Real Government Efficiency: How to 'Actually' End Debt and Restore America's Financial Sovereignty

In the face of misguided AUSTERITY measures proposed by the Department of Government "Efficiency" (DOGE) here we show how to restore America's PROSPERITY and create a full employment economy

This year marks twenty years since one of the most consequential meetings of my time in Washington, D.C. Stephen Zarlenga, a man I would come to recognize as a scholar and a legend in monetary policy, walked into my Longworth Building office with his assistant, Elizabeth Harper.

In just a seven-minute discussion of US monetary policy, they set me on a course which changed my life, and how I looked at the world. I began a deep inquiry into the nature of money, and why is our government always in debt, in this, the wealthiest country in the world?

Today, in the face of misguided austerity measures proposed by the Department of Government Efficiency (DOGE), Zarlenga’s message is more urgent than ever. While the push to eliminate wasteful government spending is laudable, it is a distraction from fundamental questions:

How is money created?

Who creates it?

Why are we locked into perpetual debt?

DOGE has fixated on slashing essential government programs in the name of fiscal responsibility. Yet, in order for it to truly serve our nation, it is urgent that it address the ossified, structural reality of our present financial system, which has been designed to manufacture deficits to the benefit of private banks.

Government borrowing, spiraling national debt, and the accompanying tax burden on the American people are not the result of overspending on public services. Rather, they stem from the privatization of the money supply, a system enshrined by the Federal Reserve Act of 1913, which handed the power of money creation to private banks, ensuring their profits through the simultaneous creation of the federal income tax.

Zarlenga exposed this deception with clarity: The U.S. Constitution, Article 1, Section 8, Clause 5, granted Congress the power to create money, yet that power was appropriated and monetized to the benefit of private interests, transforming the people’s government into a permanent debtor to the banking system.

The Federal Reserve Takeover of the Money Power

In 1910, America’s most powerful private bankers met secretly with top U.S. government officials at Jekyll Island, Georgia, and drafted a plan which would take from the people’s Congress the Constitutional power to create money and place that money power in the hands of their private interests.

The Federal Reserve Act destroyed constitutionally-based, national sovereignty over the creation of money and engineered what would eventually amount to a private takeover of the government.

The Jekyll Island secret plan created the Federal Reserve Bank, and once passed by Congress in 1913, gave private banks control over the money supply. It create a process which made the government dependent on private banks. It ensured that the only way for government to obtain money was to borrow it from private banks. It guaranteed unending private profit at government (people’s) expense and locked in a massive national debt which continues to mount to this very day.

Again, with the passage of the Federal Reserve Act, the constitutional power to coin money was appropriated by private banks and turned into a machine for creating wealth for a few at the expense of the many.

Even though it is called the Federal Reserve, it is no more federal than Federal Express. It was from its inception, and is, a system of private banks designed to take the wealth of the nation from the people’s government and transfer it to banks, guaranteeing not only debt, but inflation and, taxpayer-funded bailouts when casino-type practices result in bank failures.

Simultaneous with the creation of the Federal Reserve Bank was the creation of the federal income tax, through the 16th Amendment to the Constitution, which guaranteed the money borrowed from them by the government would be repaid through the imposition of the federal income tax. This reduced to people of the United States to being collateral for the debt which the country owed to the banks.

Lincoln’s prayer of a “government of the people, by the people and for the people,” was, through the creation of the Federal Reserve Bank, converted into government “of the banks by the banks and for the banks.” Enter Stephen Zarlenga.

Zarlenga’s idea was to reclaim the power of money creation. Through more than five years of work with him, Elizabeth Harper Kucinich, congressional staff and an expert from the office of legislative counsel, Jim Wert, the National Emergency Employment Act of 2011 (The NEED Act) was introduced by me into the House of Representatives.

THE NEED Act ENDS Debt and Ensures Prosperity

The NEED Act reclaims America’s financial sovereignty by assuming the power granted under the US Constitution to create money. Government borrowing is prohibited.

Money will enter into circulation through an Act of Congress, authorizing expenditures and appropriations.

The NEED Act eliminates the inherent conflict of interest between the private ownership of 12 Federal Reserve banks and management of our nation’s monetary policy by placing the Federal Reserve as an independent and autonomous bureau of the United States Treasury, the Monetary Authority.

That Monetary Authority will carry out any necessary functions previously performed by the Fed, following the Congressional action of originating and entering money into circulation, as well as the administration of the lending of money to depository institutions.

Instead of the government borrowing money from the banks, the banks borrow money, at interest, from the government.

The Monetary Authority will be responsible for ensuring the money supply is sufficient to meet the demand in the economy and is neither inflationary or deflationary, but will be sufficient to allow goods and services ot flow freely in trade, in a balanced manner.

The Monetary Authority will maintain long-run growth of monetary and credit aggregates commensurate with the economy’s potential to increase production, to promote maximum employment, stable prices and moderate long term interest rates.

Federal Reserve notes would be phased out and replaced with US money. Fed notes would stay in circulation until the production of US money is sufficient for them to be redeemed dollar for dollar.

Eliminating Deficits, Creating Jobs, Investing in Private Sector, Without Raising Taxes I want to stress: The NEED Act no longer allows banks to create our money supply. In reclaiming the constitutionally-based money power, the government (we the people) no longer have to borrow money from banks to meet the nation’s needs, creating millions of jobs; paying off the national debt when it comes due, releasing money for investment in the private sector; eliminating deficits, ending fiscal crises, and making the dollar a stable currency - - all without raising taxes or borrowing.

A continuous, real-time audit of disbursements of money and current fund balances would be conducted by the General Accounting Office, to ensure fiscal integrity.

The bank practice of “fractional reserve” lending, where banks create money out of nothing leveraging depositors’ money to provide loans, is eliminated. Banks can continue to make profits, acting as intermediaries, by lending the money that savers and investors make available to them for that purpose. This stabilizes the money system, the payments system and the banking system (without bailouts).

Our debt-based monetary system is crushing America. The government borrows, expending deficits and covering interest payments, all to the benefit of private banks.

It is clear that our present system relies on perpetual government deficits and reduces taxpayers to a condition of servitude. The Federal Reserve expands the money supply by creating more debt. It has created trillions of dollars of money out of thin air, for the benefit of banks. Inflation ensues. Inflation is a hidden tax which erodes consumers purchasing power, causing people to take on more debt.

We NEED to Break Our Dependence on Debt It is time to refocus the conversation. If we are serious about cutting deficits and reducing the burden on taxpayers, we must first address the root cause of government debt: A financial system designed to benefit banks at the expense of the American people.

The NEED Act will break the government’s dependence on debt. Since the government will not have to borrow money to meet its needs, the NEED Act will greatly reduce income taxes.

I’m reintroducing the bill for a wide, public discussion at this time because our government is now being dismantled by haphazard measures, which will still leave America in debt.

The NEED Act is an escape from debt, from poverty and a path towards economic freedom. If DOGE is looking for real reform, here is where it should focus. This endeavor began with Stephen Zarlenga, who spent 35 years of his life studying monetary policy, resulting in a prodigious work entitled The Lost Science of Money. He brought those ideas to my congressional office. The NEED Act is his legacy.

We shall be forever grateful for Stephen Zarlenga for showing us the path forward.

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For a background in monetary reform and the nature of money, read the Kucinich Report: Breaking the Debt Chains.