries that have been seduced or coerced into funneling their productive assets into serving foreign markets and foreign investors could become self-sustaining, using their own credit and their own resources to feed and serve their own people." (Sustainable Government: Banking for a ‘New’ New Deal )

Additional quotations from reputable authorities corroborating the banking fraud can be found among the reference links on the Money as Debt website (http://www.moneyasdebt.net/ ), and in two of the documentaries by Bill Still: The Money Masters , and The Secret of Oz .

Class War

Over the course of several decades, the monopoly power to create money from nothing has made it possible for the financial elite to corrupt and co-opt the US government. In the words of Senator Dick Durbin:

"And the banks... hard to believe in a time when we're facing a banking crisis that many of the banks created... are still the most powerful lobby on Capitol Hill. And they frankly own the place..." source

In the past, they have used their fraudulent wealth to undermine collective bargaining, block campaign finance reform, and undercut organized labor, by dismantling the US manufacturing base. So, what is next on the agenda?

As Ellen Brown, Bernie Sanders, David DeGraw, and Ismael Hossein-zadeh have all pointed out, we are now engaged in a class war designed to reduce the United States to the level of a "third world" country, a "banana republic."

According to Ismael Hossein-zadeh, professor of economics at Drake university:

"After transferring trillions of dollars of bad debt or toxic assets from the books of financial speculators to those of governments, global financial moguls, their representatives in the State apparatus and corporate media are now blaming social spending (in effect, the people) as responsible for debt and deficit!

President Obama’s recent motto of “fiscal responsibility” and his frequent grumbles about “out of control government spending” are reflections of this insidious strategy of blaming victims for the crimes of perpetrators. They also reflect the fact that the powerful financial interests that received trillions of taxpayers’ dollars, which saved them from bankruptcy, are now dictating debt-collecting strategies through which governments can recoup those dollars from taxpayers. In effect, governments and multilateral institutions such as the IMF are acting as bailiffs or tax collectors on behalf of banksters and other financial wizards.

Not only is this unfair (it is, indeed, tantamount to robbery, and therefore criminal), it is also recessionary as it can increase unemployment and undermine economic growth. It is reminiscent of President Herbert Hoover’s notorious economic policy of cutting spending during a recession, a contractionary fiscal policy that is bound to worsen the recession. It is, indeed, a recipe for a vicious circle of debt and depression: as spending is cut to pay debt, the economy and (therefore) tax revenues will shrink, which would then increase debt and deficit, and call for more spending cuts!" ~ Source

Ellen Brown agrees. In her article, IMF-Style Austerity Measures Come to America, she explains what "fiscal responsibility" really means.

"The American people, who are already suffering massive unemployment and cutbacks in government services, will have to sacrifice more and pay the piper more, just as in those debt-strapped countries forced into austerity measures by the IMF.

Fortunately for us, however, there is a major difference between our debt and the debts of Greece, Latvia and Iceland. Our debt is owed in our own currency – U.S. dollars. Our government has the power to fix its solvency problems itself, by simply issuing the money it needs to pay off or refinance its debt. That time-tested solution goes back to the colonial scrip of the American colonists and the “Greenbacks” issued by Abraham Lincoln to avoid paying 24-36% interest rates...

"What invariably kills any discussion of this sensible solution is another myth, long perpetrated by the financial elite -- that allowing the government to increase the money supply [monetize the debt] would lead to hyperinflation. Rather than exercising its sovereign right to create the liquidity the nation needs, the government is told that it must borrow from private lenders. And where does their money come from? Ultimately from banks, which create it on their books, just as the government would have done. The difference is that when bankers create it, it comes with a hefty fee attached in the form of interest.

Meanwhile, the Federal Reserve has been trying to increase the money supply; and rather than producing hyperinflation, we continue to suffer from deflation. Frantically pushing money at the banks has not gotten money into the real economy. Rather than lending it to businesses and individuals, the larger banks have been speculating with it, or buying up smaller banks, land, farms, and productive capacity, while the credit freeze continues on Main Street. Only the government can reverse this vicious syndrome, by spending money directly on projects that will create jobs, provide services, and stimulate productivity. Increasing the money supply is not inflationary if the money is used to increase goods and services. Inflation results when “demand” (money) exceeds “supply” (goods and services). When supply and demand increase together, prices remain stable. Source

Bernie Sanders, Senator from Vermont. "The nation's billionaires are on the warpath":

Mr. President, there is a war going on in this country, and I'm not referring to the war in Iraq or the war in Afghanistan. I'm talking about a war being waged by some of the wealthiest and most powerful people in this country against the working families of the United States of America, against the disappearing and shrinking middle class of our country. The reality is that many of the nation's billionaires are on the warpath. They want more, more, more. Their greed has no end, and apparently there is very little concern for our country or for the people of this country, if it gets in the way of the accumulation of more and more wealth and more and more power. In the year 2007, the top 1% of all income earners in the U.S. earned 23 1/2 % of all income, more than the entire bottom 50%....

