Believe it or not these new robots will probably hurt Chinese and other extremely low wage countries first. Their wages are starting to approach this $4 per hour without the labor strife that goes along with slave labor wages. In fact, I expect them to eventually develop a water proof model that can even do the back breaking job of rice planting and other agricultural production. We already have a new robot that kills weeds and feeds lettuce plants for farmers.

Currently there are over 2 Billion-yes that is B for Billion- unemployed and just subsistent farmers in Africa, China, India and Indonesia alone. What are we going to do with all these people that we don’t need for production? We can’t just put them in jail or camps.

We have to create the correct macroeconomic policies for this new human, global, high productivity environment. Otherwise our economy will come to a stretching halt because there will not be enough quality consumers. The following are a list of solutions:

1. A shorter work week for all-this would start in other countries first.

2. Government providing basic living requirements of medical, food, shelter and education. This will help businesses by reducing their wage pressures. There will still be an incentive to do some work to provide extra consumption.

3. Provide additional funding (both private and public) for the development of more leisure, cultural, entertainment industries along with more infrastructure, space exploration, environmental and other research spending. This will provide substantially more service jobs and employment through innovation.

4. Reduce or eliminate competition on basic wages and fringe benefits because these are the customers and clients. This is accomplished by having a Quality Customer Minimum Wage enforced by laws, tariffs and unions.

Now you ask how we can afford it. The answer is to remove the money creation process from the private hands of the bankers. They distribute it in their own interests and charge a fee for producing money which costs nothing to produce. They make money scarce which it is not! For a complete explanation see the “Monetary Reform – The Big One” on our site at www.cpe.us.com.

Austerity-Fiscal Cliff-An Explanation

Money is the life blood of an economy.  When the supply of money in circulation is extremely low, you will see recessions and depressions.  When the supply of money is too large, you see excess inflation and asset bubbles.  When money flows we grow.  When money stops, we flop.  

The major source of new money in an economy is provided by the commercial banking system i.e. Wells Fargo, Citibank, Bank of America, Chase and the smaller local banks.  They just don’t loan out your deposits.  They loan out far more.  This excess is new money created out of thin air!  This is a very important concept to understand.  This is called “debt” money.

The financial crisis that started in the last decade was caused by this commercial banking system. It actually shut down causing the Great Recession.  When this occurred loaning activity stopped, people got scared and started to pay back their loans.  This accelerated loan repayment activity actually reduced the money in circulation!  Trillions of dollars of loans were paid off since the crash. 

When this commercial banking “debt” money ceases being issued and is reduced at the same time, the lesser system of money creation takes over.  The other system is deficit spending by the Federal government.  Yes, deficit spending forces the Federal Reserve to create money by monetarizing the debt.  (They digitally create money and buy Treasuries and other assets)  No, it is not all borrowed fromChina.  This process has somewhat substituted for the lack of money in circulation from the banking system.  It has kept us out of a severe depression!  There was no fiscal spending in 1929 and the Federal Reserve tightened the access to money which caused the Great Depression.

The next question is:  When do you stop this substantial deficit spending?  If you reduce it too early, as Japandid in 1997 and we did in 1937, the country goes go back into recession.  This reduction of spending is labeled “austerity.”  The U. K. recently attempted this, bringing about another downturn, leading us to worry about the fiscal cliff, a significant increase in taxes and the cutting of spending, an agreement currently in place with Congress and the President, which will drastically reduce the money in circulation leading us towards another downturn. 

Has the banking system turned to its normal lending pace?  I don’t think so.  Lending is tight and demand is very low.  Nobody wants to borrow when times are bad?  On top of this, bank loan regulations are very strict.  This is the usual case for the commercial banking system.  Therefore, it is not an effective monetary system for a 21^st century economy.

Now, what with all the money the Federal Reserve has created in order to bail out the banking system and other financial institutions.  It sits as reserves in commercial and central banks, insurance companies and sovereign wealth funds.  It is not in circulation.

This commercial banking system’s creation of money is too narrow to create a quality economy.  It basically issues loans for mortgages, equity lines, businesses, credit cards, auto and student loans.  Those have been substantially reduced.  The other area is Wall Street borrowing to leverage up their various investments, doing little for the general (Main Street) economy.  How are we going to get the needed money into circulation?

The only way is complete monetary (money creation) reform by the elimination of fractional reserve banking.  We do have a bill in Congress-HR-2990.  You can review this act at www.monetary.org.  It is an excellent start!  This should be the single biggest economic issue, by far, and it is not even debated!

