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America Needs The NEED Act

By Nick Egnatz - Posted on 03 October 2013

America Needs The NEED Act

Today our politicians squabble over healthcare legislation passed years ago and in a few more days their fight will be over the federal deficit.  For the 95th time in the last 67 years, Congress and the President will be confronted with passing legislation to raise the "debt ceiling".  What citizens should know is that our country can pay off its debt as it comes due, put millions of people back to work rebuilding our crumbling infrastructure, provide debt free federal support for cash-strapped State governments, provide interest free funds for local governments and in addition give all Americans a Citizens' Dividend payment--putting immediate cash in the hands of all our citizens and thus giving our beleaguered small businesses what they need, customers with cash to spend on their goods and services. 

The current government shutdown is a reflection of the moral bankruptcy of the U.S. monetary system.  Throughout our history, leaders such as Benjamin Franklin, Presidents John Adams, Thomas Jefferson, Andrew Jackson, Martin Van Buren, Congressmen Wright Patman, Henry Gonzales and Dennis Kucinich have all struggled with private banks over who should have the power to create money--the people through their elected representatives for the benefit of our entire society or the private banks for the enrichment of their elite owners. 

The confusion the banking class has spread over the nature of money is largely responsible for the inability of our leaders to get it right. 

There are basically three types of money:

  1. "Money as a commodity"  Gold and silver coins and paper money backed by 100% gold and silver reserves in the vault.
  2. "Debt money created by banks" - This is the system we have now and is the cause of the problems we have now.  Bills and coins make up only about 2 1/2% of our total money supply.  The rest of our money supply is conjured up out of thin air by private banks when they make loans, with a private tax (interest) added on top.     
  3. "Money by law"     "Money exists not by nature, but by law," wrote Aristotle.  As societies grew and advanced, it became overly complicated to keep track of who owed what to whom, especially for transactions between people who didn’t know one another, therefore an impersonal but generally acceptable means of payment became necessary: money.  The law, and custom, by recognizing it as the officially acceptable means of payment for discharging debts, gave money its legitimacy.  It is meant to benefit society as a whole and not any certain segment of society.  As such, money is an instrument of law for the benefit of all.  Its value is a reflection of that society's industry and concept of justice.  Always public, never private. 

U.S.history--Jefferson and Madison battling with the private 1st Bank of the United States, Jackson and Van Buren clashing with the private 2nd Bank of the United States, the Greenback and Progressive Movements, more recently parts of the Occupy Movement--has been a struggle and search for a fair and equitable system of money.  Unfortunately, until now the banking class has had the money, clout and the ability to befuddle the issue enough to remain in power.  Listening to bank accountants, mystifying the explanations of their occult practices, is like walking into quicksand. 

The justification for giving the Money Power to the private First and Second Banks of the U.S. and the private Federal Reserve Bank was that they were issuing "money as a commodity" backed by gold and silver in their vaults.  But the reality was that the banks that Jefferson, Madison, Jackson and Van Buren fought, the private banks and  their private Federal Reserve System that citizens battle today have always created our money supply out of thin air by issuing "debt money created by banks".  This has been done historically by a process called "fractional reserve lending" in which banks  loaned out about 10 times the actual money they had in reserve.  Recently this process has been advanced to the point that the banks make the loans first and then use the entire Federal Reserve System to borrow whatever funds are necessary to justify the loan. 

It is why citizens in the U.S., countries across the globe such as Greece, Cyprus and Spain, our own cities like Detroit and states like Illinois have all become debt slaves to a private banking class. 

Let's look at the examples of money by law in our own history.

Colonial Script:  North American colonists suffered from a lack of money throughout their history.  Remember that the colonies were created to benefit the mother country and not to provide a good life for the colonists.  English law forbade sending coinage to the colonies and the Dutch also kept coinage from New Amsterdam (New York).  Economic activity became so difficult that Massachusetts even made a small amount of Indian wampum legal tender in an effort to create a circulating medium.  

Massachusetts rediscovered the science of money in 1690 when she issued "bills of credit", the first paper money in the West.  She spent them into circulation paying for the colonial expenses.  The colonial money by law fiat currencies dramatically improved life in the colonies, facilitated the building of real infrastructure, reversing the flow of emigrants who for decades had been moving back to England.

Continental Currency:  The Continentals helped us to win our independence.  The Continental Congress authorized $200 million and issued that amount.  They have been smeared as inflation money, and while the British counterfeiting billions of them eventually destroyed the Continentals, they still carried us over a 5 1/2 year period of Revolutionary War and to within 6 months of final victory.  They gave us our nation!

Greenbacks:  $450 million of paper Greenbacks were issued to fight the Civil War.  Eventually they were exchanged dollar for dollar with gold coins, but few were returned as Americans liked their paper money by law  Greenbacks. 

The Greenbacks allowed us to keep the nation that the Continentals had given us and the Colonial Paper Script had helped to build.  

Now let's examine what "debt money created by banks" has given us.

