In 2008 the debt ceiling was set at $11 trillion, in 2016 it was set at $22 trillion. On December 16, 2021, lawmakers raised the debt limit by $2.5 trillion to a total of $31.4 trillion. Historically the debt has been doubling approximately every 8 years so the winner of the 2024 election will likely see the national debt soar to $40 trillion in their first term.
Despite fighting a revolution to free ourselves from a system of debt peonage imposed by the Bank of England, a private corporation at the time, debt has been an issue for this nation from the very beginning. Hamilton, our first Treasury Secretary, convinced Congress to give its Constitutional power to create money to the private banking industry so that the nation would have to borrow all the money it spent. Congress first created the debt ceiling in 1917, which allowed the Treasury to issue bonds for specific projects without Congressional approval if the total debt fell under the statutory debt ceiling. Congress first imposed a limit on overall US government borrowing of $45 billion in 1939.
Also in 1939, a proposed solution, called the “Program for Monetary Reform,” was offered to Congress that would have allowed the debt to be paid off while funding the needs of the nation instead of increasing the debt. The proposal was authored by six prominent American economists and ultimately supported by over 400 economists from 157 countries. It was basically a restating of the Chicago Plan proposed in 1933 which would have ended the Great Depression, stabilized the economy, achieved full employment, paid down the debt, and set the nation on the road to prosperity.
Each time, Congress rejected the proposal in favor of the banker’s money system. Every dollar our government spends was created as interest-bearing debt. Under such a system one cannot pay off all debt because all money is created as debt. So, the debt-ceiling debate is a scam. They know if they don’t raise it, the economy would tank. Nonetheless, the issue is brought up often and used as an excuse to undermine and defund the already tattered social safety net.
In response to the 2008 economic crisis, the National Emergency Employment Defense Act (NEED Act) was introduced to the House in 2011 but was not allowed out of committee for a vote. It would have solved the problem permanently, with these three critical reforms:
- Require Congress to be the sole creator of all U.S. money as an asset, not a debt.
- End the privilege of commercial banks to create money.
- Transfer all remaining operations of the Federal Reserve to the U.S. Treasury.
In 2022, AFJM updated the NEED Act to the American Monetary Reform Act which retained the above reforms. Such a system would remove the parasite of debt on the economy and empower politicians to address the problems plaguing society. It would allow the funding of a public healthcare system and a 21st-century energy, transportation, education, and food production system. Our money would circulate in perpetuity, ending the scarcity most people experience and empowering a new prosperity. The terrible costs of crime, sickness, war, poverty, and ecological collapse forced upon us by the current system would come to an end. The powers behind our money system have kept this from happening.
Many assume that the government creates our money, having seen photos of the printing presses cranking out dollars. However, the Federal Reserve Notes and coins are only the currency, a representation of money, which the government sells to the banks for their customer’s cash needs. Today, most of our nation’s money is created by the banking system as interest-bearing debt, and only 3 to 5% of the money supply in circulation is cash at any one time.
From 2009 to 2014, the 200 most politically active companies in the U.S. spent $5.8 billion influencing our government with lobbying and campaign contributions. Those same companies got $4.4 trillion in taxpayer support, a 758% return on their investment. Private money has created an unelected government that controls the creation of all our nation’s money– while “We the People” are left paying the debt.
We need a modern-day American Revolution, one that will require great numbers of people demanding systemic change. The current system is built on usury, the abuse of monetary authority for personal gain. Usury was once considered a sin by all religions. Today, usury has been institutionalized and dominates the world.
Only broad societal awareness of the root cause of our life-threatening money system will bring about the necessary change. We can create an Economics of Care that would transform the world. As Thomas Paine wrote in his revolutionary pamphlet, Common Sense, “We have it in our power to begin the world over again.”