Remember the Great Recession was caused by the monetary-financial system NOT the fiscal (tax & spend) system.  Most of the governments involved in the sub-prime crisis were in surplus not deficits.  Then the crash hit causing tax revenues to go down and safety net expenses to go up.  Then on top of that, certain governments had to bail out their commercial banks. 

Japan’s crash caused by their monetary system was over 20 years ago.  They are still mired in recession type conditions.  Here we sit with no debate and no action by our leaders.  It will have to be up to you and me.  Please join the monetary reform movement.  I will be happy answer any questions you have on the economy on our site at www.cpe.us.com.

Second, the institution of capitalism-competitive markets by its sheer nature of operation has a natural flow of money to the wealthier.  The main reason for this flow is that it is easier to make money if you already have some money.  This goes for businesses as well as individuals.  This naturally causes a shift towards business consolidation creating monopolies or oligopolies.

For those doubters, I have never seen a statistical, economic study proving otherwise.  If you do a little macroeconomic historical reading of the last 150 years, you will determine this yourself.

This condition of capitalism eventually causes so much consolidation of wealth that the entire economy or country actually becomes very unstable.  This could cause a complete economic break down in society because of a lack of quantity and quality of customers and clients. This failure can result in severe violence and/or revolution.  The most recent examples areEgyptand the Arab spring.  These upheavals would probably not have occurred so swiftly if the standard of living wasn’t so low with no opportunities for advancement.  You can also see the failures in our own economy in 1907, 1929 and 2008.

We do not want to eliminate competitive markets.  It provides for more freedom and checks and balances over government.  We have seen the failures of socialism, but we do not have any system to replace it with.  We just need to offset several flaws in “the private market” capitalism of which inequality is a major one.

The following is my laundry list of reasons for inequality besides ability:

1. Birth – 41% of individuals remain in the same income level they are born into
2. Lack of Education
3. Lack of access to capital for investing and savings
4. Lack of luck
5. Over reliance on debt
6. Lack of adequate wages
7. In the wrong industry or profession
8. Competing against extremely low cost/slave labor
9. Productivity – replaced by machines
10. Caught in the boom/bust economy which hurts the middle-low class more
11. Lack of competition because of monopolies and oligopolies-less jobs
12. Illegalities and discrimination

  Now we will discuss some solutions both at the government-macroeconomic level and the individual level.

Let’s tackle the government first.  A more detailed explanation will be on our site at www.progressive-economics.com .   The major assumption for these solutions is that we live in a world of abundance or non scarcity including agriculture.  The private sector has become so productive that it can produce all the goods and services we need.  Of course, this is a two edge sword.  As it becomes more and more productive, mainly through mechanization, there are fewer jobs which create fewer consumers.  Yes, innovation and new service jobs help and should be encouraged but they are not near enough to employ the tens of millions around the world that are unemployed or underemployed under our current system.

Therefore, it is up to monetary sovereign nations to reduce basic needs inequality by creating a base of quality survival which also creates a far better customer, client and citizen.  The following are those basics:

1. Free preschool education and free education at least through two years of college or tech school.
2. Food stamps for all.
3. Free health care for all.
4. Some residential assistance and/or stipend for every citizen.
5. Elimination of Global Competition on basic wages by creating a quality customer minimum wage – providing for the above benefits reduces the upward pressure on wages helping business operations and controlling inflation.
6. Reducing the work week which will expand the leisure and entertainment industries.
7. Enforcing our antitrust laws which will create more competition which is a jobs creator.
8. Diversify the monetary delivery systems to provide funds for the many programs, projects and research that are needed.  (see “Monetary Reform Section-The Big One” on our site)
9. Eliminate usury to reduce the debt burden on the population.

This is just a brief listing of what government should do to reduce inequality in a capitalistic world.  Can you image how many great consumers are created when their basics are paid for!  It also removes substantial pressure on businesses to continually raise wages-costs and reduces their actual business expenses especially employee medical coverage.  This expense is stranglingU.S.businesses while making them very uncompetitive with foreign companies whose nations cover medical.

The question then comes up is: how do we pay for all this?

 The first concept is that there is NO cost to creating money except for excess inflation.  The second concept is it does not have to be created using debt.  The third concept is this creation should be in democratic governments’ hands, not the hands of private bankers.  The fourth concept is the distribution should be in many systems both private and public using equity, debt and direct currency issue.

