A monetary system accomplishes three objectives: 1) the creation of money (a law designating the token), 2) the issuance of money (the political question of who gets the money first), and 3) the circulation of money (the economy that is mediated by money).
How these functions are accomplished is very important to the nature of society. The workings of the monetary system indirectly shape social and economic policies by making particular actions more or less feasible. Activities that are more easily funded will tend to exceed less easily funded activities and the nature of society is altered according to the monetary system design.
The Green Party monetary reform Greening the Dollar platform position makes Green Party policies such as environmental restoration, free or low tuition education, Medicare for all, and universal basic income much more feasible than under the present Federal Reserve system. By creating money without debt, the economic merits of programs will be determined by their systemic and social benefit and not by their ability to support interest payments and banking cartel profits. With the money system under the control of Congress it becomes a possibility to serve the public interest instead of the banking cartel agenda.
In contrast, the Federal Reserve System is designed around the agenda of the banking cartel. As noted, banks create money by creating debt and deposits. Banks issue money by deciding to whom and for what purpose they will make a loan. Circulation is partly accomplished by requiring repayment of the loan with interest and the resulting drive to acquire money to make those payments. Bank loans are made where there is collateral or to the wealthiest and government spending is required to circulate money to the lower economic classes.
The two quotes show the implications of the banking cartel debt-money system:
| Alexander Hamilton | Frederick Soddy |
|---|---|
| Every loan, which a Bank makes is, in its first shape, a credit given to the borrower on its books, . . The Borrower frequently, by a check or order, transfers his credit to some other person, to whom he has a payment to make, who, . . . [can] either convert it into cash, or pass it to some other hand, as an equivalent for it. And in this manner the credit keeps circulating, performing in every stage the office of money, . . . Second Report on Public Credit |
The more profound students of money . . . have realized the enormous significance of this money power or technique and its key position in shaping the course of world events through the ages. . . . To allow it to become a source of revenue to private issuers is to create, first, a secret and illicit arm of the government and, last, a rival power strong enough ultimately to overthrow all other forms of government. The Role of Money – Preface |
The banking cartel is perhaps the best organized special interest group in U.S. history. The nature of banking promotes organized and concerted actions. The “payment system” constantly coordinates bank accounts in all the banks in the system. Banks work together to promote economic activities that promote debt: mortgages, auto loans, credit cards, student loans, imperial warfare, etc. The banking cartel organization is so strong because its participants are paid with the very money the banking cartel creates. The corporations it finances provide career and investment opportunities, and supporters of the banking cartel agenda are rewarded with loans.
The privilege of creating loans funded by deposits which act as money is the central element of banking cartel power. I describe our society as the “banking cartel culture” because we are under the Federal Reserve Monetary System in which commercial banks create loans and deposits, with the deposits serving as the money supply. The banking cartel has created the consumer economy with planned obsolesce, excessive consumption of natural resources, pollution, and social inequality. To fully exploit this privilege the banking cartel structures its lending activities to create and sustain this constant fixation on money. Everything in the banking cartel culture is oriented around money. There is a constant emphasis on “economic growth,” continuous monetary inflation, and the monetary growth imperative. Everyone always needs more money. Since bank money (deposits) are created with debt there is always a shortage of money. This drives much of the behavior in our society.
It is not only the U.S. domestic society that is shaped by the banking cartel. The need for constant expansion likewise drives imperialism and the quest for dominance of resources around the world. The book Confessions of an Economic Hit Man by John Perkins details how the banking cartel creates an empire by usurping foreign governments and trapping them with debt. Alexander Hamilton also noted the critical link between a banking cartel monetary system and imperialism in his letter of September 3, 1780:
The invention of banks on the modern principle [creating loans and deposits] originated in Venice. There the public and a company of monied men are mutually concerned. The Bank of England unites public authority and faith with private credit; and hence we see what a vast fabric of paper credit is raised on a visionary basis. Had it not been for this, England would never have found sufficient funds to carry on her wars; but with the help of this she has done and is doing wonders. From Alexander Hamilton to James Duane
Just as the British empire was a project of the Bank of England and English financial royalty, the United States empire is a project of the Federal Reserve banking cartel and Wall Street corporations. An informative history is presented in the video series Origins of the US empire and deep state
It is important to realize that the nature of the monetary system is a foundational or fundamental political issue. The Green Party platform policies are quite unlikely to be achieved under the Federal Reserve monetary system. This is due to the Green Party platform policies being oriented to the overall wellbeing of society — people over profits and environmental restoration. It is quite difficult or impossible to imagine these policies in terms of loan collateral and income streams designed to support interest payments, which is required under the Federal Reserve system. Therefore, it is important for every advocate of Green Party platform policies to understand that the present Federal Reserve system is a major obstacle to progress on social and environmental issues.
The three basic elements of monetary reform are:
- Nationalize the Federal Reserve System, by the government buying all shares of the twelve Federal Reserve Banks, from the private member commercial banks. This makes the Federal Reserve Banks part of our government, precisely what most of us mistakenly believe it is now.
- End bank creation of money. Banks will only lend money that already exists, exactly what most people mistakenly believe happens now.
- The federal government creates and spends money into the economy. This is the new US Money, issued without inflation or deflation for the needs of the nation and its people. Again, what many mistakenly think is now happening.
Modern societies require a monetary system to enable coordinated activities among people with different locations, skills, affiliations, etc. We need to advocate for reform of the monetary system to enable the transformation to a just and sustainable society.