Monetary Reform Task Force

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Posted by dr.ron45 on October 9, 2012 at 1:40 PM

It is important to point out that the dynamic systems modeling and analysis effort in relation to the Greenback Renewal Act has not yet been done (however we are seeking funding for carrying out this work at present), What Professor Yamaguchi has done so far is to model the existing purely debt-based money system (i.e. the Federal Reserve System)) and the purely debt-free money system based on the Chicago Plan as developed by the American Monetary Institute and introduced in Congress by Dennis Kucinich as the NEED Act in 2011. The bottom line of his research, which is confirmed by IMF researchers in their recently released research report "The Chicago Plan Revisited" (August 2012), is that the national debt can be paid off with higher employment and output, with greater stability, while keeping inflation under control. It is clear that this would be a much better economy than what we have now from a public interest perspective (bankers may object because of a fear of losing unearned profits, but we are viewing this from the public welfare perspective, not from the private profit perspective).

The focus here is to start the work of finding a feasible transition path from where we are towards where we would be under the NEED Act. . In my view this cannot be done all at once in one step with one bill because nationalization of the Fed and elimination of fractional reserve banking provided for in the NEED Act will not be found acceptable by Congress as first steps in monetary reform. The risks of making such large changes, especially in the midst of a financial crisis, will be deemed to be too great. Instead, a multi-stage transition plan must be developed that allows for learning and adjustments all along the way. It must start small and grow big gradually in order to avoid taking on excessive risk along the way. It would be the "conservative" approach to monetary reform, not the "radical" approach embodied in the NEED Act,.

During the transition period, government issued money and bank created money will coexist in a hybrid money system as they did from 1862 to 1976 when the Cash Door at the Treasury Dept was closed. Hence I feel that the first step in reform must be the renewal of Greenback issues of the Lincoln era modernized and extended with their electronic counterparts. This was the best money issued in American History, being debt free and without interest obligation. It worked before to win the Civil War, and I believe it can work again to prevent the Great Crash of 2013 that is brewing at the moment.

The purpose of the White Paper presented at this site is to show that in fact the double barreled threat to the US economy posed by the sequestration cuts and the national debt ceiling can be overcome with government issued money (I believe this has been shown even without the more detailed analysis that Professor Yamaguchi can provide). Elementary math models are presented that show that by increasing reserve requirements, inflation can be kept under control as budget deficits and even the national debt itself are brought down in such a way as to avert the crash that is looming now. The greenback (or green money as they may be called when the electronic form is included) injection schedules presented satisfy the deficit reduction requirements of the Budget Control Act of 2011 so the sequestration cuts can be avoided, and they are also great enough to stop the growth in national debt before the current debt ceiling is reached so that the threat of a national default can be avoided. These two threats pose major secutity risks to the US, and elimination of both of them must be seen as a task with very high priority.

Categories: Yamaguchi Research, Greenback Renewal Act

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