The current commercial banking system of money creation is too narrow, discriminating and expensive to properly fund a 21^st Century economy.  It has created too many inflationary and recessionary conditions!  A full explanation and how to avoid excess inflation is on our site under Monetary Reform.

Since we now have diversified systems to create and distribute new money, we can now lower or eliminate most Federal income, pay roll, and estate taxes except for the very rich- one half of one percent.  We will still need these taxes on the super rich to avoid creating an Economic Royalty, likeEngland.  This is called “Recirculation” NOT “Redistribution”.   The wealthy just get it back in spending into their businesses.  Also, taxation at the Federal level reduces money in circulation which helps control excess inflation.

Since our governments are far away from providing these services, let’s discuss some ideas you can do on your own.

First, consider getting a personal financial planning education.  Many schools offer these courses at night at reasonable costs or just start reading.  Second, consider pooling your talents and funds with friends and/or family in starting businesses, investment funds or owning rental properties.  Third, consider the same pooling for volume buying of goods and services.  I know it is difficult working together in these areas but there are legal and managerial materials to help in joint efforts.  I hope these ideas will help.

It is very hard to understand why because it was the 100% cause of the “Great Recession”.  Therefore, the major solution is Monetary (Money Creation) and NOT Fiscal (Tax & Spend).  We in the Monetary Reform Movement can not figure it out.  I guess the big banks do a good job of changing the debate and keeping our leaders in the dark.  Even the 99% – Occupied Wall St. movement is confused and mystified.  They just know something is wrong.

If you read Ron Paul’s book “End the Fed”, it is a very good description of  U.S. monetary history.  It does misinform some important events and of course has the wrong 19th Century solution.  The first historical misinformation is the inflationary collapse of the Continental currency during the Revolutionary War.   It was basically caused by the two British war ships in New York Harbor printing massive amounts of counterfeit currency.  This was a common practice of the British against their enemies.  I do not blame the author for this error.  You will also find the omission of this fact in the Federal Reserve history.  Both the predecessor Colonial and the Continental fiat currency worked well.  In fact, according to Ben Franklin, the major cause of the Revolution was elimination of the Colonial fiat currency by the Crown.

He also failed to fully discuss the successful utilization of the Greenbacks during the Civil War.  This was another fiat like currency that had basically limited gold backing.  Then the government started removing them from circulation which caused recessions because of lack of money in circulation.

Then he states that we had very sound currency between 1830 and 1860.  This was the time that Andrew Jackson closed the Second National Bank reducing the amount of money in circulation which caused very severe depressions.  His concern is the government inflating their currency.  I have this concern to!  But, I am more concerned with deflating currencies causing panics, recessions and depressions.  People are far better off in an inflationary environment versus a deflationary one.  Would you like to be living during the depressions of the 19^th and early 20^th Centuries or the latter half of the 20^th Century?

Another of Ron Paul’s argument is the interpretation of the Constitution which in the reform movement definition gives the power to Congress under Article I Section 8 and Clause 5.  It states that Congress can “coin money”.  If you want to take this literally in the digital age, order the Treasury to mint Trillion dollar coins and then make change as funds are needed.

Ron Paul wants to eliminate “fiat currency” and “fractional reserve banking-Federal Reserve.  These are two separate issues!  Fiat currency is paper money with no specific backing like gold and silver.  Now, it is all digital!  The supply of actual paper money is a very small part of money in circulation.  Fractural reserve banking is the creation of money by issuing loans-debt both private and public. 

Ron Paul, as expected, wants to go back to the “good old days”.  What he does not explain nor defend well is so called sound money, gold standard, private banking system.

The real solution is to create a 21^st Century modern system with transparency, diversity, checks and balances that avoid excess/hyper inflation.  The creation power has to be in public hands.  The power to create money is too easily abused and has unlimited demand to be in any private hands or secret hands of the Federal Reserve.  The actual distribution can be mostly in private hands.

We need to have a more sophisticated fiat money system and eliminate the debt money system of the banks and Federal Reserve.  We need to have enough money to fund the programs and projects we need!  We do not want to create scarce or expensive money keeping a vast majority of the population in relative poverty like the 19^th Century.

