Position Paper

Imagine a world in which every American citizen, regardless of race, gender, class, religion, or country of origin, had a job earning a living wage, access to quality health care, free public education through college, and had the opportunity to live in safe neighborhoods without rampant crime and violence. Imagine a world in which every American family had sufficient money to pay their bills, was not burdened by mountains of debt, and was optimistic about their economic future.  Imagine a world in which the government had all the funding necessary to provide critical public services and programs, like first class public schools, community centers, public transportation, and state of the art infrastructure. Imagine a world where businesses thrive because every American citizen has less private debt and more money to purchase the goods and services they need, as well as to enjoy the niceties of life like vacations and modern electronics. Imagine a world in which the rich aren’t getting richer, and the poor aren’t getting poorer because there is shared prosperity due to a more equitable distribution of the fruits of the productivity and wealth of the American economy. And imagine all of that being achieved without the government relying on excessive taxation to fund the federal budget.

This may sound utopian, but it is realistically possible to have a full-employment economy with broad-based prosperity, to reduce income inequality, provide for a social safety net, AND reduce the burden of taxation, by changing the way we think about money. By better understanding the nature of money and taking full advantage of the power to issue the nation’s money, we believe America can unleash the immense untapped potential for broad-based prosperity and general human flourishing for all Americans, and not just a few in the financial sector and corporate boardrooms. Our Money seeks to make this knowledge more accessible to the broader public and to build the political momentum necessary to unlock this potential, ensuring that the US monetary system works for and not against the American people.

The reason it is difficult to conceive of the vision outlined above is because prevailing economic thinking about money, banking, public finance, and the role of government has placed unnecessary restrictions on our nation’s economic potential. Mainstream economic thinking is still wedded to outdated policy assumptions derived from a time when the US monetary system was still on the gold standard; a system that has been defunct since 1971.  The gold standard meant that dollar reserves were convertible into gold, establishing foundational premises in the way we think about the economy.  Ideas such as the need of the government to tax in order to spend, and that private bank lending is essentially a private affair that should proceed without government involvement, are vestiges of this outdated system. The ethic of “sound fiscal discipline” caused economists and policymakers to assume that the government’s ability to fund public priorities was limited by revenue, causing a preoccupation with budget deficits and the national debt. The belief that new public spending had to be “paid for” with either tax revenue or spending cuts caused the federal government to underutilize its economic potential endowed by its power of money creation. Since the government has failed to attend to public priorities through public spending, the public has been forced to heavily rely on private credit in order to get by. Consequently, much of what we currently use as money in the US is created by banks and other financial institutions when they make loans. This reliance on private money creation increases household debt, makes it difficult for families to pay their bills, siphons the wealth of the public into the pockets of the financial elite as people pay interest on borrowed money, and hurts businesses as consumers lack the disposable income they need to spend into the economy.

Our challenge is to adapt the way we run our economy to present-day realities rather than relying on outdated assumptions that have not been operative for decades. It is about time we catch up with the times by recognizing that since the US is no longer on the gold standard and it creates its own currency, it does not need to tax in order to spend. Therefore, the US can create as much money as our economy needs, as long as it can keep inflation in check. The United States government is no longer inhibited by the fiscal constraints of budget deficits and the national debt that weighed so heavily in policymaking during prior periods. The federal government cannot “go broke” because it issues its own currency.  Whereas household spending is constrained by revenue, federal government spending is not because of that fact that it creates its own currency. Continuing to follow outdated economic assumptions limits our economic potential by causing us to underutilize the power of money creation through public spending and forcing the public to rely on private credit to furnish the economy with money. This is harmful to our society. 

Money creation through public spending, then, creates enormous potential to expand economic opportunity, provide for a full employment economy and a social safety net, and to do so without relying on the burden of taxation for funding. Therefore, creating money through public spending for purposes in the public interest is by far preferable to relying on private money created and loaned into the economy for private purposes. Private money created when banks and other financial institutions make loans has to be repaid with interest, extracting the wealth of the public into the pockets of the financial sector as the public pays interest on “borrowed” money. Meanwhile money created through public spending does not have to be repaid with interest, in the same sense as private debt, because the government as currency issuer simply creates the interest it pays on reserves and treasuries. The pervasive confusion about the US monetary system is fueled by its complex and technical nature, as well as by the fact that the financial sector benefits immensely from the public’s confusion about it. We at Our Money want to bring greater clarity to the public so that we can assert our democratic sovereignty over money creation so that it is done on the public’s behalf.

