Kucinich introduced "End the Fed" legislation - HR6550 "NEED Act"

[devil21]

Legislation text here:
http://kucinich.house.gov/UploadedFiles/NEED_ACT.pdf 46pages

http://moneyreform.wordpress.com/


Begins Discussion to Make Monetary Policy Work to Rebuild Economy

Read the Act here!

Washington D.C. (December 17, 2010) –As the nation struggles with long-term unemployment at rates not seen in generations, contracted credit and the hoarding of public dollars by the banks, Congressman Kucinich (D-OH) today introduced a dramatic new proposal to establish fiscal integrity, reassert Congressional sovereignty and regain control of monetary policy from private banks. The National Emergency Employment Defense Act of 2010 would allow the federal government to directly fund badly-needed infrastructure repairs and fund education systems nationwide by spending money into circulation without increasing the national debt. The bill would end the current practice of fractional reserve lending, whereby the economy depends upon private financial institutions to lend money into circulation.

Congressman Kucinich stated, “The staggeringly bad employment and economic numbers represent a massive problem which cries out for bold action. Rather than crossing our fingers and hoping that banks will finally lend some of the billions of public dollars they haven’t thus far seen fit to lend, we can take action. My bill would replace the Federal Reserve System’s dependence on private banks to create credit. In its place, a Monetary Authority under the Treasury Department would directly inject liquidity into the economy by purchasing much needed public infrastructure repair. Today, we have idle capital, millions of able-bodied but unemployed workers, unused equipment, and record low interest rates. These conditions are the best possible time to make a long-term investment in our nation’s infrastructure. My bill would do exactly that.”


Take a look at the text of the legislation and post your thoughts here.

[emazur]

Doesn't end the Fed, just nationalizes it, giving Pelosi et al direct control of the printing press. This plan if from the American Monetary Institute - while some of the ideas put forth by Zarlenga, Michael Hudson, and Kucinich are interesting and bring healthy debate to the table, I have caught all three of them point-blank calling for socialism and I could dig up the proof if need be. Their plan will put the Federal Reserve in direct alignment with the 5th plank of the Communist Manifesto, whereas now it has this bullshit "independence" that barely gives it half an ounce of credibility.

They think you can get something for nothing - printing up billions or trillions for infrastructure repair is fine as long as the money is "spent into the circulation" which will avoid inflation. And of course it doesn't occur to them that printing the money "necessary" for the infrastructure repairs will not turn political in the future the next time someone else in Congress conjures up a "necessary" government project or program.

[devil21]

Doesn't end the Fed, just nationalizes it, giving Pelosi et al direct control of the printing press.

Isn't that what the Constitution calls for? Congressional control of money?

[ForeverAlone]

Isn't that what the Constitution calls for? Congressional control of money?

Congress can COIN money. I don't think that means giving them control of the value and regulation of COIN money. Notice that they used coin meaning metals. If they approved of paper money they would have said "bills of credit".

[malkusm]

Congress can COIN money. I don't think that means giving them control of the value and regulation of COIN money. Notice that they used coin meaning metals. If they approved of paper money they would have said "bills of credit".

Wrong.


Congress shall have power...To coin Money, [and] regulate the Value thereof

I'd be interested to hear Ron Paul's take on this bill. More Constitutional? Yep. Potentially more dangerous to the value of our money than the Fed is? Yep.

[Agorism]

If it's a bill by Kucinich, I'll just assume it's really bad.

[ForeverAlone]

Wrong.



I'd be interested to hear Ron Paul's take on this bill. More Constitutional? Yep. Potentially more dangerous to the value of our money than the Fed is? Yep.

Hmmm. I knew that. I had a brainfart.

Anyways, I still disagree that Congress should regulate the value of money.

[ForeverAlone]

If it's a bill by Kucinich, I'll just assume it's really bad.

Pretty much. People give him way to much credit.

[jtstellar]

Wrong.



I'd be interested to hear Ron Paul's take on this bill. More Constitutional? Yep. Potentially more dangerous to the value of our money than the Fed is? Yep.

hm it just means putting a 5 instead of a 10 on it. it doesn't mean anything fancy like keeping a 5 on it but secretly diluting the density to that of a 10

[shenlu54]

man,Kucinich has no brain, dose he want to repeat greenback tragedy?

[fisharmor]

"In its place, a Monetary Authority under the Treasury Department would directly inject liquidity into the economy by purchasing much needed public infrastructure repair. Today, we have idle capital, millions of able-bodied but unemployed workers, unused equipment, and record low interest rates. These conditions are the best possible time to make a long-term investment in our nation’s infrastructure. My bill would do exactly that.”

