Create Jobs and Improve the Economy through Public Control of Our Money System

Stephen Zarlenga and Greg Coleridge

Jobs and the debt are chronic problems requiring fundamental solutions rather than piecemeal approaches. A bill providing just such fundamental solutions- the National Emergency Defense (NEED) Act by US Rep. Dennis Kucinich (D-Oh) – already introduced at the end of the 111th session of Congress – will be reintroduced soon. Americans would be wise to rally behind it.

While the bill focuses on the unemployment crisis, it contains three essential monetary measures proposed by the American Monetary Institute in the American Monetary Act (AMA). The AMA’s recommendations are based on decades of research and centuries of experience, are designed to end the current fiscal crisis in a just and sustainable way, and are aimed to place the U.S. money system under our constitutional system of checks and balances.

The three essential measures of the NEED Act include:

  1. Moving the mostly private Federal Reserve System under the US Treasury Department. The Fed would no longer be a virtual fourth branch of government, unaccountable to the public. Their important financial research functions would continue. But the Fed would no longer make unilateral monetary policy decisions beyond the reach of We the People.
  2. Making the power to issue money a public function – bypassing the current system which invited the careless and risky lending that led to the global economic crisis. The US Government would be authorized to issue dollars debt free. This power would replace the current undemocratic and unstable “fractional reserve” system in which money is created as debt through loans by financial corporations who lend many more times what they possess. Banks would no longer have this privilege to create our money supply!
  3. Enabling the US government to use its money power — creating and spending money into circulation – to address pressing infrastructure needs such as repairing our crumbling roads, bridges, rails and highways.  The government also would be enabled to invest in health care and education. These projects would provide a huge numbers of jobs without going into debt and having to repay interest on debt to financial institutions.  Economist Kaoru Yamaguchi’s computer model has shown that a public-based money system and spending government money on jobs fixing our infrastructure is the best form of economic growth.

    The irony is that these three provisions would institutionalize what most Americans falsely believe already exists: That the Federal Reserve is public. That banks only loan money that they possess. That the government creates our money. Wrong on all counts.

    Decades of distortion and deception can be remedied by this bill.

    Public control of money is not a new practice. The American colonists issued “”Continentals” and the Lincoln administration “Greenbacks” to fund the Revolutionary and Civil Wars respectively – all debt and interest free. More than 200 prominent economists during the Great Depression of the 1930s developed and endorsed “The Chicago Plan” – which declared that only the government should create money – to address that crisis.

    Ask your US representative to cosponsor the NEED Act when it is reintroduced. Ask your two US Senators to contact Rep. Kucinich about becoming a Senate sponsor. Last year’s bill can be read at

    http://thomas.loc.gov/cgi-bin/query/z?c111:H.R.6550:

    This bill alone cannot solve all our current economic problems. But it will end the private/corporate control of what should profoundly be a public democratic function of any society – issuing the nation’s money.  Maybe more importantly, the Act will serve as a beacon of hope to a beleaguered citizenry who are seeking long term solutions to unemployment, debt, crumbling infrastructure, and need to take power over their lives and their society.

    Zarlenga is Director of the American Monetary Institute and author of The Lost Science of Money. Coleridge is Director of the Northeast Ohio American Friends Service Committee.

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    6 Responses to Create Jobs and Improve the Economy through Public Control of Our Money System

    1. AMI says:

      This post was published on the Huffington Post on May 3rd, 2011. Write more comments on the Huffington version!

    2. Nancy says:

      Right, now we know that WE know what we need to know….. BUT the problem is that 99% do NOT know what we know. The first step to fix this, is to attract the attention of at least 20%. There are experts at this…. Frank Luntz, Republican practitioner, George Lakoff, liberal academic, etc. etc.

      I don’t think anyone in this campaign is working on this – please tell me I’m wrong 😉

      Here’s an amateur start – “fractional reserve RACKET”, “Federal Reserve CARTEL”,….. can’t think of anymore. How about my fellow travelers ? (“Greenbacks for Jobs”?)

      The idea is to catch attention, interest and CURIOSITY – “What are you talking about??” And then, we have a carefully crafted simple(!), concise, picture-painting (using all senses to implant our message), memorable explanation (see John Hartmann’s “Cracking the Code”)

      Then we have to get to every gathering we can find and ….. talk, catch attention, tell the story, offer the solution within our grasp -N.E.E.D! There’s so much “ain’t it awful” reportage – we bring the “ain’t it great!” reposte 🙂

    3. I just saw the article below on the internet this morning. It again, as I have constantly noted, emphasizes that, above everything else, the people of America and the world want jobs, jobs, jobs. This is exactly why we need to make jobs at a living wage for those who cannot find a job in the private sector a part of the NEED Act. If we are to have any hope of developing the massive grassroots support we need to help us pass the NEED Act, we have to offer the people what they want, more than anything else, and that is jobs. This can be called common sense, it can be called social justice, it can be called socialism (but is not, guaranteed jobs at a living wage does not take over the production and distribution of everything, which IS the definition of socialism.) Whatever anyone may call it, jobs is what the people want and it will be very difficult to get their support without giving them what they want. Jobs is the main factor in the Egyptian revolution as it was in Tunisia, and as it probably will be before too long in the United States. Here’s the article from this morning:
      January 29, 2011

      WE WANT JOBS! THE CRY IN EGYPT, AMERICA, THE REST OF THE WORLD

      By Prof. Sam Hamod

      It’s not just in Egypt, but in America and around the world, people want jobs. When Egyptians were asked what they most wanted, the vast majority said they wanted jobs — they wanted Hosni Mubarak out so that they could change the economy because many said they had no jobs and no food.

