New Economy: Free Enterprise without the Capitalist

The federal government has a simple job.  But it seems the government is doing all the things it is not supposed to do and is not doing the basic things it has been entrusted to do.  The government is to protect.  It is to protect the borders.  It is  to protect business with tariffs.  (tariffs did not worsen the Great Depression) Government is to protect from war but our military is far behind Russia and China. The Constitution also commands Congress to coin our currency and regulate its value also a duty abdicated by Congress. The major issue if the Revolutionary War was fighting for our right to control our own currency and credit. The major economic issue of the Civil War was about tariffs. If we forget these issues, we voluntarily give up the freedoms our forefathers gave their lives to protect.

Our current fiat central-banking system is on the brink of failure.  Only endless money printing is keeping us afloat. A Gold-backed currency alone is also insufficient because there is not enough gold. Traditional European fractional reserve lending is not Constitutional but has led to a history of continual market instability. When banks lose their fractional reserves, they become insolvent and fail. This led to the creation of bigger and more corrupt banks.  Yet it was the big corrupt international banks engineering the market instability in the first place. 

Banks lend based on small fractional reserves they keep in reserve in the form of stocks. If the stock market crashes, they lose their reserves and cannot lend and become insolvent.  Full reserve lending is the answer according to economist Milton Friedman.

A stable and Constitutional banking system immune from failure would create a currency based on land, real estate, gold, oil and a basket of real assets. A stable and Constitutional system would be full reserve. We don't need the the Bank of International Settlement whose Basel I Accords crippled Japan and whose Basel 2 Accords triggered the 2008 housing collapse. 

Currently, big FED members banks borrow $1000 from the FED and can lend $10,000 or more based on a 10% fractional reserve requirement.  This is the "money multiplier" principle and means that in reality, the big banks are creating a majority of the currency  (out of thin air) and not Congress. Congress loses out on earning revenue on all the prime interest on money creation.

1. Federal Congress to coin all money via the US Treasury.

2. Money created is done at the moment of loan origination for only real assets like land purchases, hospitals, mining, factories. (on-demand)

3. Local non-profit Safety Society System banks assure credit worthiness and service loans. They make money on loan origination fee and and small monthly service fees. 

4. Federal government earns revenue on 100% money creation and charging a simple interest rate.

5. Simple interest rate (fee) gives saving the advantage over borrowers, regulates value of currency, and prevents inflation (hidden tax).

6. Communities and groups can apply together for larger loan approval.  We don't need the capitalist with his unelected machiavellian economic power to give us museums and aquariums.

7. Home loan borrowers earn equity on their first payment.  No amortization schedule.

8. Missed monthly payments are deducted from equity.  

9. Default doesn't occur until a person loses all equity then the bank can repossess a real asset.  No borrowing for stocks or derivatives.  This becomes an instant reverse mortgage and built-in mortgage insurance policy.   

10. Depreciation is deducted from equity.

11. Speculative investing would never be done by the Safety Society which restores Glass-Steagall. Let venture capitalists continue to do all the speculation as they do now with no bail-outs.

12. 100% Deposited money is protected at the Safety Society and never re-loaned.

13. Repaid money is returned to US Treasury and retired.

14. Money Supply x Velocity = Price (Inflation) x Growth.  Since money is only created as needed, the money supply never exceeds or lags the need.