No, no, no, no, NO NO NO.
Just. no.

The point of his bill is to further institute socialism. This is the way he plans to finance this depression's version of the CCC.

Moreover, the infrastructure "improvements" he's talking about are government-approved "improvements". I won't use "improvements" outside of quotes because he's basically talking about doing what China does - they're building 20 totally empty cities every year (http://www.thedailybell.com/1604/China-That-Urban-Empty-Feeling.html). Cities that are supposed to house 300,000 people - some of them actually have 30k living in them.
This is a Kucinich wet dream.

This mentality needs to be fought tooth and nail whenever we run into it.
The 19th century solution was valid!
Nothing has changed the fact that rail travel is the most efficient way to move things.
It also discourages sprawl, encourages foot traffic, fosters actual relationships with fellow humans, and saves the environment - both in terms of fuel not used and in terms of NOT CUTTING IT DOWN FOR STRIP MALLS.
This is the private sector solution! It would be used again if we can just get away from the notion that government needs to plan and pay for everything!

Under Kucinich's plan, it simply accelerates the speed at which wooded area is mowed down for new developments, since brilliant new roads will be built going into them.
Existing infrastructure will be left to rot, just like in Detroit, New York, Philadelphia, Pittsburgh, Boston, and every other place that used to be someplace to be.
It's a pattern, it's stupefyingly obvious, and government funding of infrastructure bears 100% of the blame for it.

[MRoCkEd]

Wrong.



I'd be interested to hear Ron Paul's take on this bill. More Constitutional? Yep. Potentially more dangerous to the value of our money than the Fed is? Yep.
Remember, in those days "regulate" meant "to keep regular." Just like "regulate interstate commerce" was supposed to mean they could simply make sure that there is interstate commerce. At least that's what Judge Nap told me. :p

[Stary Hickory]

If it's a bill by Kucinich, I'll just assume it's really bad.

The end the FED bit is nice but the replace it part is MUCH worse than what we got now. He believes in a fraudulent fractional reserve system just as long as it is controlled directly by the government.

He would make things much worse.

[malkusm]

Remember, in those days "regulate" meant "to keep regular." Just like "regulate interstate commerce" was supposed to mean they could simply make sure that there is interstate commerce. At least that's what Judge Nap told me. :p

Yes, but one could argue that the Fed currently "keeps money regular." It's just that what's "regular" for them is inflation.

[sratiug]

Why isn't this called the end taxation bill? If they can print money from nothing what do they need taxes for?

[muzzled dogg]

Congress shall have power...To coin Money, [and] regulate the Value thereof

think this means they can regulate the value of gold and silver relative to each other and relative to foreign currencies...

[CUnknown]

Doesn't end the Fed, just nationalizes it, giving Pelosi et al direct control of the printing press. This plan if from the American Monetary Institute - while some of the ideas put forth by Zarlenga, Michael Hudson, and Kucinich are interesting and bring healthy debate to the table, I have caught all three of them point-blank calling for socialism and I could dig up the proof if need be. Their plan will put the Federal Reserve in direct alignment with the 5th plank of the Communist Manifesto, whereas now it has this bullshit "independence" that barely gives it half an ounce of credibility.

Still, if the powers of the Fed were assumed by Congress, that is a huge step in the right direction. Imagine if everything the Fed did was completely out in the open? If Congress controlled it, it would have to be. Ron Paul would have access to all of their records in this case. You're saying this isn't a positive step?



They think you can get something for nothing - printing up billions or trillions for infrastructure repair is fine as long as the money is "spent into the circulation" which will avoid inflation. And of course it doesn't occur to them that printing the money "necessary" for the infrastructure repairs will not turn political in the future the next time someone else in Congress conjures up a "necessary" government project or program.

It's not something for nothing, exactly. The money that was printed would be backed by the production and trade of the nation, the GDP basically. If they printed too much, yes, inflation would occur. Then we'd have to decide whether or not we'd prefer taxes or inflation. But the tax money wouldn't be spent, it would be destroyed just to get it out of circulation. I don't understand how anyone can prefer the system we have now to this one. A free-market system might be better, sure, but this one sounds pretty good to me, too, especially compared to the one we have now, which is absolutely horrific.

