Republicans and Democrats have supported issuing of trillions and trillions of free dollars to the rich and that seems somewhat like treason. Those quantitative easing loans at 0% put electronic deposits in big banks, and with the marginal reserve rate of 10% generally those banks could loan out 9 dollars for each dollar in their account. That means 16 trillion given between 2008–2011 amounted to 134 trillion minus the 16 trillion that needed to be repaid to the Federal Reserve. Nothing was written in the constitution about a role of government to assure that the rich are given 134 trillion now and then and the poor, nothing. Republicans in the Senate are wailing and lamenting that 430 billion for Covid relief stimulus would bankrupt the country or need to be repaid by survivors of the future.
When the Federal Reserve was started the U.S.A. was still on the gold standard. The Federal Reserve was helpful in assuring liquidity and provided some protection for depositors. When the dollar became free floating during the Nixon administration the stage was set for future unscrupulous use of Federal Reserve loans.
President Reagan and Arthur Laffer seemed to understand that the need to run a balanced budget was as important as during former times. Many viewed Reagan stimulus deficit spending as a white-washed Keynesianism and apparently that view was wrong. It was difficult to entirely revise the classical view of economics to the free floating dollar paradigm.
During the 2008–9 financial crisis their was a paradigm shift in Federal Reserve application of creating liquidity such that enabling hundreds of trillions of dollars to appear out of virtually thin air for the rich has become normative- and that policy has hidden deleterious impacts on democracy, for it reinforces the concentration of wealth and economic segregation of citizens from political power. Georgia Republicans and Mitch McConnell need to trick Georgia voters into believe they are not at fault for withholding a $2000 stimulus check in order to keep control of the U.S. Senate in the January 6 special election. Republicans either do not comprehend the vast unearned political transfer of wealth to the rich or simply are sadistic and enjoy victimizing the poor.
Big business and banks should never be regarded as ‘too big to fail’. banking and making loans is fine when the money arises from the private sector and isn’t just the result of a federal prop. It would be far better for democracy in the United States if money from the Federal Reserve that goes to assure liquidity in the private sector primarily emerged from the people of the United States in a broad base such as social security accounts.
The Federal Reserve could make zero interest loans [periodically to all social security accounts and that money could be managed en mass/concatenated and available for loans to the private sector as big banks do presently. The money multiplier of 9 to 1 would go to Americans broadly as citizens rather than to special, globalist interest. If the private sector needs special free money from the public sector it should be the public sector as actual American citizens that profit from the action as well as private sector businesses directly borrowing cash at a reasonable yet low rate of interest.. This would have numerous salutary effects.
For one thing social security would remain solvent. The U.S. Government already borrows from social security and leaves i.o.u.’s. In the future it might be possible when retiree and disabled American accounts are flourishing to forgive federal indebtedness. Loans to the private sector would be more independent from domination by corporate networks controlled by 1% of the people, and special very low loan rates could be given to students and independent small businesses. There is nothin at all remotely American about the Federal Reserve helping the rich to have more free money in a few years than the poor would earn all together in a thousand lifetimes.
Neither party really has much good sense regarding ecological economics either. When the Federal Reserves enables trillions and trillions to be dumped to the present unsustainable economic infrastructure owners that makes changing the political economy improbable. Because the rich own the broadcast media Americans can be conditioned rather easily to accept being ‘managed’ by a plutocracy. I should mention that I personally am not an optimist about meaningful positive economic reform developing.
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