by Michael Rozeff
Editor’s note: This was written last week in response to Ellen Brown’s reply in The Great Debate© Public Banking. It is posted here rather than being attached to the debate post for greater visibility. The following was originally posted at The LRC Blog.
Ellen Brown has replied to my article on her many fallacies. Unfortunately, it’s non-responsive to my criticisms. She repeats her case and introduces new fallacies about my thinking. She imagines: “Mr. Rozeff seems to think that (1) saving the government money is a bad idea, and (2) keeping the status quo, in which private bankers get the inflated cost of money — a cost that is passed on to the consumer — is a good idea.” (Photo of Michael Rozeff.)
For six years, I’ve been recommending smaller and/or no government and/or people having the government (or non-government) of their choice, all of which can improve the welfare of Americans and save them money. And I’ve been recommending the end of central banking. Ms. Brown’s notion of my positions is as fallacious as her ideas about how to reform the monetary system.
My reason for writing an article criticizing Ellen Brown’s greenback populism was simply to rebut faulty financial ideas, against the day when the opportunity for reform is at hand. I see no reason why legions of Americans should follow her faulty ideas.
Rather than debating these ideas, Ellen Brown strays into other territory: “…one has to wonder about his [Rozeff’s] motives and whom he represents. The post is an appeal to emotion and fear, and mischaracterizes what I said.”
I’d like to see Ms. Brown respond to the substance of my critique, rather than be befuddled over my motives for writing it, or be telling us something that is palpably false, which is that my analytical critique is actually an emotional tirade that taps into the fears of its readers.
Ms. Brown believes that “the interest paid by the government could be returned to the government, if the government owned the bank. The government could then spend this money into the economy or reduce taxes by that amount.” These are thoroughly confused ideas. If government borrows, it must pay interest to lenders, no matter who they are. The FED already returns most of the interest it earns to the Treasury. Any fiat money that is issued either by the Treasury (government) directly is a tax on the people who give up resources in exchange for pieces of paper.
Government issue of money (or owning the central bank) changes the method of inflation. It doesn’t get rid of the fiat money. There is no money that becomes available to reduce taxes unless the government reduces its programs of spending. Absorbing the central bank without reducing spending does not free up money to any significant extent, apart from perhaps eliminating the FED’s operating costs, but the government would probably erect a new bureaucracy of its own.
Brown writes “How this would make government 80% of the economy or turn it communist, as claimed by Mr. Rozeff, is not clear.” The economy is already 40% government, and Brown claimed that government could double in size if her policies were adopted. That is how 40% becomes 80%. The overlap between Brown and the Communists is that both she and they are claiming that interest can go to zero. The overlap between American big government and big governments run by social democrats, or socialists, or communists, or fascists is that they are all BIG monopolistic governments that use FORCE to exist. If American government becomes larger through Ms. Brown’s policies, and she is suggesting exactly that such an increase be instituted, then the economy will definitely more closely resemble the totalitarian economies of the past.
We can take another tack to all of this. What I always recommend is that those who are unhappy with the existing institutional arrangements of government and banking join me in pursuing LIBERTY. I ask Ms. Brown and others who believe as she does to pursue the goal of gaining the freedom to form their own government within America and to institute whatever monetary experiments they desire. There is no need for any of us to be ruled by a single monopoly government. Ms. Brown and I need not argue about what shape such a single government should have. We each, and many other groups within America, can all have the governments of our choice, fully by consent. We need not impose our visions on everyone else. In such a panarchic world, she may construe my essay on her fallacies as neighborly advice that she is free to decline. In such a world, I am only saying that she will find that when her group freely makes their public bank and attempts to live without a positive interest rate, they are going to run into serious difficulties.
Governments of our choice, all within this land of America, is a visionary concept. But the status quo is also a visionary concept. I don’t think that people appreciate that when they automatically assume that we must be one democracy or one republic or one America or one people, or when they see such things as already a fact, they are invoking an idea and a visionary concept. We wouldn’t have whatever reality we have without it reflecting some vision or visions. Just because it happens to be the current reality doesn’t give it any precedence in terms of being a more just or good or better or right arrangement. It may give it an advantage in terms of a hold on our minds and imaginations and our pocketbooks, but not in terms of visions of where we may go in the future or like to go. We can reshape America. We can do it in the course of one or two generations. That reshaping has been occurring visibly in my lifetime. It has occurred in lifetimes preceding mine. There is nothing special about the status quo.
So, to Ms. Brown and others, what I invite you to is a greater exercise of vision and imagination. Let us bring into reality greater choice, greater liberty, and living arrangements that more nearly reflect a higher degree of consent of the governed. Let us seek our liberty not only from the existing central bank but also from any monopoly supplier of fiat currency including the U.S. government or a department thereof. Let us seek true monetary freedom that includes the right of anyone to issue a currency, and let people have the right to choose and use the currency or currencies of their choice. Let Ellen Brown and her cohort have the right to form their own governing body and issue their own currency in any way they see fit.
The Great Debate© Public Banking A debate between Ellen Brown and Michael Rozeff
About the Author
Michael S. Rozeff [send him mail] is a retired Professor of Finance living in East Amherst, New York. He is the author of the free e-book Essays on American Empire: Liberty vs. Domination and the free e-book The U.S. Constitution and Money: Corruption and Decline. He blogs at Lew Rockwell.com where you can read The Best of Michael S. Rozeff.