Economics Solutions Strategies
Even the most informed experts disagree on how to solve economic crises. What is obvious, however, is that there is a considerable lack of debate on serious alternatives to our current economy. We want to get beyond the usual discussion and explore revolutionary possibilities that actually get to the root of the problem.
Our research and information directly implicates the global central banking system – of which the Federal Reserve is a key part in the United States – in creating the devastation and suffering that so many people are experiencing around the world. Powerful elite bankers have literally hijacked our governments, wielding more influence than any other sector. We have seen and experienced it in the most recent economic collapse – Wall Street bankers who created the problem were bailed out with taxpayer money, ultimately gaining even more power. Clearly, making banks who were already “too big to fail” even bigger is not an effective strategy or solution. Rather, it sets everyone up for more vulnerability in the future and gives banks even more control over our government and over us.
The following solutions get away from typical “quick fix” approaches and are intended to give less power to bankers and more opportunity for prosperity to everyone.
Our solutions are predicated on the core ethic of the “liberty perspective”, and are outlined in three stages:
Stage 1 – Reform Current Systems: Bring Transparency and accountability to the economic system. This includes dismantling the Federal Reserve, restoring money making capacities to Congress, monetizing the debt, and withdrawing support from harmful international banking agencies such as the World Bank, IMF, and Bank for International Settlements.
Stage 2 – Limit Government Control: Decrease government intervention in our daily activities and empower people to create their own currencies, banking systems, and sustainable local economies. This includes getting rid of government subsidies, repealing legal tender laws to allow other currencies to compete, rolling back entitlement programs, and severely limiting taxes.
Stage 3 – Voluntary Cooperation: Use the personal power and prosperity gained from stages 1 and 2 to empower people to care for one another and eliminate involuntary government altogether. This involves completely opening up the market and letting people come up with their own non-coercive governing and economic systems.
Stage 1- Reform
Stage 1 involves reforming Central Banking and getting the economy working for the people, not the bankers. In order to achieve this we propose shutting down the Federal Reserve and temporarily giving its powers to Congress. This would have to coincide with campaign finance reform to get special interests out of Washington and make sure politicians are representing the people. Reform in Stage 1 also includes monetizing the debt and abolishing harmful international banking agencies. You can check all of these out in more detail below.
Dismantle the Federal Reserve
Dismantling the Federal Reserve will likely require mass mobilization against its practices and an education campaign exposing its failures. You can sign up to participate in critical mass actions to Audit and End the Federal Reserve here. As pressure mounts, a strategy must also be in place to ensure a smooth transition so that it doesn’t result in economic chaos. For this, we propose temporarily shifting Federal Reserve powers to Congress.
Although we do not support more government power in the long run, it seems necessary to restore economic functions to the government as we dismantle the central banking system and explore new alternatives. It would be absolutely critical to make all economic decision-making accessible and transparent to the public. Televised hearings, and debates – similar to CSPAN – could help facilitate more public interaction and accountability.
New government functions would likely include printing and lending money at low or fixed interest rates at the Federal, state, and/or municipal levels. We can draw upon successful models from the past and ones that are working today. For example, North Dakota currently has a state bank that has managed to maintain a surplus amidst the economic crisis. In 2008, while the rest of the country was on the verge of bankruptcy, North Dakota had a surplus of $1.2 billion.
Withdraw Support from the IMF, World Bank, and Bank for International Settlements
This international banking trio is destroying the world. They bankrupt countries, charge astronomical interest rates, require unfair loan conditions, and create development strategies that benefit Multinational Corporations rather than the residents of the country.
International Monetary Fund (IMF) - The IMF serves as a sort of “lender of last resort” to developing or struggling countries. Although its stated goal is to “alleviate poverty”, all loans are issued with strict conditions and regulations that usually end up weakening economies, burying governments and their people in debt, and opening up the market to devastating transnational corporations. Watch this video with John Perkins, author of Confessions of an Economic Hitman, to learn more about how it works.
World Bank - Although the World Bank represents 184 countries, it is run by a small group of the most powerful nations who in turn promote their own interests. The President of the World Bank, for example, is nominated by the President of the United States and has always been a citizen of the U.S. Like the IMF, the World Bank also issues Structural Adjustment Loans which place restrictions on how the money can be spent. For example, a World Bank loan may require privatization of the water supply which benefits transnational corporations and undermines the rights of the people. In this way the World Bank can manipulate and control growth in the developing world to benefit itself.
Bank for International Settlements - The Rothschild-created Bank for International Settlements (BIS) “serves as a bank for central banks.” It has 55 member central banks but is mainly run by bankers from the United States, England, Germany, Switzerland, Italy, and Japan. Unlike the IMF and World Bank, it operates with much less transparency and is not accountable to national governments. Nevertheless, it has significant control over the global financial system by setting capital requirements and reserve controls. Evidence shows it played a key role in Japan’s recession in the late 1980’s and more recently contributed to the financial meltdown in the U.S. by enforcing the Basel II Accords, which required banks to adjust the value of their marketable securities in November of 2007. Private individuals within the BIS are making key economic decisions without public scrutiny. This must come to an end! To learn more, check out Ellen Brown’s Article, The Tower of Basel.
