Asserting Sovereignty over our finances
To have a sustainable economic policy for the USA, we have to assert sovereignty over our finances. Warren Mosler writes:
"the government’s interest is the public interest. The government is there to provide for the general welfare, and there is no correlation between this interest and a position of surplus or deficit, nor of indebtedness, in the government’s books." [Galbraith/Mosler]
Mosler is talking about the Federal portion of our Federated Government. Of course, such a correlation is IMPOSED on subsidiary governments, as if they were subjects rather than coequal and vital parts of a sovereign entity. In the United States, local government is relegated to the role of competing for funds as if it were just another private enterprise, and has almost zero sovereignty over it's own finances and this hamstrings it's efforts to pursue the public interest. States are under less constraint, largely because of their relationship with the Federal Government, but they too deal with internal, external and artificial constraints that oppress their ability to serve the Public Interest.
Yet:
"the government is sovereign. This fact gives to government authority that households and firms do not have. In particular, government has the power to tax and to issue money. The power to tax means that government does not need to sell products, and the power to issue currency means that it can make purchases by emitting IOUs. [Galbraith/Mosler]
And to be fully functional a Federated Democratic Republic should extend the benefits and privileges of that power to the whole of the country, including its parts, as well as to be able to exercise it for itself. Henry George Recommended in the 1880s that the money power be exclusively with Government [On Greenbacks]
"the power to issue money is a valuable privilege which, to secure the best circulating medium and to put all citizens on a footing of equality, ought to be retained by the general government, and to be permitted to no one else, either individual or corporation. The greenbackers, who have insisted that national bank notes should not be permitted, and that all money should be the direct issue of the government , are in the right." [Greenbacks]
At the very least our Federal Reserve should be an agency of the Government rather than protecting bankers. Unfortunately our pirates have had more influence on the Government than reformers.
Current System Privatizes Rule over Money
While this is true, Around the world centralized financial centers give responsibility to local government and then impose artificial constraints on their power to deliver service by stripping this IOU money power from them, or by privately taxing it by imposing artificial compounding interest, fees, penalties. Instead our system gives the power to emit IOUs, collect interest on them, and essentially put a lien on public and private property, to privateering banks. Essentially the International banks, through exercising this power over the money supply, act as if they were pirates. This infuriates both left and right, and it is a main driver of worldwide economic inequity. But something can be done about it if folks can avoid the over drama. This system is an outgrowth of feudalism, international chaos, warfare, trade and colonialism and of Private Government. To fix it requires an assertion of Governance in the public interest. It is not the product of diabolical conspiracies. To fix a thing one must understand it.
