Revive Lincoln's Monetary Policy - An Open Letter to President Obama

Dear President Obama:

The world was transfixed on that remarkable day in January when, to poetry, song, and dance, you gazed upon Abraham Lincoln's likeness at the Lincoln Memorial and searched for wisdom to navigate these difficult times. Indeed, you have so many things in common with that venerable President that one might imagine you were his reincarnation in different dress. You are both thin and wiry, brilliant speakers, appearing on the national stage at pivotal times. Fertile imaginations could envision you coming back dressed in that African heritage you freed, to help heal the great scar of slavery and prove once and for all the proposition that all men are created equal and can achieve great things if given a fighting chance.

As Wordsworth said, however, our birth is but a sleep and a forgetting; and if that is true, you may have forgotten a more subtle form of slavery from which Lincoln tried less successfully to free his countrymen. You may have forgotten it because it has been omitted from our popular history books, leaving Americans ill-equipped to interpret the lessons of our own past. This letter is therefore meant to remind you.

President Obama, we are now met on another battlefield of that same economic war that visited Lincoln and the Founding Fathers before him. For you to finish the work Lincoln started would be a poetic triumph no American could miss. The fate of our economy and the nation itself may depend on how well you understand Lincoln's monetary breakthrough, the most far-reaching "economic stimulus plan" ever implemented by a U.S. President. You can solve our economic crisis quickly and permanently, by implementing the same economic solution that allowed Lincoln to win the Civil War and thus save the Union from foreign economic masters.

LINCOLN'S MONETARY BREAKTHROUGH

The bankers had Lincoln's government over a barrel, just as Wall Street has Congress in its vice-like grip today. The North needed money to fund a war, and the bankers were willing to lend it only under circumstances that amounted to extortion, involving staggering interest rates of 24 to 36 percent. Lincoln saw that this would bankrupt the North and asked a trusted colleague to research the matter and find a solution. In what may be the best piece of advice ever given to a sitting President, Colonel Dick Taylor of Illinois reported back that the Union had the power under the Constitution to solve its financing problem by printing its money as a sovereign government. Taylor said:

"Just get Congress to pass a bill authorizing the printing of full legal tender treasury notes...and pay your soldiers with them and go ahead and win your war with them also. If you make them full legal tender...they will have the full sanction of the government and be just as good as any money; as Congress is given that express right by the Constitution."

The Greenbacks actually were just as good as the bankers' banknotes. Both were created on a printing press, but the banknotes had the veneer of legitimacy because they were "backed" by gold. The catch was that this backing was based on "fractional reserves," meaning the bankers held only a small fraction of the gold necessary to support all the loans represented by their banknotes. The "fractional reserve" ruse is still used today to create the impression that bankers are lending something other than mere debt created with accounting entries on their books.

Lincoln took Col. Taylor's advice and funded the war by printing paper notes backed by the credit of the government. These legal-tender U.S. Notes or "Greenbacks" represented receipts for labor and goods delivered to the United States. They were paid to soldiers and suppliers and were tradeable for goods and services of a value equivalent to their service to the community.

The Greenbacks aided the Union not only in winning the war but in funding a period of unprecedented economic expansion. Lincoln's government created the greatest industrial giant the world had yet seen. The steel industry was launched, a continental railroad system was created, a new era of farm machinery and cheap tools was promoted, free higher education was established, government support was provided to all branches of science, the Bureau of Mines was organized, and labor productivity was increased by 50 to 75 percent. The Greenback was not the only currency used to fund these achievements; but they could not have been accomplished without it, and they could not have been accomplished on money borrowed at the usurious rates the bankers were attempting to extort from the North.

Lincoln succeeded in restoring the government's power to issue the national currency, but his revolutionary monetary policy was opposed by powerful forces. The threat to established interests was captured in an editorial of unknown authorship, said to have been published in The London Times in 1865:

"If that mischievous financial policy which had its origin in the North American Republic during the late war in that country, should become indurated down to a fixture, then that Government will furnish its own money without cost. It will pay off its debts and be without debt. It will become prosperous beyond precedent in the history of the civilized governments of the world. The brains and wealth of all countries will go to North America. That government must be destroyed or it will destroy every monarchy on the globe."

Lincoln was assassinated in 1865. According to historian W. Cleon Skousen:

"Right after the Civil War there was considerable talk about reviving Lincoln's brief experiment with the Constitutional monetary system. Had not the European money-trust intervened, it would have no doubt become an established institution."

