Wednesday, November 2, 2016

829 Trump proposes 'Print the Money' to solve US Debt crisis, echo Franklin

Trump proposes 'Print the Money' to solve US Debt crisis, echo Franklin
& Lincoln
   - Ellen Brown

Newsletter published on 15 May 2016

(1) Trump proposes 'Print the Money' to solve US Debt crisis, echo
Franklin & Lincoln
   - Ellen Brown
(2) QE for the People, not the Bankers
(3) Trump vs. the Two Party System?
(4) 'Self-funded' Donald Trump preparing to seek big-Donor Money

(1) Trump proposes 'Print the Money' to solve US Debt crisis, echo
Franklin & Lincoln

   - Ellen Brown

From: Ellen Brown <>
Date: Sat, 14 May 2016 22:38:42 +0000

Hi, here is my latest article, posted on --

{visit the above page to follow other links}

"Print the Money": Trump’s "Reckless" Proposal Echoes Franklin and Lincoln

Posted on May 14, 2016 by Ellen Brown

"Print the money" has been called crazy talk, but it may be the only
sane solution to a $19 trillion federal debt that has doubled in the
last 10 years. The solution of Abraham Lincoln and the American
colonists can still work today.

"Reckless," "alarming," "disastrous," "swashbuckling," "playing with
fire," "crazy talk," "lost in a forest of nonsense": these are a few of
the labels applied by media commentators to Donald Trump’s latest
proposal for dealing with the federal debt. On Monday, May 9th, the
presumptive Republican presidential candidate said on CNN, "You print
the money."

The remark was in response to a firestorm created the previous week,
when Trump was asked if the US should pay its debt in full or possibly
negotiate partial repayment. He replied, "I would borrow, knowing that
if the economy crashed, you could make a deal." Commentators took this
to mean a default. On May 9, Trump countered that he was misquoted:

People said I want to go and buy debt and default on debt – these people
are crazy. This is the United States government. First of all, you never
have to default because you print the money, I hate to tell you, okay?
So there’s never a default.

That remark wasn’t exactly crazy. It echoed one by former Federal
Reserve Chairman Alan Greenspan, who said in 2011:

The United States can pay any debt it has because we can always print
money to do that. So there is zero probability of default.

Paying the government’s debts by just issuing the money is as American
as apple pie – if you go back far enough. Benjamin Franklin attributed
the remarkable growth of the American colonies to this innovative
funding solution. Abraham Lincoln revived the colonial system of
government-issued money when he endorsed the printing of $450 million in
US Notes or "greenbacks" during the Civil War. The greenbacks not only
helped the Union win the war but triggered a period of robust national
growth and saved the taxpayers about $14 billion in interest payments.

But back to Trump. He went on to explain:

I said if we can buy back government debt at a discount – in other
words, if interest rates go up and we can buy bonds back at a discount –
if we are liquid enough as a country we should do that.

Apparently he was referring to the fact that when interest rates go up,
long-term bonds at the lower rate become available on the secondary
market at a discount. Anyone who holds the bonds to maturity still gets
full value, but many investors want to cash out early and are willing to
take less. As explained on

If a bond with a 5% coupon and a ten-year maturity is sold on the
secondary market today while newly issued ten-year bonds have a 6%
coupon, then the 5% bond will sell for $92.56 (par value $100).

But critics still were not satisfied. In an article titled "Why Donald
Trump’s Debt Proposal Is Reckless," CNNMoney said:

[T]he federal government doesn’t have any money to buy debt back with.
The U.S. already has $19 trillion in debt. Trump’s plan would require
the U.S. Treasury to issue new debt to buy old debt.

Trump, however, was not talking about borrowing the money. He was
talking about printing the money. CNNMoney’s response was:

That can cause inflation (or even hyperinflation), and send prices of
everything from food to rent skyrocketing.

The Hyperinflation that Wasn’t

CNN was not alone in calling the notion of printing our way out of debt
recklessly inflationary. But would it be? The Federal Reserve has
already bought $4.5 trillion in assets, $2.7 trillion of which were
federal securities, simply by "printing the money."

When the Fed’s QE program was initiated, critics called it recklessly
hyperinflationary. But it did not even create the modest 2% inflation
the Fed was aiming for. QE was combined with ZIRP – zero interest rates
for banks – encouraging borrowing for speculation, driving up the stock
market and real estate. But the Consumer Price Index, productivity and
jobs barely budged.

