Monetary Reform in US Congress

A remarkable speech was given by U.S. Congressman Dennis Kucinich last week in Congress. He gave an historically important talk on monetary reform  through reintroducing his National Employment & Economic  Defense (NEED) Act.

Here is a part of his talk – you can start watching from 4:26 min – that’s where he starts talking about monetary reform and describing the NEED Act in detail:

“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.“

The reason why is perhaps best explained by the Fed itself: “The Fed can’t control inflation or influence output and employment.”

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.

…

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 does:

1. It ends the Fed’s unaccountability by putting it under Treasury.

2. It ends fractional reserve banking, ending banks’ ability to control demand in our economy.

3. It empowers 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 gets the money to where it is needed the most. It gets the economy going and keeps it going.

It avoids debt and deficits…

 We will send more announcements on this bill soon as events continue to pick up.

If you wish to watch the whole speech, here is part 1 and part 2.