Our framing of the mechanics of modern money suggests that private money creation should no longer be seen as a private enterprise that should persist free from government involvement. The economics orthodoxy of our day obscures the fact that when banks and other financial institutions create their money when they make loans, those loans are subsidized and supported by the public. Banks are able to receive virtually unlimited access to central bank reserves from the Federal Reserve, and the backing of federal deposit insurance for their deposits, including those they create when they make loans.  This means that banks reap enormous profits by allocating the public’s full faith and credit when they make loans. Other financial institutions do something ultimately very similar. The idea, then, that private credit creation is strictly a private commercial affair deteriorates. While some political commentators have convinced the public that those who want the government to spend in the public interest are the freeloaders, the truth is that the financial sector is the largest beneficiary of government welfare because it captures the power of money creation with public supports and uses it for their own private interests. It is time that we the public take control over what is already ours by asserting our democratic sovereignty over the way the financial sector allocates the public’s full faith and credit. To do that we must therefore restrict the financial sector’s allocation of public funds to public interest uses. While financial institutions may indeed try to find other ways to hijack our public full faith and credit for their own private gain, we should do everything possible to try and protect our economy from this kind of parasitic financial activity. These measures would create more space within the bounds of acceptable levels of inflation for increased public spending.

If these understandings are successfully incorporated into the public discourse, neither the left nor the right would have to compromise their core economic principles in order to create an economy that works for all. Our Money believes it is far more prudent for the public’s money to be created through public spending, rather than relying on private credit creation to furnish our economy with money. By regarding the creation of the nation’s money as a public function, we can unleash the full potential of our economy and do so without forcing households to rely on private credit markets to obtain money.  The fundamental and qualitative benefits of money spent into circulation as the government does rather than money lent into circulation as the financial sector does provides a buffer against exacerbating inequality and perpetual indebtedness to the financial sector. The economic problems we see in our society today are in large part the result of this unnecessary over-reliance on private bank credit to provide money for the economy. Our national dependence on private borrowing to provide the economy with an adequate money supply, transfers the wealth of the public into the pockets of the financial sector and causes us to underutilize our ability to create money through public spending; a power that can enable the government to more fully attend to our public priorities (e.g. health care, education, jobs, social security, protecting the environment) without relying on taxation. It is time for the public to fully take advantage of our power of money creation for public purposes through public spending within the bounds of excessive inflation. Once inflation becomes a problem, we propose to check inflation primarily by restricting private money creation to publicly approved uses. Asserting control over the way banks and other financial institutions create money ensures that private money creation takes place on our terms, and in the public’s interest, and not on the financial sectors’ terms, and for the financial sectors’ interests.

We see this as infinitely more just than the current arrangement as we would merely be asserting sovereignty over what is rightly already ours—the full faith and credit of the government. Rather than building up our private household debt burden, destabilizing our economy, and increasing the power of the financial sector over our democracy, we can instead use the power of money creation for ourselves to fund the full range of our public spending priorities. In so doing, we put our nation in a better position to end joblessness, to abject poverty and inequality, and to expand our nation’s prosperity to people of all economic classes. Now that the gold standard is behind us, we no longer have to view our nation’s top priorities through the prism of scarcity or insufficient money.  We now have an open door to advancing the most ambitious public spending proposals since the New Deal, doing so without relying on taxation to fund it.  Whenever spending on our nation’s policy proposals and priorities is discussed, the question is often asked, “How are you going to pay for it?” Our answer is, “The same way we fund the military budget and bank loans -- by allocating the government’s full faith and credit.”  We believe that bringing this understanding to the public discourse is crucial to getting ourselves out of the partisan division that confronts our nation today.

