Shave The Whales, Or Nationalize The Fed — Let Private Predator Banks Die: Lawyer

DALLAS, Texas Still pissed off at the Wall Street bailout? President Barack Obama’s stimulus package? Private bank nationalization? The new homeowner mortgage bailout?

Also afraid that the federal government won’t have enough money to fund Medicare, Medicaid, and Social Security in the future?

Well, Ellen Hodgson Brown has a solution for you.

Nationalize the Federal Reserve.

The lawyer and author of The Web of Debt: The Shocking Truth About Our Money System And How We Can Break Free told the Lone Star Iconoclast that the idea is more American than apple pie, mom, and baseball.

“The government used to create the money in the 18th century before the American Revolution. It was a brilliant system. The American colonists printed their own money, and the people think it is the government that creates the money, but it’s not. Today, it’s banks,” she explained.

Right now, the Federal Reserve is a corporate institution owned and controlled by private banks chartered to create money through a process of fractional reserve lending to themselves. Money is created when these private banks lend up to 10 times their debt deposits from the Federal Reserve to public and private institutions plus interest. This money (aka debt) is, therefore, created out of thin air.

By “nationalization,” Brown means having Congress turn the Federal Reserve into the acting central bank of the United States that prints money interest free.

There have been a few sporadic moves to nationalize the Federal Reserve over the last 100 years. Former Georgia Congresswoman Cynthia McKinney campaigned for president on such a platform in 2008. But the last major push to nationalize the Fed was spearheaded by a U.S. Congressman fromTexas’s 1st congressional district, the late Wright Patman.

“[Patman] was chairman of the United States House Committee on Banking and Currency, and he investigated the Federal Reserve and discovered that they were printing our money and charging us interest lending it to the government. He tried to get the Fed nationalized. He wanted to make it a government entity, which everybody thinks it is. He did not prevail in that, but he succeeded in getting them to rebate the interest,” said Brown.

By Brown’s rationale, if Congress had asked the Federal Reserve for money to directly fund Obama’s $780 economic stimulus package, taxpayers wouldn’t have to pay any interest back to the Fed. The interest would be returned to the federal government by law.

“Most of our bonds are issued to private parties, and they expect serious interest [returned], so that’s why we had a $412 billion interest bill last year. A third of our income taxes went to pay interest on the Federal debt. Well, what if the Federal Reserve funded the debt? It would be nearly interest free, and because it’s our own Central Bank. We could roll over the debt from year to year. Basically, it would be free money. It would never have to be paid back,” explained Brown.

Under such a system, there would also be no reason to ask Japan, China, India, Saudi Arabia, or any other foreign country to hold our federal debt. What about these foreign nations that hold our debt now? What would they most likely do if the U.S. stopped issuing U.S. Treasury bonds abroad and went to a nationalized Fed for debt service?