An Economic Problem And Its Solution

By Dr. Kenneth L. Russell, professor of education, emeritus, at Sam Houston State University

Getting people to understand that money is not the real wealth is a difficult problem. One must also understand the fact that idle money in the stock market, in bank accounts, or even in one’s pocket is not serving its real purpose.

Money measures how much wealth you can buy. It is the means of obtaining wealth produced by the labor of other people.

Money is a public utility. Money makes it possible to produce and distribute wealth or property which includes human skills. It must be managed like any other public utility, not as something that citizens own for their own private use. Money is the Wealth Transportation System that makes a civilization possible. For a country to be healthy and happy, this symbol of wealth must be available to all members of the nation to use.

Poor management of this vital public utility will always cause economic hardship for any nation and its people.

An insufficient supply of money always results in a depression. On the other hand, if too much money is put into circulation, inflation automatically follows.

An example of money as a public utility would be to compare it to the wires which move electricity from its source to the consumer. Money is the public utility that transports the goods and services that are produced with the electricity. If suddenly more customers appear, more goods and services will automatically be needed; therefore more power will be required. But if more lines are built where there is no need, where no additional customers exist, energy prices will inevitably increase because of the cost of producing the unneeded electricity. Too much of any utility only serves to increase the cost of everything.

When I was a child, a post card was a single cent and mailing a letter cost two cents. The nation prospered, but the increase in the money resulted in increasing the cost of that post card to twenty-six cents and the cost of mailing a letter eventually to forty-five cents. The inevitable national inflation caused by the expanded money supply did nothing to improve our postal service.

The jobs bill currently being debated by the United States Congress, without an increase in taxes to pay for it. It will move the cost of all goods and services up in a year or two. It will only make the cost of everything to go up thus reducing the retirement income for the elderly and those living on fixed incomes. If there is no new money via salary or investments, any increase in the cost of living is a threat to those unfortunate souls caught in the desperate struggle for survival.

History proves that messing with the money supply will never work unless it is messed with intelligently and in keeping with the lessons of history.

I may not live long enough to witness the eclipse of America, but it is coming just as surely as the Roman civilization which ruled the entire world, fell into utter ruin when that once glorious empire ceased to build, when all of the roads were finished, the aqueducts built, the walls complete and when there were no more massive construction projects, their economy failed. This historical and monumental failure should serve to help us understand what must be done in order to prevent the same from happening to our great nation that is now tottering on the same dangerous and deadly precipice.

The following is the only way to solve the catastrophic economic problem that we are now facing in the United States. The slow death of America can be prevented only by immediate emergency measures. This means an all-out war on unemployment. This can be accomplished only by putting people back to work. If you want to save this great nation of ours, then provide jobs for all citizens.

The Solution
There must be an upgrading of the existing rail system with multiple track lines between every airport and city in the country. The project will need hundreds of first class, modern, electric locomotives and passenger cars built with materials made in America. This rapid rail system must be American built, by and for the prosperity of everyone in this nation.

Airplanes are needed only for long flights of three hours or more. More cars and buses will still be needed for the short hauls but such vehicles already exist in abundance. Automobile plants can be converted to railway construction systems. A similar transition was made in this country when a shift was made to military hardware for the Second World War. This, too, is a war, a struggle for our very survival! We either win this economic campaign or we are finished as a nation. It is as simple as that!

This emergency measure must include the repair of our present highway system and power lines. We must use only American materials and documented American citizens. Remember we are trying to fix this country, not the entire world.

It must be understood that the American way of life is in peril. It could very well be destroyed in only a few years if the nation’s current economic policies are not reversed and fiscal stability restored.

All power lines from coast to coast must be put underground.

Every able-bodied American citizen must have work and the emphasis must be on citizens. Even the handicapped, but otherwise healthy people, must be found a productive job in the work force.

Every bank in America must be held accountable for its decisions and actions. No corporation should be considered too big to fail. Regular commercial banks, those that make loans, and investment organizations that underwrite stocks and bonds, must be separate institutions once again. A customer must not be able to write check on a savings account without a 30 day notice.

If a banking institution fails, it fails, that’s all. Debit cards are acceptable, but credit cards should be made illegal if not paid ever month.

A system must be set in place that keeps America’s money working in this country rather than hidden under mattresses, drawing interest in foreign banks and off-shore accounts. Interest should only be paid on true savings accounts, bonds, and investments that cannot be liquidated in less than thirty days or more without a penalty.

Such an enlightened economic policy would mean an all out war on the previous system, one that has for years rewarded people for sloppy money management practices and irresponsible social activities It also means a totally different life style for every American. There should be no more tax free anything.

The present income tax should be completely scrapped and replaced by a system in which a one cent charge is placed on every financial transaction. If one spends a hundred dollars on something, anything, when the transaction takes place, one dollar will go to the federal government. How much an American is taxed should depend solely upon how much he or she spends, whether it’s for a bus ticket to get downtown or a brand new yacht. This is not a flat tax.

Insurance companies must be eliminated from the health care industry. The present system only deprives many people of medical health while driving them into bankruptcy. The government’s job should be to protect the country’s population from the abuses of those who would take advantage of the sick and helpless. Our country should do better than embracing and emulating a survival of the fittest social mentality. We are a better people than that by far.

The responsibilities of the Federal Reserve, a for-profit, private banking system in the business to make money must be assumed by the United States Treasury as required by the U.S. Constitution.

If you want to forestall the destruction of America get rid of free trade as now practiced. Never trade the cow to another country, only trade or sell the milk, butter and cheese. Never sell or trade the apple orchard to another country but do sell or trade the apples. Never sell the farm to another country but do sell or trade the produces of the farm.

If we don’t get our money under control and stop selling or trading our productive wealth, it means the end of the most beautiful way of life the world has ever known.

As I write this, more than 20 million Americans live 50% below the poverty line. This figure is the highest ever recorded in our nation’s history. History has proven time and time again that just throwing money at a problem does little if any good. Only contracts that put people back to work building new or repairing our old infrastructure will solve the problem Only investments that the nation so desperately needs will solve the real and terrible problem that’s festering at the heart of this dying country.

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