Skip to content

OMG, OMG, OMG, Historic opportunity! Washington,Jefferson,Lincoln and TRUMP?? On the same page.

May 15, 2016

OMG, OMG, OMG, Historic opportunity!
Washington,Jefferson,Lincoln and TRUMP??
On the same page.

“Print the Money”: Trump’s “Reckless” Proposal Echoes Franklin and Lincoln

Posted on May 14, 2016 by Ellen Brown
“Print the money” has been called crazy talk, but it may be the only sane solution to a $19 trillion federal debt that has doubled in the last 10 years. The solution of Abraham Lincoln and the American colonists can still work today.
“Reckless,” “alarming,” “disastrous,” “swashbuckling,” “playing with fire,” “crazy talk,” “lost in a forest of nonsense”: these are a few of the labels applied by media commentators to Donald Trump’s latest proposal for dealing with the federal debt. On Monday, May 9th, the presumptive Republican presidential candidate said on CNN, “You print the money.”
The remark was in response to a firestorm created the previous week, when Trump was asked if the US should pay its debt in full or possibly negotiate partial repayment. He replied, “I would borrow, knowing that if the economy crashed, you could make a deal.” Commentators took this to mean a default. On May 9, Trump countered that he was misquoted:
People said I want to go and buy debt and default on debt – these people are crazy. This is the United States government. First of all, you never have to default because you print the money, I hate to tell you, okay? So there’s never a default.
That remark wasn’t exactly crazy. It echoed one by former Federal Reserve Chairman Alan Greenspan, who said in 2011:
The United States can pay any debt it has because we can always print money to do that. So there is zero probability of default.
Paying the government’s debts by just issuing the money is as American as apple pie – if you go back far enough. Benjamin Franklin attributed the remarkable growth of the American colonies to this innovative funding solution. Abraham Lincoln revived the colonial system of government-issued money when he endorsed the printing of $450 million in US Notes or “greenbacks” during the Civil War. The greenbacks not only helped the Union win the war but triggered a period of robust national growth and saved the taxpayers about $14 billion in interest payments.
But back to Trump. He went on to explain:
I said if we can buy back government debt at a discount – in other words, if interest rates go up and we can buy bonds back at a discount – if we are liquid enough as a country we should do that.
Apparently he was referring to the fact that when interest rates go up, long-term bonds at the lower rate become available on the secondary market at a discount. Anyone who holds the bonds to maturity still gets full value, but many investors want to cash out early and are willing to take less. As explained on MorningStar.com:
If a bond with a 5% coupon and a ten-year maturity is sold on the secondary market today while newly issued ten-year bonds have a 6% coupon, then the 5% bond will sell for $92.56 (par value $100).
But critics still were not satisfied. In an article titled “Why Donald Trump’s Debt Proposal Is Reckless,” CNNMoney said:
[T]he federal government doesn’t have any money to buy debt back with. The U.S. already has $19 trillion in debt. Trump’s plan would require the U.S. Treasury to issue new debt to buy old debt.
Trump, however, was not talking about borrowing the money. He was talking about printing the money. CNNMoney’s response was:
That can cause inflation (or even hyperinflation), and send prices of everything from food to rent skyrocketing.
The Hyperinflation that Wasn’t
CNN was not alone in calling the notion of printing our way out of debt recklessly inflationary. But would it be? The Federal Reserve has already bought $4.5 trillion in assets, $2.7 trillion of which were federal securities, simply by “printing the money.”
When the Fed’s QE program was initiated, critics called it recklessly hyperinflationary. But it did not even create the modest 2% inflation the Fed was aiming for. QE was combined with ZIRP – zero interest rates for banks – encouraging borrowing for speculation, driving up the stock market and real estate. But the Consumer Price Index, productivity and jobs barely budged.
While the Fed has stopped its QE program for the time being, the European Central Bank and the Bank of Japan have jumped in, buying back massive amounts of their own governments’ debts by simply issuing the money. There too, the inflation needle has barely budged. As noted on CNBC in February:
Central banks have been pumping money into the global economy without a whole lot to show for it other than sharply higher stock prices, and even that has been on the downturn for the past year.
Growth remains anemic, and worries are escalating that the U.S. and the rest of the world are on the brink of a recession, despite bargain-basement interest rates and trillions in liquidity.
