Monetary Reform Task Force

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Posted by dr.ron45 on December 21, 2013 at 6:35 PM Comments comments (1)

It is with some satisfaction that I read the recent WSJ article about the recent decision of the Federal Reserve Board to cut back on Quantitative Easing 3 (QE3) from its current $85 billion per month level at the rate of $10 billion per month.  In effect, the Fed has decided to comply with the provisions of the EMERGENCY GREEN MONEY STIMULUS ACT of 2013 voluntarily.  In fact the 2013 version of the act provides for a cut back of $7 billion per month, and they have upped that to $10 billion per month.  I couldn't believe my eyes when I read the news.  

Of course to keep the economic recovery on track, or better to accelerate its progress, it is essential to offset the QE3 cutbacks with an equal and opposite ramping up of debt-free interest-free green money that is simply spent into circulation to support growth in the economy and a reduction in unemployment.  Towards that end, I have therefore revised the schedule of green money issues to conform to the announced QE3 tapering so that green money issues increase dollar for dollar as QE3 expenditures decrease.   I have also appended an argument showing why this green money substitution plan is non-inflationary.  The revision is now posted as the EMERGENCY GREEN MONEY STIMULUS ACT of 2014 from the home page of this site.  Please download and distributed as indicated on the Political Action page or as you see fit.

In order to reach current and future decision makers in government, it will be necessary to ramp up Monetary Reform Task Force activities considerably in 2014.  This will require voluntary contributions from concerned citizens such as yourself.  Therefore, a donation button has been appended to the Political Action to enable you to put your money where your mouth is.  Pick your own amount based on your personal situation, but notice that the current budget items total to approximately $4000.  Give as generously as you can to get Congress to step up to the plate and do it's part of the job.  Replacement of QE3 with GREEN MONEY STIMULUS is the best way to set the budget sequestration aside, eliminate the debt ceiling increase habit, and put the economy on a stable path towards robust growth without inflation and a decreasing national debt.  The Guernsey and Jersey Islands have been managing hybrid money systems for almost two centuries now.  We have to wake our leaders up to the fact that we can do it to.  In fact, we can do it better because we have computational and mathematical modeling and analysis techniques that go far beyond anything available on those tiny British Island protectorates.  One thing they have that we don't though is the clear thinking and common sense to understand that if you can created it yoursefl free of charge, it makes no sense at all to go out and borrow it at interest from banking interests that have little concern for the quality of life in the country where you live.  It's time our leaders understood this, and start creating free green money instead of borrowing expensive bank money.  If done according to the constitutional guidelines for regulating the value (i.e. buying power) of money, the benefits will be enourmous and the cost next to zero.


Posted by dr.ron45 on October 24, 2013 at 2:20 PM Comments comments (0)

Due to the failure of Congress to avert budget sequestration cuts, and due to their apparent inability to deal with the budget/debt dilema that exists at present. we feel compelled to offer our new version of the former Green Money Stimulus Act that is renamed the EMERGENCY GREEN MONEY STIMULUS ACT of 2013.  For those new to the site, GREEN MONEY refers to coin, paper, and electronic bank deposit money that is CREATED AND ISSUED by the government without debt or interest obligation.  It is the modern version of the Greenback paper money issued under the Legal Tender Acts of the 1860s that facilitated victory in the Civil War during Lincoln's administration.  Creation and issue of this money, when regulated to be in tune with the growth in the real output of the economy, is non-inflationary and enables the funding of public works projects and safety net expenditures that would otherwise be impossible without higher taxes.

The notes section for this draft legislation (download from home page of this site) identify five huge benefits accomplished by this bill:

(1) First it terminates the sequester cuts that have been hampering growth and services this year since their inception, and provides that US Money be used to replace funds previously cut due to sequestration.

(2) Secondly, it eliminates the need for any further debt limit increases during the remainder of the Obama administration by paying down the bond debt to the Federal Reserve Banks in four quarterly installments. This will reduce the national debt by approximately $1.6 trillion. A nation that creates its own money does not have to maintain a continuous program of borrowing to sustain itself.

(3) Thirdly, it provides a steady stream of debt-free funding for government programs in the years ahead that will enable gradual elimination of the national debt without debt default. Moreover, use of borrowing as a funding source will diminish to the point that it is used for exceptional circumstances only, approved by Congress on an exception basis.

(4) It reduces inflationary pressures by reducing both bond sales AND quantitative easing expenditures for each dollar of new green money created and spent into circulation. Net inflationary pressures will be reduced to as little as half as much as if the current regime (without green money issues) continues.

(5) The green money issues replacing quantitative easing may be used for public works projects, education, basic and applied research, funding of the US Postal Service and the Office of Technology Assessment, VA and social security benefits, health care, and grants to failing states, thus stimulating the creation of jobs and increasing the growth rate of national real output of the economy.

Due to the short time frame, before February 2014 rolls around, it is not feasible to build a popular "movement" to promote this elegant solution to all major problems with the US economy.  All one can hope to do is to educate and persuade key people in Congress.  Three likely supporters are Elizabeth Warren (D-MA), Bernie Sanders (I-VT), and Alan Grayson (D-FL).  Others who should see the draft legislation are the future members of the Monetary Control Agency listed on that page at this site.  Of course the President should see it as well, but good luck trying to get it to him.  The strategy is to flood Washing DC with copies of the bill so that discussions will start in the halls of Congress.  Your part is to contribute to the flood.  The clock is ticking, there is not much time left.



