Congressman Dennis Kucinich’s address to the US House of Representatives: September 7, 2011
Thomas Attwood would have appreciated the Congressman’s message
Extracts selected from the ten page text:
This lawless interventionism spurred on by an unaccountable NATO which violates United Nations Security Council resolutions with impunity, this attempt to use force to bring others to subjection in the name of democracy actually has become a device for control over the wealth of other nations and the squandering of our own wealth and the spreading of poverty here at home.
While spending trillions for unnecessary wars, the government bailed out the banks for $700 billion, refusing to link the bailout to mortgage modification which would have helped millions of Americans stay in their homes.
The Fed, which infamously looked the other way as the financial crisis was building and failed to properly monitor the overexposure of top banks, created $1.2 trillion, out of nothing and gave secret emergency loans to some of the largest banks who helped to cause the financial collapse through reckless investments. This secret money created out of nothing, but backed by the full faith and credit of the U.S. is going to fuel an international financial system which siphons wealth out of the U.S., avoids paying taxes, takes American jobs and moves them to low-wage climates.
Democracy itself is at risk here. An economic democracy is a precondition of a political democracy
The greatest losers in today’s economic system are the young. They have been fleeced. They were promised good jobs with good pay if they got a good education. Millions have done that only to discover that the jobs we promised were not there. Millions of young people have moved in with their family and friends, barely scraping by, dreading student loans that they have to repay. The dread when those loans come due.
The major fault of the domestic economy is the failure to provide good paying jobs for Americans. The reasons for the high unemployment and low paying jobs are many, but two major reasons stand out: lack of consumer demand and stagnant wages accompanying low union participation. There is a lack of consumer demand in an economy that is 70% dependent on consumer spending.
Since World War II, America has come out of every recession in less than a year, but this time we have had a false recovery. The economic numbers improved briefly, while stimulus was injected. Today we are back in recession, a double dip recession that is destroying people’s lives and setting back our nation.
Stimulate the economy
We can stimulate the economy by providing revenue to rehire state and local government employees. That is the easiest way to put hundreds of thousands back to work. This is an obvious way to stimulate the economy on a significant scale. State, local government, public schools, public and private college would all have an enhanced ability to restore service. Such a stimulus would create an economic climate where businesses will expand their investment, utilizing their own profit.
The same thing is true in the housing area. The government must immediately implement a new housing program. More and more properties are becoming vacant and vandalized, while people are doubling up. We need a full-scale program where economically troubled homeowners are given the right to rent, at a market rate, property in foreclosure. The government would provide a rent subsidy while the homeowners seek work.
The American people want work not welfare. There should be work for those who are able to work. Government must become the employer of last resort. The private sector is not providing the jobs. When the private sector fails to provide the jobs, the government has a moral responsibility and a practical responsibility to step forward to put the country back to work.
There comes a time when we need to look at some dramatic change that needs to be done to restructure our economy. This month I am going to be introducing a bill which will be aimed at addressing our structural economic problems directly. It is called the National Employment Economic Defense act – – the NEED Act. America needs millions of jobs.
How can we create millions of jobs in a time of annual deficits, long-term debt and contracting budgets?
Here’s how: The Federal Reserve creates money out of nothing and it has given it to banks. The Fed has assumed that power through an Act of Congress. The Federal Reserve has used all of its standard monetary policy tools. But the American economy is not getting better. Whatever the Fed is doing, it is not working.
Reality beats theory. The reality is that not enough people have enough money. Why is this? Where does our money come from? Why isn’t it coming?
The Fed doesn’t create money we use in our bank accounts. The banks do. Most of this money is created when banks make loans. This is why the Fed can’t control inflation or influence output and employment.
Output and employment depend on demand. Demand depends on how much money people have, or can borrow. Because banks create this money, they control demand. If banks aren’t lending or borrowers aren’t borrowing, new money isn’t being created to replace the money removed when bank loans are paid, so the money supply shrinks.
The money is not getting to where it is needed. Until it does, things can only get worse. None of the current policies work because of the way the current system is set up.
Here is how we fix it. We have to reclaim our Constitutional power to issue money into the economy, unburdened by debt. Last Congress I introduced legislation to do just that, and I am reintroducing it next week. Here is what the legislation would do:
1. It would end the Fed’s unaccountability by putting it under Treasury.
2. It would end fractional reserve banking, ending banks’ ability to control demand in our economy.
3. It would empower our nation to issue money directly into the economy to create jobs to rebuild our crumbling infrastructure, unhindered by debt and interest payments – – creating millions of new, good paying jobs. It would get the money to where it is needed the most. It would get the economy going and keep it going.
It would avoid debt and deficits. It would prime the pump of the economy. It would enable us to regain control of our destiny as a nation.
This plan would not create inflation because it would reduce infrastructure costs. Lower costs means prices can go down. Lower prices do not define inflation. Real wealth will be created with the new money. Infrastructure is enduring wealth, unlike the ‘financial wealth’ of the stock market.
If government borrows money created by banks for infrastructure it is an interest bearing debt, paid for over a long time. But if government creates money for infrastructure and spends it into circulation, there’s no debt or interest costs. The same amount of money is created in either case, adding to the money supply by exactly the same amount.
The American people know what is going on in our economy. It is run by Wall Street for Wall Street. It is run by banks for banks. Unless we look at serious structural reforms we are headed for a two class society.
The ability to coin or create money is an inherent power under Article I, Section 8 of the United States Constitution. The NEED Act would enable the government to invest in America.
We will regain our confidence, we will regain our economic strength, we will put people back to work, we will help millions save their homes, we will protect the retirement security of elderly Americans, we will ensure that our children will be able to obtain a college education and a job when they graduate. We will restore our public institutions and the services they provide.
We can do all of this and more. But we must ask that those who operate the engines of finance abandon their recklessness, their selfishness and pledge allegiance to our nation and its people. We must demand that corporations pay a fair share of the taxes. We must end the off-shoring of jobs and profits . . . and correct our course. We must move away from trying to determine the fate of nations around the globe and focus on the fate on the one nation that must matter to us more than all others — The United States of America!
The full address can be read here.