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Alliance For Just Money
Message from President Lucille Eckrich
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MESSAGE FROM PRESIDENT LUCILLE ECKRICH
As I near the end of my first term on the AFJM Board of Directors, including serving as president, I find myself reflecting on from whence our Alliance has come, where we are at, and where we are headed and how best to get there. In fact, I am working on a piece for AFJM’s August newsletter that shares those personal and organizational reflections on our Alliance For Just Money. In the meantime, I want to shout out NOW to encourage (1) all AFJM members to attend our July 19th Annual Membership Meeting and (2) all nonmembers reading this newsletter to join the Alliance before July 15th so that you too can attend our online Annual Membership Meeting.
Full details are in “Upcoming Events” below; the meeting link will be emailed to all AFJM members in early July. But why spend three or four precious hours of a mid-summer Sunday in another Zoom meeting? While I’m sure many of you can come up with other good reasons, here is my Top Ten List* for Why YOU Should Attend AFJM’s July 19th Annual Membership Meeting:
- To get out of weather too hot, humid, rainy, or otherwise inclement to do anything else
- To commune with dozens of monetary reformers committed to changing our world for the better
- In other words, be with others who also know how we can pay for a better world so that humanity’s steadfast work for justice, sustainability, democracy, and the public good—including but not limited to commerce, education, health care, the arts and sciences—can finally come to fruition for all
- To hear and ask about AFJM’s accomplishments in its second year of monetary reform work
- To be among the first to know the outcome of our elections for the Board of Directors
- To learn more about and possibly ratify AFJM’s Resolution for a National Monetary Commission
- To contribute to envisioning AFJM’s third year of monetary reform work through an election year and during these difficult economic times brought on not only by the COVID-19 pandemic but more fundamentally by the centuries-old and now festering flaws in our monetary system
- To be led in song by AFJM’s own singer-song-writer, Howard Switzer
- To stick around for a happy hour to “toast” outgoing and incoming newsletter editors and directors and to celebrate the AFJM membership
- To become a better ally for money that is just and, thereby, for you to strengthen the Alliance For Just Money
(*My ten reasons are unnumbered so as to leave them open for your enumerating pleasure!)
Whether you come for these or other reasons, I look forward to meeting you at the Second Annual Membership Meeting of the Alliance For Just Money. Thanks for making every effort both to be there and to be involved in year three and until Just Money is the legal tender between and among us from sea to shining sea and everywhere in between in these so-called United States of America.
In solidarity, ~~Lucille
Lucille L. T. Eckrich, Ph.D.
Founding member, founding board member, and founding president,
Alliance For Just Money
Save the Date: 2nd Annual AFJM Membership Meeting Sunday July 19th at 2-5 pm ET / 1-4 pm CT via Zoom
The AFJM Resolution for a National Monetary Commission will be one of the main discussion items.
At this time there are no coffee houses scheduled.
H.R. 6553, introduced on April 17 by Representative Rashida Tlaib of Michigan, injects at least $2 trillion of sovereign money into circulation in the form of payments directly to people, $2000 per month until the end of the pandemic and $1000 per month for one year after the end of the pandemic. The sovereign money is created by the U.S. Mint in the form of coins the value of which is set at $1 trillion each. The coins are to be deposited in the government’s account at the Fed. The value of the coins is used to fund the disbursements to people for relief from the pandemic. The bill does mean the creation of significant amounts of sovereign money, but it is nonetheless a work-around within the current system and a stopgap measure to address the current crisis, not a permanent shift to sovereign money. It also fails to end creation of money by banks. Is it a step toward monetary reform or is it a distraction?
Greg Coleridge published “Ending the Monetary Pandemic” in OpEdNews, 5/5/2020. In arguing for a system of just money he says, among other things, “The truth is both parties can slash and tax away, but it still won't come close to taking a real bite out of the debt. Selling or leasing every public asset or service to corporations will be debated. Economic Einsteins will also suggest addressing the debt problem by simply borrowing more -- analogous to the belief that you can drink yourself sober. Being in debt means being in servitude to those who own the debt.” He also points out the remarkable fact that “…the CARES Act suspends the Freedom of Information Act for the Fed and allows it to hold secret meetings on corporate bailouts with no publicly-released minutes. Further evidence that banking corporations rule.”
Marc Tognotti brought to our attention an excellent video on the monetary system by John Titus, entitled “Mommy, Where Does Money Come From?”
Many responses were offered to Stephanie Kelton’s June 9 MMT editorial in the New York Times, entitled, “Learn to Love Trillion Dollar Deficits.” Here is one.
Stephanie Kelton’s article in the June 9 NY Times has some things right, and some things wrong. What is right is Kelton’s push toward having government spend what is needed to address major problems, such as the pandemic and climate change. What is wrong is her lack of concern about funding it through debt. There are negative consequences of debt, including the continued and increasing flow of money to lenders through interest payments on that debt. The government should be creating the money it needs, not borrowing it. Government would create it under the proposal of the National Emergency Employment Defense (NEED) Act (HR2990) introduced into Congress back in 2011.
