Your Questions About Debt-free Money

Mary asks…

Is it ‘privatise the profit, nationalise the debt’? Free money?

How can anyone especially supposed conservatives accept this? This is just like the Iraq fiasco. Once the crime is done everyone gets off and the American taxpayers take on the debt. Does it seem fair to you? Please let us know whether you are a Republican,Democrat, or Independent too.

John answers:

It is important to understand how this Bush bailout proposal differs from the Resolution Trust Corporation of the late 1980’s. The RTC collected all the loans held by banks that had failed. The RTC sorted through them and sold the loans it could sell. The Bush bailout buys only the bad loans from solvent institutions. That means that these institutions – and their stockholders – don’t have to pay for their errors in judgement.

There are other, fairer, cheaper, ways to solve the problem. See
A Bad Bank Rescue
By Sebastian Mallaby
Washington Post, Sunday, September 21, 2008
http://www.washingtonpost.com/wp-dyn/content/article/2008/09/20/AR2008092001059.html?hpid=opinionsbox1

Thomas asks…

What is the advantage of money that comes laden with debt, why cant we have debt free government issued money?

Money is issued by the central banks. The people have no power whatsoever over it, which means, they do not hold the real power. Those who control money ultimately control everything else.

There were attempts made by kennedy to issue debt free money, issued by the government instead of having the federal reserve issue it, as it was the case before 1913. Now most countries have a central bank, which issue money at an interest rate, although there have been rare cases where the interest rate went down to zero.

What is the big disadvantage of governement issued money at 0% interest rate, that almost no country is using that method?
Also how exactly is the american federal reserve federal
Steve continued irresponsible issuing of money would cause inflation, just like being too tight would cause deflation. The same effect can be achieved with government issued money at 0% interest. The big flaw I see is that all money needs to come from the fed and therefore all money comes with debt.

John answers:

You have some misconceptions and you do not understand money and banking. You need to learn more about economics in the 19th century and take some courses on money and banking.

Between 1863 and 1913, the government did not issue money. However, the Treasury department and the Comptroller of the Currency were responsible for printing National Bank Notes. This is similar to the current situation where the Bureau of Engraving and Printing is responsible for printing Federal Reserve Notes. A lack of control over the money supply and other factors led to a series of depressions and bank panics that severely disrupted the economy. A few of the worst were the Panic of 1873, Panic of 1896, and the Panic of 1907.

Your statement about President Kennedy is also wrong. E.O. 11110 (1963) did not create authority to issue new silver certificates, it only affected who could give the order. President Kennedy had just signed legislation repealing the Silver Purchase Act. With the repeal of that act, the Treasury Secretary could no longer control the issue silver certificates on his own authority. However, the President had the authority to control the issuance of silver certificates. E.O. 11110 simply delegated that authority to the Treasury Secretary. The purpose of the order was to facilitate the reduction of certificates in circulation, not to increase them. In October 1964 the Treasury ceased issuing them entirely. The Coinage Act of 1965 (PL 89-81) ended the practice of using silver in most U.S. Coins, and in 1968 Congress ended the redeemability of silver certificates (PL 90-29). Http://www.publiceye.org/conspire/flaherty/flaherty9.html

The Federal Reserve was created by an act of Congress. Contrary to conspiracy theory belief, Congress was not in recess when the act was passed. Congress had stayed late that year in order to pass important legislation, much like it has several times before and after that session. Controlling the Federal Reserve is the Federal Reserve Board of Governors. All members of the Board of Governors are appointed by the President and confirmed by the Senate. The Board of Governors is a 100% government agency. The 12 Federal Reserve district banks are setup similar to corporations. However, the stock in those banks does not confer any rights of ownership. Instead, the stock is simply indicative of membership within the system. By law, all national banks must be members of the Federal Reserve system and some state banks may become members if they meet certain requirements. Federal Reserve district bank stock may not be sold or traded and only nationally chartered or state chartered banks may hold it. The amount of stock a member bank must subscribe to is set by law. A bank may hold no more and no less than the prescribed amount.

Maria asks…

I am finally debt free almost and need to put my money somewhere for good fortune, where should it go?

I dont have much debt now so Id like invest in something safe or put more towards my retirement or something. What should I do? Thanks

John answers:

You should be putting it in a savings account, you need to have 6 month’s salary stashed in a savings account for your emergency fund in the event you lose your job; after you have paid off all your debt and have your emergency fund fully funded, start putting extra money towards retirement…..

Ruth asks…

if Walker had REAL brains wouldn’t he just create a Wisconsin Bank with power to print its own DEBT FREE money?

cogitate and discuss:
http://www.yesmagazine.org/new-economy/how-wisconsin-could-turn-austerity-into-prosperity-own-a-bank
amalone: what about the Bank of Dakota? and if they don’t have the power then WHY not??

John answers:

Two answerers have said this can’t be done but doesn’t North Dakota already run a bank? Prinitng money is a different thing, no one state can or should be able to print dollars – but there is no reason why the Fed shouldn’t. The Fed’ Reserve ‘creates’ money buy turning small deposits into massive chunks of debt.

Michael asks…

I want to work from home, be self employed, be debt free but don’t have much money, any suggestions?

I am fed up with this 9 to 5, monday to friday work thing. I know that there is something better out there, I just need to find it. I’m dreaming big and ready to make the change. Does anyoine have any suggestions?

John answers:

Do what you love and what interests you- and the rest of your desires will follow…

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