22 November 2008

The Question of Money as Government Issue Credit Versus Bank Issued Money

I fail to understand the difference in the two notions (1) The notion of a government making money versus (2) The notion of a government using the banking system to make money. All governments control money. It has got to be so because that is why the governments control who makes the currency or the paper or the coin or the mode of debt settlement. If the US Congress has the Constitutional power to make money I wonder who else would or could it ever be? The US Congress must use the banks to dispense the money, be it as credit or as physical currency. If it gives away that power then it has given the right away, right or wrong. But if any government ever wants it back, or if a government lacking any stated constitutional power over money wants such power in the first place, any government may do so by fiat backed by the army, as any government has the power to do anyway, if it is a government worth talking about seriously.

It was LaRouche who asserted the need for the USA Congress to take its constitutionally asserted power over money creation seriously. This LaRouche asserted as opposed to what he said was every other country which uses banks.

I love Lyndon Hermyle Larouche and his basic economic ideas.

But here, again, I find him odd. His argument bypasses the need for the US government to take control of the economy out of the hands of the gamblers (who do not run the economy but ruin it). If the US government wants to end the financial debacle it needs nothing more than its own power backed up with the military, which here is the people, which, in the end, IS the power.

I figure that what LaRouhe means is that Congress has the power built in without resort to invention. and they are not using it. And that they had better use it and use it right.

The problem is that no one seems to be listening to him too hard. He wants to cancel debt that makes no sense. NO money to finance bad debt. That is what happens in a bankruptcy, as properly done. And Congress has the given power to not pay anything to the bad debt holders. What seems to be happening is that "they" want to keep the bad debt and have us finance it. If it is bad, and the gambling debt they created while they, like gamblers out of control, played with our economy, is B A D, then Congress should refuse to pay it.