Skip to main content
  1. News
  2. Politics
  3. Nonpartisan

Federal Reserve System CAUSES unpayable debt, unemployment, inflation

See also

The Federal Reserve System’s mechanics cause ever-increasing and unpayable debt, unemployment, inflation, and high interest rates. Ellen Brown is right: it’s time to transform the Fed into a public utility. This shift from the Fed being a privately-owned business to maximize its owners’ profits to a public service would end the national debt, provide full-employment, end inflation, and have interest rates as a tool to manage money supply and/or pay taxes.

On the 100th birthday of the Fed, let’s examine their factual mechanics to create what we use for money (revised from 2011):

The Federal Reserve System causes unpayable debt: Because private banks and their admitted privately-owned pinnacle bank, the Fed, create credit/debt for what we use as money, this becomes the mother of all conflicts of interest (so to speak). If the Fed were to deliver its three stated goals (page 15) of “maximum employment, stable prices, and moderate long-term interest rates,” we have a stunning observation: an honest Fed would at least ask for independent professional cost-benefit analyses to determine if government-created debt-free money would do better than their ever-increasing and unpayable aggregate debt.

US debt is unpayable under the Federal Reserve System because the US does not have a money supply; it’s a “debt supply.” If we paid the debt, what we use for money would disappear entirely. The 1% in government gave the 1% in banking legal authority to create debt and lend it to the 99% of us at interest. The 1% in government can also borrow at interest and then tax the 99% to pay the interest cost. The Federal Reserve System causes Americans to be perpetual debt-slaves. This is the 1% parasitizing the 99%’s work.

Federal Reserve System causes unemployment: To maximize employment, isn’t the only policy one can imagine to do so for the government to use debt-free created money to be the employer of last resort for infrastructure investment?

Think about this, please. Can you think of any other policy that could maximize employment other than the government employing people for useful work who do not find it in the free market?

Debt-free money has no direct cost. And because infrastructure investment (hard and soft) historically contribute more economic output than cost of inputs, we have the triple benefits of full employment, the best infrastructure available, and lower overall prices.

Federal Reserve System causes inflation: Banks expand what we use for money, credit, when they make loans. Banks profit from making loans. Increased credit, our “debt supply” and Orwellian opposite of debt-free money supply, works to increase inflation. So in our current Federal Reserve System, the very profit-generating mechanism of the banks is in conflict with a stated goal of the Fed. The 1% is thereby causing inflation to charge the 99% interest on the increasing “debt supply.” The 99% pay for this twice: in the decreased value of their savings and by paying interest.

Federal Reserve System causes high interest rates: Corporate banks with fiduciary responsibility to maximize their own profits are OBVIOUSLY NOT the best people to minimize interest costs. Banks maximize their profits by maximizing interest rates. Minimizing interest rates would occur only at non-profit rates as a public service. Bank profits are over $100 billion a year; a cost to the average US family of $1,000/year (~100 million US households). This $100 billion cost doesn’t include all the business and advertising costs that would disappear if banking were a simple public service.

The simple and obvious solutions: Many groups and citizens work to explain solutions that are indeed obvious upon inspection. Leaders include Public Banking Institute and American Monetary Institute. Benefits of the solutions:

The 1% in government changed the definitions of unemployment and inflation to mask their damage: The 1% lie to the 99% every time these figures are reported because they do not remind us of the changed definitions. When adjusted to their previous definitions, economist John Williams’ Shadow Stats website shows inflation to be at ~8% higher than officially reported. Unemployment is roughly double when adjusted to its previous measure. The same criminal liars will never honestly ask to compare the system of the 1% that we have to alternative systems.

Former Assistant Secretary of the Treasury and Assistant Editor for the Wall Street Journal, Paul Craig Roberts explains:

“The unemployment rate, as reported, is a fiction and has been since the Clinton administration. The unemployment rate does not include jobless Americans who have been unemployed for more than a year and have given up on finding work. The reported 10% unemployment rate is understated by the millions of Americans who are suffering long-term unemployment and are no longer counted as unemployed. As each month passes, unemployed Americans drop off the unemployment role due to nothing except the passing of time.

The inflation rate, especially “core inflation,” is another fiction. “Core inflation” does not include food and energy, two of Americans’ biggest budget items. The Consumer Price Index (CPI) assumes, ever since the Boskin Commission during the Clinton administration, that if prices of items go up consumers substitute cheaper items. This is certainly the case, but this way of measuring inflation means that the CPI is no longer comparable to past years, because the basket of goods in the index is variable.

The Boskin Commission’s CPI, by lowering the measured rate of inflation, raises the real GDP growth rate. The result of the statistical manipulation is an understated inflation rate, thus eroding the real value of Social Security income, and an overstated growth rate.”

And why do you have to hear this from a high school economics teacher rather than government, corporate media, or economics journals? Chair of the Economics Department of George Mason University (ranked 8th in the world for political economy by econphd.net), Donald J. Boudreaux, concludes that US politicians in their economic policy act like pimps who supply taxpayers’ services as enslaved prostitutes to corporate customers who lust after the taxpayers’ money.

Corporate media has been suspect since 1917 when the House of Representatives found evidence (but never formally investigated) that J.P. Morgan purchased the editorial boards of the leading 25 publications.

As for economics journals, half their editorial board members are current or former Fed employees.

Together we’ll accomplish our three objectives:

  1. Public recognition of the 1%’s crimes, centering on war and money.
  2. End war and money crimes that annually kill millions, injure billions, and loot trillions of our dollars.
  3. Build a brighter future for 100% of Earth’s inhabitants.
Advertisement

News

  • Al Qaeda video surfaces
    A video of an Al Qaeda meeting surfaces, concealed identities are raising suspicions
    Video
    Watch Video
  • Boston Marathon
    Boston cops shut down Boylston street after finding suspicious, unattended backpacks
    Top News
  • Death penalty for hate crime?
    Actions by the anti-Semitic gunman are being condemned by the unlikeliest of groups
    Crime News
  • New York gun control
    As many as one million New Yorkers are ready to disregard the state's new gun laws
    Headlines
  • Korean ferry capsizes
    Hundreds of passengers are missing after a ferry sinks off the South Korean coast
    World News
  • NYPD ends surveillance on Muslims
    The NYPD will end surveillance programs against Muslims in their own communities
    Video
    Watch Video

User login

Log in
Sign in with your email and password. Or reset your password.
Write for us
Interested in becoming an Examiner and sharing your experience and passion? We're always looking for quality writers. Find out more about Examiner.com and apply today!