In 2011, to address the failed US recovery, former Congressman Dennis Kucinich (D-Ohio) and Congressman John Conyers (D-Michigan) introduced HR2990, the National Emergency Employment Defense Act. The bill proposed to abolish the Federal Reserve system and end the ability of private banks to create money out of thin air.* If the bill had passed, it could have instantly ended all federal deficits and debt, while simultaneously providing trillions of dollars for vital infrastructure and restoring funding to states and local authorities for education, hospitals, clinics, housing, police, libraries and other programs cut after the 2008 economic crash.
The late Stephen Zarlenga, founder of the American Monetary Institute and co-author of the bill, always found it ironic that in 2008-2099 the US Treasury “printed” between $3-15 trillion of new money (aka quantitative easing) – as HR2990 proposes. However instead of spending this government-created money into the economy as HR2990 specifies, they handed it over to private banks. They in turn used it to pay obscene CEO salaries and to inflate their stock prices by buying back shares.
Among other provisions, of HR2990 would
- Dismantle the Federal Reserve and transfer its powers to a new Monetary Authority operating under US Treasury oversight.
- Replace all Federal Reserve notes with United States Money.
- Instruct the Secretary of the Treasury to create United States Money to address any and all deficits resulting from a discrepancy between tax receipts and funds appropriated for government services.
- Subject to criminal and civil penalties any person [ie banks] who creates or originates United States Money by lending against deposits through “fractional reserve banking.”
- Prohibit borrowing by the Secretary or by any federal agency or department, independent establishment of the executive branch, or any other instrumentality of the United States (other than a national bank, federal savings association, or federal credit union) from any source other than the Secretary.
- Require the Secretary to begin to pay off all outstanding US debt payment in full in United States Money.
- Prescribe requirements for the entry of United States Money into circulation.
- Require the Monetary Authority to instruct the Secretary to disperse monetary grants to states for public infrastructure, education, health care and rehabilitation, pensions, and paying for unfunded federal mandates.
- Direct the Secretary to make recommendations to Congress for payment of a tax-free Citizens Dividend to all U.S. citizens residing in the United States in order to provide liquidity to the banking system at the commencement of this Act, before governmental infrastructure expenditures have had a chance to work into circulation.
- Prescribe requirements for federal funding of education programs, coverage of any deficits in Social Security Trust Fund account, a universal health care plan, resolution of aspects of the mortgage crisis, and a program of interest-free lending of United States Money to state and local governmental entities.
As Kucinich points out in the preamble to his bill, Article 1 Section 8 of the US Constitution places the power to create money in Congress. In 1913, Congress made the foolhardy decision to delegate this bower to the Federal Reserve system and private banks. Predictably the latter operate the US monetary system (and money creation) in such a way as to their profits – and not for the benefit of the American people. The result has been increasing economic instability, skyrocketing income inequality and growing power of private banks, such as Goldman Sachs and JP Morgan – to the extent they virtually control our so-called democratic system of government.
More information on the American Monetary Institute at their website: http://www.monetary.org/
Link to HR2990: HR2990
In the video below, Kucinich** speaks about HR2990 on the floor of Congress in 2013.
*Contrary to popular belief, the government doesn’t create the dollars in circulation in the US. The vast majority is created by private banks out of thin air when they initiate loans. See How Banks Invent Money Out of Thin Air
**Like Bernie Sanders, Kucinich was more of an anti-coproratist than a Democrat. He opposed military intervention in Iraq, Libya, Syria and the Patriot Act. As a presidential candidate in 2004 and 2008 he called for single payer health care, free education (including pre-school and university), instant run-off voting, a moratorium on GMO crops, withdrawal from the WTO and NAFTA, ending the death penalty and the War on Drugs and lowering the voting age to 16. He collaborated with libertarian Republican Ron Paul on a number of bills and currently serves on the Ron Paul Institute advisory board. He lost his seat in 2013 after the Ohio state legislature re-districted his Congressional District out of existence.