The 11 Major Financial Catastrophes in U.S. History

  1. Panic of 1785-1788
  2. Panic of 1792
  3. Panic of 1819-1822
  4. Panic of 1837-1843
  5. Panic of 1857-1861
  6. Great Depression or Panic of 1873-1878
  7. Panic of 1893-1897
  8. Panic of 1907
  9. Great Depression 1929-1941
  10. Recession of the mid 1970s
  11. Depression 2008-?

The historical record is clear.  There will be no relief for the American people under the current monetary system of "debt money created by banks".  Congress squabbles because the system in place cannot solve the problem.  It is the problem.  Here is the solution. 

AmericaNeeds the NEED Act

In the last Congress, then Congressman Dennis Kucinich and Congressman John Conyers, Jr. sponsored H.R. 2990 The National Emergency Employment Defense (NEED) Act.

1) The Federal Reserve is dismantled and good parts are placed into the US Treasury. A Monetary Authority under Congress is created which avoids an inflationary or deflationary money supply.  Most Americans think that the Federal Reserve is actually a federal agency.  The NEED Act accomplishes this.

2) Accounting rule changes prohibit the banks from creating debt money.  Fractional reserve lending is decisively ended.  Future bank lending would consist of banks lending monies that they actually had.  This is what the majority of Americans mistakenly think happens now. 

3) The Congress originates (creates) new U.S. Money and spends it into circulation, for infrastructure, health care and education; starting for example with the $2.2 trillion the engineers tell us is needed for infrastructure over the next 5 years. Later the human infrastructure of health care and education is added. This is estimated to create over 7 million good jobs quickly.

What about the $17 trillion federal debt?

The federal debt will be paid off as it becomes due. If we continue with a "debt money created by banks" system, we will never be able to pay off the debt.

What about the consumer debt owed? Under the NEED Act, payments would continue to be made to banks and the principal would then be passed on the federal government. These funds then become available to make the following programs possible:

  • The NEED Act is based on an understanding that the root economic problem is using debt for money and consequently a lack of money for average everyday people. This is immediately addressed with a Citizen's Dividend to be paid to every citizen. This is necessary to maintain a sufficient money supply. Other dividends may be forthcoming in the future, as long as they are non inflationary.
  • A commitment of the NEED Act to channel 25% of all newly created new U.S. Money to state governments based on population to use as they see fit.
  • A 0% lending facility to local governments.

Stephen Zarlenga's The Lost Science of Money, a tour de force study of 3,000 years of monetary history, incorporates the perspective of social justice and fairness in monetary policy.  All the world's great religions have struggled to reconcile monetary policy and the abhorrent concept of usury.  In our youths almost all states had usury laws limiting the amount of interest that could be charged by lenders. In 1978 in  Marquette vs. First Omaha Service Corp., the Supreme Court ruled that a national bank could charge the highest interest rate allowed in their home state to customers living anywhere in the United States, including states with restrictive interest caps.  This ruling coupled with subsequent court rulings and legislation has left the public completely exposed to the Money Power's greed.  Learning from Aristotle, Thomas Aquinas, the Scholastic Scholars of the Middle Ages and 3,000 years of monetary history, Zarlenga frees the term usury from the constraints of modern interpretation: simply charging an excessive interest rate.  Zarlenga's "macro usury" is "the taking of something for nothing through the structural misuse of the monetary mechanism."  

The NEED Act cuts to this very "heart of darkness" of the "debt money created by banks" monetary system of usury.

Under a "debt money created by banks" monetary system, the people have austerity, sequestration, squabbles over raising the "debt ceiling" and an economic depression.  The people suffer a real unemployment rate of 23%. Millions more who are working are not being paid enough for life's basic necessities.  8 million families have been thrown out of their homes.  Under a money by law NEED Act, we have payment of debt, no deficits, jobs, rebuilding of our crumbling infrastructure, funding for healthcare, funding for education and an economic shot in the arm Citizen's Dividend for all Americans that will be an immediate boost to every small business in the country.  Which system are you for? 

Author's note: Our nation has other serious problems; endless wars, empire and militarism, inequality, destruction of our environment, undemocratic democracy, and assault on civil liberties. They are all related and cannot be attacked piecemeal.  They are a direct result of propping-up an economic system that is geared to a relative handful of people accumulating more and more, while the poor and working class are forced to fight over the occasional crumbs that fall from the bankers' table. The NEED Act, conceived in fairness and social justice, can lead us in our struggle to "promote the general welfare" of all Americans.

Visit and join the American Monetary Institute to organize for social justice through monetary reform.

Nick Egnatz & Jamie Walton

Nick Egnatz is a Vietnam veteran. He has been actively protesting our government’s crimes of empire in both person and print for some years now and was named “Citizen of the Year” for Northwest Indiana in 2006 for his peace activism by the National Association of Social Workers.  Contact Nick: 

Jamie Walton uses his practical, problem-solving background as a New Zealand civil engineer to decipher the obfuscation of the Money Power.  His efforts were integral to making The NEED Act a reality in the last Congress.  Contact Jamie:

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