This former banker shows how liberal economists serve the oppressive capitalist system.
Their calls for more deficit spending are impotent when they simultaneously defend the fundamental paradigm that the only source of purchasing power must come from the rentiers themselves.In case you didn't know, rentiers is a term used to describe those who live off of low interest government bonds and securities. Rentiers don't like risk. Thus, they don't mind low interest rates when they can lend to governments that can saddle their populations with these debts. Since rentiers are overwhelming found among the ruling class who exercise dominant control of government and all other institutions, they are in an excellent position to enforce the repayment of these debts. To insure that repayments are sound and paid back, they force policies on their governments to curb inflation and discourage the use of bankruptcy laws. (See this excellent, brief article for more details.)
In a debt based monetary system privately owned banks known as "central banks" provide credit to governments, often to fund their wars. Some wars can be very devastating to all involved and governments may have difficulty paying back these loans. In such times those who own these debts, the creditors or rentiers, aggressively pursue policies of low inflation and restrictions on bankruptcy for ordinary people. (In 2005 President George Bush, Jr., who loyally served the rich, made things harder for working people burdened with debt by tightening the restrictions on bankruptcy law for ordinary people.)
Now after so many official wars in Iraq, Afghanistan/Pakistan, and many other secret wars elsewhere such as in Somalia and maintaining around a thousand military bases all over the world, the government is very deep in debt to this class of rentiers. You see, the ruling class government supposedly run by two so-called political parties, Democrats and Republicans, had no difficulty accepting more credit during all these wars. There was absolutely no debate then.
Currently we are witnessing a political show in Washington portrayed as a debate between Republicans and Democrats, but in reality it is designed to impress upon the American people that they must accept draconian cuts to public expenditures including cuts to Social Security and Medicare. The latter have been separately funded by equal payroll contributions from workers and employers. However, these funds have been "borrowed" by the government also to fund the wars, and the ruling class refuses to pay higher taxes to pay back these IOUs.
The author of this article correctly sees real solutions to our current dilemma:
...how about marginal tax rates approaching 100% at high incomes, recognition we can create our own fiat purchasing power without relying on the rentier, guaranteed jobs, and severely regulating the monopoly-like power of the mega corporations.This debt-based monetary system is a creation of the ruling class, serves their interests, and is the source of most of our current economic problems. Although our central bank, the Federal Reserve ("The Fed"), is hidden behind a maze of government and private banking arrangements, the power really lies with the bankers and those who own the banks, the ruling class. They issue all our money except coins. (Notice at the top of any money you will find the inscription, "Federal Reserve Note", which indicates a debt issued by the Federal Reserve.) And they create this debt-money "out of thin air".
What is the alternative? Read this succinct article entitled, "The Need for Monetary Reform", which I think would more appropriately be entitled, "The Need for Monetary Revolution", because it really dramatically changes the nature of money.