Ellen Brown’s Public Banking
Ellen Brown is famous for her brilliant book ‘Web of Debt’. But she has not stopped there. Her Public Banking initiative is a direct assault on the Money Power’s control of the money supply. Her approach is fully in the Populist spirit and although it does not solve all problems, it is eminently practical and ready for immediate implementation.
The idea couldn’t be more simple: American States and Counties can open banks for themselves, capitalize them with taxpayer money and finance both the State and businesses with interest free (or low interest rate) credit. This saves them massive amounts of interest. It also secures both Government and the Commonwealth of continued financing, making them independent from unstable and often unwilling international financial markets. The little interest that is raked in by Public Banks is used to finance the bank’s operations and thus it is spent directly back into the community. In this way there is no drain of purchasing power for the community, which is a major problem in our current system.
Clearly, society’s independence from punitive monopoly interest rates by the International (Central) Banking Cartel is a great boon to society.
Credit is the modern way of creating money. Interest free credit is superior to debt free money in many respects. It is easier to take out of circulation, because the debt will be payed off. Credit can be given out several times, debt free money just keeps on circulating. A flexible money supply is in many ways attractive.
The key point to understand is, that the problem is not debt, it’s interest.
So Public Banking addresses both interest slavery and lack of access to capital. To boot, it decentralizes power from tightly controlled international financial power to local government, which is much closer to the population.
Another major advantage is that its main points are easy to communicate because they fully fit within existing paradigms. It can be immediately implemented by any State, which is especially important in this time of crisis.
Of course there are limitations too. But that is only natural and unavoidable considering the vast scope of such a thing as a monetary system.
Public Banking does not address the insanity of Fractional Reserve Banking. It does solve the Interest issue associated with it and that is of course by far the most important thing. But FRB is a very inefficient, expensive, unstable and fundamentally unsound way of creating credit. Eventually it will have to go.
Another issue is that there is a risk that Governments would abuse easily available credit, creating inflationary pressures. It must be said though, that an interest bearing money supply like we have today is inherently inflationary, because not only the principal, but also the interest to payed must be created. Otherwise people would have to go bust, because there is not enough money to pay off all the debt + the interest.
This is a key reason that our monetary system is so unstable: because the debt must grow eternally, the interest payed over it must also become more and more. This is why we must have economic growth, or face declining income. But it is easy to see it is unsustainable: the exponential growth can go only so far before the numbers become astronomical.
These pressures would not be a part of Public Banking so risk of inflation is limited.
All in all Public Banking is an amazingly powerful concept. It clearly decentralizes financial power to local and regional communities. It eats away at the horrible interest drain to the Plutocracy. It prevents deflation and the turmoil associated with that criminal enterprise.
It is available now to communities everywhere in the United States and all it needs is the support of the people to implement this wonderful scheme.
More information on the Public Banking Institute