Congressman Paul’s main concern is inflation and that is obvious.  Therefore, a 21^st Century monetary system should have the following to prevent excess inflation and avoiding asset bubbles:

1. Substantially increase the number of systems that actual delivery new money.  This especially helps in avoiding asset bubbles.  The current banking system has only several ways to place money into circulation like home loans causing asset bubbles.
2. Encourage continued production and productivity.  We now live in a world of abundance.  The private sector is extremely productive and can produce most of the goods and services that are needed including agriculture.  We have excess capacity for most goods and services which is a deflationary factor.  We just don’t have enough quality consumers who can buy them. 
3. Reduction of higher interest rate charges which is a cost of doing business and places upward pressure on prices.
4. Encouraging savings and investing rather than over consumption of goods.
5. Encouraging spending on personal services rather than over spending on goods.
6. Having the Commerce Dept. create and publish an array of inflation statistics.
7. Having many checks and balances in the creation of money in the Federal Government.  President, Treasury, Commerce, Senate and House will be the major participants of how much and where to increase or decrease the monetary supply.  This will be based on inflationary statistics instead of the current philosophical debate.
8. Voters will be able to cast their votes based on the inflationary management of the country.
9. Currency and Commodities markets should be monitored in the long term to help control excess inflation.  This includes gold!
10. Increasing taxation removes money from circulations.
11. Competition usually keeps upward spirals of prices in check.  Increasing anti-trust enforcement and/or regulating monopolies and oligopolies helps.
12. Substantially encourage renewables and recycling to reduce the demand pressures on raw materials and energy.

This is just a short description of a completely new, evolutionary 21^st Century monetary system.  You can read the Monetary Reform section of our site at www.cpe.com for more information.  Then if you want more input and proof you can start reading the books listed on our monetary section of the site’s book list.

In the latter half of the 19^th Century, we had the most economically non involved Federal government that could be physically possible to have.  We had no income taxes, anti-trust laws, effective unions, minimum wages, Federal Reserve nor any fiscal spending such as Medicare and Social Security.

This resulted in an extreme concentration of individual wealth and large monopolies.  Approximately 4500 families owned most of the wealth in the country.  (Yes, it was still better than most other countries at the time)  Because of this concentration and lack of money, there were severe recessions-panics in 1837, 1857, 1873, 1873-79, 1892-6, 1904 and 1907, cumulating in the Great Depression of the 1930’s.

Then we started to get the government involved in the economy with the before mentioned programs-policies.  It still did not get us into a healthy economy until the largest government spending programs of WW II, followed by the Federal Highway System and the GI bill giving free education and reasonable home loans to many.  This started to create one of the best economies in the history of the world. 

It was surely not perfect but we were always trying to make it better.  We really had only one major flaw to correct; that of a very under diversified, unfair monetary system.  Then the 1980’s came along with the Reagan Administration reintroducing this 19^th Century failed macroeconomic philosophy instead of improving on the policies of the last 50 years.  This gradual shift backward eventually culminated in the “Great Recession”.

The Libertarians argue that there was still too much government involved in the 19^th Century economy and that the free market place is self correcting.  This argument has two major flaws.  One, there is no clear definition of “free” market nor what is actually the make up of a market.  There are many types of markets with all differing human influences and operations.  The second flaw (and the major one) is that it assumes humans and their commercial interactions are perfect.  There is no such thing as human perfection either individually or in their institutions.

Therefore, this libertarian philosophy does us extreme harm by always saying “no government” instead of “the right government”!

The following is a list of some of the reactionary policies, implemented in the last 30 years that have hurt the economy:

1. Reducing anti-trust enforcement creating many new monopolies and oligopolies reducing competition in the market place.
2. Eliminating the Glass-Steegle Act separating the money creators (commercial banks) from the money managers (investment banks) causing the worse financial crisis in modern history.
3. Reducing the enforcement of financial regulations making the financial crisis even worse.
4. Hindering raises of the minimum wage, reducing Union participation, and sending jobs toAsia.  This trade war reduced the quantity and quality of customers, clients and consumers.  This created excessive borrowing just to keep up.

So here we are!  What do we do?  I do NOT recommend going to a more socialistic State.  We have seen the failures of socialism in the Soviet Union,China,India,Israel,Cubaand others.  Socialism is also based on human perfection of the government.

Our solution is to offset the imperfections of competitive markets-Capitalism by effective government policies.  The four major flaws are: inadequate monetary distribution, failure to plan for the long run maximization of profits, inadequate recirculation programs and reducing competition on basic wages and fringe benefits for our customers-employees.

I believe the philosophy should NOT only be providing a safety net as the Democrats keep professing, but also to create better quality customers, clients, consumers and citizens by providing basic minimal support for all by the government.  This includes health care, food stamps, education and residential subsidies.  This does not mean that government owns or operates these functions.  It only means government pays for these basic necessities.  Can you imagine the quality of customer that is created when these financial burdens are eliminated or reduced?