There are profound social and political consequences of relying on private money creation that are often ignored. Wealth concentration, economic insecurity, and relying on outdated economic assumptions exacerbate the pervasive feeling that resources are scarce in America. When this happens, people often scapegoat others and compete for resources they believe to be limited. The widespread economic insecurity that people feel as a result of our over-reliance on private money creation has greatly contributed to a resurgence of bigotry and social tension as mainstream economic thinking advances the myth that public spending requires tampering with an otherwise just distribution of wealth by redistributing it from makers to takers. Proposals to cut taxes, federal spending, and social programs on the one side, and proposals to increase taxes on the rich in order to increase public spending on the other mask underlying outdated economic assumptions that contribute to and fuel social divisions and class tension.  Even though public spending could be used to make structural, systemic changes to create a more universally hospitable and secure economic environment, conventional economic thinking feeds into economic insecurities and fuels the public’s rage at their economic conditions that gets distorted and channeled into support for discriminatory, racist, sexist, and xenophobic political ideas.

Bringing this understanding to the public discourse is crucial to any effort to counteract the appeal of certain forms of social and political extremism. It is urgent that we implement these reforms to counter extremist appeals to populism that foment social friction, discrimination, and scapegoating.  Because the public has been uninformed about the monetary system, they are left to interpret their experience of marginalization and the prospect of overcoming those obstacles simply and solely through the prism of race, gender, and other identity politics. While these discourses have validity, we believe that creating a basis for solidarity among all people of goodwill is possible by re-legitimizing the exercise of democratic sovereignty through public control of money creation so that it is done on behalf of the public interest. The key to re-legitimizing this exercise of democratic sovereignty is to deconstruct the illusions of the prevailing understanding of money and show people that public spending by a government that creates its own money does not entail the forced distribution of wealth from makers to takers. Instead it merely consists of the legitimate exercise of the public power of money creation on behalf of the public interest.

While some rail against the indignity of relying on our government, the real indignity is allowing defenders of the current monetary order to continue to hide from us our own public power and prevent us from exercising our democratic sovereignty on our own behalf. America is the birthplace of modern democracy, nothing could be more American than the exercise of democratic sovereignty over money creation on behalf of the public interest. Neither cutting government programs nor taxing the wealthy is necessary to fund federal spending, as the two major political parties often lead us to believe. We must educate politicians, economists, and the public about the untapped potential to generate a more inclusive and thriving economy; but to do so, we must re-frame public spending as the legitimate allocation of our own full faith and credit that it is. Without increased public spending we will continue to see more of the economic pain, scapegoating in the public square, and the erosion of our democracy, as wealth continues to be concentrated into the hands of the financial elites due to an unnecessary reliance on borrowing as the means of furnishing our economy with money.

This is the moral dilemma and opportunity of our day. We are so deeply divided in America, in areas such as race, party affiliation, class, gender, and business sectors. The financial elite benefit from this division. America desperately needs a metanarrative and an explanation of our plight that helps us bridge these divides and bring us together to solve our greatest social and economic challenges. If we change the way we think about money, we can change the way we relate to one another, we can build bridges that unite, rather than walls that divide. Our Money is dedicated to claiming the full extent of the power of money creation for the public. We believe that our program has the potential to appeal to the left and the right. Our program enables the government to fund a full range of public priorities, and to do so without relying on taxation for funding. Additionally, our program is pro-business as more households will have less private debt and more money to spend into the economy. All we have to do as a nation is to fully leverage the power of money creation through public spending and crack down on the financial sector’s appropriation of the public’s full faith and credit for their own private gain.

This is a challenging task, but together, we can change the world by changing how we think about money. We hope you will work with us in our efforts to take advantage of this incredible opportunity. For the first time in a generation, ambitious public spending proposals are on the table, but we still struggle to achieve clarity with how we think about public spending. Our campaign aims to clarify the nature of money, how it is created in our current system, and the implications for how we think about the exercise of democratic sovereignty on behalf of the public interest through public spending. Public spending is actually the preferable and most legitimate form of money creation -- a public function largely appropriated by the private financial sector, often at the expense of the public interest. 

Help us build a network of support that educates the public, advances the public debate, facilitates research, and ultimately results in electing members of Congress who support these goals because “money created by us is money created for us.” Join our campaign at to stay informed of our campaign efforts, and follow us on Facebook, Instagram, and Twitter @ourmoneyus. Join Our Money because, “If we change the way we think about money, we can change the world.”