Richard Cook calls for Write-Off of all Debt

His analysis of the abuse of the banking power, and his proposal for legal and monetary reform to prevent such abuse, is spot on.

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Bailout for the People

The amount of debt the economy is carrying is staggering. If we count individual, household, business, and government debt, that figure now exceeds $40 trillion, including the recent bailouts. What the General Accounting Office calls “unfunded liabilities” of the federal government, due to future costs of entitlement programs like Social Security and Medicare, adds another $60 trillion. These estimates don't include outstanding debt for derivatives, most of it bank-leveraged, which, according to the Bank for International Settlements, may amount to $1.28 quadrillion worldwide.

Growth in debt through 2006—understated, compared to figures derived by independent analysts—is shown by the following chart based on Federal Reserve figures. Note that virtually all of the debt has been incurred since removal of the gold peg and that its growth is exponential.

The commentators who write for newspapers like the Washington Post or give advice to the Federal Reserve have come up with solutions like slashing Social Security and Medicare benefits, a prescription President Obama will likely follow, or selling more U.S. assets to creditor nations like China. But they are proposing solutions in the interest of the financiers, not the nation.

They refuse to propose the obvious, which is that the debt must be written off as soon as possible and the monetary system changed to prevent further debt from being accumulated. Nationalization of the banks is not the answer; it still would be a debt-based system where the banks would rule from within the government rather than outside.

Bailouts financed by the government must be repaid with interest by the taxpayers. But the taxpayers are already overburdened by debt. Because the bankers are so untrustworthy and motivated by self-interest, they must be removed from power. This requires a political revolution that may already have begun.

In the late 1960s, an aberrant socio-economic phase emerged: the usurious state, in which the control over money, rather than the ownership of machinery, is the most important lever of economic and social power. Investment in debt, and the speculative buying and selling of paper assets, are the most significant means of accumulating personal wealth.

Hunter provides the following list of characteristics of usurious systems, features that are agonizingly familiar:

• “Crushing debt;
• “A widening gap between rich and poor;
• “Share markets subject to collapse;
• “Currency meltdowns;
• “Mounting social distress;
• “A pervading belief that the free market should be allowed free reign;
• “Banks driven by profit but holding tremendous power through their ability to create and extinguish the national currency, that is, money.”

Hunter's analysis is light-years ahead of U.S. economists, who, even when playing the role of an “official” opposition, really only enable the international financial elite to continue their dominance unabated. Of course industrial society is at the mercy of this financial tyranny, because huge quantities of money are needed for a modern economy to function.

This system is not free enterprise, and it is not capitalism. It is the cancer that is destroying the world.

The American Monetary Act became part of Kucinich's platform during his 2008 congressional campaign after he had dropped out of the run for the presidency.

This plan would eliminate public debt for federal government expenditures by returning to a Greenback-type system of direct government purchasing like we had during and after the Civil War. Public expenditures would focus on the creation of infrastructure assets as the basis for the monetary system. The Act would eliminate fractional reserve banking by requiring the banks to borrow money they lent from the government.

These measures would address the errors made by all Western governments by which, according to Canadian professor of economics John H. Hotson, they have violated “four common sense rules regarding their fiscal and monetary policies.” Hotson was professor emeritus of economics at the University of Waterloo and executive director of the Committee on Monetary and Economic Reform (COMER), when he identified these rules in 1996 as:

“1. No sovereign government should ever, under any circumstances, give over democratic control of its money supply to bankers.
“2. No sovereign government should ever, under any circumstances, borrow any money from any private bank.
“3. No national, provincial, or local government should borrow foreign money to increase purchases abroad when there is excessive domestic unemployment.
“4. Governments, like businesses, should distinguish between ‘capital' and ‘current' expenditures, and when it is prudent to do so, finance capital improvements with money the government has created for itself.”

The violations would be corrected by the reforms contained in the American Monetary Act. This would go a long way toward returning banking to its proper role of providing working capital for the economy but would displace the banking system as the focal point of national economic and political dominance. But these reforms by themselves still would not meet the need for a direct infusion of purchasing power into the hands of individuals.