Posted by dr.ron45 on February 24, 2013 at 5:55 PM Comments comments (0)

The Green Money Stimulus Act button on the home page takes you to my latest thinking on how to avert the budget sequestration and halt the increase in national debt, at least in the short term.  The unique thing about it is that there are NO NEW TAXES required, and NO NEW SPENDING CUTS either!  The whole thing is done by replacing new bond selling with new Green Money creation, and replacing old bond buying with more Green Money creation.  Since the whole process is one of substitution rather than augmentation, there is NO NET INCREASE in money supply beyond what would occur by continuing the current system.  Hence the inflation red flag cannot be waived.  Such a claim is so amazing to those who have not studied green money mechanics that I have provided for Congress to insert their favorite new revenues and spending cuts, as long as they can be approved by both sides of the aisle.  So Democrats would have to stop calling for new income  taxes (new Green Money takes their place) and Republicans have to stop calling for draconian cuts in the social safety net.  Optional headings for uncontroversial revenues and cuts are provided because everyone expects that reducing the deficit requires a combination of new tax revenues and entitlement spending cuts.  But  in reality, new Green Money issues to replace current and previous borrowing is enough on its own to set aside both the budget sequestration and the debt ceiling debate.

Projected deficit reduction for the first year is $120 billion, $35 billion more than the $85 billion cuts scheduled under sequestration, and in ten years the deficit reduction would total $2.388 trillion, about three times the amount required to set aside budget sequestration.  It delivers sequestration set aside with NO new taxes, NO spending cuts, and NO net inflationm all at essentially zero cost (Green Money is created without borrowing or interest obligation),  How can you beat that?  Meanwhile, national debt declines for 7 quarters in a row eliminating any need to increase the debt limit and providing time to plan new measures to keep it headed down towards the debt free status enjoyed by the British Island Protectorates Guerney and Jersey in the English Channel.  The Canadians used Green Money to finance their participation in WWII, and their national debt remained essentially flat from 1935 until 1975 as a result.  And here at home, Abraham Lincoln used Green Money ("greenbacks") to win the civil war and push through the 13th Amendment.  Green Money is not a new idea, it's been around a long long time, and it has worked in all cases where new issues were regulated to be in proportion to the needs of trade and commerce, or to the "readl GDP" as we say today.  

So to stop the sequestration and national debt default, please alert the key decision makers to the low cost solution promoted here.  Why do it the hard way when you can do it the easy way? Failure to introduce Green Money into the solution now may have dire consequences, which are totally unnecessary if we but get Green Money flowing again (at a responsible rate).  March 1 is just a few days away, no time to waste.

$740 billion down, &760 billion to go!

Posted by dr.ron45 on January 14, 2013 at 4:45 PM Comments comments (0)

The Budget Control Act of 2011 tasked the "Super Committee" with finding ways to reduce the deficit over the next ten years by $1.5 trillion or more.  The Revenue Deal just passed at the beginning of this year accomplished $740 billion of that, leaving a balance of $760 billion that must be accomplished by March 1 in order to avert the sequester cuts that were provided by the BCA of 2011.  I have just posted my Deficit Reduction Act of 2013 that would accomplish at least $2.27 trillion in deficit reductions with US Green Money, almost three times the amount needed to set aside the sequester cuts.  And all without new income tax hikes or cuts to entitlement programs!  New pages have also been posted showing a comparison of US and Federal Reserve Notes, a bar graph showing Net Interest in comparison with other major programs, and data pertaining to spending and debt growth rates.

Mitch McConnell, John Boehner, and others are fond of saying, with great confidence, that the government in Washington DC has a spending problem that needs to be fixed.  But the government numbers posted on the web tell a different story.

I just published a couple of government charts on the new "Debt and Spending Growth" tab together with some of the downloadable data provided by a link at the sites indicated.  Disregarding the forecasts and just looking at the historical data for the period from 2008 to 2012 leads to the conclusion that as a percentage of GDP, the growth rate in debt (8.825% per year) is almost TEN TIMES greater than the growth rate in spending (0.8925%).  And the increase in spending, which has decreased from its high in 2009, is largely explained by the bailouts that required extraordinarily large outlays, most of which has been paid back now.  So the message from the data is that the US GOVERNMENT IS BORROWING TOO MUCH!  "It's a borrowing problem, stupid, not a spending problem!"

One of the reasons that we are borrowing too much is that we continue to have a debt-based monetary system.  As the economy grows, there needs to be more and more money to facilitate the growing number of transactions each year, so monetary expansion has to keep pace with growth in real output (GPD).  If the only way to expand the money supply is to borrow it, then of course the debt must keep growing exponentially at a rate pegged to the interest rate and the real GDP growth rate.  Hence, to break the vicious cycle, it is necessary to relearn the lessons of history that tell us that properly regulated debt-free government issued money leads to a much better result than continued reliance on debt-based money.  Ben Franklin brought prosperity to the colonies with government issued money; Abraham Lincoln won the Civil War with government issued money; the Canadian government maintained an almost constant national debt from 1935 to 1975 with government issued money; and the British Island Protectorates Guernsey and Jersey off the coast of France have been issuing government money with zero national debt and zero unemployment for almost 195 years!  The threat of inflation can be blocked by modern macroeconomic models and control theory technology that will make it possible to control inflation by regulating monetary expansion rates.  The amazing prospect of zero debt, zero unemployment, and zero inflation is within our grasp, but only with government issued debt-free money.  In view of the impending March 1 deadline, the time to get those greenbacks flowing again is now!

Updates of the White Paper and the Open Letter to the President will be posted soon.