Global Warming and the Existential Threat of Fractional Reserve Banking

Part 2: On Eliminating Taxes to Save the Earth !!

Part 2: On Eliminating Taxes to Save the Earth !!

A Monetary System in Balance with Nature

In Part-1 of this story we saw that growth in pollution and global warming is directly tied to fractional reserve banking. It was concluded that a new monetary system, which is in balance with nature, is needed to provide a long-term fix to our climate problem!

That is to say, even if population decline and clean energy solutions are currently emergent phenomena, relentless: economic, energy-use, and pollution growth will eventually overpower these shorter-term trends, to our collective detriment, as planetary temperatures soar.

As it turns out, a very good solution to building such a monetary system was developed by the wise founding-fathers (and mothers) of the United States, even before the war for independence! In fact, this monetary solution was in many ways a catalyst for the Revolutionary War in the US.

Wow!! Hang on folks … it’s going to get really interesting…

Benjamin Franklin: Father of “Money in-Balance With Nature”

Benjamin Franklin was a printer by trade and he was an exceptional advocate for a new medium of exchange, beyond gold and silver coin, called paper money.

In 1729 he published a pamphlet called “A Modest Enquiry into the Nature and Necessity of Paper-Currency.” This immediately earned him printing contracts for creating his new paper money in the states of New Jersey, Pennsylvania, and Delaware. Other states followed.

Ben goes on to say “Experience, more prevalent than all the logic in the World, has fully convinced us all that [my version of paper money] has been, and is now of the greatest advantage to the country.”

Ben’s version of paper money was NOT the same as today’s paper money. Ben’s paper money was NOT secured by gold or by fiat via the full faith and credit of the US. It was secured by the goods purchased with loans from the federal government.

Ben notes that “The riches of a country [should] be valued by the quantity of labor its inhabitants are able to purchase, and not by the quantity of gold and silver they possess.”

You see, in Ben’s day, when gold and silver were in strong supply, goods got produced. Whey the gold and silver was scarce, people went out of work and hungry.

The wonderful aspect of Ben’s paper money, i.e. government issued paper script, was that the government could pay for anything it needed for the common good with government issues paper for the local community. The local community created both the supply and the demand.

What was revolutionary about all of this is that Benjamin Franklin’s version of paper money made the colonies independent of British central bankers and their gold and silver. It allowed local governments to be financed by the people for the people, all without taxing the people!

For example, for over 25 years, from 1723 to the French Indian War of 1750, the state of Pennsylvania ran its provincial government mostly on this kind of loan system. No taxes were ever collected during this period!!!! As another example, the War for Independence, was also paid for in this way. The war was run without the need for any taxes!

Thus, without amassing any gold or silver, Pennsylvania created a way to bypass gold and silver, and the value of the government-issued script never dropped below that of said gold and silver.

This was great for states like Pennsylvania, New Jersey, New York, Delaware, etc.., but it really pissed-off the British Crown and the Bank of England. It caused rapid depreciation of the British merchants and financiers. Then in 1751, King George II, thus angered, created a first ban on this form of paper money in the Americas!

Accordingly, in 1764 Ben went to London to explain the great advantages of his version of paper money for the colonists. The result was just the opposite of what Ben was looking to accomplish! The British Parliament created even greater restrictions on US paper money that was not issued by the British central banks, i.e. the Bank of England.

With Parliament’s ban, 75% of the colonist’s money supply disappeared overnight and there was widespread unemployment, hunger, and poverty — all to ensure that the banks in England were enriched.

This was taxation without representation!

This was war!

The Continental Congress, now at war with England issued new paper script money called “Continentals” to pay for the war!!

Thomas Pain called Ben Franklin’s monetary system the “corner stone” of the Revolution. When King George and then Parliament banned Ben Franklin’s paper money, and its particular methods, the war for Independence was locked in.

However, the useful Continentals (paper money) were eventually undermined by the British flooding of the US markets with counterfeit Continentals, destroying its value and allowing the Bank of England to reassert fractional reserve banking.

Thus, today’s global warming is also tied directly to the flooding of the US markets with counterfeit Continentals and the conversion of the US to fractional reserve banking, all to ensure that the middleman (the banks) were further enriched.

That said, Benjamin Franklin, and all the experimentation of the early US States, taught us that government loans can be used to provide money into the economy, that the loans can be paid back as principal plus interest, and that the interest can be used to provide government services that inject sufficient money back into the economy to pay future interest on other loans. It is a circular economy and it is tested to work!! It can be used today to combat global warming!!

All we need do (not really!) is update from paper to digital technologies that are hard to counterfeit!

A New Monetary System

Here is the modern version:

Step-1: Eliminate all state and federal taxes, The Federal Reserve Bank, and the practice of fractional reserve banking.

Yup, today’s banks get destroyed, as they can no longer provide ANY loans ever again, which also destroys things like mortgage backed securities and associated derivative markets. However, please recall that this realignment is in service to saving the planet. At some point bank profits need to be subordinated to maintaining healthy life on earth over the greed of men. The banks had a good run at wealth creation, but nothing lasts forever. The banks should be grateful for what they achieved and leave it at that. Credit cards will be issued by the federal government, not your local bank.

Step-2: The US government creates all new money for the US by a digital account entry at a newly formed IRS.