The institution that became established instead was the Federal Reserve, a privately-owned central bank given the power in 1913 to print Federal Reserve Notes (or dollar bills) and lend them to the government. The government was submerged in a debt that has grown exponentially since, until it is now an unrepayable $11 trillion. For nearly a century, Lincoln's statue at the Lincoln Memorial has gazed out pensively across the reflecting pool toward the Federal Reserve building, as if pondering what the bankers had wrought since his death and how to remedy it.

BUILDING ON A SUCCESSFUL TRADITION

Lincoln did not invent government-issued paper money. Rather, he restored a brilliant innovation of the American colonists. According to Benjamin Franklin, it was the colonists' home-grown paper "scrip" that was responsible for the remarkable abundance in the colonies at a time when England was suffering from the ravages of the Industrial Revolution. Like with Lincoln's Greenbacks, this prosperity posed a threat to the control of the British Crown and the emerging network of private British banks, prompting the King to ban the colonists' paper money and require the payment of taxes in gold. According to Franklin and several other historians of the period, it was these onerous demands by the Crown, and the corresponding collapse of the colonists' paper money supply, that actually sparked the Revolutionary War.

The colonists won the war but ultimately lost the money power to a private banking cartel, one that issued another form of paper money called "banknotes." Today the bankers' debt-based money has come to dominate most of the economies of the world; but there are a number of historical examples of the successful funding of economic development in other countries simply with government-issued credit. In Australia and New Zealand in the 1930s, the Depression conditions suffered elsewhere were avoided by drawing on a national credit card issued by publicly-owned central banks. The governments of the island states of Guernsey and Jersey created thriving economies that carried no federal debt, just by issuing their own debt-free public currencies. China has also funded impressive internal development through a system of state-owned banks.

Here in the United States, the state of North Dakota has a wholly state-owned bank that creates credit on its books just as private banks do. This credit is used to serve the needs of the community, and the interest on loans is returned to the government. Not coincidentally, North Dakota has a $1.2 billion budget surplus at a time when 46 of 50 states are insolvent, an impressive achievement for a state of isolated farmers battling challenging weather.1 The North Dakota prototype could be copied not only in every U.S. state but at the federal level.

THE PERENNIAL INFLATION QUESTION

The objection invariably raised to government-issued currency or credit is that it would create dangerous hyperinflation. However, in none of these models has that proven to be true. Price inflation results either when the supply of money goes up but the supply of goods doesn't, or when speculators devalue currencies by massive short selling, as in those cases of Latin American hyperinflation when printing-press money was used to pay off foreign debt. When new money is used to produce new goods and services, price inflation does not result because supply and demand rise together. Prices did increase during the American Civil War, but this was attributed to the scarcity of goods common in wartime rather than to the Greenback itself. War produces weapons rather than consumer goods.

Today, with trillions of dollars being committed for bailouts and stimulus plans, another objection to Lincoln's solution is likely to be, "The U.S. government is already printing its own money - and lots of it." This, however, is a misconception. What the government prints are bonds - its I.O.U.s or debt. If the government did print dollars, instead of borrowing them from a privately-owned central bank that prints them, Uncle Sam would not have an eleven trillion dollar millstone hanging around his neck. As Thomas Edison astutely observed:

"If our nation can issue a dollar bond, it can issue a dollar bill. The element that makes the bond good, makes the bill good, also. The difference between the bond and the bill is that the bond lets money brokers collect twice the amount of the bond and an additional 20%, whereas the currency pays nobody but those who contribute directly in some useful way.

It is absurd to say that our country can issue $30 million in bonds and not $30 million in currency. Both are promises to pay, but one promise fattens the usurers and the other helps the people."

A WAKE-UP CALL

Henry Ford observed at about the same time:

"It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning."

Today we the people are starting to understand our banking and monetary system, and we are shocked, dismayed, and furious at what we are discovering. The wizard behind the curtain turns out to be a small group of men pulling levers and dials, creating an illusory money scheme that, behind all the talk and bravado, is mere smoke and mirrors. These levers are controlled by a privately-owned, unaccountable central bank called the Federal Reserve, which has recently dispensed billions if not trillions in funds to its banker cronies, without revealing where these monies are going even under Congressional inquiry or in response to Freedom of Information Act (FOIA) requests. As Chris Powell pointed out recently in conjunction with an FOIA request brought by Bloomberg News, which the Fed declined to comply with:

"Any government that can disburse $2 trillion secretly, without any accountability, is not a democratic government. It is government of, by, and, for the bankers."2

There was a time when private central bankers were the heavyweights in control, able to run their ultra-secret agenda with impunity; but that era is coming to an end. The bankers are scrambling, trying to patch up their crumbling creations with schemes, bailouts and sleight of hand. That effort, however, must ultimately prove futile. As investment adviser Rolfe Winkler said in a recent article:

"The great Ponzi scheme that is the Western World's economy has grown so big there's simply no 'fixing' it. Flushing more debt through the system would be like giving Madoff a few billion to tide him over. Or like adding another floor to the Tower of Babel. To what end? The collapse is already here. The question is: How much do we want it to hurt? Using the public's purse to finance 'confidence' in a system that is already kaput may delay the Day of Reckoning, sure, but at the cost of multiplying our losses. Perhaps fantastically."3

The bankers are on the run, feverishly trying to use the collapse of the current system to steer us toward an "Amero"-style North American currency, or a one-world private banking system and privately-issued global currency that they and only they control. We the people will not accept those solutions, however, no matter how bad things get. We demand real solutions that empower us, not further enslave us.

Abraham Lincoln had such a solution. President Obama, you can finally bring his monetary solution to fruition. Manifest the vision of Lincoln, Jefferson, Madison and Franklin, and we the people will make sure you are placed in the pantheon of our greatest leaders and are revered for all time. America's greatest days can still be ahead of us; but for this to happen, we need to expose and root out the deceptive banking scheme that would enslave us to a future of debt and increasing homelessness in this great country our forefathers founded. The time has come for democracy to rise superior to a private banking cartel and take back the power to create money once again. Such a transformation would represent the most epochal and empowering shift that humanity has ever seen. As you recently said:

"This country has never responded to a crisis by sitting on the sidelines and hoping for the best. Throughout our history we have met every great challenge with bold action and big ideas."

Your words are a timely reminder of our long legacy of action and bold solutions in the face of adversity. Can we do this? Yes we can.

____________________________________

1. Congressman Charles Binderup in a 1941 speech, "How America Created Its Own Money in 1750: How Benjamin Franklin Made New England Prosperous." Binderup quotes historian John Twells on this point.

2. Chris Powell, "Fed Refuses to Disclose Recipients of $2 Trillion," GATA (December 12, 2008).

3. Rolfe Winkler, "More Debt Won't Rescue the Great American Ponzi," Option Armageddon (March 9, 2009).

Originally posted on Yes! Magazine Online April 7, 2009. Special thanks to CC for his invaluable help with this article.

Ellen Brown, J.D., developed her research skills as an attorney practicing civil litigation in Los Angeles. In "Web of Debt," her latest book, she turns those skills to an analysis of the Federal Reserve and "the money trust." She shows how this private cartel has usurped the power to create money from the people themselves, and how we the people can get it back. Her websites are http://www.webofdebt.com/ and http://www.ellenbrown.com/ Her eleven books include the bestselling "Nature's Pharmacy," co-authored with Dr. Lynne Walker, which has sold 285,000 copies; and "Forbidden Medicine."

Hillary Warns Obama Voters About Al-Qaida

Hillary Clinton has warned voters not to elect Barack Obama. The reason: Because the Al-Qaeda is watching the US elections. According to Clinton, America could not risk electing an inexperienced candidate as Obama to president as this would exacerbate the threat of a terrorist attack from the Al-Qaida.

Clinton pointed out how, days after Gordon Brown took over as the British Prime Minister, terrorists had planted bombs, which, incidentally failed to go off. She was referring to the two devices, which, however, failed to explode, and the car, which crashed into the Glasgow airport in June 2007.

"I don't think it was by accident that Al-Qaeda decided to test the new prime minister," the New York senator said. "They watch our elections as closely as we do ... they play our allies," she added, quite evidently attempting to playing on the issue of national security to her advantage. With Obama predicted to deal her a second defeat at the New Hampshire primary, to follow on the earlier one at Iowa, Clinton's move could reflect her desperation.

"Let's not forget, you are hiring a president not just to do what a candidate says he or she will do in an election," Clinton said, adding "You are hiring a president who will be here when the chips are down, and problems pile up, because that's when you really need somebody who knows exactly what has to be done, to make the tough decisions."

"I hope I don't face any of those in my first 100 days, but if I do, I think I will be ready," Clinton said, in a reference to her long career in US public life. On the other hand, Obama, she argued, was a freshman senator from Illinois who was too much of a novice to serve as US commander in chief.

Obama retorted by questioning Clinton's foreign policy expertise. He referred to Clinton's flawed judgment, regarding her vote during the 2002 Senate authorizing President George W. Bush's decision to go to war with Iraq.

