econintersect.com
       
  

FREE NEWSLETTER: Econintersect sends a nightly newsletter highlighting news events of the day, and providing a summary of new articles posted on the website. Econintersect will not sell or pass your email address to others per our privacy policy. You can cancel this subscription at any time by selecting the unsubscribing link in the footer of each email.



posted on 18 December 2015

Does The U.S. Government Create Money Just By Deficit Spending?

Written by

"I heard that our Sovereign Government was, logically and axiomatically, the Monopoly Issuer of Its Currency?? Even that the government actually creates new money just by spending. How could it not be so?" -Anonymous

listening.cupped.ear

Well, indeed you may have heard such a thing, there being maybe hundreds of YouTube videos out there making that claim today, some loosely granted under the purview of prestigious organizations such as the Columbia Law School.

But, only if one does NOT understand the legal complexity of the 'sovereign', could one lay out, or believe, any such argument. Any logical axiom is readily and completely made inoperative by law and legal constraints. I would think that any such notion could be laid to rest by considering the situation with the Euro, and as a case in point, with our friends in Greece, and their money history.

Is the Greek government sovereign? Is Greece a monopoly issuer of its currency? Do they create money when they spend? More importantly to consider, please: Did the Greek government EVER have monopoly issuing power over money and create money via spending before it joined the European Monetary Union?

Of course not, and neither do we. Nor does Iceland. Nor does Switzerland. Nor does the Netherlands.

Delegation of Monetary Sovereignty

One can see therefrom that every sovereign nation can pass laws and enter agreements by which the public's sovereign power to issue the nation's money (the national money power) is legally delegated to a separate, autonomous system of money-issuers. It is autonomy over money that is negotiated away, not sovereignty itself. Sovereignty cannot be negotiated without surrender. Autonomy here is the keyword.

There is an implication among certain monetary theorists today that no such delegation of the "money power" has been made in this country. This, despite the proof that the same government these theorists claim to be the 'monopoly - issuer' of the nation's money is $17 Trillion in debt to a consortium of private bankers who have legally claimed and execute the autonomous 'monopoly' issuing power.

So, it just stands to reason that there can't be a sovereign government (public) monopoly over something (money) if that government has to borrow that something (money) from an existing private issuing monopoly. In the U.S. that is the Federal Reserve System, or to be more exact, the designated member banks of that system.

Legislative Action Needed

Of course, for most people, the logic outlined above simply implies a needed fix to restore the autonomy over the money system back to the sovereign that we empower to make our laws and govern.

That is what today's modern monetary 'reformers' are trying to do. The reform we are trying to advance is a "public monopoly" over money issuance. This modern proposal is today as designed over twenty years by the American Monetary Institute (AMI) , and as proposed in 2011 as a Bill in Congress by Dennis Kucinich and John Conyers, The National Emergency Employment Defense Act (The NEED Act HR 2990 - 112th Congress). This 'public monopoly issuance' is also precariously close to what some of the smartest kids in the room believe happens now, under Modern Monetary Theory (MMT).

But here's the thing - It does not happen now. Never has. Never will, without reform. The government, our government under the Constitution, has abrogated the "monopoly power of issuance" and instituted our bankers' private money system. That is a fact. That fact premises a reform that MMT should find comforting. It would readily result in what MMT has been claiming all along - a government 'monopoly issuer'.

There Are Voices in the Wilderness

Reforms to the private monopoly over money have been proposed under research at the IMF.

Reforms to the private monopoly over money have been proposed by Martin Wolf of the Financial Times, to restore to government the power to issue the money.

Reforms to the private monopoly over money have even been proposed by Adair Turner, former top banking regulator in the UK. Today, Turner's reforms merely add the government to the existing monopoly, being unworkable as a practical matter. But, he's learning. And, we're thankful for that.

Sufficient research on the topic of public money has been done over recent years that it should occupy the front-and-centerpiece of our coming political-economic-monetary discussion.

Let's start here:

They have privatized OUR money.

And we want to take it back.

>>>>> Scroll down to view and make comments <<<<<<

Click here for Historical Opinion Post Listing










Make a Comment

Econintersect wants your comments, data and opinion on the articles posted. You can also comment using Facebook directly using he comment block below.




Econintersect Opinion


search_box

Print this page or create a PDF file of this page
Print Friendly and PDF


The growing use of ad blocking software is creating a shortfall in covering our fixed expenses. Please consider a donation to Econintersect to allow continuing output of quality and balanced financial and economic news and analysis.


Take a look at what is going on inside of Econintersect.com
Main Home
Analysis Blog
The Job Guarantee, Wage-Price Inflation And Alternative Solutions: Part 1
The Job Guarantee, Wage-Price Inflation And Alternative Solutions: Part 2
News Blog
Why NASA Won't Send Humans To Venus
Rail Week Ending 18 March 2017: Short Term Rate of Growth Slowing
How Taxes And Transfers Affect The Work Incentives Of People With Low And Moderate Income
How Tourism Affects China's Current Account Surplus
Infographic Of The Day: The Habits Of Highly Successful Entrepreneurs
To Where The Maple Syrup Flows
The U.S. Has The Most Expensive Healthcare System In The World
Five Maps That Will Change How You See The World
What We Read Today 16 March 2017 - Special Public Edition
Hate Groups In The U.S. Are Flourishing
What We Read Today 23 March 2017
March 2017 Kansas City Fed Manufacturing At Highest Level Since March 2011
February 2017 Headline New Home Sales Improve and Above Expectations
Investing Blog
Early Headlines: Asia Stocks Mixed, Dollar, Oil Up, Gold Down, Health Care Vote Today, Calif. Solar, Russia And Poison, Mumbai Bridge, Sanctions Cause Suffering In N. Korea, And More
Tesla Is Playing The Long Game
Opinion Blog
Time To Stop Rewarding Economists For Bad Behaviour
The American Dream: An Endangered Ethos
Precious Metals Blog
These Gold Stocks Will Produce Much Bigger Gains Than Gold Itself
Live Markets
24Mar2017 Pre-Market Commentary: Looks Like Markets Will Flatline
Amazon Books & More






.... and keep up with economic news using our dynamic economic newspapers with the largest international coverage on the internet
Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government































 navigate econintersect.com

Blogs

Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day
Weather

Newspapers

Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government
     

RSS Feeds / Social Media

Combined Econintersect Feed
Google+
Facebook
Twitter
Digg

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution

Contact

About

  Top Economics Site

Investing.com Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2017 Econintersect LLC - all rights reserved