SOCIAL SECURITY and MEDICARE
Not a single U.S. Congressperson has demonstrated, in my opinion, that they know how money is created or how new money comes into existence. Both major political parties assert that Social Security and Medicare are "bankrupt" because the trend is toward growing expenditures and decreasing in-flows. But how can the one organization (U.S. Federal government) with the legal right to create money go bankrupt? The Department of Defense has no exogenous money in-flows but no politician is proclaiming it to be bankrupt nor calling for its privatization to "save money."
If I was exempt from U.S. counterfeiting laws, I would never go bankrupt. But financial experts at the credit rating agency Standard & Poors (specifically, David Beers, head of S&P's government debt rating unit as of 2011) assert that the Federal government has a growing risk of defaulting on its debts. This is the same credit rating agency that declared Enron and AIG to be financially sound right up until both organizations collapsed. Standard & Poors' top government debt analyst concluded that the U.S. Federal Government is at risk of being unable to provide the one thing that only the U.S. Federal Government can legally provide, i.e. paper dollars and coins.
Ask a policy maker how money is created and they will most certainly lack an answer. But without this basic foundational knowledge, I question whether the persons currently serving in Congress are qualified (Constitutional qualifications aside) to control the creation of money. I assert that it is false to conclude that Social Security and Medicare are "bankrupt." I seek to educate policy makers on the physical (the underlying stuff that is traded and consumed) and legal nature of money.
Not a single U.S. Congressperson has demonstrated, in my opinion, that they know how money is created or how new money comes into existence. Both major political parties assert that Social Security and Medicare are "bankrupt" because the trend is toward growing expenditures and decreasing in-flows. But how can the one organization (U.S. Federal government) with the legal right to create money go bankrupt? The Department of Defense has no exogenous money in-flows but no politician is proclaiming it to be bankrupt nor calling for its privatization to "save money."
If I was exempt from U.S. counterfeiting laws, I would never go bankrupt. But financial experts at the credit rating agency Standard & Poors (specifically, David Beers, head of S&P's government debt rating unit as of 2011) assert that the Federal government has a growing risk of defaulting on its debts. This is the same credit rating agency that declared Enron and AIG to be financially sound right up until both organizations collapsed. Standard & Poors' top government debt analyst concluded that the U.S. Federal Government is at risk of being unable to provide the one thing that only the U.S. Federal Government can legally provide, i.e. paper dollars and coins.
Ask a policy maker how money is created and they will most certainly lack an answer. But without this basic foundational knowledge, I question whether the persons currently serving in Congress are qualified (Constitutional qualifications aside) to control the creation of money. I assert that it is false to conclude that Social Security and Medicare are "bankrupt." I seek to educate policy makers on the physical (the underlying stuff that is traded and consumed) and legal nature of money.
MICHIGAN FREEDOM BANK
A bank owned by the People of Michigan whose primary purpose is to offer low interest loans (but still profitable) and refinancing options to local governments.
I propose that the Legislature charter the MICHIGAN FREEDOM BANK (MI BANK). It will be a State chartered bank owned by the citizens of Michigan and be a member of the Federal Reserve System. Its primary purpose is to provide local governments with an alternative to traditional commercial banks. MI BANK will actually retain the notes on the loans that it creates so as to create and maintain a relationship with its borrowers.
MI FREEDOM BANK will serve as a depository for the State and municipal governments. It will save Michiganders millions of dollars because:
(1) it will not have an advertising budget or a marketing department,
(2) it will be statutorily constrained from operating more than three physical "branch offices," and
(3) no employee shall receive a salary in excess of Michigan's Governor ($159,300/year as of 2016).
MI FREEDOM BANK will offer demand deposit accounts (checking accounts) to only Michigan Residents but it will offer savings accounts to the general public. For an example of a current publicly owned State bank see the Bank of North Dakota.