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-- private financial institutions, including banks, "would recycle this money as loans;"
-- they'd still earn interest, but not as much;
-- as a result, the money supply would need to expand to cover it, but not as much as now; and
-- overall it would expand proportionally to demand keeping inflation contained.
Vilified today as socialism, it's the very system colonists used successfully to jump-start the country, make it grow, and do it without taxes or inflation. Franklin and Jefferson championed it. So did Jackson, Lincoln, and perhaps Kennedy later on.
Early 20th century Australia's Commonwealth Bank created money, made loans, and collected interest at a fraction of what private bankers charged. It worked well enough for the country to have one of the highest standards of living in the world at that time. Once private banks printed money, Australia became heavily indebted, and its living standard fell to a 23rd place ranking.
In the 1930s, the Fed printed money. However, FDR empowered the Reconstruction Finance Corporation to provide plenty of cheap credit to build infrastructure, create jobs, and provide emergency loans to states. The US Postal Savings System, Small Business Administration (SBA), Fannie and Freddie initially worked the same way outside the private banking system.
After being privatized, these mortgage lenders became corrupted, then bankrupt proving government can be the solution, not the problem, and a cheaper, more efficient one besides. From her own experience as Assistant HUD Secretary, Catherine Austin Fitts states:
"The public policy 'solution' has been to outsource government functions to make them more productive. In fact, this jump in overhead (simply subsidizes) private companies and organizations....regardless of (their) performance. (The scheme) make(s) no sense except for the property managers and owners who build and manage it for layers of fees."
It's the same argument used against privatized health care as opposed to cheaper, more efficient universal coverage leaving out insurer middlemen, letting government buy drugs at lower cost, and still leaving lifelong, high quality, comprehensive, and affordable choices in consumers' hands. It's a system begging to be instituted but won't be under Obama.
Once again, fear of big government is misguided. It should protect and serve everyone equally - impossible with the Money Trust running it, the way it works now with bankers creating money and extracting the national wealth for themselves.
Masquerading as "free enterprise today is a system in which giant corporate monopolies (use) their affiliated banking trusts to generate unlimited funds to buy up competitors, the media, and the government itself, forcing truly independent private enterprise out" - the very system Adam Smith and other classical economists abhorred.
Private banks have America and most other nations by the throat. They force governments to pay interest on their own money as well as "advance massive loans to their affiliated cartels and hedge funds, which use the money to raid competitors and manipulate markets." Its Darwinism in the extreme giving power brokers the right to choose who survives and who doesn't with ordinary people faring worst of all.
The solution is "publicly-operated police, courts and laws to keep corporate predators at bay" under a nationalized banking system, creating its own money, and serving people, not bankers - a truly equitable, sustainable, efficient and democratic system freed from parasitic financiers.
Beating the Robber Barons at Their Own Game
Using accepted business practices, the Rockefellers, Morgans, Carnegies, and Vanderbilts et al "deprived their competitors of property" by buying it on the open market through takeovers. Their "slight of hand" was how they funded them - through their own affiliated banks able to create money out of thin air, the same way it's done today for even larger stakes.
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