IT'S THE MONEY CREATION, STUPID!

President Obama continually states that he has done just about everything humanly possible to "jump start" the economy. He has greatly enriched Wall Street banks and other large banking and financial institutions. Surely they will soon loan enough of this money to industry - both large and small - to promote job-creation.

Why should these large banks invest these funds given to them by Uncle Sam in the name of the people in risky enterprises, when they can take this money and put them in Treasury bonds where they can safely double or triple their money? They can borrow additionally money from the "Federal" Reserve at near zero interests and invest this in U.S. bonds (or other relatively safe bonds) and double or triple their money.

They exist, as do bloodsucking parasites (bedbugs, leeches, ticks, et al), and there is little reason to free themselves from Uncle Sam's body and risk the dangers of finding other hosts. Only after swelling to immense size will they take a risk, usually setting up the next cycle of increasingly bad loans.

President Obama hasn't come close to tackling the problem, as the problem is systemic. It is founded on the originating of money through private banks in a system that creates about 90% of it monetary aggregates by means of debt. The U.S. provides the "Federal" Reserve with bonds as collateral for "cash" which are merely ledger creations out of nothing.

Commercial banks take 10% (or whatever the reserve figure required) of all deposits and set that amount aside as a "Federal" Reserve deposit. They loan out the other 90%, if they choose to do so. This created money ends up as a deposit in the originating bank or another, and goes through the same process, the bulk of the funds reloaned. Hence, a pyramiding of "created money" takes place. Inevitably, a deflation of the "created money" occurs, as bad loans increasingly appear on bank books.

Instead of this complicated nonsense, the system should be changed to one in which the U.S. Department of the Treasury and the U.S. Bureau of the Mint in conjunction create positive legal tender. The whole of the American economy can easily adjust to it.

The money can be injected into the economy by means of infrastructural works paid for by the issuance of legal tender (as Abraham Lincoln did with his original "greenbacks"). It could also be injected through the Social Security Administration's Social Security and Medicare payments. The Defense Department could pay for its war equipment and personnel by means of this money.

All our relationships with foreign nations should be altered to reflect these changes. All our "connections" with the extra-American nations and companies/peoples were man-made by our "statesmen" and can be unmade by patriotic, wise statesmen. It is not a declaration of hostility toward the world beyond our shores, but that we place our interests first.

As part of the latter adjustment, tariffs should be applied to all products coming to our shores on the  basis of labor costs. Our workers should not be consigned to slave labor rates because our competition employs slave labor. American industry should not be obliged to flee America to survive. Equality of rates should be obtained by adjusting extra-national rates to reflect the rates our workers in the same or very similar industries are paid. This would also encourage the outside world to pay decent wages.

Lastly, American industry that operates entirely domestically should receive tax reductions, as compared to international corporations. In no case should an international corporation operating in the United States have lower taxes than an entirely domestic company.

All internationalist citizens should be encouraged to leave their property in America and go to England, France, Germany, Italy, Israel, et al, where they would reside among kindred spirits. 

President Obama was, is, and will always be a Wall Street and Lasalle Street agent. What he can squeeze in as an expression of solidarity with Karl Marx, he will no doubt do. He will never solve the systemic problem of negative money. He will only participate in the jump-starting of the next episode of inflating the debt-balloon.