Yes, there will be goof offs.  Who cares!  But, if they want anything extra they will have to do some additional part time work and if they want the real good life they will have to have successful careers as they do now.

Then the question is how to we pay for all these programs besides taxation.  The answer is in the monetary reform movement at www.progressive-economics.com and www.monery.org.

The reason the governments need to enact this philosophy is that we do not need all these employees to produce most of the goods and services.  The private sector, including agriculture, is just too productive at a continuing increasing pace, including robotics.  Then how do our consumers get paid?  We have to create a unique win-win 21st Century economy not based on the scarcity of a 19^th Century economy.

 The major reason is that the private sectors production of goods and services including agriculture is continuing its significant march on productivity.  This reduces the number of employees and working hours.  This is a two edged sword.  It makes products less expensive and increases the quantities available for distribution.  We do not live in a world of scarcity anymore!  In fact most of our firms are not at full capacity.   But, it reduces the number of employees who are the customers/clients/consumers.  Innovation helps but it will not increase employment enough to create a quality economy.

 Can you image if agricultural in India and China become just a tiny bit more productive.  We will see millions more migrate to the cities looking for jobs that are not there.  This does’t even count the robots replacing employees-customers.

 \Many U.S. companies looking to maximize their profits have moved jobs to lower paying countries. First to Mexico, then to China and now to Vietnam and others, they are running out of countries!  These low/slave wages does not allow for enough purchases of the production of goods and services.  No wonder China had to implement a Trillion dollar stimulus to increase domestic spending.  The monetary system attempts to offset this low paid, labor factor by issuing new money through debt.  This is obviously over with the financial crisis.

What are the solutions? 

1. Reduce or eliminate competition based on basic wages-fringe benefits by creating a Quality Customer Minimum Wage enforced by laws, tariffs and unions.
2. Government providing basic living requirements reducing the wage pressures on businesses i.e. Medicare, food stamps.
3.  A shorter work week for all.
4. Government funding of additional cultural, entertainment, infrastructure, environmental and research projects.  They can afford these projects with an adequate monetary system.  There are a lot of things we need to get done.
5. Total monetary reform by eliminating “fractural reserve banking” and increasing the diversity of monetary distribution.

 What are we going to do with all these unemployed people, we do not need for production?  They will be walking the streets getting into trouble.  Our jails are already full.  The global economy needs to move towards Europe, Japan and US, not us down towards them!

How can we afford this program?  The same way we could afford the GI Bill right after  WW II, when we were loaded with gov’t debt.  We can do a large part of the funding with gov’t guaranteed loans which are basically off  book.  Section 8-low income housing is another example with their 50 year low-interest mortgages.  Also, when we establish a Domestic Industrial Complex, it will compete with the Military Industrial Complex for regular budgeted, spending dollars.

How do we implement these programs?  The same way the Military does.  We use private companies, like Rockwell, Boeing and Lockheed and other gov’t suppliers.  We also  could use quasi-gov’t firms like JPL, Aerospace and NASA, and direct gov’t spending like the Army and Navy.

Obviously, we attempt to use private firms-first!  What are some of these programs:

1.  Infrastructure loans-these are very long-term loans, 100%, low-interest loans to fund projects with tolls or charges.  This will provide a pay back  to the gov’t and provide incentives to select appropriate projects.  It also helps by reducing inflationary pressures.  Most of the construction would by private constructors as it is now!

2.  Massively expand the SBA program to more entrepreneurs using the same, no/low down, low-interest, longer term loans.  Also include some direct investments into new firms with some equity return instead of interest charges.  This increases the chances of success because there are no debt service costs-hurting cash flow.  These start-ups immediately hire new employees!

3. Provide no down-100% financing, low-interest, and long-term loans for the many needed environmental projects in this arena.  These projects have to have a cost savings (usually energy or water) which allows for repayment of the loan.

4.  Non profit and cultural loans.  Again provide some low-interest, very  long-term loans for projects that will charge for admission.  This charge will allow for the pay back of the loan.

5. Completely revamp the low and moderate income housing loans by providing longer term, lower interest, at market value of new home purchases and 100% refinancing of existing mortgages of personal residences only!  This will revitalize the housing industry which is a major employer in our economy.

As you can see, most of the implementation of these loans are by private industry.  The government is just the source of the loans and in many cases, not even the underwriter.  Direct spending programs would be projects that would not have the ability to pay back a loan.