Earlier, former president Bill Clinton, referring to the 9/11 tragedy had also argued that the next president of the US would have to be ready for sudden, national security challenges. "You have to have a leader who is strong and commanding and convincing enough... to deal with the unexpected," he said, adding "There is a better than 50 percent chance that sometime in the first year or 18 months of the next presidency, something will happen that is not being discussed in this campaign."

Senator Hillary Clinton - latest information and collection of flip flop videos about her election campaign, speeches, and quotes.

Emma Johnson has majored in American History. She writes on politics and current affairs.

US Retirement System - The Next Obama Overhaul?

"A nickel ain't worth a dime anymore."

If you're a baseball fan, you'll likely remember Hall Fame Yankee catcher, Yogi Berra, who became best known for his humorous, cracker-barrel one-liners, including the above quote. His point, although made in the 1940's, is just as true today. Uncertain future inflation and the erosion of future purchasing power is one of many factors which make financial planning for retirement so extremely difficult and why the government is feverishly studying how to secure today's very shaky retirement system.

While the country attempts to digest the long-term impact of the recently passed healthcare bill, today's administration has its eye on another major problem and much needed overhaul: the retirement system. In fact, government studies and recently proposed legislation cite the need for major changes in today's retirement system in order to pre-empt financial disaster for middle class Americans, not just a disadvantaged few. Perhaps because the "tsunami" hasn't hit, we have yet to see media headlines regarding the impending retirement crisis, but the government is working feverishly to devise, at least partial, solutions.

A number of potentially disastrous issues have the keen attention of the White House, including the following: (1) the largest generation in the history of the nation, the baby boomers, has begun entering retirement and will continue to do so for another fifteen to twenty years. In sheer numbers, the "belly of the python" should enter retirement in the year 2016. Some estimates forecast the number of retirees in America to double within the next generation, while the number or workers supporting them will significantly decrease; (2) the decline in the value of financial assets has been coupled with an equally dramatic decline in home prices across America, which has further diminished workers' retirement security by eroding the value of the largest single investment for many middle-class families; (3) the shift from defined-benefit pensions to 401(k) and other defined contribution plans has left more workers than ever before to plan their retirements for themselves and to bear the risk of retirement investing alone; (4) Social Security is expected to meet a mere 40% of income needs for most retirees; (5) even for workers who save at recommended rates for their entire lives, dutifully stashing away funds into their 401(k) and IRA plans, the possibility of another market "disruption" always poses serious risks, as the recent financial crisis so tragically illustrated; and, finally, (6) the predominate use of defined contribution plans (unlike the good old days when retirees received a gold watch and a pension check for life from employers) leaves retirees and their savings exposed to the three great unknowns: (a) an unknown life span; (b) an unknown investment return; and, (c) an unknown future inflation rate.

With such tremendous financial vulnerability in retirement, those high up the government food-chain are researching how to avoid a potential train wreck. Translation - our federal government can't afford the expense of providing huge supplements to Social Security in order to ensure our seniors avoid impoverishment. With little fanfare to date, the federal government has been carefully studying the above issues. In early 2010, the White House Task Force on the Middle Class produced a report which confirmed its worst retirement fears and stated, "The current system does not provide sufficient retirement security for millions of Americans." The report went on to suggest promoting the availability of guaranteed lifetime income products, which transform at least a portion of retirees' savings into guaranteed future income, reducing the risks that retirees will outlive their savings or that their standards will be eroded by investment losses or inflation.

The U.S. Government Accountability Office, in a July 2009 report, noted that, "Workers covered by defined contribution plans, in particular, risk making inadequate contributions or earning poor investment returns, while workers with defined benefit plans risk future benefit losses, due to lack of portability if they change jobs." The "Retirement Security Needs Lifetime Pay Act of 2009" was proposed on June 8, 2009 by Congress (H.R. 2748) and reaffirmed on June 18, 2009 by the Senate (S. 1297). The two bills are nearly identical and propose to amend the Internal Revenue Code of 1986 to encourage guaranteed lifetime income payments from annuities by excluding up to 50% of lifetime annuity payments received under one or more annuity contracts, up to a maximum of $20,000 and otherwise includible in gross income in a taxable year. Some are suggesting the creation of Guaranteed Retirement Accounts (GRAs), which would give workers a simple way to invest a portion of their retirement savings in an account which is free of inflation and market risk. Finally, the Department of Labor included in a recent agenda an initiative by its Employee Benefits Security Administration (EBSA) to promote annuities for all workers as part of 401(k) and other retirement plan benefits. Studies performed by other credible sources, such as Ernst & Young, confirm the impending retirement disaster.

All studies seem to agree on one partial solution: Americans need to supplement Social Security with more guaranteed lifetime income. In other words, while Social Security is the government's lifetime income to recipients, it now appears that the government wants Americans to supplement Social Security with their own "private layer" of guaranteed lifetime income. Essentially, the message from policy makers is to encourage Americans to take some portion of their defined contribution plans and purchase an added layer of guaranteed lifetime income to supplement Social Security. The size of the additional "lifetime income" layer is something which each individual needs to determine, based upon needs and resources.

Whether Republican or Democrat, for or against government management or interference in our private lives, we all care about the fate of those in retirement, particularly if that includes us, or soon may. Though lifetime income via private annuities is unlikely to become a legislative mandate, I believe it's a positive for the government to offer incentives to Americans who buy them. Consider this: if you had the resources available, wouldn't it be wise to purchase enough guaranteed lifetime income, adjusted annually for inflation, such that, when added to Social Security, guaranteed income would cover your basic needs for as long as you live? Any extra funds you could then use for vacation and fun or bequeathing to heirs, but you wouldn't have to lose sleep over the prospect of winding up in the poor house. If able to cover the great financial unknowns, why would you gamble with your financial future?

Ironically, and regardless of government initiatives, the most challenging retirement hurdle may lie within our human nature. The psychology that seeing a lump sum of money in your monthly statement feels better than seeing a modest monthly income check, even if you live to be 105, is difficult to overcome. And, until the time arrives, it's so difficult to see ourselves as old or to understand how swiftly savings can waste away. But, unless you are extremely wealthy, the great unknowns (investment returns, inflation, longevity and major market disruptions) may just bring you to your financial knees, should you live long enough. The real question is, "Can you take the actions dictated by prudence and wisdom or will your feelings dictate your financial future?" I welcome your opinions.

Dean C. Lovett is a Wharton MBA and President of The Annuity Foundation in Charlotte, NC.

Dean C. Lovett is a Wharton MBA who worked as a CPA early in his career. As an entrepreneur of twenty years, he has created and operated approximately ten businesses. He launched The Annuity Foundation, LLC, dba AnnuitySpeak (www.annuityspeak.com) to promote awareness of fixed lifetime annuities and the importance of incorporating such annuities into today's retirement planning as the only way of ensuring that income lasts as long as a lifetime.

Obama's Insurance Policy - How the Obama Administration is Helping Consumers With Insurance

The current administration, headed by President Obama, has faced a lot of criticism the past year. All the problems the country has been experiencing landed right smack on his lap and he has not been given any wiggle room since then. There is, however, some good news. Despite all the troubling year the entire nation has had to contend with, the Obama Administration, in one way or another, has made insurance more affordable for the average consumer.

How so? In indirect ways, the administration has provided the consumers with opportunities to get more cash on hand. The most obvious way this was done was through the federal stimulus package. This was initially enacted by the former administration, with American taxpayers receiving stimulus payments. The amounts received by consumers were not much, but at least they were receiving something. The federal stimulus package continued with the Obama Administration - with major improvements. The current administration provided funds to bail out struggling corporations and the financial institutions to keep the economy afloat.

The effects of are coming to fruition and the economy is starting to recover. Many people have lost jobs, but there are some who are going back to work. Employment means an increase in income. This money, together with the payments from the stimulus package, and the other savings the consumers have gotten through the federal government's aid in mortgage payments and restructured loans, can now allow consumers to have enough money for something important - insurance.

Today, life insurance has become far more affordable for the ordinary citizen. The economic downturn has, indirectly, made policies more affordable since insurance companies, as with most large corporations today, are struggling in the destabilized market. Competition between insurance companies also helps. Insurance companies, in the hopes of getting more clients to boost their business, are lowering their rates radically. Programs are also offered with large discounts; and policy holders are being treated to better benefits and privileges.

The economy is still not as stable as one might like, however, it is getting back on its feet. It is high time for individuals to start shopping for life insurance policies while the market is advantageous to consumers. As they say, there is no time like the present. So, contact an agent or look online. Find insurance policies now, get quotes and rate estimates, compare benefits and coverages, and start your way into a more secure future.

It is important to compare insurance quotes before getting signed up with an insurance policy. When you compare insurance quotes you can rest assured you are saving both time and money because you are guaranteed to get the lowest insurance quote.

Given the current recession it is important to make sure to prioritize your money and compare insurance quotes online. A good place to state would be an online website that actually allows you to compare insurance quotes online for free.

A good site to compare insurance quotes online can be found here: Find Cheap Insurance Online