Helicopter Money Goes Mainstream
European economists and central bankers are wringing their hands over what to do about a flagging economy despite radical austerity measures and increasingly unrepayable debt. One suggestion gaining traction is “helicopter money” – just issue money and drop it directly into the economy in some way. In QE as done today, the newly issued money makes it no further than the balance sheets of banks. It does not get into the producing economy or the pockets of consumers, where it would need to go in order to create the demand necessary to stimulate productivity. Helicopter money would create that demand. Proposed alternatives include a universal national dividend; zero or low interest loans to local governments; and “people’s QE” for infrastructure, job creation, student debt relief, etc.
Simply buying back federal securities with money issued by the central bank (or the U.S. Treasury) would also get money into the real economy, if Congress were allowed to increase its budget in tandem. As observed in The Economist on May 1, 2016:
Advocates of helicopter money do not really intend to throw money out of aircraft. Broadly speaking, they argue for fiscal stimulus—in the form of government spending, tax cuts or direct payments to citizens—financed with newly printed money rather than through borrowing or taxation. Quantitative easing (QE) qualifies, so long as the central bank buying the government bonds promises to hold them to maturity, with interest payments and principal remitted back to the government like most central-bank profits.
As Dean Baker, co-director of the Center for Economic and Policy Research in Washington, wrote in response to the debt ceiling crisis in November 2010:
There is no reason that the Fed can’t just buy this debt (as it is largely doing) and hold it indefinitely. If the Fed holds the debt, there is no interest burden for future taxpayers. The Fed refunds its interest earnings to the Treasury every year. Last year the Fed refunded almost $80 billion in interest to the Treasury, nearly 40 percent of the country’s net interest burden. And the Fed has other tools to ensure that the expansion of the monetary base required to purchase the debt does not lead to inflation.
An even cleaner solution would be to simply void out the debt held by the Fed. That was the 2011 proposal of then-presidential candidate Ron Paul for dealing with the debt ceiling crisis. As his proposal was explained in Time Magazine, today the Treasury pays interest on its securities to the Fed, which returns 90% of these payments to the Treasury. Despite this shell game of payments, the $1.7 trillion in US bonds owned by the Fed is still counted toward the debt ceiling. Paul’s plan:
Get the Fed and the Treasury to rip up that debt. It’s fake debt anyway. And the Fed is legally allowed to return the debt to the Treasury to be destroyed.
Congressman Alan Grayson, a Democrat, also endorsed this proposal.
Financial author Richard Duncan makes a strong case for going further than just monetizing existing debt. He argues that under current market conditions, the US could actually rebuild its collapsing infrastructure by just printing the money, without causing price inflation. Prices go up when demand (money) exceeds supply (goods and services); and with automation and the availability of cheap labor in vast global markets today, supply can keep up with demand for decades to come. Duncan observes:
The combination of fiat money and Globalization creates a unique moment in history where the governments of the developed economies can print money on an aggressive scale without causing inflation. They should take advantage of this once-in-history opportunity . . . .
Returning the Power to Create Money to the People
The right of government to issue its own money was one of the principles for which the American Revolution was fought. Americans are increasingly waking up to the fact that the vast majority of the money supply is no longer issued by the government but is created by private banks when they make loans; and that with that power goes enormous power over the economy itself.
The issue that should be debated is one that dominated political discussion in the 19th century but that few candidates are even aware of today: should creation and control of the money supply be public or private? Donald Trump’s willingness to transgress the conservative taboo against public money creation is a welcome step in opening that debate.
________________
Ellen Brown is an attorney, Founder of the Public Banking Institute, and author of twelve books, including the best-selling Web of Debt. Her latest book, The Public Bank Solution, explores successful public banking models historically and globally. Her 300+ blog articles are at EllenBrown.com. She can be heard biweekly on “It’s Our Money with Ellen Brown” on PRN.FM.

