Federal Reserve Act of 1913 as the cause of the Great Depression and the Bush Great Recession. - Debt Money.

By Gerry Senda

So you think that the Federal Reserve Bank injects new money into the economy in order to accommodate growth in population and economic activity? After all, at the founding of the country, there was roughly $10M in circulation.

We are required to believe as citizens that money deposited by savers is loaned out for business and mortgages. That's not how it works for the most part. Wall Street banks get credits on their balance sheets from the Fed and then loan that "money" to your Main Street Banks. The Main Street Bank charges you a higher interest rate than it is being charged by the Wall Street Bank, for their profit margin. The Wall Street Bank did not have to work for their deposits, that money was simply created for them by the Fed by accounting entries.

In addition, the Fed must then pay interest on those "securities", which in reality have no value. That interest is paid with your income taxes which do have value, having been generated by your labor and investments. No matter how much money is injected into the economy, it always comes with the price of an interest expense in a never-ending spiral of debt. That debt has now accumulated to trillions of dollars.

Then what happens? The Wall Street banks simply stop lending, constricting the money supply and curtailing economic activity. That in turn causes foreclosures, loss of businesses and unemployment that those same Wall Street banks can exploit to further enrich themselves.

Have a small farm? Can't you simply pay your ongoing costs of operations from your savings and profits from previous years? You cannot. Your profit margins have been squeezed over the years by huge multi-billion dollar taxpayer subsidies to agricultural corporations such as ConAgra. Now, your family farm can be purchased at fire-sale prices by increasingly larger agricultural corporations. In addition to squeezing the family farm, small Mexican farmers are being undercut by those subsidies and being put out of business. They then stream across the border in search of a living.

Have a small business? Can't you simply pay your ongoing costs of operations from your savings and profits from previous years? You cannot. Your profit margins have been squeezed over the years by huge multi-billion dollar taxpayer subsidies and tax breaks to huge corporations such as Exxon and Enron. Enron paid no income taxes for 4 of the 5 years 2001 to 2005. Exxon gets huge tax breaks for public mineral rights giving them an unfair competitive advantage against green-energy enterprises.

How did this Debt Money sham happen? A bunch of Robber Barron Bankers managed to dupe the Congress into passing the Federal Reserve Act of 1913 primarily for their own benefit. Was even the former Fed Chairman duped?

Alan Greenspan's 'shocked disbelief' at the financial meltdown. Former Fed Chairman Alan Greenspan told Congress he's "shocked" at the financial meltdown. <http://marketplace.publicradio.org/display/web/2008/10/23/greenspan> Greenspan said "Those of us who have looked to the self-interest of lending institutions to protect shareholders' equity are in a state of shocked disbelief."

Solution: Amend the Federal Reserve Act of 1913 to make the Fed a check-clearing house and allow the US government to directly inject new debt-free dollars directly into the economy as needed to accommodate growth in population and economic activity. This has already been done successfully during the presidencies of Abraham Lincoln and John Adams. Eliminate the Wall Street Middlemen!

For more information, see <http://www.webofdebt.com>