| Subject: | [socialcredit] Richard C. Cook: Monetary Crank | | Date: | Tuesday, September 2, 2008 08:42:12 (-0700) | | From: | william_b_ryan <william_b_ryan @.....com>
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Appended below is Richard Cook's recent Internet posting. It is a great
disappointment to me in many respects. Gone is even the pretense of Social
Credit theory. It is heavily influenced by Stephen Zarlenga, a Georgist who
argues that Henry George was a Greenbacker!
The A + B theorem is replaced by the fallacious "debt virus" theory that we have
discussed previously. The "usury" argument is an Islamic fundamentalist slam
against modern informed Christianity, which we have also discussed previously, so
I'll just briefly outline the arguments now.
In Zarlenga's "American Monetary Act" is a provision for a so-called "citizens'
dividend." Says Cook: "The Act also includes a provision for a citizens’
dividend, similar in some respects to the Alaska Permanent Fund, which would
inject desperately needed purchasing power into the economy without additional
government debt or taxation."
Lest anyone think that this "citizens' dividend" is similar to the Social Credit
proposal for a dividend, read this from the act itself, as posted on Zarlenga's
website:
"SEC. 506 INITIAL MONETARY DIVIDEND TO CITIZENS Not later than 90 days from the
effective date of this section, the Secretary, in cooperation with the Monetary
Authority shall provide recommendations to Congress for payment of a Citizens
Dividend as a tax-free grant to all U.S. citizens residing in the U.S. in order
to provide liquidity to the banking system at the commencement of this act,
before governmental infrastructure expenditures have had a chance to work into
circulation."
Please note that in Zarlenga's plan the dividend is not continuing, as in Social
Credit, but paid only once at the beginning of the plan's implementation "before
governmental infrastructure expenditures have had a chance to work into
circulation."
As to the "debt virus" argument, Cook quotes Bob Blain:
“Loans created only the principal. Interest had to be paid out of principal.
So payment of interest reduced the money supply and slowed economic activity.
Recovery could come only when new loans were taken out at least equal to interest
paid.”
The second sentence is simply a false statement of fact. Banks create customer
deposits not only through the principal of loans, but when they spend, through
reciprocal economic activity, salaries, wages, dividends and ordinary business
expenses into the community, which become available to pay interest back to the
banks.
As to the religious argument, I have as the authority John Calvin's letter of
1545, as related by Norman Jones of Utah State University, that two quite
different words in the Semitic languages were inappropriately translated as
"usury" into the European languages.
http://www.geocities.com/new_economics/Calvin-usury.txt
This is supported in modern Islam.
http://www.geocities.com/new_economics/Quran-usury.txt
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FAIR_USE_CLAIMED
Democrats in Denver Should Skip One of Their Parties & Read the American Monetary Act
by Richard C. Cook
Aug. 27, 2008
How are things going at the Democratic Party National Convention in Denver this
week?
Are they talking about the fact that the Western world is run by an
international financial elite headquartered in London, the financial capitals of
mainland Europe (such as Frankfurt, Hamburg, Amsterdam, Paris, and Milan), and,
of course, New York City?
Are they mentioning at their cocktail parties that the financial elite exert
control over the world’s population through the cartels that make up the
world’s producing economies and through the civilian and military bureaucracies
who work for the governments that kow-tow to them?
Of course they know that the most important cartels are those which control
energy resources. And that of these, the commodity of central importance is oil.
But is any of this helping them draw conclusions regarding the doubling of oil
prices during the last year or about the largest oil company profits in history?
Also, they should be drawing the right conclusions from the fact that every
private and pubic enterprise operates on the basis of a money economy, though it
would be more accurate to call it a credit economy. This means that whoever
controls the issuance of money and credit controls the world. And the world’s
monetary systems function on the basis of money and credit being introduced into
circulation through loans from the banking system, loans for which interest is
charged. So what should that tell them?
In fact, they should be pointing out to each other and their TV viewers that the
charging of interest for the use of money is a chain around the neck of everyone
on earth. Further, that these cumulative interest charges are built into the
price of every product that is manufactured or consumed. And that growth of debt
means price increases too.
They should be honest in making it clear that the world is a master-slave
society, that the slaves are those who borrow and pay interest, that the masters
are those who collect the interest, and that this unjust system has existed in
one form or another for thousands of years.