While the Fed has stopped its QE program for the time being, the
European Central Bank and the Bank of Japan have jumped in, buying back
massive amounts of their own governments’ debts by simply issuing the
money. There too, the inflation needle has barely budged. As noted on
CNBC in February:

Central banks have been pumping money into the global economy without a
whole lot to show for it other than sharply higher stock prices, and
even that has been on the downturn for the past year.

Growth remains anemic, and worries are escalating that the U.S. and the
rest of the world are on the brink of a recession, despite
bargain-basement interest rates and trillions in liquidity.

Helicopter Money Goes Mainstream

European economists and central bankers are wringing their hands over
what to do about a flagging economy despite radical austerity measures
and increasingly unrepayable debt. One suggestion gaining traction is
"helicopter money" – just issue money and drop it directly into the
economy in some way. In QE as done today, the newly issued money makes
it no further than the balance sheets of banks. It does not get into the
producing economy or the pockets of consumers, where it would need to go
in order to create the demand necessary to stimulate productivity.
Helicopter money would create that demand. Proposed alternatives include
a universal national dividend; zero or low interest loans to local
governments; and "people’s QE" for infrastructure, job creation, student
debt relief, etc.

Simply buying back federal securities with money issued by the central
bank (or the U.S. Treasury) would also get money into the real economy,
if Congress were allowed to increase its budget in tandem. As observed
in The Economist on May 1, 2016:

Advocates of helicopter money do not really intend to throw money out of
aircraft. Broadly speaking, they argue for fiscal stimulus—in the form
of government spending, tax cuts or direct payments to citizens—financed
with newly printed money rather than through borrowing or taxation.
Quantitative easing (QE) qualifies, so long as the central bank buying
the government bonds promises to hold them to maturity, with interest
payments and principal remitted back to the government like most
central-bank profits.

As Dean Baker, co-director of the Center for Economic and Policy
Research in Washington, wrote in response to the debt ceiling crisis in
November 2010:

There is no reason that the Fed can’t just buy this debt (as it is
largely doing) and hold it indefinitely. If the Fed holds the debt,
there is no interest burden for future taxpayers. The Fed refunds its
interest earnings to the Treasury every year. Last year the Fed refunded
almost $80 billion in interest to the Treasury, nearly 40 percent of the
country’s net interest burden. And the Fed has other tools to ensure
that the expansion of the monetary base required to purchase the debt
does not lead to inflation.

An even cleaner solution would be to simply void out the debt held by
the Fed. That was the 2011 proposal of then-presidential candidate Ron
Paul for dealing with the debt ceiling crisis. As his proposal was
explained in Time Magazine, today the Treasury pays interest on its
securities to the Fed, which returns 90% of these payments to the
Treasury. Despite this shell game of payments, the $1.7 trillion in US
bonds owned by the Fed is still counted toward the debt ceiling. Paul’s

Get the Fed and the Treasury to rip up that debt. It’s fake debt anyway.
And the Fed is legally allowed to return the debt to the Treasury to be

Congressman Alan Grayson, a Democrat, also endorsed this proposal.

Financial author Richard Duncan makes a strong case for going further
than just monetizing existing debt. He argues that under current market
conditions, the US could actually rebuild its collapsing infrastructure
by just printing the money, without causing price inflation. Prices go
up when demand (money) exceeds supply (goods and services); and with
automation and the availability of cheap labor in vast global markets
today, supply can keep up with demand for decades to come. Duncan observes:

The combination of fiat money and Globalization creates a unique moment
in history where the governments of the developed economies can print
money on an aggressive scale without causing inflation. They should take
advantage of this once-in-history opportunity . . . .

Returning the Power to Create Money to the People

The right of government to issue its own money was one of the principles
for which the American Revolution was fought. Americans are increasingly
waking up to the fact that the vast majority of the money supply is no
longer issued by the government but is created by private banks when
they make loans; and that with that power goes enormous power over the
economy itself.

The issue that should be debated is one that dominated political
discussion in the 19th century but that few candidates are even aware of
today: should creation and control of the money supply be public or
private? Donald Trump’s willingness to transgress the conservative taboo
against public money creation is a welcome step in opening that debate.

(2) QE for the People, not the Bankers

Last year, Positive Money launched Quantitative Easing for People, a
campaign in the eurozone.

QE for People has been bringing together civil society organisations who
agree the European Central Bank’s programme of QE is failing.

Since QE started, 720 billion euros have been created. This money has
flooded financial markets, pushing up house prices and driving inequality.

QE for People argues there is an alternative. Central bank could use
newly created money to meet the needs of society - to finance
infrastructure projects, build affordable housing or by giving it
directly to eurozone citizens.

Our campaign is already having a big impact.

In March, Mario Draghi, president of the ECB,  declared helicopter money
(a QE for people proposal) a 'very interesting concept'.

Thomas Mayer, former chief economist of Deutsche Bank, recently wrote:

"Helicopter money would facilitate the change-over from our present
credit money system to an alternative money system, in which money is no
longer created as private debt."

Economists and policy makers are beginning to take an interest, but we
need a strong public voice to bring about change.

Will you help us to achieve this by liking the
Facebook page and
joining the campaign?

(3) Trump vs. the Two Party System?


MAY 9, 2016

With his win last week in Indiana’s Republican primary, it appears
increasingly likely that Donald Trump will now be the Republican nominee
to run for president. However, Republican party elites are coming around
only slowly to that prospect and are still having a hard time accepting
that reality. They could still "shoot themselves in the foot," as the
saying goes, by engineering an 11th hour contested nominating
convention. Not likely, but still possible.

Or they could accept Trump as the nominee, and withhold their financial
support beyond just a token commitment, and instead focus on retaining
control of the Senate and US House of Representatives.

Or, they could do what the Democratic party leadership did in 1972, when
the Democrat party elite faced a grassroots populist revolution from
below in the form of the George McGovern’s challenge to party leaders
and McGovern’s eventual winning of the 1972 Democratic party nomination.
That is, just as ex-president Lyndon Johnson and other high level
Democrat party leaders quietly threw their support behind McGovern’s
Republican opponent at the time, Richard Nixon, in the 1972 election,
key leaders of the Republican party establishment could indirectly
support Trump’s opponent in 2016. They could support Hillary, in other

The Republican party elite is quite capable of doing that in Trump’s
case. A growing number of Republican party leaders are already coming to
believe that Hillary is not all that bad an option for them. More
Republican billionaires are considering the same. For example, the
notorious Koch brothers, ultra-conservative multi-billionaires in the
US, have already
signaled publicly they could support Hillary if Trump becomes the
Republican nominee. And Hillary’s husband, Bill, is reported to be
aggressively courting with some success-other billionaire Republicans,
seeking money and support for Hillary in exchange for what in return one
can only guess.

The Trump-Ryan Exchange

That the Republican party leaders have still not decided what to do
about Trump was reflected in the past week’s verbal exchanges between
Trump and Republican U.S. House Speaker Paul Ryan, one of the top
leaders of the party. Last month Ryan was clearly being discussed by the
"insiders" of the party as the Republican nominee if Trump failed to get
the nomination on the first ballot at the convention, and there was a
need to select a candidate other than Trump. Ryan was at the top of that

Ryan’s initial public statement after Trump’s opponents, John Kasich and
Ted Cruz, dropped out of the race this past week was that he, Ryan,
could not yet support Trump’s policies or his nomination. Nor would he
meet with him. Ryan was clearly speaking on behalf of the rest of the
Republican establishment. They were probably testing Trump. Would he
come to them and tell them what they wanted to hear, supporting free
trade, cutting social security, providing more tax cuts for big
business, repeal Obamacare, etc. Refusing to be upstaged by Ryan,
however, Trump quickly retorted publicly that he was not ready to
support Ryan’s policies either, and was not interested in meeting with
Ryan in any event. In short, the Trump-Republican leadership
relationship remains fluid, and it is not yet clear what the Republican
elite has decided to do with Trump, their presumptive party nominee now
that Kasich and Cruz dropped out.

Trump As ‘Outside the Outsiders’

What the Trump-Ryan exchange this past week reflects is that Trump never
loses an opportunity to position himself ‘outside’ the two party system,
including his own Republican party. U.S. presidential candidates
typically like to run as "Washington outsiders" in U.S. presidential
elections. Blame all the problems of the country on the "insiders," i.e.
the politicians in Washington. That was Cruz’s strategy, even though he
himself was a Washington "insider" as a Senator. But Trump "out-Cruzed"
Cruz in the primaries and went one step further, positioning himself as
outside the two party system itself, not just the Washington
establishment. It’s what voters wanted to hear.

In this year’s election, that’s a theme that has great appeal whether on
the left or the right: attack the party system itself as corrupt and
non-responsive to average Americans’ interests, not just the Washington
establishment. The unresponsive party system has become a kind of proxy
for an unresponsive political system itself, which more voters are
coming to think is basically corrupt, both politically and economically,
undemocratic, and increasingly disregarding of the needs of the majority
of U.S. middle and working class households. The parties are only
concerned about the interests of bankers, corporations, and the
wealthiest 1 percent.

A majority of American voters — on both the left and the right — are
increasingly fed up with both political parties. That has become a U.S.
voter "hot button" that Trump discovered early in the campaign and has
never lost an opportunity to push. Ryan and the rest of the Republican
party establishment haven’t quite figured that out yet. They keep
playing into Trump and he wastes no opportunity to "push the button" and
attack them in return as representatives and reflections of a system
that is no longer responsive to average Americans. Sometimes Trump will
even bait one of them, charge them with having done great harm to U.S.
national security by attacking Iraq when there was no proof of weapons
of mass destruction there, as in the case of Trump’s accusation aimed at
former president, George W. Bush; or draw out former Republican
presidential candidate, John McCain, questioning his former Vietnam
prisoner of war status; or some other party "elder" who was previously
considered untouchable.

Every time Trump attacked a member of the Republican party establishment
— whether Jeb Bush, Cruz, Rubio, or even party leaders not running
against him like John McCain, Lindsey Graham, or others — he was de
facto attacking the Republican party and its leaders who, with their
Democrat counterparts, represent a failed party system in the mind of
the U.S. voter. The Republican party elites could not — and still do not
— understand why Trump is doing this. But Trump and the voters
understood. And every time they criticized Trump in return for his
attacks, he comes back at them declaring them part of a corrupt party
system. Their criticisms don’t weaken Trump; they strengthen his appeal.
And the more abusive of them Trump becomes, the more it resonates with
U.S. voters.

Echoes of a Past Election

There are a number of "echoes" of past U.S. elections in this year’s
U.S. election. In a number of important respects, Trump’s appeal is
reminiscent of Reagan’s back in 1980. Not because their policies are
similar. But because of their unabashed attack on what they proclaim is
a failed political establishment. Reagan of course was pointing at the
Democrats, but also indirectly at the ‘liberal’ Republican establishment
in control of that party at the time. Trump attacks both and appeals
directly to voters outside both the party structures.

Trump’s appeal should not be underestimated by progressives or liberals.
Trump cannot be simply disregarded as "crazy" or some kind of fascist,
the latter charge only revealing how little they understand fascism let
alone Trump. It is true that Trump is more brash, crude, and outlandish
in his public statements and his pandering to the ignorant
ultra-conservative base in the US, when compared to Reagan. All that
difference in tone reflects, however, is the general deterioration of
U.S. public and political discourse in recent decades. Progressives and
liberals today, who were not around in 1980 to experience the 1980
election, should know that Reagan in 1980 was no less "shocking" for the
time with some of his extreme positions and proposals.

One of the several things that are unique in this 2016 electoral cycle
is that a majority, if not a big plurality, of American voters are
becoming increasingly fed up with the two party system — which is
perhaps better described as two wings of a single Corporate Party of
America system. Both wings, Republican and Democrat, have been flapping
in unison the past 36 years, both delivering neoliberal economic
policies that have been devastating average Americans’ standard of
living, while enriching the wealthiest 1% households and their
corporations to an obscene degree.

As a recent study by University of California, Berkeley professor,
Emmanual Saez, has revealed using IRS data: no less than 97% of all the
net gains in national income since 2008 have been captured by the
wealthiest 1 percent households. That compares to 65 percent captured by
the same during 2000-2008, and 48 percent captured in 1992-1999.

It may be the two party (aka two wings-single party) system today is the
target of U.S. voter wrath in this particular election. But it may also
be that the party system itself is a proxy for a growing, deeper
discontent with the system itself that could eventually manifest more
quickly than some think. It is not coincidental that in polls nearly
half of young workers in the U.S. today speak sympathetically about, or
identify in some way, with Socialism. They may not have a clear or
historical understanding of the term, but to them it means "anything but
the present" in some fundamental way.

Jack Rasmus is the author of ‘Systemic Fragility in the Global Economy’,
Clarity Press, 2015. He blogs at His website is and twitter handle, @drjackrasmus

(4) 'Self-funded' Donald Trump preparing to seek big-Donor Money


May. 13, 2016 1:41 PM EDT

LAS VEGAS (AP) — The billionaire presidential candidate who prides
himself on paying his own way and bashed his competition for relying on
political donors now wants their money — and lots of it.

Donald Trump, the presumptive Republican presidential nominee, recently
hired a national finance chairman, scheduled his first fundraiser and is
on the cusp of signing a deal with the Republican Party that would
enable him to solicit donations of more than $300,000 apiece from

His money-raising begins right away.

The still-forming finance team is planning a dialing-for-dollars event
on the fifth floor of Trump Tower in New York, and the campaign is at
work on a fundraising website focused on small donations. In addition to
a May 25 fundraiser at the Los Angeles home of real estate developer Tom
Barrack, he'll hold another soon thereafter in New York.

The political newcomer faces a gargantuan task: A general election
campaign can easily run up a $1 billion tab. For the primary race, Trump
spent a tiny fraction of that amount — he's estimated $50 million of his
own money, plus about $12 million from donors who sought his campaign
out on their own.

Trump told The Associated Press in an interview this week that he will
spend minimally on a data operation that can help identify and turn out
voters. And he's betting that the media's coverage of his rallies and
celebrity personality will reduce his need for pricey television

Yet he acknowledged that the general-election campaign may cost "a lot."
To help raise the needed money, he tapped Steven Mnuchin, a New York
investor with ties in Hollywood and Las Vegas but no political
fundraising experience.

"To me this is no different than building a business, and this is a
business with a fabulous product: Donald Trump," Mnuchin said in an
interview at a financial industry conference in Las Vegas. Trump's new
national finance chairman said prospective donors are "coming out of the
woodwork" and he's been fielding emails and phone calls from people he
hasn't heard from in 20 years.

More experienced fundraisers are coming aboard, too, such as Eli Miller
of Washington, Anthony Scaramucci of New York and Ray Washburn of
Dallas. All three helped raise money for candidates Trump defeated in
the primary.

To convey the amount of work needed to vacuum up money, Scaramucci, part
of 2012 GOP nominee Mitt Romney's finance team, recently shared Romney's
old fundraising calendar with Trump. He said Trump was receptive to a
schedule that has 50 to 100 fundraisers over the summer.

Scaramucci said he didn't expect Trump to grovel for donors. "But is he
going to say thank you and be appreciative? Of course. He's very good
one-on-one. He's a hard guy not to like."

Trump's dilemma: By asking for money, he could anger supporters who love
his assertion that he's different from most politicians because he isn't
beholden to donors.

He's tried to navigate these tricky waters by saying he wants only to
raise money to benefit the party and help elect other Republicans. But
his planned joint fundraising agreement with Republican officials also
provides a direct route to his own campaign coffers.

Such an arrangement could work like this: For each large contribution,
the first $2,700 or $5,400 goes to Trump's campaign, the next $33,400
goes to the Republican National Committee, similar amounts could go to
national party accounts and the rest is divided evenly among various
state parties the candidate selects.

Democrat Hillary Clinton set up such a victory committee in September,
and it had collected $61 million by the end of March.

She also counts on several super PACs that. They've landed
million-dollar checks from her friends and supporters and already
scheduled $130 million in TV, radio and internet ads leading up to
Election Day.

Trump is only now beginning to turn his attention to this kind of big
money. A decision on how fully to embrace outside groups is fraught with
possible charges of hypocrisy, since he has called them "corrupt."

Still, wealthy Trump supporters have several options — and megadonors
are beginning to line up.

Sheldon Adelson, a billionaire Las Vegas casino owner who was the
largest donor of the 2012 presidential race, wrote in a Washington Post
editorial this week that he endorses Trump and is urging "those who
provide important financial backing" to do the same.

Libertarian billionaire Peter Thiel, who co-founded PayPal and pumped
millions of dollars into Ron Paul's presidential bid four years ago,
recently signed on as a California delegate for Trump. And billionaire
oil investor T. Boone Pickens said this week he intends to help finance
Trump's effort. He's invited officials from one of the pro-Trump super
PACs to his Texas ranch next month.

That entity, Great America PAC, has struggled to get off the ground but
hopes to raise $15 million to $20 million in the next few months, said
its chief fundraiser, Eric Beach. The group recently brought on Ronald
Reagan's campaign manager Ed Rollins, whom Trump has praised.

On Thursday, another pro-Trump super PAC emerged. Doug Watts, former
communications director for Ben Carson's 2016 bid, started a group
called the Committee for American Sovereignty with an advisory board
that include former Trump resorts executive Nicholas Ribis Sr. and
longtime GOP donor Kenneth Abramowitz. The group aims to raise $20
million before the GOP convention in July.

One Trump emissary to the world of major donors is billionaire investor
Carl Icahn, who made calls to Pickens and others to gauge their interest
in Trump.

Some are biting, either because of support for Trump or a desire to keep
Clinton out of office. Among the latter group is Stanley Hubbard, a
Minnesota broadcast billionaire who spent money trying to "stop Trump."

Having failed in that quest, he said he's prepared to write a check to
stop Clinton. ___

Associated Press writer Jill Colvin contributed to this report.

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