Watch the whole speech

People like Senator Sanders are a tiny minority. Generally speaking, neither the government, nor the corporate media, nor academia can be trusted to tell us the truth about what is really happening to our economy. So, here are some of the most credible sources that I have stumbled on to, in the course of my research:

A Few Damage Reports:

The Economic Elite Vs. The People of the United States of America (David Degraw)

The Critical Unraveling of U.S. Society (David Degraw)

Fascist Agenda On Track (Richard Moore)

Shadowstats - Analysis Behind and Beyond Government Economic Reporting (John Williams)

Deficit Terrorists Strike in the UK - USA Next? (Ellen Brown)

Mr. Budhoo's Open Letter of Resignation to the Managing Director of the International Monetary Fund

War is a Racket

After a long career in the US military, Major General Smedley Butler denounced war and its instigators in a pamphlet titled, War is a Racket:

"I helped make Mexico safe for American oil interests in 1914. I helped make Haiti and Cuba a decent place for the National City Bank boys. I helped in the raping of half a dozen Central American republics for the benefits of Wall Street. I helped purify Nicaragua for the international banking house of Brown Brothers in 1909-1912. I brought light to the Dominican Republic for American sugar interests in 1916. In China I helped to see to it that Standard Oil went its way unmolested."

Most people don't want war. But, in the absence of economic power, we have no political power to determine how our money is spent. In the words of Mayer Amschel Rothschild: "Permit me to issue and control the money of a nation, and I care not who makes its laws."

Solutions

Much energy has been expended trying to persuade legislators to make changes that would limit their own power, and that of their wealthy patrons. Naturally, progress has been slow. Consider the long stuggles for campaign finance reform, progressive taxation, collective bargaining, banking reform, etc.

There are more direct and effective methods for regaining control over our economic and political systems. Consider the "move your money" movement, for example. More and more people are expressing their outrage by transferring savings from the too-big-to-fail welfare bums to smaller, socially responsible, local banks and savings & loans.

On a grander scale several states are preparing to withdraw their assets from the big banks and use them to capitalize state banks to be operated in the public interest.

Mutual Credit

Perhaps even more powerful and transformative are mutual credit systems and business-to-business trade exchanges. These are systems that we can build and participate in without having to plead with and wait upon the action of government officials.

As a way of introducing mutual credit systems, let's take a moment to explore a seldom asked question:

What is Money?

Money is essentially an accounting system... a way of keeping score.

Mutual credit systems demonstrate the real nature of money. In these systems money is created in the very process of trade. This money is not backed by gold, silver, petroleum, or the "full faith and credit" of a duplicitous government. It is backed by the goods and services that are actually being exchanged. Here's an example:

Suppose someone needs work done on their car. They search the online bulletin board where members of the exchange post their offerings. They find a mechanic, and arrange a time a place. When the work is done, each party signs an invoice describing the particulars: the work done and the price, etc. Both parties get a copy. The mechanic can then go online and credit his account. For his customer this registers as a debt. The mechanic can now spend those credits on anything offered by any other member of the exchange.

All members of the exchange must have something on offer so that they have the means to balance credits against debits. Accounts payable are payed for with accounts receivable. Purchases are paid for with sales. This is a mutual credit clearing system. Each member has a line of credit based on monthly sales and satisfaction ratings.

This cashless, debt-free trading system, uses "points" as a medium of exchange. There is no need to borrow points from a bank, and no need to pay an exorbitant interest rate for their use.

Mutual credit systems demonstrate that wherever there is work to be done, and people who are willing to do it, the money supply need never be a limiting factor. Not having enough money to engage in trade is as absurd as not having enough inches to measure a board.

There are hundreds of cashless, mutual credit systems like LETS , Fourth Corner Exchange, and the Community Exchange System, as well as commercial trade exchanges like BarterCard that do billions of dollars worth of business each year. Thomas Greco believes that these exchanges have enormous unrealized potential, and offers advice on how to improve them.

Local Currencies
and Mutual Credit Systems:

Did you know that there are cities in the U.S. and around the world that print their own money? There are, for example, Pittsboro Plenties in Pittsboro, NC; Berkshares in the Berkshire region of Maine; and Ithaca HOURS in Ithaca, NY. Ithaca HOURS are probably the most successful local currency in the US. (A list of other HOUR cities can be found here .) First issued almost 20 years ago, their use has been steadily increasing ever since. Over 500 local businesses accept Ithaca HOURS. They are accepted by some of the best restaurants, local grocery stores, and theaters, as well as the Chamber of Commerce and a local credit union.

Example: Local Currencies :

This example is one of many ways in which a new currency can be introduced into a local economy.

Let's say that a group of social services come together and form a consortium for the purpose of issuing the new currency. This consortium combines the roles of employment agency and bank. One of the first orders of business is to explain the advantages of this program to local business owners, and encourage them to participate. If all goes well, some will agree to accept a percentage of the new currency in exchange for their merchandise. The advantage to the business owners is that they will get free advertising, attract new business, and benefit from a general increase in the local money supply, without having to pay interest for the use of that money. This increase is non-inflationary because it occurs at the same rate as the increase of goods and services.