The candidates and delegates are talking about the aspirations of the American
people and how everyone should have an opportunity to achieve their dreams. But
if the United States were a free nation, they would also be talking about a
financial system that destroys people’s dreams.
Unfortunately, the highest rung the candidates and delegates have been able to
reach on the ladder of modern-day slavery is the need for more jobs—but they
fail to note that jobs are not only the means by which people live, but also the
instruments for them to pay the heavy burden of interest the masters of finance
require.
What they won’t say is that the world economy is based on usury, something
religions used to consider a crime (and which Islam still does). Usury is the
charging of interest for the use of money. As the religions backed off from their
prohibitions of interest, usury became just excess interest. But that’s not
what the word really means.
So what have over two centuries of usury done to the United States?
The best answer ever given to that question was contained in a paper entitled
“Revisiting U.S. Public and Private Debt” published in January 2005 by Dr.
Bob Blain, Emeritus Professor of Sociology at Southern Illinois University. The
paper updated an earlier study by Dr. Blain published for the United Nations
Educational, Scientific, and Cultural Organization (UNESCO) in the International
Social Science Journal, November, 1987, Paris, pages 577-591.
In his paper, Dr. Blain examined the growth of total public and private debt in
the U.S. Total debt includes “the debts of governments (federal, state, and
local), corporations, farmers, home mortgages, and consumer, commercial, and
financial debts.”
In his analysis, Dr. Blain began with data from the Bureau of Economic Analyses
of the United States Department of Commerce which covered the years 1916-1976.
After that year the Bureau stopped publishing the data.
The figures showed that from 1916-1976, total U.S. debt grew from $82 billion to
$3,800 billion ($3.8 trillion). But most of that growth was during the last 21
years, from 1955-1976, when it began to grow exponentially. Dr. Blain wrote,
“The consistency of the pattern suggests that some imperative is at work,
something that requires debt to increase.”
Dr. Blain found the answer by researching American history. He wrote: “Then I
read G.R. Taylor’s 1950 book, Hamilton and the National Debt, which described
the debate over Alexander Hamilton’s plan to fund the new economy with borrowed
money.” He continued:
“The most revealing account was a speech by the first congressman from
Georgia, James Jackson, on February 9, 1790, in which he predicted that adoption
of Hamilton’s funding plan would lead to the explosive growth of debt. Jackson
said, ‘Though our present debt be but a few millions, in the course of a single
century it may be multiplied to an extent we dare not think of.’” (Annals of
Congress, Vol. I, February 1790, pp. 1141-2)
From the very beginning, the U.S. had a monetary system based on borrowing and
debt. First came the thousands of state chartered banks that began operating late
in the Revolutionary War period and continued in one form or another until today.
Then there were the two early central banks: the First Bank of the United States
(1791-1811) and the Second Bank of the United States (1816-1836). Today’s
national banking system began during the Civil War with the National Banking Acts
of 1863-64. Then there is the system we are living under today, the Federal
Reserve, chartered by Congress in 1913. Even during the times when the government
has sold its debt directly to the public, as with war bonds, savings bonds, and
Treasury notes and bills, that too has been money borrowed at interest.
Although there have been times in history when money entered into circulation
other than through debt, such as with coinage and the Civil War greenbacks, those
were exceptions and today are of little importance.
Dr. Blain estimated that from the time Alexander Hamilton placed the U.S. under
a debt-based monetary system until today, the debt has compounded at 5.8 percent
annually. The big problem with this system, he said, was “that no money was
created to pay interest.” He continued:
“Loans created only the principal. Interest had to be paid out of
principal. So payment of interest reduced the money supply and slowed economic
activity. Recovery could come only when new loans were taken out at least equal
to interest paid.”
Dr. Blain concluded, “As long as the money supply of a nation is created as
debt costing interest, debt must grow by compound interest.” From a
longer-range view, it’s a system that is constantly collapsing and that must
constantly be bailed out.
Dr. Blain next sought to update his figures past the 1976 data from the Bureau
of Economic Analyses. Turning to the Federal Reserve’s series on “Total
Credit Market Debt Outstanding,” he found remarkably similar indicators.
