Is it really so hard?

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That boy has been waiting there since he was an infant. And he will be waiting there when he is an old, old man.

Just now I read a lengthy (2,900-word) article at Counterpunch titled Financial Oligarchy vs. Feudal Aristocracy.

It discusses the financialization of today’s society, and how the Lords of Capital are parasitical thieves, just like the Landed Lords of feudal times.

I’ve been saying that same thing for years, and I won’t delve into that topic right now.


The article notes that the state of California must pay $70 billion each year in interest alone to private banks and other bondholders. That is 44% of California’s total financial obligations. There are 39 million people in California (more than half of the entire U.K. population). Half of all human energy in California is stolen by bankers and financiers.

So what’s my point?

Check out the following paragraph from the same article.

Tell me what’s wrong with it…

At the national level, in 2011 the U.S. federal government paid $454 billion in interest on its debt—the third highest budget item after the military and Social Security outlays. This figure amounted to nearly one-third of the total personal income taxes ($1, 100 billion) collected that year. This means that if the Federal Reserve Bank was publicly owned, and the government borrowed directly from it interest-free, personal income taxes could have been cut by a third.

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A great deal of human folly and misery arises from average people’s refusal to acknowledge what they already know…namely that the U.S. government (like the U.K. government, but not like the state of California) can create infinite money out of thin air.

Thus, if the U.S. government created $454 billion to pay interest on T-securities in 2011,  so what? None of that money came out of anyone’s pocket. It was not tax revenue. The situation cannot be compared to California’s.

Incidentally, why should the U.S. government borrow from the Fed, when the U.S. government already creates almost $4 trillion a year out of thin air by instructing banks to credit accounts?

The article shows the pernicious effects of Ellen Brown in the USA (who the authors quote) plus the “Positive Money” crowd in the U.K. These people insist that (a) all money is created by banks as loans, and (b) the U.S. and U.K. governments depend on loans and on tax revenue.


These people want the U.S. and U.K. governments to create money out of thin air, which those governments already do.

The thing is, these people portray federal politicians as slaves of the bankers, when in reality politicians are fully complicit in sustaining poverty and inequality. Politicians push for austerity, which is the removal of money from the real economy (as opposed to the financial economy).

These people also want (and I agree with them here) public state banks like the Bank of North Dakota. A public bank returns its profits to the state.

However at the state level, local bankers own all politicians. Therefore, every time someone in a state proposes to create a public bank like North Dakota’s, the local private bankers kill it.

My point?

I’m saying it’s useless to start any conversation about banking or finances or economics until we get one thing clear…


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3 Responses to Is it really so hard?

  1. Steve says:

    ‘Half of all human energy in California is stolen by bankers and financiers.’ Not so fast, the mean & weak-minded always blame that human energy loss on PENSIONS. (Like no one EVER earns or spends their pension dollars in Cali, or Illinois, or New York or CT or…)


  2. coolslim says:

    What I don’t understand is how people can acknowledge that the government creates money out of thin air, yet simultaneously believe that the government needs to tax in order to spend!


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