So, suppose a local farmer needs people to pick strawberries. Through the new consortium he hires 20 teenagers. The consortium pays the workers with scrip (the new medium of exchange) and the farmer now has a debt to the consortium that can be repaid with some combination of scrip and conventional money. The strawberry pickers go out and spend the new currency in all those venues where it is accepted in trade. It then circulates in the local economy.

Local Currencies and mutual credit systems may play an important role in helping us to survive the IMF-style austerity measures that are now being imposed in America and around the world. As mentioned earlier, after extorting bailout money and shifting their bad gambling debts from Wall Street to the government, "the powerful financial interests that received trillions of taxpayers’ dollars, which saved them from bankruptcy, are now dictating debt-collecting strategies through which governments can recoup those dollars from taxpayers. In effect, governments and multilateral institutions such as the IMF are acting as bailiffs or tax collectors on behalf of banksters and other financial wizards." ~Source

The resulting degree of pain, here and elsewhere, will be a function of how rapidly we can defund the existing money system by propagating a more equtable and sustainable system. It's up to us to spread the word, and show our friends and neighbors that there is a better way. If the middle-class fails to produce a peaceful revolution, the most disenfranchised and downtrodden among us will produce a violent one, as we have seen in London, Greece, and Egypt.

One of the foremost authorities on local currencies and mutual credit systems is Thomas H. Greco, author of many books on the subject, including Money: Understanding and Creating Alternatives to Legal Tender, and The End of Money and the Future of Civilization. Greco has an excellent blog at beyondmoney.net . He was also a speaker at the 2009 Economics of Peace Conference .

As you can see from these examples, local currencies and mutual credit systems make it possible to increase the money supply without borrowing from a bank, and paying usurious interest rates. Mutual credit systems enable the actual producers of wealth to create a medium of exchange in the very process of trade. Using these alternatives, economic democracy becomes a real possibility, giving people more control over the uses that their money is put to.

According to the Community Exchange website:

"Conventional money is created as debt by private financial institutions for their own profit-making purposes, not as a public service. This is the root cause of the economic, social, and environmental problems that beset us. The amount of debt determines the quantity of money, which has nothing to do with the amount of money we need to live decent lives.

When money is proprietary it confers the money power on those who 'create' and control it; when it is in the public domain the money power resides with its users, who can ensure that it is used for the public good."

According to the E. F. Schumacher Society local currencies are "catalysts for sustainable regional economies." They help to strengthen local economies and protect them from the ravages of globalization. They make it possible to increase the local money supply without paying usurious interest rates; hence, local businesses can expand without going into debt, and more people can be gainfully employed. This, in turn, reduces dependency on social services and lowers the crime rate. Likewise, fewer people are driven to join the military and risk life and limb in global resource wars, on behalf of the financial elite.

Public Banks

The fractional reserve system is insidious in its present form, as it is used to concentrate wealth in the hands of a few; however, it could be used to our advantage, in the form of a network of democratically owned and operated state banks, similar to the Bank of North Dakota. Like a commercial bank, a publicly owned state bank would have the power to create money out of nothing. However, the profits would be used to improve the commons, and raise the general standard of living.

A public bank could stimulate the real economy by providing low, or no-interest loans for factories, farms, businesses, housing, transportation, sustainable energy systems, health care, and education, etc.

One of the most active proponents of the public bank solution is Ellen Brown. On her website, you can find many articles describing the advantages of a public bank. She also manages a site devoted entirely to current news about the progress of the state banking movement.

In 2010, for example, Farid Khavari, ran for governor of Florida on a platform that included the formation of a public bank to finance the development of alternative energy systems.

A public bank is also part of the platform of the Green Party in New York, and there is already legislation in the works to establish public banks in Washington and Oregon (HB3162).

Things You Can Do
to Help Turn the Tide

Every day, in my mail, I get letters from environmental and social justice groups pleading for donations. The great irony is that, although these organizations call incessantly for action in their "action alerts," their action alerts rarely, if ever, call attention to the root of the money problem itself... which is the whole reason why they are forever in need of contributions. Write to them and ask them to put a prominent, permanent link on their website's main page, leading to articles on this topic.

Because of our lack of democratic control over our own money, environmental and social justice organizations are always outmatched by their corporate adversaries, whose financial backers have the quasi- legal power to create money from nothing. This power has made it possible for the financial elite to use their illusion of wealth to gain control over REAL wealth, all over the world. They have used it to corrupt and co-opt most of Congress, to the point where we-the-people are no longer represented (with very few exceptions) by our elected representatives. We have, as Greg Palast once quipped, "the best government money can buy." Without economic democracy, political democracy is impossible.

If the folks at Greenpeace, The Nature Conservancy, and The Southern Law Poverty Center, etc., etc., do not understand that the money system is at the root of our environmental and social problems, then it is up to us to educate them.