Here is the Authority to Fix the Glitch

Minnesota State Constitution

Article 1,  BILL OF RIGHTS

Section 1.  OBJECT OF GOVERNMENT.  Government is instituted for the security, benefit and protection of the people, in whom all political power is inherent, together with the right to alter, modify or reform government whenever required by the public good.

US Constitution

Article 1, Section 8

• To coin money, regulate the value thereof, and of foreign coin, and fix the standard of weights and measures;
• To establish post offices and post roads;

FEDERAL FIX: We can change things to have Congress "coin" money to build roads (infrastructure). Debt free money would flow into circulation.

STATE FIX:  We can pass a law authorizing a small change in accounting procedure, and allow State Chartered Banks to create (just like they do now, except debt free) and deposit new money into the State's Transportation Account.  As the state follows the existing procedure for getting the roads build, new debt free money would flow into circulation. 

The MINNESOTA TRANSPORTATION ACT - Text

"Fix the Glitch" 

The MTA in it's most recent form, Senate File 705:

SF 705       

(updated Spring 2009)

This piece of legislation, with true bipartisan support, can help fix our broken economy.

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The MINNESOTA TRANSPORTATION ACT - Introduction

History Made

In March of 2008 there was an historic hearing in the Minnesota House and Senate. The Minnesota Transportation Act (MTA), in the form of HF 619 and SF 500, would fund the rebuilding of bridges and roads in Minnesota using Transportation Certificates, in lieu of bonds, or increased taxes.

This is a robust, wealth based concept, with newly created money from State Chartered Banks flowing into the economy.  New money flows from the Bank, to the State of Minnesota, that pays the Contractor to build the roads and then pays the Workers - they continue the movement of the new money into wider circulation:

1. debt free
2. interest free
3. inflation free
4. tax free

The State Chartered Banks create the money the same way they do it now - electronically.

Creation of the new money is limited by production and the infrastructure supports the new money, so it is inflation free.

It is not a loan, so it is debt and interest free, bringing down the cost of production.

Because the State no longer needs to tax for bridges and roads, the fuel tax can be eliminated and Minnesota property taxes get immediately reduced. Again, the cost of production drops.

Jobs will be created. A boom in Minnesota's technology sector will occur as we build infrastructure that is more gentle on the environment. Innovation, investment and savings will be the result.

The public gets safer, modern roads and bridges with which to conduct commerce.

1. Banks win - lower default rate, increased liquidity and a tax break
2. Minnesota government wins - balanced budgets, national leadership
3. The people win - lower taxes and prices, plus safer bridges and roads
4. The US wins - Minnesota paves the way into a new era of prosperity
   
   

There is a glitch in the system that we use to finance infrastructure; the MTA will fix it.


Learn about the MTA and become part of history!

UPDATED BILL

If It Can't Be Grown, It Has To Be Mined.

Everything we have (excluding cosmic debris) comes from the Earth.  As we produce, we create wealth; we do not create money as we produce. That only happens at a bank.

Now, money only comes into being when someone, an individual, business or government, takes out a loan. 

It's true that gold, silver, platinum and diamonds are forms of wealth (wealth = raw resources + labor + innovation) but we don't use wealth for money.  We use debt.

The Minnesota Transportation Act (MTA) will introduce a stream of wealth-based money into the economy to allow people to pay off their debt. Bank default rates will decline and our economy will stabilize.

We can't grow money and we don't mine it either.  We borrow it.  Our money is not wealth - it's debt.

Question of the day II...

Q: Where does the money come from to pay interest?

A: Someone else's loan principal.

Question of the day:

Q: If all new money is created by banks when they make loans, what new money is created to pay the interest due on those loans?

A: None.

Wealth to Debt

Once, the more money we had, the more wealth we had.
Now, the more money we have, the more debt we have.

"Note that although the system of fractional-reserve banking creates money, it does not create wealth. When a bank loans out some of its reserves, it gives borrowers the ability to make transactions and therefore increases the supply of money. The borrowers are also undertaking a debt obligation to the bank, however, so the loan does not make them wealthier. In other words, the creation of money by the banking system increases the economy's liquidity, not its wealth."

- N. Gregory Mankiw, Ph D., Professor of Economics at Harvard University, Macroeconomics, Fifth Edition, pg 485 .

Thus...

"Thus, in a system of fractional-reserve banking, banks create money."

- N. Gregory Mankiw, Ph D., Professor of Economics at Harvard University, Macroeconomics, Fifth Edition, pg 484

What is Wealth?

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Wealth = Innovation + Raw Resources + Labor   

Gold worked as "money" because it was wealth based; not because it was rare, shiny, heavy or had an interesting color, but because one had to work in order for it to exist. It is described as "a store of wealth." One had to use the formula above to create it. It was newly created wealth. That newly created wealth was then spent into our economy, debt free.

That's also why silver worked; as well as sea shells, coffee beans, furs or tobacco. They were all examples of wealth based money - not simply barter, but used for money. So, you see, we don't have to use gold to have a wealth based money system. But we must use the same principals.

There are other methods of wealth creation that could "back" or support our money system today, using the same principals that made gold work, and bring prosperity to our nation - instead of unpayable, compounding debt and interest payments.

Think Infrastructure.

Think About It

First, we have to borrow, just to have a medium of exchange.

Then, we have to borrow to pay the interest that is due on the initial borrowed money.


Q: Wouldn't that make it impossible to get out of debt?

A: That is obvious.

Start at the Beginning

4 Of the Most Important Quotes in Economics:

1. “…the actual creation of money always involves the extension of credit by private commercial banks.”
- Russell L. Munk, Assistant General Counsel, Department of the Treasury

2. “Money is created when loans are issued and debts incurred; money is extinguished when loans are repaid.”
- John B. Henderson, Senior Specialist in Price Economics, Congressional Research Service, Report No. 83-125 E

3. “Thus, the money that one borrower uses to pay interest on a loan has been created somewhere else in the economy by another loan.”
- John M. Yetter, Attorney-Advisor, Department of the Treasury

4. “Someone has to borrow every dollar we have in circulation, cash or credit. If the banks create ample synthetic money we are prosperous; if not, we starve. We are absolutely without a permanent money system. When one gets a complete grasp of the picture, the tragic absurdity of our hopeless position is almost incredible, but there it is. It is the most important subject intelligent persons can investigate and reflect upon.”
- Robert H. Hemphill, Credit Manager of the Federal Reserve Bank of Atlanta

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