Recall that Article-1 Section-8 of the US Constitution allows the US government to create its own money. It is crazy that today we instead allow a middleman (the banks) into the picture to give the US government loans. The middleman costs more money, thereby effectively increasing taxes substantially. Getting rid of the middleman removes these wasteful middleman-profits.

Note, the middleman banks always tells some version of: “If the US creates its own money then it will cause massive inflation, so don’t do it! This happened before with Continentals, an older form of US money!!”

Nonsense!!

THINK!… would it be in the US constitution if it were that unsound? Were the founders that stupid? NO!! The only difference between today’s government created money and bank created money is the paperwork. In the end there are still the same number of new dollars sent into circulation and the inflation will be the same if fractional reserve banking is used. So let’s not use fractional reserve banking!

Again, the Continentals’ value were destroyed by British banks flooding the US with counterfeit bills to gain, by subterfuge, what could not be won on the battle field: the ability to demolish and then takeover the US monetary system — a better means of control than any bayonet!

The US avoided that outcome, but the history is beyond the scope of this article. The bottom line is that today we have better technology to battle counterfeit currency, money is mostly digital, and the United Kingdom and the United States are the best of friends.

Thus, the founders (Ben and the early states) of the US had a different monetary system in mind than we have today, one that did not include banks as a means to create money– just central governments issuing loans.

So today the banks make these false statements to keep the status quo going, so they can continue to make massive profits! This must be stopped as it also poisons to our lovely planet Earth! Global Warming is an existential threat.

By the way, that Global Warming is an existential threat is clearly stated by the US Secretary of Defense and US Department of Defense writ large…not to mention many other science-based agencies in the US and over seas. This is not a joke and it impacts all of us.

Step-3: The newly re-formed Internal Revenue Service (IRS) creates all loans in the USA and collects principal plus interest repayments. The interest repayments fund the internal activities of the Federal and State governments! The principal repayments go out again as new loans to service economic stability (not growth). This is a circular economy having zero growth!! Money only circulates, and just in time.

No taxes, and associated tax forms, are ever collected again.

Financial activity is now followed electronically, perhaps with the help of AI, to avoid fraud and criminal activity. The middleman banks have been removed so that the loan interest rates are less than today’s taxes! Loans are now actually loans, where the IRS gives legal consideration (the principal of the loan) for a promise to repay principal plus interest. The loan contract is just an agreement to work to do some good within the economy.

Some economic activities might be paid as loans by law, even if a wealthy person or company can pay cash. Also, each loan has its interest rate set to substitute for taxes and other social and economic policy considerations. For example, poor people will pay less in interest rates. Also, businesses that are desired in the USA will also pay less to encourage their business activity.

Now, by the power of Article-1 Section-8 of the US constitution the US makes its own money…again! For example, it can seed several trillion dollars to run the economy, just by entering the amount on the computer books after authorization by congress….and perhaps confiscating it from the banks.

All of this eliminates unchecked growth and creates a circular economy where money circulates but does not grow. The interest collected is used to pay for government services for the common good. The amount of energy used is regulated to ensure that planetary pollution is keept within reasonable bounds.

I cannot stress more strongly that this approach eliminates the “middleman banks,” that have been taking unreasonable profits at the expense of tax-payers and the state of the Earth! The effective overall tax rate is thus lowered and planet Earth becomes in balance with human activity!

No more excessive pollution into the earth’s atmosphere!

No more inflation, deflation, boom, and bust cycles!

No more hidden tax from inflation!

Everyone likes lower effective taxes so that is a win for politicians too.

No more annual (federal & state) tax forms!!! WOW!!

The method is easily spread to other countries by eliminating all central banks! And the US can remain the global standard currency if desired.

The money supply is controlled by the government’s lending policies. In time the current debt is paid down completely too. And debts are eliminated.

The guardians of this system must be physicists that ensure, by physical measurements, that the economy is in balance with nature by measures of energy, pollution, and other physical metrics. I recommend that the National Institute of Standards and Technology (NIST) and the IRS combine forces and do this in the US. The use of GDP is not sufficient, as it has no part therein related to physics and atmospheric chemistry.

SUMMARY

The BIG IDEA is actually very simple:

Eliminate the Federal Reserve Bank and the practice of Fractional Reserve Banking. The IRS then issues actual loans, from money in the treasury, into the economy and collets the principal plus interest, sending it back into the treasury, instead of collecting taxes.

The interest on loans is used to run the government internally, to pay the salaries of public servants such as the military, national labs, NASA, the Center for Disease Control and many other branches of the government all for the public good. Modern aspects of the new monetary system include block-chain to track each dollar as it circulates so that tax-like forms are never needed again. Taxes are gone. Tax forms are gone. Unending energy and pollution growth is gone. Boom and bust economics is gone. Nature and humanity come into balance.

Finally, please note that this this article is not meant to address all issues. It is however a good conversation starter towards a better way forward. Let’s start talking about the elimination of the Federal Reserve and using Ben Franklin’s monetary system in its modern digital form.

Let’s be good stewards of Earth.

Let’s be both creative and wise.

For further information see books like: “The Web of Debt,” by Ellen Hodgson Brown; “The Creature from Jekyll Island,” by G. Edwin Griffin; and the many books and reports on Global Warming.