Refuse International Taxes
The UN and other international organizations are pushing policies that could help set up a global taxing system. Cap and Trade is just one example. This would consolidate power even more. Don’t go for it.
Monetize the Debt
With government issuing fiat-currency itself, rather than the Federal Reserve, we could eliminate the national debt. The national debt consists of securities: bills, bonds and notes. The U.S. government could simply issue new fiat currency to buy back all the securities and take them out of circulation. Because securities act as cash this would not increase the overall money supply and cause inflation. Instead it would just eliminate the debt and taxpayers would no longer have to pay interest on it.
If it’s so simple, you might ask, why don’t we just do it now? Because the Federal Reserve currently has the power to issue currency. When the Federal Reserve buys securities, it doesn’t make them void. Instead the securities become “reserves” for issuing many times their value in new loans. This compounds the problem of ever-rising inflation. If we dismantle the Federal Reserve, however, and give its power to Congress, then we can easily eliminate the debt.
Stage 2- Limit Government
In Stage 2, which significantly overlaps Stage 1, we want to limit government functions to the protection of individual rights and to empower people to run their own local economies, create competitive currencies, and allow a truly free market without government intervention. This would involve repealing legal tender laws* to allow other currencies to emerge and compete, eliminating government subsidies, rolling back entitlement programs, and limiting taxes. It would also involve a transition away from state-run banks to privately-run, diverse banking systems.
Repeal Legal Tender Laws
Although Stage 1 involves setting up some kind of service-based government banks, they would not be the only ones. In Stage 2, other currency and banking systems should be encouraged and allowed to compete for customers. Banks could take multiple forms – and they all need to compete in the open market. Some issue local currencies; others are 100% backed by silver or gold; others owned and run by community members, etc. Fractional reserve lending would be illegal to safeguard borrowers from fraudulent banking practices.
Eliminate Government Subsidies and Bailouts
Subsidized businesses have an unfair advantage that allows them to remain competitive. In Stage 2, any business that is unable to compete in the free market, should be allowed to fail without government bailouts or subsidies. Commercial farms, for example, which have brought down the price of food and pushed small, organic farms out of business would no longer be subsidized. Commodity prices would begin to reflect their real value and the best and most trustworthy businesses would rise to the top.
Use Increased Personal Wealth to Take Over Government’s Mismanaged Entitlement Programs
As money is freed up for everyone by decreasing taxes, there would be more opportunity to care for one another rather than rely on government services funded by taxpayers. Services such as Welfare, Social Security, and Medicare would no longer be needed because all people would have more resources with which to support themselves and help support each other. Evidence shows that people who are free to prosper are more inclined and better able to take care of each other than the State. This naturally can bring up a lot of fear from concerned citizens who want to ensure that everyone is cared for at a basic level. However, government programs are very inefficient, often ineffective and do not allow for complete empowerment and recovery the way prosperous people can and do.
Limit Taxes to Protection of Individual Rights and Commons
Most of our taxes in the U.S. currently go to the military and interest on the debt. In Stage 2, taxes would dramatically decrease. They would still be needed to protect from pollution of the commons – the air, water and land that we all share – and basic human protections until Stage 3 is sufficient to protect people, their property, and shared common spaces.
Stage 3- Set Up Systems for Voluntary Cooperation
In Stage 3 coercive government is dissolved and private voluntary enterprise – including justice, insurance and security – competes for the respect of potential customers. People set up systems for voluntary cooperation – no force, no coercion – unless someone is violating someone else. Of course, many questions arise as we transition from a parental type State (telling us what to do and what not to do, what to study, who we can marry, what gets put in our water, who has to go to war for the benefit of corporations, etc). How would we deal with criminals? Schooling? Healthcare? How would the economy function? These are legitimate and important points to address as we make the transition to full and complete freedom for everyone. Fortunately, many people have already thought a lot about this and come up with empowering Stage 3 systems and solutions. The challenge lies in the transition – how do we get there? For the economics sector there would need to be a truly free market and some form of private judicial and security systems. Here are some possibilities:
Establish a Truly Free Market
We have never experienced a truly free market without government intervention. There would be tremendous innovation, diversity and growth to create thriving economic systems. The best banking models, trading networks, and currency systems would rise to the top. Because Stage 3 is based on non-violation, there would also be far more sustainable products and services available.
Set Up Systems for Protection
In Stage 3, state courts would no longer be necessary. To take their place, researcher and host of Freedomain Radio, Stefan Molyneux, suggests using Dispute Resolution Organizations (DROs). Each person would have a DRO, similar to an insurance company, to insure their daily activities. DROs would provide insurance for contracts and charge a fee based on the risk of the contract. If someone breaks the contract, the DRO pays for it. DROs incentivize good behavior because that keeps peoples costs down. The DROs also are incentivized to encourage good behavior, because they then make more money from fees and have to pay less for their client’s bad behavior. This is explored more in the Liberty Section and is offered here as just one idea of how a stateless society could deal with crime in a non-violent way.
** Legal Tender means that Federal Reserve notes (US Dollars) are considered a valid and legal offer of payment in the U.S. The Coinage Act of 1965, specifically Section 31 U.S.C. 5103, entitled "Legal tender," states: "United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues."