Open letter to all 2020 Green Party candidates
The Green Party’s Banking and Monetary Reform Committee (BMRC) wishes to be a resource for all 2020 Green Party candidates seeking a deeper and more critical understanding of the current Federal Reserve monetary system. We believe understanding monetary policy is essential to understanding many of the nation’s (and the world’s) problems – social, environmental and economic.
We encourage you to read our committee website, GreensForMonetaryReform.org. This site explains simply the problem with our current monetary system and the solution, “Greening the Dollar”, found in our national platform.
Money is a form of power. The 1% have money and therefore power. They rule. How did they get all this money and power?
The 99% have lots of debt, which can be an oppressive burden. They do not rule. How were we burdened with so much debt?
Money Created as Private Debt
One of the most important sources of power in the whole world is the legal power given to commercial banks, by the Federal Reserve Law, passed by Congress in December, 1913. In this system, all money comes into our economy as an asset to the bank. At the same time, this new money is a debt to the people. Shocking? Absolutely.
All money comes into our economy when a commercial bank signs a loan agreement with a borrower and legally creates bank credit in the account of the borrower. The bank now has a loan agreement worth something. The borrower now has a debt, to be repaid with interest. The bank has gained power; the borrower has given up power and taken on a liability.
Here are some examples. A man walks into a bank and negotiates a mortgage loan to buy a house. He signs the mortgage loan agreement. The bank now owns the mortgage loan, which is an asset to the bank. The man has a debt to the bank. The man does not own the home; the home is owned by the bank until the debt is repaid in total. The bank simply types the amount of the loan into the man’s account – creating bank credit (aka ‘money’).
Another example: The U.S. Treasury auctions off Treasury bonds to fund the government. A Primary Dealer bank (a commercial bank specially authorized to buy bonds directly from the US Treasury) buys some Treasury bonds in the auction. The Primary Dealer, say J.P. Morgan Chase Bank, buys the Treasury bonds (an asset) and pays for them by creating bank credit in the Treasury’s bank account. J.P. Morgan Chase has the asset; the government (the people) have a debt. The bank has gained power; the people have lost power.
The examples are endless. The rule – every time a private commercial bank makes a loan, all it is doing is creating the deposit in the account of the borrower. The borrower needs to return the loan with interest. The bank owns an asset – the loan agreement – and gains the interest payments from the borrower.
The Design of the Monetary System
The rules of banking, set forth in the Federal Reserve Law, determine the system. The system is structured to gain assets and power for the banks, and diminish the power of the people, governments, and businesses, who borrow.
The system is designed to work for the 1% and weaken the power of the 99%.
This system drives the vast and constantly-increasing inequality of income and ownership in our country, the financial sector’s capture of elected officials through campaign contributions, and increasing homelessness and poverty.
The system is the exploitation of the many by the few and, if left in place, will continue producing the same results regardless of the individuals elected or appointed to run it. It must be abolished for our nation to survive.
Change the System
‘Greening the Dollar’ in the Green Party’s platform describes the solution. This plank represents a law introduced into Congress by Representative Dennis Kucinich in 2011, called the NEED Act. National Emergency Employment Defense Act.
There are three things that have to change for this system of bank exploitation to be ended, and a just monetary system take its place:
- Change the bookkeeping rules so banks cannot create bank credit to lend. The banks must lend money they already own.
- The federal government buys all the shares of the twelve Federal Reserve Banks and creates a Bureau of the Fed in the U.S. Treasury.
- The Congress authorizes the creation of money to be spent on federal expenses; grants of 25% of the new money to all the states (on a per capita basis) and the states decide how to spend it; non-interest loans to states, counties, municipalities.
In the new system, all money is U.S. Money, authorized by the Congress. This U.S. Money is an asset to the government (the people). This U.S. Money is created as an asset, not a debt!
Invitation to Speak with the BMRC
We are encouraging all Green Party candidates to contact the BMRC and attend one of our weekly meetings. The BMRC wants to reach out and speak to each candidate, discussing how this issue of monetary reform could add to your campaign platform. Please contact us. [email protected]
Top photograph by AgnosticPreachersKid - Own work, CC BY-SA 3.0