Unlike our current military spending, all of this spending is in the domestic economy, creating jobs here!  There is also a requirement restricting the use of low wage-slave labor.  Thus, creating more quality customers/clients/consumers and citizens.

Standard and Poor’s was established in 1860 and was bought by the publishing giant McGraw-Hill in 1966.  It is the largest of three major credit rating agencies-companies in the country.  The other two are Moody’s and Fitch.

A large part of the revenues that is generated by these companies actually comes form the actual issuers of these financial instruments.  It is very difficult to be objective in your evaluations if you’re being paid by the institutions who want a high rating so they can sell their financial instruments.  It is also very difficult to actually tell if a company or government is in trouble or about to go under or default.

Thus, all the mortgage backed securities that Wall Street was pedaling actually had the highest rating as they went under.  This is nothing new!  I remember from the 1970’s of various high rated bonds being down graded only after they filed for bankruptcy.

The Financial Crisis Inquiry Commission the called the credit-rating companies “cogs in the wheel of financial destruction.”  A report by a Senate subcommittee criticized S&P and Moody’s for giving overly optimistic assessments on tens of thousands of high-risk securities so it wouldn’t lose the business of financial firms that paid for the ratings.  There are also on going investigations by the SEC and Justice Dept.  Congress and federal regulators are discussing ways to implement the Dodd-Frank Act, which contains several provisions aimed at reducing the raters’ role in the financial system and creating more competition in the ratings industry.

Now let’s discuss the debt of the United States and other Monetary Sovereign Nations.   The U.S. Britain, China and Japan are examples of nations who can create their own money.  California, Spain, Greece, Italy and Ireland are examples of States who can not.  Therefore, they can create money and pay off their debt which creates an excess inflationary risk not a default risk!  

There is a big difference between the United States and all other countries.  The first is that the United States Treasuries are the only reserve currency in the world.  This means that other countries have to hold these bonds as reserves in their central banks or Treasuries.  The second is that all oil production-market is in dollars.  The third is the massive-super power status of our military makes it very safe to hold Treasuries. (Yes, there is something good coming out of our massive over spending in the military industrial complex.)

Because of these reasons, there is no shortage of buyers of these Treasuries even at these very low rates, no matter what the ratings are.  In fact over half off our debt of $14 Trillion is owned by governments and commercial banks that hold these bills, notes and bonds as reserves.  This figure includes the $4+ Trillion that the Federal Reserve and Social Security Trust fund holds.  Does this make any sense?

It only makes sense if you understand that the only way we get money into the economy is through the issuance of debt both public and private.  We call this “debt created money”.  This is a very limited, narrow, monopolistic and inefficient way of doing it.   This is the cause of the Great Recession NOT how much we tax and spend (fiscal).   What is happening now is there is a shortage of money in true circulation because the larger creation and infusion process of the private commercial banks was severely limited by the financial crisis.  Therefore, there is less borrowing (by both lenders and borrowers) and more loan pay offs; over 1 Trillion since 2008.  Therefore, the government goes into deficit spending forcing the Federal Reserve to create money by buying our own Treasuries.  No this system does not make cense!  If you want to learn more you will have to go to the Monetary Policy Section at www.progressive-economics.com.

Our private enterprise system in coordination with governments around the world has eliminated scarcity in our basic production of goods and services.  We have become so productive that fewer and fewer employees are needed to produce these goods and services.  This means fewer and fewer will paid customers/clients/consumers/citizens.  What do we do with all these people we do not need for production?  Yes, innovation will help.  It will not be enough on a global basis.  Can you imagine if the Chinese and Indians increase their agriculture productivity by 10%.  It will mean millions will be seeking  jobs elsewhere.  What is the answer?

The answer is hiring these people for cultural, environmental, charitable, space and other projects.  The question is how can we afford it?  The answer is to take away the monetary creation powers form the single private source of commercial banks.  We have the money!  We just have to worry about excess inflation.  Please read the Monetary Reform Section of this site.

So we are now world policemen and protectors (and nation builders).  The question is why should we be paying for all this by ourselves!  This causes deficit spending putting more pressure on the dollar.  It also allows other nations to significantly lower their defense budgets.  This gives them a competitive advantage by allowing more domestic spending for infrastructure, education, research etc.

The answer is, we should Charge!   A perfect example of this, is the 1990 Gulf War.  We received payments from the oil rich nations.  There are several ways to negotiate and implement this policy with other rich nations.  Most are export nations with the U.S. anyway, they would just get the funds back through our imports, like oil.