With computerization, robotics, advances in genetics and food growing, we have the potential to turn the planet into a sustainable ecosystem capable of supporting all. . . . This is not a time to be saddled with an 18th century money system designed around the endless rape of the planet, [one] based on the robber baron mentality and flawed with Unrepayable Debt. . . . A new monetary system with enough government control to ensure funding of vital issues could unlock the creative potential of the entire nation.

In the nineteenth century, the corporation was given the legal status of a "person" although it was a person without heart, incapable of love and charity. Its sole legal motive was to make money for its stockholders, ignoring such "external" costs as environmental destruction and human oppression. The U.S. government, by contrast, was designed to be a social organism with heart. The Founding Fathers stated as their guiding principles that all men are created equal; that they are endowed with certain inalienable rights, including life, liberty and the pursuit of happiness; and that the function of government is to "provide for the general welfare."

In his 1911 book The Purchasing Power of Money, Irving Fisher wrote that for money to serve as a unit of account, a trusted medium of exchange, and a reliable store of value, its purchasing power needs to be stable. But substances existing by the bounty of nature, such as gold or silver, cannot have that property because their values fluctuate with changing supply and demand. To avoid the disastrous devaluations with changing supply and demand. To avoid the disastrous devaluations caused by international currency speculation, governments need a single stable peg against which they can value their currencies, some independent measure in which merchants can negotiate their contracts and be sure of getting what they bargained for. Gold served as such a peg historically but was an imperfect solution, because the value of gold itself fluctuated widely, and because gold also traded as a currency, causing the "global banker" (the United States) to eventually come up short. Some unit of value is needed that can stand as a lighthouse, resisting currency movements because it is independent of them. But what? The relationship between feet and meters can be fixed because the ground on which they are measured is solid, but world trade ebbs and flows in a moving sea of currency values.

A solution devised in the experimental cauldron of eighteenth century American was to measure the value of a paper currency against a variety of goods. . . .

Going over the rainbow suggests a radical visionary shift, a breakthrough into a new way of seeing the world. We have come to the end of the Yellow Brick Road, and only a radical shift in our concepts of money and banking will save us from the cement wall looming ahead. We the people got lost in a labyrinth of debt when we allowed paper money to represent an illusory sum of gold held by private bankers, who multiplied it many times over in the guise of "fractional reserve" lending. The result was a Ponzi scheme that has pumped the global money supply into a gigantic credit bubble. As bond investor Bill Gross said in a February 2004 newsletter, we have been "skipping down this yellow brick road of capitalism, paved not with gold, but with thick coats of debt/leverage that requires constant maintenance."

Originally posted by Mary Rose
Chapter 47, "Over the Rainbow: Government Without Taxes or Debt," . . .

The runaway inflation suffered by Third World countries has been blamed on irresponsible governments running the money printing presses, when in fact these disasters have usually been caused by speculative attacks on the national currency. Devaluing the currency forces prices to shoot up overnight. "Creeping inflation" like that seen in the United States today is also blamed on governments irresponsibly printing money, when it is actually caused by private banks inflating the money supply with debt. Banks advance new money as loans that must be repaid with interest, but the banks don't create the interest necessary to service the loans. New loans must continually be taken out to obtain the money to pay the interest, forcing prices up in an attempt to cover this new cost, spiraling the economy into perpetual price inflation.

Originally posted by Mary Rose

Originally posted by Mary Rose
Chapter 47, "Over the Rainbow: Government Without Taxes or Debt," . . .

Several bullet points are listed under the heading "Home at Last." One of them is:

Public acquisition of a network of banks to serve as local bank branches of the newly-federalized banking system, either by FDIC takeover of insolvent banks or by the purchase of viable banks with newly-issued U.S. currency. Besides serving depository banking functions, these national banks would be authorized to service the credit needs of the public by advancing the "full faith and credit of the United States" as loans. Any interest charged on advances of the national credit would be returned to the Treasury, to be used in place of taxes.

So, that expression "full faith and credit of the United States" will shift from the bonds that are associated with the national debt to loans that are associated with human productivity.