Many critics of the MMT proposal, which Kelton espouses, argue against it because of its potential to cause inflation. Kelton is right to point out that increased government spending won’t necessarily cause an unacceptable level of inflation as long as it is used to increase the production of goods and services. A number of things can contribute to inflation in one section of the market or another, but the continuous inflation to which we have become accustomed is primarily a consequence of the current money system in which new money is created by banks in the form of loans. Most bank created money goes into the financial sector, raising asset prices, but doing nothing for the real economy of goods and services.
A better approach is that of Representative Rashida Tlaib. She and 11 cosponsors propose, in HR 6553, avoiding more debt by using the government’s authority to “coin” money. Her proposal is to have trillion-dollar coins minted and deposited in the government’s account at the Fed. The government would use the value of that deposit to fund needed responses to the pandemic. Tlaib’s proposal does avoid more government debt, but it also fails to end the private creation of money by banks that will be necessary for the control of inflation. HR 6553 is worth supporting now as a stop-gap measure, recognizing that it doesn’t complete the job of monetary reform that is needed for a sustainable economy.
Here is another.
On his island, Mr. Mosler is the authority, and his kids are totally dependent on him; it's a two party relationship. He didn't need the cards, he could list chores and privileges, assign unit values, and keep a ledger. In the real world economy, all the exchanges are not between government and the public. Money circulates. Money is a tool used by ALL for setting a unit value, facilitating exchanges (whether or not anyone is paying taxes), and storing value. In our Fed system, the private commercial banks create over 90% of the money by making accounting entries in borrowers accounts. When the US government wants to overspend, it must borrow from this supply of money created by the private banks. The fact that our dollar is a 'national' money, authorized and backed by the government and used to pay taxes, does NOT mean that the government is the one creating the supply. Yes, it can run overdrafts, go into debt indefinitely, pay interest or not. But that doesn't mean government is actually creating money. Glorifying overdrafts and perpetual debt is an ugly value foundation for the nation, and leaving the bankers with the power and privilege of creating the money supply locks in an unstable system that transfers wealth from the many to the few with private islands. The real solution is for government to create an updated version of the sovereign money that we used to win the Revolutionary and Civil Wars: pubic asset money – no need to borrow, no escalating debt. Beautiful.
MMT is just the latest economic theory embraced by academics to justify and defend the monetary system status quo on behalf of the big banks. This Magical Mystery Tour obscures the fact that using credit for money concentrates wealth systematically to the wealthiest. It requires no conspiracy, that is merely the mathematics of the system. This is a private banking system, a for-profit monopoly that issues nearly all our money electronically as debt by creating deposits for loans. It is the compounding of interest within the system that has created the extreme and brutally enforced economic disparity we see causing the problems in the streets today. Just ask yourself, why were there no classes on our money system in grade school?
The problem can be solved by replacing the current governments with people who have a spine and cannot be bought, a project made difficult by the private control of our nation's money system. We need to take the money creating power that rightfully belongs to the government, as we all believe, and replace it with a debt-free sovereign money system. Instead of foolishly using credit for money we would be using money for money. Then anything physically possible, that is ecologically wise and socially desirable, will be financially feasible.
LATEST READING AND RESEARCH
1) Talk about Borders
Inspired by an illuminating, geopolitical world map, this article digs into the shaping of the Trilateral West, that is, the combined economic power houses of the USA, the EU and Japan. The history of this set-up started with Bretton Woods at the end of World War II, with in the background the long-term policy planning think-tank the Council on Foreign Relations and the three specific planning phases it had designed.
2) Money and Banking: Assessing overlaps and differences between SMR and MMT
Maurice Höfgen & John Glazer
In April and May 2020 the Alliance For Just Money hosted German economist Maurice Höfgen to discuss overlaps and differences of money and banking concepts between Sovereign Monetary Reform (SMR) and Modern Monetary Theory (MMT). Out of this discussion came two documents presenting the different positions. First, Maurice Höfgen presented his MMT view, then John Glazer presented the SMR view. The page linked to below sets everything in context.
FROM LAST MONTH'S NEWSLETTER BUT STILL VERY RELEVANT
The Pandemic and the Economy
A Statement of the AFJM Board of Directors, April 15, 2020
While attention is necessarily focused on dealing with the Covid-19 pandemic, underlying economic issues must also be kept in mind. Indications of a repeat of the 2008 meltdown appeared prior to the beginning of the pandemic. The response to the current economic collapse, exacerbated by the virus, shows that when money is needed, money appears. But how can we have a recovery saddled with a multi-trillion-dollar debt? Who will pay? With a sensible monetary system government can create the needed money debt-free. We can have systems in place ready to cope with disasters and make the big adjustments needed for human life on our finite planet. (Article)
Covid-19 Capitalism, Neoliberal Debt & the Need for Sovereign Money, April 1, 2020
By Tim Di Muzio
Milton Friedman is on the record stating that, when there is a crisis, "the actions that are taken depend on the ideas that are lying around". Both the coronavirus pandemic and the economic crisis it triggered are an opportunity for actions which can either profit the 1% or the people. One of the ideas lying around whose time has come to help the people is sovereign monetary reform, which has been well researched and proposed during earlier crises. Dr. Di Muzio makes the case that this idea is exactly the one lying around which can direct our actions. (Article)