[Travlyr]

Ron Paul talks about central planning as being ineffective and inefficient. No one can know the right amount of money, interest rate, or regulations. Not the FED, not Congress, not the IMF... nobody should be in charge of printing money. The free market is the only option if you want a free society. Ron is consistent on this position. Read Gold, Peace and Prosperity by Ron Paul. No compromise.

[jtstellar]

no, regulating money doesn't mean bills of credit.. it is coins.. it's specific
regulating coins just means minting the coins and deciding how much precious metal is in a coin.. it doesn't mean you can cheat the people by secretly diluting the coin while keeping the same face value on it.. must the constitution write out every single cheat one may abuse under the table and specifically prohibit it? no, c'mon.. some common sense is required

[yatez112]

Ending fractional-reserve banking and putting sovereign credit in the hands of Congress is a step in the right direction. However, it still keeps legal tender laws and does not create a place for competing currencies.

I would definitely hope that both the Pauls will talk about the bill in the coming weeks. Debate is healthy and NEEDED!

Some interesting conversation over at TickerForum.

http://market-ticker.org/akcs-www?post=175557

[UK4Paul]

"It would absolutely bar the use of depositor reserves for any lending purpose whatsoever - that is, if you deposited funds into a transaction account (any sort of "demand" account) the bank would have to hold the funds as an actual custodian with fiduciary requirements for performance. Other than by direct and punishable fraud, depositor losses would instantly become impossible." http://market-ticker.org/akcs-www?post=175557

Does that mean a reduction in fractional reserve lending? Isn't that a STEP in the right direction?

[yatez112]

"It would absolutely bar the use of depositor reserves for any lending purpose whatsoever - that is, if you deposited funds into a transaction account (any sort of "demand" account) the bank would have to hold the funds as an actual custodian with fiduciary requirements for performance. Other than by direct and punishable fraud, depositor losses would instantly become impossible." http://market-ticker.org/akcs-www?post=175557

Does that mean a reduction in fractional reserve lending? Isn't that a STEP in the right direction?

Correct. The bill explicitly says this...

2) To abolish the creation of money, or purchasing power, by private persons through lending against deposits, by means of fractional reserve banking, or by any other means.

Thus, no private bank can create money out of thin air. It would be placed by the sovereign duty of Congress essentially.

[devil21]

bump

Enjoying the thoughts so far. I agree that it is a step in the right direction. Now if RP and DK could come together and amend the bill to allow competing currencies then I'd be all for it. Does anybody have a direct line to get RP's attention toward this bill? With his upcoming Monetary Policy chair duties I imagine this bill would be in his committee, would it not?

[devil21]

Ending fractional-reserve banking and putting sovereign credit in the hands of Congress is a step in the right direction. However, it still keeps legal tender laws and does not create a place for competing currencies.

I would definitely hope that both the Pauls will talk about the bill in the coming weeks. Debate is healthy and NEEDED!

Some interesting conversation over at TickerForum.

http://market-ticker.org/akcs-www?post=175557

God I hate that man.



Let's see the proof.

The Paulites (Rand and Ron) along with the Tea Party have about 24 hours to show up and support this before I start doing this:


I will NOT accept excuses and I will be absolutely ****ING RELENTLESS hammering the **** out of them if they don't back this - right now, today, immediately.

Expect a WEEKLY callout Ticker on this and I will NOT be polite.

Ending the financial **** of this nation has just been reduced to A BILL and put in front of Congress.

You either support it or you do not.

Period.



His bill would end the process of money issuance by The US Federal Government as a debt instrument. It would thus restore actual "lawful money" as Ron Paul claims to want, but in a form he has never, ever elucidated.

He never misses a chance to bag on us because we're smarter than him.

[emazur]

Isn't that what the Constitution calls for? Congressional control of money?

In one of the drafts of the Constitution the power to print paper money was included but was shot down by the many Founding Fathers who knew firsthand the dangers of fiat currency. I would suggest reading the article "A Crisis of Dollars and Sense" by Dr. Edwin Vieira and here is a key excerpt:
http://www.thenewamerican.com/index.php/economy/commentary-mainmenu-43/2360-inflation-what-inflation
http://findarticles.com/p/articles/mi_m0JZS/is_1_25/ai_n31212610/

In the same clause, the Constitution also mandates that "No State shall ... emit Bills of Credit" (the Founders' term for paper currency) or "make any Thing but gold and silver Coin a Tender in Payment of Debts." Often overlooked, though, is that the original draft of Article I, Section 8, Clause 2 of the Constitution empowered Congress "To borrow Money, and emit bills on the credit of the United States." But, by a vote of nine states to two, the Federal Convention deleted the power to "emit bills"--so that Clause 2 now reads simply "To borrow Money on the credit of the United States" Inasmuch as Congress has no powers other than those the Constitution delegates, this deletion absolutely deprives Congress of any power to "emit bills." And if Congress cannot "emit bills" at all, it cannot emit "bills" with the special character of "legal tender," either. Thus, the emission of every form of paper currency by the General Government is as utterly unconstitutional as the emission of paper currency by the states.