Related

Trumping the Federal Debt Without Playing the Default CardIn “Ellen Brown Articles/Commentary”
The Trillion Dollar Coin: Joke or Game-changer?In “Ellen Brown Articles/Commentary”
CHENEY WAS RIGHT ABOUT ONE THING: DEFICITS DON’T MATTERIn “Ellen Brown Articles/Commentary”
Filed under: Ellen Brown Articles/Commentary Tagged: | Donald Trump, federal debt, infrastructure crisis, public banking, quantitative easing
« Bank of North Dakota Soars Despite Oil Bust: A Blueprint for California?

justaluckyfool, on May 14, 2016 at 9:37 am said:
The Fed has already proven that it can do this at a profit to the US Treasury (“we the people”)
and with no increase in the debt (it is an asset purchase).
Make America Great Again !
**Why not Trump ? (RAP) Renaissance for the American People.
Donald J Trump,
Gandhi’s famous quote: ““First they ignore you, then they ridicule you, then they fight you, and then you win.”
You will win with your response to your valid reasoning of ” A Monetary Sovereignty
can not default because they are the issuer of the currency…
” if the debt is in their currency”. Period.
WHY not STATE PUBLIC OWNED BANKS (SPOB) with an Honest Central Bank to reverse..”Where We Went Wrong and Fix It.”

Thank you, Ellen Brown for your due examination…
***** “Believe nothing merely because you have been told it…But whatsoever,
after due examination and analysis,you find to be kind, conducive to the good,
the benefit,the welfare of all beings – that doctrine believe and cling to,and
take it as your guide.”- Buddha[Gautama Siddharta] (563 – 483 BC),
Share and then share again, why would you not want prosperity? Why not Trump ? (RAP) Renaissance for the American People.
May 10, 2016
Donald J Trump,

RWER asks ‘Why Trump’?
..Answer:
**Why not Trump ?

The BEST chance for the American people.

QE 4 Infrastructure- Make America Great Again!
MR. President, the Sec. of the US Treasury, and
Chairman of the Federal Reserve; use the power of the U S Constitution.
Not as a bailout.
Not as a cost to all the taxpayers.
Not as an increase in deficit spending.
Rather a magic economic proven silver bullet that would reduce taxes
while at the same time increase non- deficit spending.
REVERSE: What the Central Banks are doing; rather than making the rich richer have them…
fuel the increase in wealth Equality and …” promote the general Welfare, and secure the
Blessings of Liberty to ourselves and our Posterity,…””
A HONEST CENTRAL BANK;
THE ONE STEP ADMINISTRATION SOLUTION..
When a honest Central Bank uses “QE” for the betterment of the community in a
capitalistic economy, it will be the greatest system ever devised by mankind.
FREE DOWNLOAD: “The Role Of Money”
”http://archive.org/…/role…/roleofmoney032861mbp_djvu.txt
Comments by Justaluckyfool ( http://bit.ly/MlQWNs )

QE !
A simple change in direction of doing something for the common bettering of all the people.

