The solution to the problem of our dysfunctional money system lies in the establishment of a system of exchange that is fair, just, and structurally functional.


Monetary reform will change the way money is created. Most people think that money is created by the government and that banks lend money that has been deposited by customers. Neither of these are true. Monetary reform will make the money system operate like most people think it does. With Just Money, money will be created by the government for its people. New money will no longer be created by banks as credit, that is, through loans. Banks will still lend money as they do now, but they will lend money they actually have, rather than creating it.

Banks would still function independently as they do now, providing payment services through checking accounts, debit and credit cards, and other electronic transfers, and lending money for mortgages, car loans, and business loans. But banks would be like other lenders, in that they could lend only what they have taken in as equity from investors and as savings accounts from customers who want a return on their savings.

Under monetary reform the government will no longer borrow money when it spends more than it takes in as taxes and fees. Government borrowing currently costs a lot of money, namely the interest paid on the federal, state, county, and municipal debt. Under monetary reform that money will be available for reducing taxes or for needed spending on the country’s infrastructure at the federal, state, and local levels.

Government creation of new money will be limited by an independent public agency whose only function is to determine how much new money, if any, should be issued each year (or withdrawn), adhering to a mandate to keep the purchasing power of money stable. This agency’s decisions will be based on economic data (most of which is already being collected) and citizen input. How that new money is spent, invested, given, or lent is up to Congress, which has the constitutional responsibility not only for creating our money but also for allocating federal government spending.

With banks no longer creating money, the Federal Reserve System will not be necessary to bail out the banks when they get into trouble and will be ended as a separate entity. Some needed functions of the Federal Reserve will transfer into the Treasury Department. Others, no longer needed, will be ended.

New money will no longer enter circulation as credit, that is, as debt. It will simply be money spent into circulation by the government as a permanently circulating exchange medium to enable the country’s economy to function. Money will be equity on our national balance sheet and be our common wealth. It will replace bank-created debt money. Coins are currently equity money created by government – a form of Just Money. Monetary reform will make all the money we use a national and public asset – Just Money. The creation of money (whether dollar bills, coins, bank account entries or other forms) will no longer be accompanied by the creation of debt.

Monetary reform will be introduced through a smooth transition that will not interrupt economic activity. Studies indicate that the transition to Just Money will stabilize the economy, produce jobs, and extend economic prosperity more broadly and equitably.

Just Money is synonymous with Sovereign Money as advocated by, Joseph HuberPositive Money and others.



Achieving sovereign money requires three reforms of our existing money and banking systems that must be implemented together to achieve real monetary reform:

  1. Require Congress to exercise its Constitutional power to be the sole creator of all U.S. money, issued debt-free, and to establish a transparent and independent public monetary authority to determine the amount of new money the Treasury will disperse under authority of Congress.
  2. End the privilege of commercial banks to create and issue what we use as money.
  3. Transfer ownership of the 12 Federal Reserve Banks, and all remaining operations of the Federal Reserve System, to the U.S. Treasury.

For links to many presentations of these three elements, see Formulations of the Three-Point Policy Proposal for Monetary Reform.



Monetary reform has roots that go back centuries with precursors in ancient Greece and elsewhere. Ideas have been percolating and advocates gaining strength over many years. (Two examples: A New Monetary System by Edward Kellogg, (published in 1861); and Sovereign of the Market: The Money Question in Early America by Jeffrey Sklansky, 2017)

In 1933, in the wake of the Great Depression, a group of  University of Chicago economists, supported by numerous notable economists nationwide, published a program for monetary reform that came to be known as The Chicago Plan. In the last chapter of his 2002 The Lost Science of Money, Stephen Zarlenga lays out the history and contemporary relevance of this proposal, and in 2012 two IMF economists revisited it in their IMF working paper entitled The Chicago Plan Revisited.

In 2002, The American Monetary Institute published Director Stephen Zarlenga’s book, The Lost Science of Money: The Mythology of Money – The Story of Power. It was the catalyst for nearly a decade of work that resulted in a Monetary Reform Act, which drew from the work of the Chicago Plan economists.  This became HR 2990, The National Emergency Employment Defense Act of 2011 (NEED Act), and was introduced in the U.S. House of Representatives in 2011. This Act included provisions to address the struggling economy after the 2007-2008 Great Recession, and remains the basis for our monetary reform efforts today.



The Chicago Plan Revisited
August 2012 IMF Working Paper by International Monetary Fund economists Dr. Michael Kumhof and Jaromir Benes

Seigniorage Reform and Plain Money
by Joseph Huber, chair of economic and environmental sociology at Martin Luther University of Halle-Wittenberg, Germany

Workings of A Public Money System of Open Macroeconomies
by Professor Kaoru Yamaguchi, Doshisha University, Kyoto, Japan