Representative Dennis Kucinich has introduced a bill to end the Fed. Unfortunately his proposal grants Congress ability to create money at will for virtually any purpose. Kucinich specifically mentions full employment, stabilizing social security, and to “lend new money into circulation as authorised by Congress and to provide means for public investment in capital infrastructure”.
In other words Kucinich want Congress to have the power to print money into existence for any reason it wants. Here are a few snips from Kucinich’s End the Fed Bill that show what I mean.
IN THE HOUSE OF REPRESENTATIVES Mr. KUCINICH introduced the following bill
To create a full employment economy as a matter of national economic defence; to provide for public investment in capital infrastructure; to provide for reducing the cost of public investment; to retire public debt; to stabilise the Social Security retirement system; to restore the authority of Congress to create and regulate money, modernize and provide stability for the monetary system of the United States, retire public debt and reduce the cost of public investment, and for other public purposes.
To enable the Federal Government to invest or lend new money into circulation as authorised by Congress and to provide means for public investment in capital infrastructure.
SEC. 201. ENTRY OF U.S. MONEY INTO CIRCULATION.
The Secretary shall cause United States Money to enter into circulation by and through any of the following means:
Any origination or disbursement of funds to accomplish Federal expenditures authorised and appropriated by an Act of the Congress.
Any disbursement to retire outstanding instruments of indebtedness of the Federal Government or the Secretary of the Treasury as such instruments become due.
Any exercise of “lender of last resort” emergency authorities under the emergency procedures specified in section 305.
Any other means, and for any other purpose explicitly authorised by an Act of the Congress that becomes law after the effective date of this Act.
Support for the Bill
I saw this bill a few days ago thinking it was so insane no one could possibly stand up in favour of it. I was sadly mistaken.
I am hoping Karl Denninger’s excuse is he failed to read the entire bill. Otherwise I am at a loss to explain Dennis Kucinich: Delete The Fed
Dennis Kucinich, which many people have (properly) labelled as one step removed from a communist in the past, and who has a reputation as having a hard-core left slant in his politics, has just written up and introduced a bill that will fundamentally restore the free market – for real – to banking and credit.
We’re about to find out if people like Ron and Rand Paul really stand for what they claim, or if they’re empty suits. If they do, then I expect to see them on the Tee Vee within hours demanding passage of this bill, and joining with Mr. Kucinich in making sure that it is immediately reintroduced in the new Congress – and passed.
If that does not happen then these two claimants of a demand for “sound money” have been immediately and permanently exposed as FRAUDS, as will any so-called “Tea Party” members of Congress.
This is a bill that must become law.
I’m Stunned Too
Denninger is not the only one who is stunned. I am stunned that anyone could support this preposterous idea, assuming they read it and are sober.
Neither sound money nor the free market comes from printing money into existence. Arguably the only thing worse than the Fed printing money out of thin air is Congress printing money out of thing for the purpose of full employment and/or any other absurd ideas Congress has.
The last thing we need, the very last thing we need is Congress lending money into existence to pay the bills or to do anything it wants for any reason. Those looking for hyperinflation can find the roots of it in that bill.
Kucinich did mention abolish fractional reserve banking, in a clumsily worded paragraph difficult to interpret precisely. A second paragraph was more precise “fractional reserve lending is ended”.
I am 100% in favour of eliminating fractional reserve lending. Ironically, Denninger once challenged me on that score, defending the practice. Please see Fractional Reserve Lending Constitutes Fraud for the debate.
Hopefully Denninger has changed his mind.
All things considered, and in spite of horrendous flaws, it may be a plus that someone has actually submitted a bill in Congress to end Fractional Reserve Lending. Now all we to do is throw away the entire rest of the bill and let Ron Paul draft a proper bill ending FRL as the central idea.
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