      Most countries have gone into a capitalist system, and with this, came the necessity to having a job at all times in order to pay for shelter, food and other human needs. In Egypt and in many countries in the Middle East, Africa and South America, as well as in America, the unemployment rates are at record highs. For some time, the people were sold on the idea of “education” as the cure-all. But as many Americans have found out, even with MBA, IT, Ph.D. degrees, there just aren’t that many jobs, and many of the jobs that are available do not pay a decent wage, a wage that can help a person pay for shelter and food. Egypt is not alone in this situation, but because it is now at center stage with its revolt against Mubarak, it appears that it is an Egyptian problem.

      But, as many of the youths say, yes, they want Mubarak out, but they want a way to survive in the world, and at this time, most of those interviewed on CNN, MSNBC and other networks have made clear, the lack of jobs is a large part of the problem. Thus, it was interesting to find out that of the $1.5 billion dollars America gives to Egypt, that $1.3 billion goes to military spending, with the little left going to other areas of Egypt. I had a kind of dark-humor reaction to Hillary Clinton and Obama threatening their financial aid to Egypt, when so little of it goes to the people. It was almost like a bad joke but I’m sure neither Hillary nor Obama realized what a faux pas it was, because the Egyptian people could care less since they get so little of the money, and most of them know that what is left often goes into the pockets of the other oligarchs who run Egypt, and as in America, little filters down to the people.

      With this in mind, we cannot simply focus on Egypt, but we must all think of alternative ways to help people throughout the world to find a way to make a living and to lead a life of dignity with shelter, food and medical care. If we don’t succeed at this, then chaos will be the future for all countries of the world, and this includes America because the pot is already boiling here. That is why there were so many seats lost in the Senate and House in this election — the people in the U.S. are fed up, but are not at the dire level that has been reached in Egypt, Tunisia, Jordan and elsewhere. Yet.

      We must also not be led down the garden path by people who jump onto politicians’ words and say, “We cannot do this, because it sounds like socialism, or welfare.” On the other hand, the “trickle down” system that is supposed to work in capitalism is no longer working as we have more and more automation and robotics, and the outsourcing of jobs to lower and lower paying countries, while the costs of living in many more developed countries continues to rise, with more and more homeless, unemployed, and with food banks running out of food and charities failing because donations are down so low.

      Sadly, hour after hour on CNN, MSNBC, CBS, FOX, NPR, ABC and other media, there is a repetition of the problems in Egypt, but few if any of he talking heads really realize that the problems of jobs and anger that is building in Egypt is not limited to Egypt, but the same problems exist — not to the degree at this time — in America, and in many Western, African, South American and Middle Eastern countries, and no one is addressing them in a strong and intelligent way. Too often the people in power say, like so many have said in times past, “Don’t worry, the problems were solved using our old system, it will work — it always has.” Unfortunately, some commentators like Bill Moyers, Helen Thomas, Walter Cronkite and Peter Jennings aren’t around to speak the truth, and some of those who are around either do not know the truth or perhaps are be afraid to speak it for the sake of keeping their jobs in a capitalist job situation where some of the oligarchs of our society want the people to keep believing “the system is working, and we’re coming out of our jobless and financial disaster””

      The truth is that the system is not working in most of the world, and there are few of those in power who are addressing the problem in a serious manner. In this sense, it was interesting that both Obama and Hillary Clinton kept saying that the government of Egypt should be partners with the people of Egypt. Yet the people of America have spoken by polls against further wars in Iraq and Afghanistan, but our government is not listening. Billions are spent every day on these wars, while social, welfare and medical services are being cut in America, and there is even talk of privatizing Social Security or cutting it. No, even in America, the government is not listening to the people, not just in Egypt. Thus, although hypnotized by the news from Egypt, we too in America must get our heads out of the sand before it is too late.

      Egypt is but a harbinger that is like the canary in the coal mine that warns when the poisonous gases have reached the danger point. The gases are here and expanding, let us hope that people in power in the world will awaken in time and find solutions, no matter how radical they may seem, before more explosions occur and more people have to suffer.

      Author’s Website: http://www.todaysalternativenews.com

    4. Helge Nome says:

      I fully agree with the above article. Allowing private people to willy-nilly create the nation’s money is an unmitigated disaster, as can be readily seen today.

    5. Hi Stephen. Thank you so much for your fantastic work. I thought you might be interested to read the following two posts on my blog:

      Letting Go of Public Banking at the State Level

      The Permavegan’s 2011 SOTU Analysis: Four Reasons to Explore a Rally Around Dennis Kucinich, the Last American Democrat

      I’ll be following your blog and looking forward to future discussion.

    6. john says:

      IT’S ABOUT TIME!

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