“QE- “State Infrastructure Bonds (Year of Issue).(Ex. SID 2016 $1 Trillion)
Total amount to be issued by State Public Owned Banks (SPOB) to be $1 trillion of State Infrastructure Bonds 2016 with a rate of 2% for 30 years, (divided among the 50 states plus 1 for D.C. and Territories using a relative population percentage as a guide).
The Federal Reserve is to PURCHASE this entire issue, purchase this entire asset.
It would be a purchase of an asset to produce an income “for the people, for the common bettering of all citizens,
rather than for the “private for profit banks”.
Yes increase revenue of $20 billion/year.(A revenue income of $720 BILLION with a zero cost.)
We must rebuild and replace so that it is not in vain; do it smart; as an investment for the future.
The states will be able to not only rebuild but also do it smart by creating millions of new jobs.
The Fed has already proven that it can do this at a profit to the US Treasury (“we the people”)
and with no increase in the debt (it is an asset purchase).
Make America Great Again !
**Why not Trump ? (RAP) Renaissance for the American People.
Donald J Trump,
Gandhi’s famous quote: ““First they ignore you, then they ridicule you, then they fight you, and then you win.”
You will win with your response to your valid reasoning of ” A Monetary Sovereignty
can not default because they are the issuer of the currency…
” if the debt is in their currency”. Period.
Donald Trump: “The U.S. Gov’t Doesn’t Default Because It Can Print More Money”
Posted on May 9, 2016
“Bonnie Kristian over at Rare writes,’Bonnie Kristian over at Rare writes, Seriously, this proposal is so economically ignorant it is difficult to know how to respond. It’s the sort of thing you’d see if any half-decent economist got a guest writing gig at The Onion. If there were no video evidence, I’d be convinced it was satire.
All that new money would not magically create new wealth. It would simply dilute the purchasing power of the money that already exists—”
Seriously, Bonnie Kristian are you ..”economically ignorant”
believing that this money spent is not in existence ? Then why even pay off debt ?
***** If the nation has ZERO plus dollars in its account as owned funds, how does it ‘spend’ even one dollar-except by stealing it or creating a copy of it “out of thin air”.What is so hard to realize that “It is impossible to create wealth “out of thin air” . What they are really doing is “making a copy of someone elses “real Wealth” and giving that copy made “out of thin air” to someone else thereby “creating two owners for the exact same thing”. If a Nation could, in fact, violate these rules of physics, why would we not be fat and prosperous, sitting on our backsides “printing wealth” for our selves and our children! *****The people receiving the USTBBs are GIVING UP THEIR RIGHTS TO REAL WEALTH THEY OWN and are willing to exchange this new ‘paper’ and have it held in safe hands until needed. (US TREASURY BEARER BONDS @ 0%).
****** BTW you should read the U.S. Constitution: When a Monetary Sovereignty spends more money than that which it has taken out of its own currency circulation: it must “borrow” (as per US Constitution). This creates the debt of the entire sovereignty,that debt being in that currency.When a Monetary Sovereignty has a debt in its own currency that debt is a deposit in its Central Bank. The owner of the Debt Deposit may withdraw upon demand; however the owner then loses the protections and safety of the credit of the sovereignty.
Why is there a problem?
SO where did we go wrong ?
“Its the INTEREST, stupid.”
A deficit that grows exponentially MUST over time destroy the quality and quantity of the currency.Period. One can not ignore this mathematical fact this fatal flaw. With no additional spending, while asleep at the wheel the present debt will go from $19trillion to $38trillion, then to $76trillion, to $142trillion…maybe then, perhaps your great-grand children will ask, “What were you thinking?” MMTers are correct that the debt NEED NOT be paid, but we must FIRST correct the fatal “exponential flaw.” READ: National Debt becomes money deposited in the Central Bank as US TREASURY BEARER BONDS at 0% Interest (USTBB) need only be paid on demand by each holder- there is no growth of debt.
To those who “buy” the debt, it is really just a very safe savings account, identical to a bank CD but totally safe because it is Constitutionally guaranteed.
EXACTLY, why China will not convert its $3.5trillion and be happy with USTBB – and we will no longer have to give them @ $200billion of new money. Nor would the 10%ers that hold this ‘debt’ wish to spend it (that would be ,perhaps, maybe a great boost of income for the 90%ers), or allow the banks to hold their lifetime saving, knowing that they will be subject to risk (they know how trustworthy they are with money.).
