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Since 1790, our governments -- federal, state and local -- have financed their budget deficits by issuing and selling interest-bearing, debt-creating, taxpayer-guaranteed IOUs called bonds to wealthy creditors worldwide. The New York Times, on Dec. 6, 1921, quoted Thomas Edison: "It is absurd to say that our country can issue $30,000,000 in bonds and not $30,000,000 in currency. Both are promises to pay; but one promise fattens the usurer, and the other helps the people." Shouldn't we at least be debating all viable alternatives to the suicidal system now in place?
In 1976, the Banking, Currency and Housing Committee of the House of Representatives issued a 120-page report, "Study of Corporate and Banking Influence." After amassing indisputable evidence of the extent to which one creditor, the Federal Reserve system, was then influencing our political, economic, and financial futures, the report's authors concluded that the "Concentration of economic and financial power in the United States has gone too far. ... The Federal Reserve directors are apparently representatives of a small elite group which dominates much of the economic life of this nation." This elite's influence existed in 1976 despite the constraints imposed on corporate and bank lending by the 1933 Glass-Steagall Act. When that legislation was repealed in November 1999, corporate and banking lenders took advantage of the freedom to run amok and proceeded to take control of governments that until then they were only influencing.
In May 2011, coverage by Californian reporter James Burger of Kern County's pension problems revealed that the Kern County Board of Supervisors borrowed $516 million to fund pension commitments. At that time, we still owed $451 million, repayable in 17 annual installments of $57 million, for a total of $970 million, of which $519 million would be interest. And this is only one example of what is commonplace! Surely, there has to be a way to eliminate this madness.
On a larger scale, a worldwide financial power structure, spearheaded by the International Monetary Fund, has told governments at all levels in every country that debt is the most serious problem now confronting them, the United States included. So, if we do not quickly balance our budgets, we will become a credit risk, and our creditors will raise the interest rates on any future borrowing. Of course, this threat assumes that, until their demands are met, we will continue to borrow. It also assumes that even if we do balance our budget and no longer have to borrow, we will continue to pay compound interest on the trillions of dollars of debt that we will have accumulated since 1790. In response to the threat, our elected representatives can't get out of each other's way in their mad rush to obey.
Obviously, the warning contained in that 1976 report has been ignored by our representatives for reasons they refuse to reveal. Where is the open government that would fearlessly debate all aspects of, and propose solutions to, a problem of this magnitude? In what ways do the elites dominate the life of this nation and the world? How can we end their dominance, take back our country, and set an example for a humanity yearning to be free?
In view of this, it seems appropriate to demand that Republican Congressman Kevin McCarthy and independent challenger Terry Phillips debate the following question at a site that is open, free of charge, to a substantial number of voters. Why do our governments at all levels persist in borrowing interest-bearing, debt-causing money when the United States Constitution empowers the Congress of the United States to create and distribute to all levels the interest-free, debt-free money we need if we are to solve our economic problems and develop an economy that treats all of its participants equitably?
I suggest that the public reaction that hopefully might follow would shake the very foundation upon which this abominable power structure rests. It would replace a darkness born of ignorance with the shining lamp of knowledge. The elite could no longer play "good cop-bad cop" while their representatives meet behind closed doors to prepare the budgets that will make them happy, while millions suffer the needless consequences of the policies they adopt.
John Turnbull of Bakersfield is a retired attorney and former candidate for the Kern High School District board of trustees. Community Voices is an expanded commentary of 650 to 700 words.