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DID YOU KNOW THAT banks create new money when they create loans? Consequently, money is destroyed when loans are repaid ( this is M1,
cash and checkable deposits, the stuff that the economy runs on).  ,
p.3.  Likewise, the federal government creates money when it spends and destroys money through taxation and borrowing., pp.4-5.                                                                                         

Federal deficit spending funded through borrowing from the private sector is a completely self imposed mechanism. The federal government need
not tax or borrow in order to spend. It can simply write a check. Taxation, however, is necessary to drain excess money out of the economy. Too
much money in the economy devalues the dollar and creates inflationary pressures. The elimination of the current legislative framework which
requires the federal government to fund deficit spending through private sector borrowing would save the federal government approximately $400
billion annually. This figure, net other related cost savings, probably exceeds the amount necessary to fund a federal Employer of Last Resort jobs
THE UNITED STATES, with the exception of WWII, has seldom
experienced full employment. There was a brief period in the late 1990's,
when some economist claim that the nation flirted with full employment.
Official statistics, however, don't reflect discouraged workers who had
dropped out of the job market, among them ex-convicts, many of whom
have little chance of finding work in the private sector. Economist often
worry that full employment will create inflationary pressures. Their are two
problems with this objection: first, if the poor have to suffer unemployment
so that the rest of us can enjoy an inflation free environment, then we
need to correct this serious flaw in our system; second, today, deflation is
more of a concern than is inflation. Meanwhile, the banking sector keeps
pumping money into the supply side of the economy which creates
dangerous assets bubbles with little positive effect on the the job market
for those most in need of a job. The nation needs divert money creation
away from the supply side toward the demand side through a federal jobs
program which guarantees a job to any person who seeks a job. This will
both fight against current deflationary pressures and unwanted asset
bubbles. After all, the only time that the nation truly experienced full
employment was during the last huge federal jobs program--WWII
THIS 2011 U.S. HOUSE BILL, introduced by Ohio Representative Dennis Kucinich and co-sponsored by Michigan Representative John
Conyers died in Congress. While not a perfect bill, it's not a bad starting place for monetary reform. In essence, the bill takes the money
creation process way from private banking interest and places this power in the hands of Congress. This bill would enable Congress to fund
U.S. expenditures free of debt. Like Greenbacks during the civil war, this would provide an appropriate funding mechanism for a federal jobs
program. It is time to re-introduce this bill.
The link below contains a paper which examines the gross and net cost of
governments acting as Employers of Last Resort. Once the cost associated with
unemployment are netted out, i.e., unemployment benefits, cost associated with
the criminal justice system, urban blight, welfare, stress related health effects,
destroyed lives, loss of human capital..., not to mention the improved subjective
well being of those employed, the program's cost become miniscule and probably
offer a positive net return on investment. Skip to page 4 of this 5 page paper for
the authors' cost estimates for an Employer of Last Resort program.
FUNDING A FEDERAL JOBS PROGRAM. The link below discusses Lincoln's refusal to borrow bank created money to fund the civil war effort.
Instead, the Union created it's own money--Greenbacks-- to finance the war. This saved the Union from having to pay interest to private banking
interest. Through appropriate legislation, the same type of public money creation can be used today to fund a federal jobs program.
THERE IS A CONSTANT PUSH to increase federal and state funding for higher
education. This is fine, but we should consider reaching down even further in an
effort to develop basic work skills. Our inner cities are filled with idle human
resources--people, who through no fault of their own, lack employment
opportunity. The consequent loss of basic work skills diminishes hope not only for
these individuals but also hope for the nation at large. Lack of employment
opportunity destroys local communities, and, it destroys our national community as
well. Our cities need much work, and, our cities are full of people looking for work.
We can bring these needs together, and, develop basic work skills through a
federal jobs program which guarantees a job, at a decent wage, to any person
ready and willing to work. The time to act is no

AN EDITORIAL IN THE WALL STREET JOURNAL dated June 2, 2015 and written by William McGurn states that the best solution for
economic success among Baltimore's African American population is to leave Baltimore and to head south. He basis this conclusion on
two studies. The first is from Harvard University's "The Equal Opportunity Project" and the second study is from Joel Kotkin's Center for
Opportunity Urbanism.

The Harvard study recognizes that children, when moved at a young age from a poor community to a more affluent community, will
experience greater economic success later in life. The Kotkin study, apparently claims that upward mobility for African Americans is more
limited in the northern urban environments and is stronger in the southern cities of the former Confederacy. McGurn, and apparently the
Kotkin study, claim the North's liberal economic policies of government intervention and strong labor unions are responsible for this shift.

In terms of the first, government intervention, Mr. McGurn, and his ideological brethren should be grateful for the dressings placed on the
deep wounds of a capitalist system left to its own devices. The social safety net provided through government intervention have kept
many from homelessness and starvation and has pacified a population which otherwise may not be so pacified. In effect, these
government interventions may well have saved the system from its own internal shortcomings. In terms of labor unions, without union
protection, labor is pitted against labor in a downward spiral of ever lower wages. Unions offer a short term solution to low wage issues
but eventually the private firm will move to a geographic location with a lesser union presence. So, in the long run, Mr. McGurn is correct
about the impact of labor unions on economic development.

His argument, however, misses a more fundamental issue that we will need to grapple with sooner or later. Capitalism is first and foremost
a philosophy, a complete system of thought, premised on values which are damaging to the fabric of community. It is premised on the idea
that individual acquisition of more stuff is better than the acquisition of less stuff. New stuff is generally better than old stuff and individual
material acquisition is more highly valued than community welfare. These ideas are so woven into the fabric of our collective
consciousness that we seldom stop to question these very important premises of the capitalist system. As a result, people first move from
the city to the suburb, and then to the next flourishing geographic locale. In this process, people are left behind. Their fewer numbers are
left to support an old and inefficient infrastructure and an aging industrial base which can no longer compete with the latest technology
found in the latest 'hot spot" of development.

This is all fueled, of course, by the individual's belief that success is defined through material acquisition. This lies at the core of the
capitalist philosophy and it is at the core of our social problems as well. Until we redefine the value system, the social problems of poverty
and extreme class distinction will never disappear. Until individual success is defined as contributing to a strong community and working
toward the social welfare, capitalism's dynamic nature premised on individual material advancement will simultaneously build and destroy
communities in it's never ending march toward higher individual and corporate profits. So while William McGurn's observations are correct
given the current value system that we operate within, it is actually the very premises of that system which we need to challenge.

None of this is stated to challenge the existence of capitalism as our economic model. There are great individual liberties associated with
capitlism and these should be cherished. Unbridled capitalism, however,  premised on individual material self advancement with no regard
for community leave us with places like Baltimore. McGurn's editorial fails to recognize the true forces which have destroyed our inner
cities. The very values which underlie and promote technological advance and prosperity for some, are the same forces which discard
older communities and technologies and cause extreme poverty and deprivation for others.