Should creation of money stay in private hands?
March 9, 2009 1:11 AM Subscribe
posted by woodblock100 (49 comments total)
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Professor and economist Richard Werner proposes a solution
for the current banking crisis, under which "... national debt and interest liabilities will not increase, but credit creation will."
He begins by giving a rather novel perspective on some basics: "It is a little-known fact that there is no such thing as a 'bank loan.' Banks do not lend money. 'Lending' refers to transferring control of the lent object to the borrower. If I lend you my car, I can't at the same time drive in it. That's not what banks do when they issue a 'bank loan.' Instead, they are allowed by the current regulatory framework to create new money out of nothing--which is called 'credit creation.' The collective decisions of commercial bank staff thus determine how much money is created, who gets the newly created money and for what purpose."
His proposal involves the issuance of 'United States Notes', such as the ones President John F. Kennedy authorized to be issued in 1963