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27 March, 2009

Credit As A Public Utility: The Solution to the Economic Crisis

The long awaited Six Part Video Series by Richard C. Cook

Credit As A Public Utility: The Solution to the Economic Crisis

Please bookmark this page and watch these videos!

Part One “Our Early Political Leaders Warned Us Against the Banking Interests”

Summary: Early U.S. statesmen, such as Benjamin Franklin, Thomas Jefferson, James Madison, and Andrew Jackson worked to free the nation from control by the bankers who had been behind the establishment of the First and Second Banks of the United States. During the Civil War, President Abraham Lincoln implemented a true democratic currency by spending Greenbacks directly into circulation without borrowing from the banks. These measures allowed the U.S. to develop for much of the 19th century largely free from bankers’ control. By the end of the century, this had changed, and the bankers were taking over.

Part Two “The Federal Reserve System: The Bankers Take Over”

Summary: President Lincoln’s Greenback system worked but was undermined and replaced by the financiers who got Congress to pass the National Banking Acts of 1863 and 1864, then the Federal Reserve Act of 1913. The United States now became a nation dominated by the financial elite, the banks, and a debt-based monetary system. Consequently, the 20th Century was one of constant cycles of inflation and deflation resulting in the economic chaos we see today.

Part Three “The Collapse of the Financial System”

Summary: The collapse we are seeing today began in the financial system, not the producing economy. The crisis started with the housing bubble which the Federal Reserve created by cutting interest rates and then brought own by raising them. The trigger of the 2008 bank meltdown was refusal by European banks to purchase any more “toxic” U.S. debt based on mortgages and sold as securities. Now, with the decline in equity values, the burden of debt in our economy has grown even larger. Thus a renewal of bank lending will not solve the problem, while the economic stimulus program of the Obama administration is likewise insufficient to restore economic health.

Part Four “What is Credit and Who Should Control It?”

Summary: Fractional reserve banking is the process by which banks create credit out of thin air. But despite abuses of the system, credit is still a crucial part of modern economics. An enlightened concept of governance would view credit as a public utility. This means that government must take back the control of credit from the private financiers.

Part Five “The Gap Between Prices and Income”

Summary: One of the most important and least understood concepts in modern economics is the existence of a gap between prices and purchasing power. This gap results when a portion of prices must be set aside as business and private savings. The money is then used by the financial system for lending and speculation. Keynesian economics takes control of some of the savings through government deficit spending but is still a compromise with control of the economy by the financiers. In fact Keynesian economics has helped cause the collapsing debt pyramid. A better system would be to provide consumers with a National Dividend as a way to monetize the continuous appreciation of the producing economy.

Part Six “The Greenback and National Dividend Solutions”

Summary: The U.S. should convert to a system where the money supply is created by the federal government by being spent into circulation without government borrowing or taxation as was done with the Greenbacks. The Federal Reserve should no longer be a bank of issue. Additionally, a National Dividend should be paid directly to the people. The “Cook Plan” calls for the initial distribution of vouchers in the amount of $1,000 a month plus a new system of community savings banks. Greenbacks combined with a National Dividend will create a non-inflationary democratic currency and transform the economy of the United States.

Richard C. Cook is a former U.S Treasury analyst who also worked in the Carter White House and for NASA and writes on public policy issues. His new book is We Hold These Truths: The Hope of Monetary Reform (Tendril Press 2009). His website is He is a member of the U.S. Basic Income Guarantee Network and has been an adviser to Congressman Dennis Kucinich and the American Monetary Institute. Purchase the DVD at Richard C. Cook’s website.


  1. "The Congress shall have the power to coin money, regulate the value thereof, and of foreign coin, and fix the standard of weights and measures." --U.S. Constitution, Article I, Sec.8

    Since this law has never been constitutionally amended the Fed is an illegal institution for Article VI affirms that the Constitution is "the supreme law of the land.."

  2. Damien -- You're right in your quote but look carefully. Nothing says "The power to coin money, regulate the value thereof, and of foreign coin, and fix the standard of weights and measures" is reserved EXCLUSIVELY to the Congress. Alternative currencies have always been floated. You're free to introduce your own -- I'm not being facetious. I invite you to consider (Although I'm an "anonymous coward", I'm not connected with them). Just like the Reserve Note, these currencies don't always last. I just bought out part of the bullion deposits for a similar "Mormon Dollar". -- MR from IN

  3. Sure anybody can print what they want, but the introduction of a national currency created by private interests is unconstitutional.

    U.S Supreme Court case SHECHTER POULTRY v. U.S.A.(29US495)(1935)ruled that Congress cannot legally delegate it Constitutional authority:

    "The Question of the delegation of Legislative Power. The Constitution provides that 'All legislative powers herein granted shall be vested in a Congress of the U.S.ArtI,SecI. And the Congress is authorized 'To make all Laws which shall be necessary and proper for carrying into Execution its general powers. Art.I,Sec.8. The Congress is not permitted to abdicate or to transfer to others the essential legislative functions with which it is thus vested." --U.S. Supreme Court

    Thus according to the Constitution and the Supreme Court the nation's money(being the prerogative or function of the state) is to be produced by Congress and not by privately-owned banks like the Fed.