Still, if the powers of the Fed were assumed by Congress, that is a huge step in the right direction. Imagine if everything the Fed did was completely out in the open? If Congress controlled it, it would have to be. Ron Paul would have access to all of their records in this case. You're saying this isn't a positive step?

The Bank of England was nationalized and it did not make any improvements.


It's not something for nothing, exactly. The money that was printed would be backed by the production and trade of the nation, the GDP basically. If they printed too much, yes, inflation would occur. Then we'd have to decide whether or not we'd prefer taxes or inflation. But the tax money wouldn't be spent, it would be destroyed just to get it out of circulation. I don't understand how anyone can prefer the system we have now to this one. A free-market system might be better, sure, but this one sounds pretty good to me, too, especially compared to the one we have now, which is absolutely horrific.

You're putting waaaay too much faith in the powers that be to determine how much "production" (digging holes and filling them up again?) should take place, how much money should be printed to cover this supposed production, and that the things Congress decides to "produce" are things that you wouldn't fight kicking and screaming (I heard an interview and Zarlenga was questioned about the Soviet Union's central bank~paper money and he really didn't have anything bad to say about it). You also put too much faith in the ability of Congress to destroy this money that it printed. Congress is quite happy to have its debt rolled over by the Federal Reserve, which fraudulently increases the money supply

http://www.youtube.com/watch?v=gWgzWsHlAiE

[Lucille]

God I hate that man.

He never misses a chance to bag on us because we're smarter than him.

Mish blogged about Kucinich's proposal, and Denninger promptly attacked him.

Mish: Fatally Flawed "End the Fed" Proposal from Rep. Kucinich would Allow Congress to Print Money into Existence for Essentially Anything (http://globaleconomicanalysis.blogspot.com/2010/12/fatally-flawed-end-fed-proposal-from.html)

Denninger: Mush: One Goldbug Cowering In Fear (http://market-ticker.org/akcs-www?post=175610)

Always with the name-calling.

[miltonc4l]

I realize that the liberty movement is full of commodity-money advocates, so bear with me.

If you establish laws requiring commodity-backed currency WITHOUT abolishing the scourge of fractional reserve banking, you've only scratched the surface of the problem. Control of the money SUPPLY is far more important than what backs the currency. Suppose we abolish the Fed and have commodity backed money. If fractional reserve banking remains legal, the international banking cartel can still create money out of thin air, manipulate the overall money supply and can arbitrarily perpetuate the boom and bust cycles we're accustomed to.

It's still scary to think that ANYONE has arbitrary control of the money supply, but at least with this sytem, the mandate is that control leads to neither price inflation or deflation. I also see no provisions that allow for "secrecy" in the monetary policy decision making. If price inflation does occur, then the citizens have a CLEAR line of sight showing the cause/effect relationship between price tags and government policy making. The current system is cloaked in so much abstraction and secrecy that the vast majority of people can't make the connection between monetary policy and commodity prices.

The NEED Act MUST be amended with at least one critical update. It must abolish the sections of Title 18 of the U.S. code which ban competing currencies (e.g. the Liberty Dollar, gold, silver, etc.) Hopefully we can count on Ron Paul to introduce such amendments. With this addition to the bill in place, it's a real winner.

If we can End the Fed and get rid of the fractional reserve banking system, it's a gigantic leap forward. If people are also made free to circulate competing gold and silver currencies, there's no reason to oppose it.

It's natural (and well justified) for any liberty activist to reflexively oppose anything coming out of Washington D.C. and oppose every marginal increase to government power. In this case however, the law is attempting to restore an important government power that has been seized by a private banking cartel for their own enrichment. There's nothing wrong with banks being successful with a business model that involves lending and transaction processing, but they must be stripped of the power of money creation.

