MEDIA ROOTS — Many of us notice our society’s shift away from the use of anonymous cash and toward the use of databeast-tracked digital money.  But many are unaware that there are steps already being taken to outlaw cash in favour of debit/credit cards and digital transactions.  In Louisiana, House Bill 195 of the 2011 Regular Session (Act 389) was passed this summer by its State Legislature and Republican Governor Bobby Jindal.  This law makes it illegal to use cash in transacting second-hand goods.  The question becomes, ‘who actually motivated this law and why?’ 

The bill states:

“A secondhand dealer shall not enter into any cash transactions in payment for the purchase of junk or used or secondhand property.  Payment shall be made in the form of check, electronic transfers, or money order issued to the seller of the junk or used or secondhand property and made payable to the name and address of the seller.  All payments made by check, electronic transfers, or money order shall be reported separately in the daily reports required by R.S. 37:1866.”

Ackel & Associates LLC, a professional law firm in Louisiana, describes the new legislation as the U.S. Government taking private property without due process.  As one may have expected, the justifying pretext involves police crime-fighting. One Louisiana State Rep co-author of the bill, Rickey Hardy, argued the law is intended to be “a mechanism to be used so the police department has something to go on and have a lead” in combating theft.  Yet, while local cops take no interest in white-collar crime, even shielding major financial criminals from nationwide Occupy Movement protests, they will definitely be ready to bust thrift shops, local antique stores, flea markets, and anyone who dares to use cash in second-hand retail transactions in Louisiana.

Already, we see class-division in the U.S. reflected between those who make virtually all purchases through digital transactions and those who rely on cash.  Here’s one possible scenario:  First an individual legislator (with or without external influence) establishes a precedent under law enforcement pretexts in a state, which may not often capture the national imagination.  Then it spreads to other states.  Unchecked, something that seemed outlandish at first becomes orthodox convention.  First, second-hand cash transactions are outlawed.  Then the slippery slope slide into fully outlawing cash becomes inevitable.  It may sound like a far-fetched concept, but in light of this legislative trajectory it’s not implausible.

Messina

***

NATURAL NEWS — Besides prohibiting the use of cash, the law also requires such “dealers” to collect personal information like name, address, driver’s license number, and license plate number from every single customer, and submit it to authorities. And the only acceptable form of payment in such situations is a personal check, money order, or electronic transfer, all of which must be carefully documented.

The stated purpose of the law, which excludes non-profits and pawn shops, is to curb criminal activity involving the reselling of stolen goods, particularly metals such as copper, silver, and gold. But according to A&A, existing Louisiana state law already requires businesses and other resellers of secondhand goods to account for transactions, and has specific laws already on the books that address the selling of stolen goods.

The new law is so broad and all-encompassing that individuals who buy and sell on sites like eBay or Craigslist using cash will also be in violation of it. Even a stay-at-home-mom who holds a garage sale with her neighbors more than once a month could be required to refuse cash from customers, as well as keep a detailed record of every single purchase made, and who made it.

There really is no legitimate reason for banning cash payments, especially in light of the required collection of detailed and excessive personal information. The measure is simply just another excuse for the government to spy on individuals, and take away their economic and civil liberties.

Read more about Louisiana prohibits residents from using cash when buying, selling secondhand goods.

© 2011 Natural News Network

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Photo by flickr user purpleslog

MEDIA ROOTS — Felipe Messina of Media Roots speaks with Vaquous of Occupy Montreal to get an international perspective of the global Occupy Wall Street Movement, find out what Canadians are saying and doing as they participate, and what lessons they can share with their international counterparts about what can be done toward socioeconomic justice through collective action and the taking of the public square around the world, physically and digitally.

We apologise for the audio quality wherever distortion occurs.  We feel these stories from the ground are worth being shared even without slick production or bells and whistles.  Media Roots is a collaborative independent media project and not corporate-funded, so we rely on your contributions.  If you would like to support this type of fiercely independent, unembedded, journalism bringing you real stories of substance toward socioeconomic justice, please contribute whatever you can to help Media Roots bring you the highest quality content possible.

MR

MEDIA ROOTS — As big banks inject record amounts of cash into lobbying this year, largely aimed at access to financial regulators, Wells Fargo, in particular, stands out because of its added rapacious dimension of investments in for-profit prisons and immigrant detention centres.  Certainly, legal wrangling over deportation policies is politicised.  Yet, whereas pre-9/11, undocumented immigrants were summarily deported to their country of origin by border patrol agents along the border, post-9/11 for-profit detention centres are hugely profiting from the detention of scores of immigrants apprehended throughout the country, not just along the border at the point of entry.

Meanwhile, one of Wells Fargo’s biggest investors, the for-profit prison firm GEO Group, Inc., invests millions in lobbying for ever more draconian anti-immigrant legislation, as Eric Dolan (in the article below) and Hyun-Mi Kim (in the interview below) explain.  Kim notes, the racist anti-immigrant SB 1070 Bill in Arizona was shaped in large part by the nation’s top-two for-profit prison firms GEO Group, Inc. and Corrections Corporation of America.  The two firms, says Kim, raked in a whopping $2.9 Billion in profits in 2010. 

As regressive policies, such as NAFTA, create economic refugees forced to migrate from Latin America to the U.S. in search of employment, predatory anti-immigrant policies, shaped by for-profit prison firms, incentivise prolonged detentions, such as at the notorious T. Don Hutto Detention Center in Texas, as Davey D notes (below). 

Kim correctly points out the complete betrayal by Obama to his campaign promises of compassion towards immigrant communities.  Not only have record numbers of immigrants been imprisoned under Obama’s support for the regressive policies of I.C.E. and S-Comm, but Obama has even run defence on behalf of for-profit detention centres by exempting them from the Prison Rape Elimination Act of 2003.  As Frontline has reported, immigrants “held in U.S. immigration detention facilities filed more than 170 allegations of sexual abuse over the last four years, mostly against guards and other staff at the centers, according to government documents obtained by FRONTLINE and the American Civil Liberties Union (ACLU).”  Thus, not only must immigrants endure economic abuse, class-warfare, and arbitrary detention, but torture as well. 

Messina

***

RAW STORY — The advocacy group Small Business United on Thursday called on Wells Fargo to provide a full accounting of investments related to private prisons and immigrant detention centers.”

Wells Fargo is one of the largest investors in Geo Group, Inc. — the second largest private prison company in the world contracted by state and federal government agencies. The group spends millions lobbying for stricter immigration enforcement.

Wells Fargo has claimed the investments in the GEO Group were made by Wells Fargo mutual funds on behalf of clients, not investments made by Wells Fargo and Company.

For-profit prisons are associated with heightened levels of violence toward prisoners and have limited incentives to reduce future crime, according to a report by the American Civil Liberties Union.

“The perverse incentives to maximize profits and cut corners — even at the expense of safety and decent conditions — may contribute to an unacceptable level of danger in private prisons,” the report stated.

After spending a month in solitary confinement in a GEO Group operated Texas prison, 32-year-old Jesus Manuel Galindo allegedly died of an epileptic seizure in December 2008. The cell lacked an operational intercom, which would have allowed Galindo — who needed regular medical attention — to call for help. The neurologist who reviewed Galindo’s autopsy said he was “set up to die.”

Read more about how Wells Fargo takes heat over investments in private prison industry.

© 2004-2011 Raw Story Media, Inc.

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On Wednesday, November 2, 2011, Hyun-Mi Kim, an immigrant supporter of the Occupy Movement, spoke with KPFA/Pacifica Radio’s Davey D (of “Hard Knock Radio” and “The Morning Mix with Davey D”) and Dennis Bernstein (of “Flashpoints”) during KPFA’s live coverage of the historic Occupy Oakland General Strike events.  Their discussion included Obama’s betrayal of campaign promises, such as the continued support of racial profiling and criminalisation of immigrant communities, Wells Fargo and “the relationship between Wall Street corporation-supported detention centres,” and anti-immigrant policies.  –Messina

***

Hard Knock Radio/Flashpoints, KPFA, Pacifica Radio

Live coverage of Occupy Oakland General Strike, 11/2/11, 3:00pm PDT

Davey D (1:33:45):  “We have here Hyun-Mi Kim.  And you’re down here this afternoon.  What organisation are you with?”

Hyun-Mi Kim:  “Well, I work for a non-profit legal services organisation called Asian Pacific Islander Legal Outreach.  I am not here on behalf of my organisation today, but I just wanted to talk about how proud I am to be part of this organisation that provides low-cost/free legal services for the immigrant community.  But the reason I wanted to come on-air today is, really, to speak about why and how immigrant communities and people of colour communities should not only support the Occupy Wall Street Movement, but why they should play a much deserved, active role in organising their own rallies to be part of the bigger movement.  And I’m an immigrant myself.  I’m a Korean immigrant.  I came here when I was 15 years old.  And [three] years ago when President Obama was running for the White House in 2008, I was very excited about the possibility of having the first Black President in this country.  But I was really most excited about his promise to immigrant communities that he would show compassion, that he would not tolerate racial profiling practices that have been going on so long in people of colour communities in this country.  While [Obama] was on the campaign trail he chanted and shouted, ‘¡Si se puede! Yes, we can!’ with our Latino brothers and sisters.  But since he got elected, I really think his actual immigration policies have shown a very tragic contrast, in reality.”

Davey D (1:35:18):  “Let me ask you this.  Do you think his immigration policies are reflective of a 1% policy?”

Hyun-Mi Kim:  “Yes.”

Davey D:  “What would be the benefit for that class of people?”

Hyun-Mi Kim:  “Okay, so I would think that conversation would take me to the relationship between the Wall Street corporation-supported detention centres and how the detention centres are breaking up hundreds of thousands of immigrant families in this country.  So, what is happening right now is there are three major corporations in this country.  They are investing and building more and more detention centres.  And I want to name the names of those corporations today.  Those three corporations are Corrections Corporation of America, GEO Group, and I can’t remember the last corporation’s name [Management and Training Corporation].  But those two groups are the nation’s largest owners and operators of government-contracted correctional facilities.  And they are actually traded on the New York Stock Exchange.  And just last year in 2010, Corrections Corporation of America and GEO Group made over $2.9 Billion dollars.  $2.9 Billion dollars in profit and they actually even played a very active role in drafting the immigration law in Arizona SB-1070, which is an extremely racist and discriminatory law.”

Davey D:  “Just a couple of things, Dennis.  I know we’ve done a lot [on Hard Knock Radio] and I know you guys have covered a lot on ‘Flashpoints’ on the detention centres.  And, you know, I don’t know if a lot of people realise what this is because they think it’s, entire families go there.  Just being in Texas, the Don Hutto Detention Center was just notorious for just bringing babies, mothers, pregnant folks, keeping them in there for months at a time locked up.  And so—”

Dennis Bernstein:  “And mixing men and women, exposing teenagers to hardcore folks, a brutal situation and—”

Davey D:  “And just breaking up families in general.”

Dennis Bernstein:  “Breaking up families.  And at the core here is that these prisons for profit, I began investigating C.C.A. a long time ago, just when they got started with the immigration operation.  And one of the things that they do, it’s a total contradiction to the Bill of Rights and the First Amendment because their concept is no rights, no due process, the longer we can keep them in jail, the more money we make.  So, the idea of ‘corrections,’ of people getting better, getting healed, recovering, they have a bad time, they have a bad situation, they get arrested.  They work, their modus operandi, ‘how long can we keep them in jail?’”

Hyun-Mi Kim:  “That’s right.  And, you know, the Corrections Corporation of America, they currently own and operate more than 60 facilities, including 44 company-owned facilities.  And I want to speak a little bit about their relationship with the U.S. Military.  And do you know what they are doing now?  They are actually hiring now, the national military magazine, G.I. Jobs to recruit the military veterans to come and work at these detention centres.  There was an article in G.I. Jobs edition of September and the title of the article was called ‘Careers in Corrections.’  The publication described:  ‘military experience as the perfect match for this recession-resistant industry and our culture has much in common with the U.S. Military,’ said Wendy Gardner, C.C.A. Senior Director, Staffing and Recruiting.  And C.C.A. has twice, twice, been ranked in G.I. Jobs’ annual listing of the top fifty military-friendly employers.  So, we have to connect all those dots about Wells Fargo Bank, how they’re investing their money, using the mutual funds that their clients, you know, when their clients put in their money to open their accounts.  And they are actually now building a relationship with the U.S. Military to recruit the Iraq and the Afghanistan War Veterans [that] come back here.  And they work in the detention centres, funded by Wells Fargo, breaking up thousands and thousands of immigrant families.”

Davey D:  “Right.  And what they won’t say is they’ll couch it as:  ‘We are creating new jobs.’  But they won’t exactly tell people what those jobs are.  And so, yeah, that’s a very sinister way of doing things.  As we get ready to let you go, Hyun-Mi, what would be one or two things that you want people listening to do?”

Hyun-Mi Kim (1:39:41):  “You know, I want them to come out this Saturday, the immigrant rights organisations are putting on a march this Saturday [11/5/11] against Wells Fargo.  And they are gonna be educating the public about the relationship Wells Fargo has been building with the corporate-owned detention centres.  But one quick thing I want to talk about, Davey D, before I go is, I don’t know if you’ve seen the PBS Frontline documentary, “Lost in Detention.”  It’s a brand new documentary exposing Obama’s immigration policy.  And the most disturbing aspect of the documentary to me was how [the] Obama Administration has exempted the immigration detention centres from the Prison Rape Elimination Act.  This Act was established back in 2003 because there had been so much sexual abuse allegations, sexual abuse taking place.  The Congress passed this Act to make sure that when there’s an allegation they will do a thorough investigation of each allegation.  But Obama, since he came to the White House, he has eliminated this Act from the immigration detention centres.  So, in this documentary, the Frontline investigator talks about how there have been so many women who have been sexually harassed.  They have been raped while they’ve been shackled.  And there’s nothing getting done about it because of the exemption of this law.  So, this is extremely, extremely outrageous and unconscionable.” 

Davey D (1:41:02):  “And as we mentioned this goes all the way up to the doorsteps in Wall Street.”

Hyun-Mi Kim:  “That’s right.”

Davey D:  “They have people who have their 401Ks; they have people that are betting on it on the stock market, all the way down and around.  So, this is something that we need to keep on the front of our minds.  Hyun-Mi, we appreciate you comin’ on.”

Hyun-Mi Kim:  “Sure, thank you for having me.  And I just wanna mention that I’m a proud Member of [the] KPFA Local Station Board.  And I just so appreciate Dennis and Davey.  You guys have been doing such an awesome job covering this [Occupy Oakland General Strike] rally.  Thank you very much.”

Davey D:  “Thank you.  Thank you so much.”

Dennis Bernstein:  “Thank you.”

Transcript by Felipe Messina

Photo by flickr user Casey Serin

MEDIA ROOTS — On Saturday, November 19, 2011, Occupy Oakland (OO) held another mass day of action after the nationwide crackdowns against the Occupy Movement days before.  In response to the coordinated Federalised repression, the OO General Assembly voted unanimously for a coordinated West Coast Port Shutdown, for which ILWU leaders have announced support, even urging a simultaneous East Coast port shutdown.  This would be the first nationwide port shutdown in U.S. history. 

Thousands vigorously took to the streets and jubilantly marched through downtown Oakland and around Lake Merritt before tearing down a fence around an empty lot at 19th & Telegraph to establish another OO encampment.  The uptown location draws attention to the ongoing gentrification in Oakland, as public schools are being closed whilst charter schools are opening.

The demonstrators held a huge dance party in the streets despite the pouring rain, as over thirty tents were set up by occupiers.  Although not enough people held the space overnight to prevent a third raid by Oakland PD the next morning, 11/20, the Occupy Movement continues undeterred.  Even as the long-standing OO encampment a few blocks away at Snow Park was forced out by police, 11/21, OO persisted with at least eight more tents sprouting later that evening “in a West Oakland lot at 18th and Linden streets.”

Messina

***

Abby Martin of Media Roots covers Occupy Oakland’s Day of Action Saturday, November 19, 2011.

***

On Friday, November 18, 2011, Jack Hayman, of ILWU Local 10, spoke with Steve Zeltzer of Work Week Radio on Pacifica Radio’s “The Morning Mix with Project Censored.”  They discussed the burgeoning solidarity between labour, particularly ILWU, and the Occupy Movement in the wake of the historic Occupy Oakland General Strike earlier this month, the new call for a West Coast shut down of ports, as well as urging East and Gulf Coast ports to also shut down next month.  -Messina

***

PROJECT CENSORED

Dr. Peter Phillips (27:56):  “The Occupy Movement certainly is a nuisance to the 1% and increasingly more so, as they worry and coordinate nationally the repression of that.  And we’re just coming back stronger.”

Steve Zeltzer:  “That’s right.  That is a fear that they have.  The other thing is this week the President of ILWU Local 21, Dan Coffman, was here in San Francisco and he spoke last night to ILWU Local 10.  They are under attack by the same repressive forces in Longview, Washington where they brought in, union people are scabbing on their jobs, IUOE 701 [International Union of Operating Engineers Local 701].  But there was a meeting last night.  Jack Hayman is a retired Member of ILWU Local 10 and he’s joining us this morning to talk about the meeting [with] Dan Coffman and a formation of a new committee, the Committee to Defend ILWU.  Welcome, Jack, to the show.”

Jack Hayman:  “Hello.”

Steve Zeltzer:  “I wanted to ask you about a report about what’s happening, of the visit of Dan Coffman.  What’s going on with this Committee to Defend the ILWU.”

Jack Hayman (29:03):  “Well, Dan spoke at the Longshore Clerks Hall first, Local 34, to their union meeting.  And then he came over to address the Local 10 Membership.  And it was quite an event because we’ve all been waiting with bated breath to get a report on what’s happening up in Longview.  And he gave a tremendous talk to our Membership.  We hadn’t quite heard a report like this in a while.  It was very inspiring.  And the key point was that this multinational bank consortium, EGT, that they’re fighting up there is gonna be bringing in a big ship within the next month, he said.  And a call is going to go out to all ports on the West Coast to shut down because what this is about is about union-busting.  And they’re taking on probably the most militant union in the country.  It’s not just a small local up in Longview of 200 people.  It’s a challenge to all of the ILWU.  And, in fact, what Dan said, a call will also go out to the East Coast and Gulf Coast ports to ask longshoremen there to shut down as well.  So, if this happens, it’ll be the first ever nationwide strike of all the ports.  And he got a tremendous standing ovation for that.  The Members were really, really inspired, fired up.”

Steve Zeltzer:  “The ILWU has supported the [Occupy] Movement and maybe you can talk about the march that’s gonna happen this coming Saturday [11/19/11], tomorrow at 2pm.  And Dan will probably be speaking at that march.”

Jack Hayman:  “That’s right.  Dan spoke about the march tomorrow.  But he first mentioned the November 2^nd Port Shutdown here in Oakland that was led by Occupy Oakland.  And he said they watched it on television.  And it sent thrills down the spines of their membership.  There was a collective shot in the arm for the entire Membership up there to see thousands of people pouring into the Port of Oakland in solidarity with the Longview longshore workers and shutting the Port down.  I mean, he’s never seen anything like that, he said.  And you could see it in his face, his expression.  So, yeah, they have their union banner, he and Byron Jacobs, the Secretary Treasurer of Local 21 in Longview, will be marching.  The Occupy Oakland march begins at 2pm, 14^th & Broadway.  They’ll be up front on the demonstration march.  But he’s also gonna be speaking tonight, if the listeners out there are interested.  There’s an Occupy Oakland General Assembly at 6pm and then we’ll be addressing that Assembly.  So, I’d encourage listeners to come out to both of those, the General Assembly tonight at 6pm at Oscar Grant Plaza, formerly Frank Ogawa Plaza, and tomorrow, Saturday, at 2pm, 14^th & Broadway.” 

Steve Zeltzer:  “Now, also there’s a committee that was recently formed at your union hall, Local 10.  It’s gonna be meeting this coming Tuesday at 7 o’clock, the Committee to Defend the ILWU.  You can reach it at [email protected].  What exactly is this committee?”

Jack Hayman (32:39):  “It’s a committee to build rank and file support within the longshore unions and the labour movement in general.  One of the activities it will be involved in is organising a caravan from the [S.F.] Bay Area up to Longview [in Washington state].  And that will be led by the ILWU Members.  We’ll have motorcycles and cars and buses.  And when we get the call from Longview, we’ll be heading up there in a caravan.  And we just kind of bounced it around a little bit in a discussion last night with Dan and he seems to think that’s a great idea.  Maybe they’ll have a caravan coming in from Portland and Seattle.  And the idea is that if we can show that kind of support when this ship comes in, there’s a good possibility that Occupy Portland and Occupy Seattle will do the exact same thing that we did down here on November 2^nd and shut the ports down.”

Steve Zeltzer (33:46):  “Well, that sounds like a powerful response to the attack on your Members in Longview, Washington and also the attack on all workers.  I was gonna discuss on the other segment there are many workers who don’t have a contract, Oakland Education Association, United Airline Mechanics, American Airlines.  The Railroad Workers are working without a contract nationally.  They wanna impose a contract.  All these workers have the power.  They’re not even without a contract.  But it would mean fighting and breaking the law, though, to actually go out in some of these cases.”  

Jack Hayman (34:17):  “Well, yeah, what we’re looking at here is a first ever shutdown of all the ports in this country.  And that’s gonna have an inspiring effect on other unions and people that are not unionised.  That’s exactly what happened in the ‘30s when with these convulsive militant strikes by workers occupying plants, mass-picketing.  And that’s what made the Labour Movement grow.  People saw they could challenge the power of capital.  And they organised millions and millions into the trade union movement.”

Steve Zeltzer (34:59):  “I wanna thank you, Jack for joining us.  We have to go on, but hopefully people can, if they are interested, come to the rally tonight and tomorrow at 2pm.  And also on Tuesday night at 7 o’clock, they’ll be a meeting of the Committee [to Defend ILWU] at 400 North Point, ILWU.  So, thanks for joining us this morning.”

Jack Hayman (35:18):  “Alright, thank you, Steve.  And thank you to everybody out there.”

Transcript by Felipe Messina

MEDIA ROOTS — With the Occupy Movement rightly putting Wall Street and the ruling-class on blast, the Federal Reserve and the mechanics of our national money supply in relation to our national economic health and body politic, equally deserve scrutiny.  Despite the complexities of finance, the money supply, and Congressional budgets, we must consider such questions of political economy, and seek to understand them.  In a recent article, Ellen Brown, author of Web of Debt: The Shocking Truth About Our Money System and How We Can Break Free, discusses the autocratic Congressional Super Committee.

The establishment insists budget cuts are inevitable, so its political servants don’t consider a necessary progressive tax code.  Ellen Brown disagrees and offers alternatives.  Brown points to the political theatre of the faux debt-ceiling crisis of 2011, as economist Dr. Richard Wolff, et al., have done.  This faux crisis led to the current incarnation of ruling-class assault against the working-class 99%.  Brown notes that the 1% have pushed for austerity before. So, if the Occupy Movement is to respond effectively to the sophistries of the 1%, they must first demystify the game of neoclassical economics.

Messina

***

TRUTHOUT — It is no great surprise that with only days to go, the Congressional “supercommittee,” given the Herculean task of carving an additional $1.2 trillion out of the federal budget, has failed to reach agreement. Why should six Republicans and six Democrats with diametrically opposed views agree in a few weeks, when Congress couldn’t shake hands on it after months of wrangling, despite the guillotine blade of a federal default hanging over their heads?  

Whether the supercommittee reaches agreement or not, however, the deficit hawks win. If they agree, either $1.2 trillion gets cut from the budget or taxes go up by that amount; and the committee co-chair has categorically stated taxes are not going up, so that means the budget will be cut. If agreement is not reached, $1.2 trillion in cuts automatically kick in, split evenly between domestic and military spending. Either way, the economy will wind up with $1.2 trillion less in purchasing power. The result will be to reduce demand, kill jobs and put more people on the streets.

For the deficit hawks, however, it all seems to be going according to plan. The supercommittee is characterized as an emergency measure that was rushed through to avoid an arbitrarily imposed August deadline for freezing the debt ceiling, but it has actually been in the works for years. In 2009, it was called the “Bipartisan Task Force for Responsible Fiscal Action.” That plan died when its Senate sponsors, Judd Gregg and Kent Conrad, failed to secure 60 votes for passage in the Senate. The Gregg-Conrad bill was criticized as railroading through legislation that would unconstitutionally slash domestic services without Congressional debate, but its task force would actually have been LESS autocratic than the supercommittee, which has sweeping powers and needs only a simple majority among its 12 members to prevail.

What has been forced out of the debate is whether cutting the budget is a good idea at all. The Peter Peterson Foundation, which has been pushing “austerity” for years, has finally gotten its way. Hedge fund magnate Peter G. Peterson was chairman of the Council on Foreign Relations until 2007 and head of the New York Federal Reserve between 2000 and 2004. He made his fortune with the controversial Blackstone Group, which he co-founded and chaired for many years. The Peter Peterson Foundation was established in 2008 with a $1 billion endowment to raise public awareness about US fiscal-sustainability issues related to federal deficits, entitlement programs and tax policies. The money was used to spearhead a massive campaign to reduce the runaway federal debt. Hysteria over the debt then prompted Tea Party newbies in Congress to hold a gun to Congress’ head by arbitrarily capping the debt. 

In the campaign to educate us to the debt’s perils, we were repeatedly warned that when foreign lenders decided to pull the plug, the US would have to declare bankruptcy, that we were mortgaging our grandchildren’s futures and selling them into debt slavery; and that all this was the fault of the citizenry for borrowing and spending too much. The American people, who are already suffering massive unemployment and cutbacks in government services, would have to sacrifice more and pay the piper more, just as in those debt-strapped countries forced into austerity measures by the International Monetary Fund.

The fear mongering, however, is a red herring. A sovereign nation can always find the money to pay debts owed in its own currency. The Federal Reserve can buy the debt itself – just as it has been doing. That alternative would effectively eliminate the problem of interest, since the Fed returns its profits to the government after deducting its costs. 

Alternatively, Congress could reclaim the power to issue money from the banks and fund its budget directly. The US could pay its bills using debt-free US Notes or Greenbacks, just as President Lincoln did to avoid a crippling debt during the Civil War. Congress could do this without changing any laws. Congress is empowered to “coin money,” and the Constitution sets no limit on the face amount of the coins. It could issue a few one-trillion dollar coins, deposit them in an account and start writing checks.

Neither option need inflate prices. As long as the money is used to purchase goods and services, the result will simply be to increase demand, increasing production. Prices will not increase until the economy reaches full employment and, at that point, any excess in the money supply can be taxed back to the government, keeping prices stable.

The key to all this is that our debt is owed in our own currency – US dollars. Our government has the power to fix its solvency problems itself, by simply issuing the money it needs to pay off or refinance its debt. The US federal debt has been carried on the books since 1835. It has NEVER been paid off during that time, but just continues to grow. This has not hurt the economy, which for most of that period has been among the most vibrant in the world. The federal debt IS the money supply. All of our money except coins is created as bank debt. Historically, when the deficit has been reduced, the money supply has been reduced along with it, throwing the economy into recession.

The real problem with a growing federal debt is the interest on it, which WILL become an insurmountable burden if allowed to grow exponentially. Interest paid on the federal debt in 2010 was $414 billion, or about one-half of personal income tax receipts. That’s about as high as we dare let it go. But this problem can be eliminated either by funding the debt through the nation’s own central bank, effectively interest free; or by the Treasury issuing the money outright, interest free.

The burgeoning debt has been blamed on reckless government and consumer spending; but the debt crisis was created, not by a social safety net bought and paid for by the taxpayers, but by a banking system taken over by Wall Street gamblers. The banking debacle of 2008 caused credit to collapse, businesses to go bankrupt and unemployment to soar, drastically reducing the federal tax base. If anyone should be held to account, it is Wall Street; but the bankers were bailed rather than jailed and the taxpayers got billed for the crime.

We have been deluded into thinking that “fiscal responsibility” is something for our benefit, something we actually need in order to save the country from bankruptcy. In fact, it has simply been an excuse to impose radical austerity measures on the people, measures that benefit the 1 percent while locking the 99 percent in a dungeon of debt peonage.

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