Washington DC, May 8, 2013 — I urge a major all-points mobilization in support of Sen Elizabeth Warren’s Bank on Students bill mandating that the Federal Reserve provide 0.75% cheap federal credit for federal student loans (Stafford loans) via the US Department of Education. This is so far as we know the first bill which proposes to force the Fed to provide cheap credit to something other than banks and financial institutions. The substantial benefits in interest savings to American students groaning under $1 trillion of high-interest student debt are obvious.
It is vital to point out that Warren’s bill will not cost the US Treasury or US taxpayers one penny to generate these formidable benefits. It represents federal lending, not federal spending. It simply mandates the use of credit creating power which the Fed has always had, but has insisted using for the benefit of financial institutions only. The bill would relieve pressure on the federal budget by freeing up general revenue for other uses. It is a step toward the restoration not of Keynes, but of Hamilton’s vastly superior American System of Political Economy.
This bill also represents the first pilot project for how to get out of the current world economic depression – by forcing the central bank to act like a national bank, using federal credit creation to serve not just zombie banks, but also the real economy.
Clearly Wall Street forces will attempt to suppress Warren’s proposal. All persons and organizations of good will need to do everything possible to publicize this bill on internet, social media, and TV/radio talk shows and GET IT PASSED AND SIGNED BY OBAMA this spring. Take the news of this bill to campuses and urge students to demonstrate their strong support before the end of the academic year. We suggest urgent amendments to extend this debt relief to additional categories of student loans so as to afford them protection from the scheduled doubling of the interest rate from 3.4% to 6.8% on July 1.
The principle embodied in this bill is the key to rebuilding US infrastructure and creating 30 million new productive jobs through a large-scale credit stimulus from the Fed. It takes us beyond squabbling over the limited funds of the US Treasury into the virtually limitless realm of Fed credit creation to finance the needs of the nation. Any politicians groups or media who claim to be progressive must mobilize at once for the Warren bill or be relegated to irrelevance. Anybody who refuses to support it with the claim that the Fed needs instead to be ended will be exposed as a Wall Street agent. We urge all economists who care about our nation’s future to come out in support of this bill.
This bill represents an historical turning point. It must now become law!
Margaret Thatcher’s first high-profile political job came in 1970 when she was appointed to serve as education and science minister in the cabinet of the liberal Tory Edward Heath.
She imposed a series of brutal budget cuts, the most infamous of which was the abolition of a program left over from the Great Depression, which guaranteed a daily pint of milk to schoolchildren between the ages of seven and eleven.
This was a program which had done much good in the poorer mining, industrial, and farming towns and villages of Wales, Scotland, and the north of England, where vitamin deficiency diseases like rickets and pellagra had been an immense public health problem.
But for Thatcher, that daily pint of milk was the essence of communism, a violation of the free market. The milk distributions were stopped. Since then, Thatcher has been hated by all Britons of goodwill, and since then her nickname has been “Thatcher milk snatcher.” This is the epitaph which should be inscribed on her tomb.
The Romans had a saying, “De mortuis nihil nisi bonum” – say nothing but good things about the dead. It is good advice, but in the face of certain enormous crimes against humanity, it cannot be honored. Such is the case of Margaret Thatcher.
Thatcher offers one of the most egregious cases in recent history of a sociopath in power. She can be seen as the mother, or at least as the grandmother, of the world economic depression which broke out in 2007-2008. Thatcher was a fanatical apostle of the economic theories of the Austrian school ideologue Friedrich von Hayek and especially of Hayek’s 1944 screed, The Road to Serfdom, a raving attack on the highly successful economic methods of the Franklin D. Roosevelt New Deal in the United States. On at least one occasion, Thatcher is known to have brandished a copy of Hayek’s scribblings as her personal holy book.
Last Wednesday, April 10, marked a day of infamy for the Obama administration and an ominous watershed in contemporary American history.
On that day, Obama sent to Congress his proposal for the Fiscal Year 2014 US federal budget containing crippling cuts in both medicare and social security, the two mainstays of the remaining US social safety net.
For the first time since the passage of the Social Security Act of 1935, a democratic president has dared to launch a frontal attack on the most important economic rights of the American people, the fruits of centuries of political and labor struggles.
Social security and medicare are widely regarded by the American middle class as benefits which have been earned and paid for by a lifetime of contributions, These are social insurance policies which belong to beneficiaries and are their personal property as much as their homes and other possessions. They are considered as sacred promises. Support for keeping these programs intact, and not cutting them under any pretext, is generally in the range of 75% to 80% in public opinion polling. A poll just released by the American Association of Retired Persons (AARP) found that, among likely voters aged 50 and over, 91% of Democrats and 80% of Republicans are totally opposed to the device for chiseling Social Security known as the Chained CPI.
Since public approval for Medicare and Social Security is so overwhelming, it is widely assumed that, if these programs can be successfully attacked by Wall Street, then no other economic right or entitlement currently enjoyed by the American people can be considered safe.