[Bern]

...
There you have it folks. Dennis wants the power of the Federal Reserve in Congress. His ambitions are actually quite disturbing because he is also pursuing the flawed concept of full employment, but now he has added even grander ambitions - the one thing that the horrible Federal Reserve prevented Congress from doing - creating money for the purpose of spending it. Granted with QE2 in full swing it becomes difficult to make that argument, because buying US debt so that the US Government can continue functioning is essentially the same thing, but at least our total debt grows and Americans are still aware of the cost. With Kucinich's bill this aspect disappears as money will appear whenever Congress wishes it to be so and the value imbued in this money will come through Congress alone - a Chartalist dream come true.
...

http://www.rightcondition.com/2010/12/dennis-kucinich-finally-shows-world-why.html

As for Denninger, he has a huge disconnect on the issue of gold as sound money. As David Morgan put it:
...
The crisis can be solved by putting the world back on sound financial basis such as a gold standard. There are also options that would entail a limited money supply growth but this requires complete honesty in the system and because mankind is at the heart of all financial systems the basis for this is to be determined.
...

http://www.chaostheorien.de/artikel/-/asset_publisher/haR1/content/silver-will-out-perform-almost-any-other-commodity-asset?redirect=%2F

[Carole]

One of the reasons Congress liked giving up control of monetary policy was so that their members could spend more freely. By not having to answer to taxpayers anymore, they could spend all they wanted without having to be accountable directly to the people since they no longer had to "tax" the people for what they spent. They would simply borrow and print money when they wanted to spend more, with the Fed as their agent. This shifted all the blame from Congress onto the Fed and made Congress almost completely unaccountable to the people. No longer did they have to "worry" about their spending habits getting in the way of being re-elected. I think maybe this is also in many ways responsible for so many bubbles. Congress and business liked growing the economy at too fast a rate and growing it too much. Fractional reserve banking certainly must have made this easier just as these days derivatives make it ridiculously easier. And look what that got us.

My question would be this. How to make Congress once again accountable for its behavior with the people's money? Is it feasible to go back to the original way--the Constitutional way? I definitely see the Fed as a dismal failure in preserving the rights and freedoms of average Americans. I see the Fed as evil.

Just some thoughts I have from time to time. My knowlege is very limited. I like to read about monetary policy and economics, but am a novice. I like what Ron Paul says about monetary policy.

[Churchill2004]

I suggest y'all actually start reading the bill before agreeing R&RP should support it. Some of the "it'll end the fed! full-reserve banking!" descriptions of it are very misleading- it includes a lot more than just monetary/banking policy reforms. The summary of its purpose is as follows:

To create a full employment economy as a matter of national economic defense; to provide for public investment in capital infrastructure; to provide for reducing the cost of public investment; to retire public debt; to stabilize the Social Security retirement system; to restore the authority of Congress to create and regulate money, modernize and provide stability for the monetary system of the United States, retire public debt and reduce the cost of public investment, and for other public purposes.


I started reading the findings and it's a bunch of typical Kucinich complaining about how the government hasn't provided full employment, and how our "privatized healthcare system" is unacceptable, and how the Feds need to "invest" more in infrastructure, and how tax cuts have cost the government too much haven't created jobs, and on and on along those lines. No way Ron Paul signs on to this, and if Kucinich wanted to do a bill abolishing the Fed (which RP has already done before) or requiring full-reserve banking, he should have limited himself to that. This bill contains way too much extraneous nonsense. It's not legislation, it's a stream-of-consciousness rant from the UFO gnome.

[Vessol]

So where is this public "Monetary Authority" going to get the money it lends out?

The Tooth Fairy?

Kucinch warps what the definition of what the Federal Reserve is. It's is not purely a public bank..but it's definitely not a 100% private institution, LOL. How many banks has the President of the United States name their Chairmen?

Now don't get me wrong, I hate the international banks with a passion, but the way that they are described is incredibly childish. "Rather than crossing our fingers and hoping that banks will finally lend some of the billions of public dollars they haven’t thus far seen fit to lend,"
It paints a picture of some fat little kid hoarding all the candy and saying "I'm not going to give you any! Neener neener neener!"

Why would a bank in any way shape or form want to HOARD money when it could be giving it out on loans to earn interest on? The current problem is the FIAC insurance pretty much prevents banks from having to worry about keeping any money that is in their deposits plus with the Fractional Reserve Banking system, they can just practically print the money.

As to the people saying this is a step in the right direction. Ladies and gents, there is a reason why Ron Paul called his book "End the Fed" and not "Nationalize the Fed"

[progressiveforpaul]

Isn't that what the Constitution calls for? Congressional control of money?

If Paul supporters want the constitution followed, the Fed ended, and to win this election, they need to embrace this proposal even if it is not their ideal.