https://justaluckyfool.wordpress.com/…/debt-service…/
Quote Thomas Edison, “…Whereas the currency, the honest sort provided by the Constitution pays nobody…” But the owners of the debt that is now on deposit.
***”The ease with which the government’s debt could be paid in this way was demonstrated in January 2004″, As the chairman of the Coinage Subcommittee observed in the 1980s.
READ-CHALLENGE-ENDORSE:
***The ease with which the government’s debt could be paid in this way was demonstrated in January 2004****
As the chairman of the Coinage Subcommittee observed in the 1980s, the entire federal debt could actually be paid in this way. The Federal Reserve has already established that it can issue $4.5 trillion in accounting-entry QE without triggering hyperinflation. In fact, it has not succeeded in triggering the modest inflation the exercise was designed for. As with QE, paying the federal debt in this way would just be an asset swap, replacing an interest-bearing obligation with a non-interest-bearing one. The market for goods and services would not be flooded with “new” money that would inflate the prices of consumer goods, because the bond holders would not consider themselves any richer than before. They presumably had their money in bonds in the first place because they wanted to save it rather than spend it. They would no doubt continue to save it, either as cash or by investing it in some other interest-generating securities.
The ease with which the government’s debt could be paid in this way was demonstrated in January 2004, when the US Treasury called a 30-year bond issue before its due date. The bonds were redeemed “at par” to avoid a 9-1/8% interest rate, which was then well above market rates. The Treasury’s January 15, 2004 announcement said that payment would be made “in book entry form,” meaning numbers were simply entered into the Treasury’s online money market fund (Treasury Direct). In effect, the money just moved from an online savings account to an online depository account, converting interest-bearing bonds into non-interest-bearing cash.
Where did the Treasury get the money to refinance this $3 billion bond issue at a lower interest rate? Whether it came from the private banking system or from the Federal Reserve, it was no doubt created out of thin air. As Federal Reserve Board Chairman Marriner Eccles testified before the House Banking and Currency Committee in 1935:
When the banks buy a billion dollars of Government bonds as they are offered . . . they actually create, by a bookkeeping entry, a billion dollars.
The US government can just as easily create this money by a bookkeeping entry itself. It can and it should, to avoid the interest charges that compound the national debt and make it unrepayable.
Quoting Thomas Edison again:
If the Nation can issue a dollar bond it can issue a dollar bill. The element that makes the bond good makes the bill good also. The difference between the bond and the bill is that the bond lets the money broker collect twice the amount of the bond and an additional 20%. Whereas the currency, the honest sort provided by the Constitution pays nobody but those who contribute in some useful way.http://ellenbrown.com/…/how-obama-could-beat-the-debt-ceil…/
Comments by Justaluckyfool ( http://bit.ly/MlQWNs )
( “You are always welcome to share, copy, plagiarize, improve, etc..any comments.)
Read and challenge:
Frederick Soddy writings, namely “The Role Of Money”
(Entire book as a free download…)http://archive.org/details/roleofmoney032861mbp ******************** “Believe nothing merely because you have been told it…But whatsoever,
after due examination and analysis,you find to be kind, conducive to the good,
the benefit,the welfare of all beings – that doctrine believe and cling to,and
take it as your guide.”- Buddha[Gautama Siddharta] (563 – 483 BC),

THEN PUBLIC DEBT WOULD BE A GREAT THING-INDIVIDUALS LENDING THE COMMUNITY FOR ITS BETTERMENT.
“WHY PUBLIC DEBT IS A GOOD THING.”

Advertisements

From → Uncategorized

One Comment
  1. You can ddcrease your risk for a lot of cancers as well as heart disease.
    From the beginning of time everybody discusses moisturizing, but once again I will remind you the reason is not only how we moisturize on the exterior, including lotions and face creams,
    but how much water you’re drinking. It will keep you moving in a
    direction that can bring prosperity and peace throughout the New Year.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: