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Elijah Speaks Truth to Power PDF Print E-mail
Written by Jim Jordal   
Tuesday, 26 October 2010


By Jim Jordal

The last time I played the game of "musical chairs" was perhaps 40 years ago, but I remember it well. Everyone pushed, held and scrambled to get a chair when the music stopped. The problem was, of course, that there was one fewer chair each time around, thereby forcing each of us into serious competition with everyone else to remain in the game. But compete as we might, there was always another person excluded after every round. You could only struggle with the hope that you would not be the next person pushed out.

Folks, in essence that’s how today’s debt money system works. That’s why there are so many poor people who cannot seem to rise above their poverty. That’s why stimulus programs—no matter how well intentioned--have only limited success. That’s why businesses compete so viciously for customers. That’s why advertising seems so desperate. And that’s why we can’t seem to make any progress against pressing issues like poverty, unemployment, homelessness, lack of medical care and so on.

Economists and financiers deliberately confuse the issue by inventing descriptive terms that few can understand. But the concept of debt money is simple: Most money comes into circulation as a debt; more debt, more money.

Interest, which produces nothing, is a drag on the economy because it subtracts from the income stream with the same general effect as pulling one chair from the circle. If interest had produced something that could be added to the circle to replace the lost chair, it wouldn’t be so bad.

Think of the economy as a living body that has needs for nutrients if it is to live and grow. In the body blood carries these nutrients wherever needed. In the economy it’s money that does the same thing by transferring factors of production wherever needed. When the body lacks blood it become anemic; similarly, without adequate money flow the economy becomes moribund, like now.

Even arch-conservative economist Milton Friedman candidly admitted that the major cause of the Great Depression was the Federal Reserve’s misguided action in shrinking the available money supply by one-third, thus strangling business, production and consumption. Again, no money, no life!

Right now, when Uncle Sam needs money beyond tax receipts he simply prints bonds (backed by nothing except the faith and credit of the country) and trades them to the Federal Reserve in return for a like amount in the government’s checking account. The problem is that this new public debt adds to itself every year through compounded interest. Thus we trade debt for money with the national debt growing accordingly.

So we have the 2008 Great Recession, with the economy almost comatose from lack of money. What to do? The Fed’s first thought was to cut interest rates, but that didn’t do much good because banks hoarded their reserves and were afraid to lend for fear of adding more bad paper to their balance sheets. Taxes could be cut so that people would have more money (blood) to spend, but that has a negative side of adding to the national debt and taking even more money away from government (but the rich still get their tax cuts).

The major problem with debt is of course the return to holders of capital (interest) that must be paid in order to gain credit. Thus debt transfers wealth from debtors to creditors or the owners of capital. The more capital you possess the more you gain, and the more debt you have the more you’ll likely need. And so it is for individuals, families, businesses and nations.

So interest becomes a major form of control and oppression by owners of capital over debtors. In other words, it is a cause of developing economic class warfare. Not the poor against the rich, but the rich against the rest of society.

The simple and soon to be inevitable answer is for the government to take back its constitutional power to print non-interest bearing money based upon the faith and credit of the United States and in an amount sufficient to meet immediate needs of the economy.

It’s time to stop the game of financial musical chairs that pits the rich against everybody else and mandates that some must fail for others to succeed. It’s time for the top-rung of ultra-rich people to ask themselves, "How much is enough?" It’s time for all of us to ponder the truth spoken by Jesus: "What will it profit a man if he gain the whole world and lose his own soul."