As the fiscal crisis deepens day by day, the question of how to pay for the stimulus needed to get us moving again is beginning to get some attention. Many of us think the right formula is simple enough for a bumper sticker:
"Federalize the Fed -Grow with Greenbacks"
In other words, pull the power to create money back into the Federal government where it belongs. Make the Federal Reserve a part of the government. Raise banking reserve requirements to 100%. Issue interest-free Greenbacks to pay for past, present and future deficits.
Doing this would leave us with no national debt, no interest payment on that debt, and a sustainable banking system. All without inflation.
If it seems too good to be true, it is - but only because Congress just won't do it. After all, the Republicans are getting their economic advice these days from Joe the Plumber, and he is against having the government do much of anything at all, except fight some very expensive wars. And the bankers, who, sad to say, pretty much own both branches of the Republicrat party running the country, are mightily opposed to any such move because it would deny them the power to continue creating virtually all of our money out of thin air, as they now do.
Some of the folks who know that "Federalizing the Fed" is the right thing to do also realize it can't happen, so they have come up with a brilliant alternative that requires no Congressional action and so is much more feasible. Rather than selling US debt on the soon-to-disappear open market for public debt, the government should borrow what it needs from the (non-Federal) Fed, just as banks and industrial borrowers have been doing.
For a very clear and coherent description on why we need to do this and how it would work, see "Monetize This!" by Ellen Brown.