He found that adding data from the Federal Reserve from 1945 to 2003 showed the
“debt explosion” continuing. In 1945 total debt was $463.4 billion. In 2003
it was $44,967.7 billion ($45.0 trillion). When he projected the debt level for
2010, he arrived at a figure of $74.9 trillion. By this time the debt curve was
climbing so steeply there would be almost a doubling of the amount of total debt
in only nine years.
It might be argued that these figures do not take into account inflation. This
is because lending at interest is the cause of inflation. The dollars still have
to be repaid with interest. The problem occurs when economic growth, measured by
GDP, does not keep up.
Looking at the growth of GDP from 1945 to 2003, the increase was from $223.1
billion to $10,987.9 billion, a factor of 49. But the debt ($463.4 billion vs.
$44,967.7 billion) grew by a factor of 97, almost twice the rate of GDP growth.
Thus the total debt burden on the economy has doubled from a ratio of 2:1 to more
than 4:1 (though it was much less than that during the early days of the nation).
But with continued compound growth of debt and a slow- or no-growth state of the
economy as we head into a recession, we are starting to see what Dr. Blain called
an “acceleration to meltdown.” He wrote:
“We are buying more and more in the same amount of time. Witness the
efforts of people to get rid of their excess through yard sales, storage units,
and big trash pickup days, and the massive size of what are euphemistically
called landfills. While two billion people in the world lack basics such as clean
water, food, and shelter, Americans throw away their microwave ovens,
televisions, computers, refrigerators, furniture, and cars. Meanwhile,
acceleration is applauded as increasing productivity. It’s like arguing that
cancer is good because it grows.”
These are the things the Democrats in Denver should be talking about, instead of
going to so many parties. They should be making note that the U.S., to quote
economists close to the Federal Reserve, is “functionally bankrupt.”
In fact, the debt this nation owes to the banks, to foreign creditors, and to
each other can never be paid off. Further, one big reason for all of our
fruitless military endeavors overseas may simply be to escape unpleasant economic
realities at home. But this is pointless. Nothing creates more debt than war, as
the bankers have always known.
The only solution is to adopt a monetary system that is not based on debt. Dr.
Blain makes a couple of specific recommendations: 1) “Stop using percentage
rates to calculate charges for the use of money”; and 2) “Congress must
supply the economy with a money base that is debt-free and interest-free.”
The second point is a call for a new monetary system, not one based solely on
lending by the banks or on government borrowing. One organization that has
developed a blueprint for such a system is the American Monetary Institute (AMI),
headquartered in Chicago. The director of the AMI is Stephen Zarlenga, author of
a massive, groundbreaking work: The Lost Science of Money (AMI, 2002).
Zarlenga’s assistant is Jamie Walton, a monetary reformer from New Zealand.
AMI will be holding its fourth annual conference in Chicago on September 25-28.
Expected as keynote speaker is Congressman Dennis Kucinich, whose wife Elizabeth
once worked as an intern at AMI. Dr. Bob Blain will be a featured speaker.
On the AMI website at www.monetary.org is a remarkable document, the American
Monetary Act [.pdf] The product of several years of work by Zarlenga and his
network, which now includes a number of local chapters around the country, the
American Monetary Act would replace today’s debt-based monetary system with one
where the government spends or loans money directly into circulation.
Under the Act, the Federal Reserve would be retained as a national financial
clearinghouse but would no longer be a bank of issue. The system would be
overseen by a Monetary Control Board within the U.S. Treasury Department. The Act
also includes a provision for a citizens’ dividend, similar in some respects to
the Alaska Permanent Fund, which would inject desperately needed purchasing power
into the economy without additional government debt or taxation.
Also promoting a citizens’ dividend, by the way, is Stephen Shafarman in his
important new book, Peaceful, Positive Revolution. (Tendril Press, 2008)
It’s the American Monetary Act the candidates and delegates in Denver should
skip one of their parties to read, because it’s the only way any of their hopes
for America can ever be realized. Says AMI’s Jamie Walton:
“This is a crucial time. Things are happening. We have got some key media
people talking and writing about our kind of reforms. The inertia is starting to
yield. Things are starting to roll. The worsening conditions in 2009 will give us
a once-in-a-lifetime chance to be heard above the propaganda.”
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Richard C. Cook: M
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