In “Money is working against us” (The Athens Messenger, August 7, 2021), Mat Roberts rightly points out the failure of our money system. It has led to an extreme concentration of wealth among the few while leaving financial insecurity and/or outright poverty for many.

Former Supreme Court Justice Louis Brandeis observed that “We can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we can’t have both.” Where wealth concentrates, power concentrates. The failure of our money system is a threat to democracy itself.

Our money is issued, i.e., created, by privately-owned banks as they extend credit, that is, as they make loans. Many people think that government issues money, but the only money created by government is coinage, a trivially small percentage of the money supply.

The money supply grows every year. New money is created by bank lending. That money exists only as numbers in accounts, not as bills or coins. The new money issued goes to those who qualify for and receive bank loans, typically those who already have wealth.

What is needed to address current needs is spending, not lending. Governments spend. Banks lend. Lending is needed in society – for business loans and the purchase of major items such as homes and cars. Lending, however, need not be coupled with the creation of new money. Lending has always taken place between people and businesses without the creation of new money. Banks can do the same.

According to the Constitution, it is government, not banks, that should be creating new money. The Constitution doesn’t mention banks or corporations. It directs Congress to issue money. Government spending on health care, education, law enforcement, addressing climate change, roads, bridges, and water systems benefits everyone. Government issuance of money distributes wealth. Bank issuance of money as credit concentrates wealth.

For funding a response to climate change Roberts suggests lending by public banks and by the Federal Reserve banks. Public banks are a good idea, but there is currently only one in the country, the Bank of North Dakota. Public banks can direct lending to programs which benefit the public and return the profits of lending to the public.

However, money creation by banks should simply end, with new money issued exclusively by government in the public interest. As Jerome Powell, the Federal Reserve Chair, has said, the solutions to our present problems have to be fiscal, not monetary – spending not lending.

Some fear that government creation of money would lead inevitably to unacceptable levels of inflation. But government creation of money is in fact the only way to end inflation. Inflation is built into the current system of money creation through lending, which is why every government has inflation targets. They worry about not having inflation. The danger of inflation is no greater when government creates the money it spends than when government borrows the money it spends, leaving the banks to create it.

If the government were to use its Constitutional authority to create (issue) money, there would be no need for government borrowing – for deficit spending. The US government has issued money under four administrations and has never abused that prerogative. Compare that with the record of the Wall Street banks in recent years. Following the 2008 crash, big banks paid $110 billion in mortgage-related fines for their role in inflating a mortgage bubble that helped cause the crisis. Do we really want the unelected officials of these institutions to continue to control our money supply?

The Federal Reserve Act formally outsourced money creation to the banks. This experiment has failed. Under the Federal Reserve, the dollar has lost more than 98% of its value, and democracy is now threatened by the extreme concentration of wealth and power in a few hands while most Americans face financial insecurity.

Legislation to make the needed change in the money system has been written and was introduced into Congress in 2012. It should be reconsidered now. For more information go to the Alliance For Just Money (

This editorial was previously published in The Athens Messenger on August 16, 2021.

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Tabitha Enriquez
Tabitha Enriquez
27 days ago

Excellent article!

Govert Schuller
Govert Schuller
1 month ago

Thank you, John, for sharing your thoughts and the Op-Ed by Mat Roberts. Reading his article makes clear that he knows that most money comes into existence by extending credit and that most of that is leveraged by already wealthy people. To counter this he offers an interesting list of counter-measures except . . . sovereign monetary reform! As he is in the neck of your woods, could you inform him?