EDUCATION AND OUR ECONOMY Gregory K. Soderberg, Austin, MN. 507-440-1015 Dec. 22, 2012

Much is heard about the need for education and ways to measure teacher and student performance. We’re pushed hard to ‘invest’ more in education. Yet, after years of ‘investing heavily in education’ it seems that we are not getting the desired return. It is said that education is the ‘foundation of a strong economy.’ If that is true, then there is something wrong with our educational system as we now have a terrible economy and seem to experience poor economies over and over again every ten to fifteen years. When will education make us smart enough to break this pattern, to know that we cannot export our manufacturing base to China and other third world countries and still have a good economy, that we cannot pay debt with debt and get rid of our debt, that we cannot borrow our way to prosperity and that borrowing to have any money and that borrowing to pay the interest creates economic servitude and cannot work?

If education were giving a ‘return on investment’ America would run more smoothly each year rather than constantly having booms and busts and its citizens collectively getting deeper in debt. If the ideas, concepts and principles being taught in our schools were correct we would have a workable, sustainable monetary system and economy. Society would continuously get better with more solutions and fewer problems.

Our current state of affairs and the historical repetition of bad economic events is the result of education failing to teach the general citizenry the true and complete facts about the creation and circulation of money. It is the reason we never get a real ‘return on investment’ from education. Mankind will never see the full potential return on this investment until our educational system starts teaching the truth and the facts about how our monetary system was changed from a wealth-based, debt-free monetary system to our current slave-based, destructive, confiscatory and unsustainable fractional Federal Reserve debt-based money system. The critical first measure of educational performance should be how well teachers explain and how well students understand our monetary system.

Our current money system creates economic servitude as it forces citizens and their government to incur unpayable interest-bearing debts to obtain a medium-of-exchange to do commerce and to save. It is destructive because it destroys the ability of most people to gain the benefit of their own production. It is confiscatory because when all money is created as interest-bearing debt, there is no way to create the money needed to pay the interest on the borrowed money. Interest paid is simply other loan principal captured in the process of commerce. Principal portions of bank loan payments extinguish money.

The interest part of the debt cannot truly be paid. It can only be shifted to someone else. This shifting goes on until someone, some company or some country is caught in a position where they cannot shift the debt to someone else. Then, they lose their property to foreclosure.

It is unsustainable because in time the debt will grow so large that just the interest alone will be greater than the total income of everyone. Educators never teach that this was not always so nor the intent of the American founders. They do not teach how our medium-of-exchange was changed from the evidence of debt-free wealth it was intended to be to an evidence of unpayable interest-bearing debts.

It seems that only a few ‘higher educated’ economic students really understand that all of our money is now created and placed into circulation as loans. These few are never taught about the effects of interest in a debt-based money system nor that debt-money is the antithesis of Freedom. In fact, students and American citizens in general are conditioned to be concerned about almost everything and every kind of cost except the cost and effects of interest and the nature of their monetary system. Students who  question what they are taught never do well in economics classes. Those who want to  do well and gain good positions from their economic teaching must go along to get along thereby perpetuating the ignorance about the evil effects of forced borrowing and interest in a debt-based money system. Therefore, teachers, students and most citizens  never see that forcing a free people into debt to obtain a medium of exchange puts them in economic servitude to growing debt service, rising costs of living, loss of purchasing power, higher and higher tax pressures and that it creates an impossible ‘saving’ environment and a tyrannical government run by the elite in the banking system.

Growing concerns about ‘student loans’ and ‘student debt’ is especially ironic. Students in public ‘lower education’ are never taught much about money. Mostly, they are taught how to write checks, balance checking accounts and manage their money to achieve good credit scores so that they can borrow more. It is never suggested that they should ask why they have to borrow and where the lenders get all the money they lend. Students are never taught that our medium of exchange has been switched from an evidence of wealth and ownership to a medium of exchange that represents our unpayable indebtedness to the private banking system. They are never taught the simple facts that now we use interest-bearing debt for money created as simple electronic bookkeeping entries by private commercial banks nor that when a society uses interest bearing debt for money it will have debt, lots of it and the debt owed will always be greater than the money supply and growing. These educational failings are the reasons most citizens grow up, remain in the dark and produce societies far behind their developmental potential while struggling with the distraction of growing contention and chaos.

This lack of education conveniently makes it easier for a few to take advantage of the majority of society who will be willing to work longer and harder as they grow older and who will accept greater and greater taxation, sacrifice and hardship to pay the interest on the growing, ridiculous, unnecessary and enslaving debt.

Citizens are taught that the debt is caused from the government ‘spending’ too much and the people wanting to live beyond their means. Our educational system never asks where all the money is that the government spent. If government ‘spent’ it shouldn’t we all have it? Education never teaches that when a country has to borrow before it can have any money that the country is not free but in economic servitude and that its people must live beyond their means (income) or there would be no money in circulation. When interest is added to the loan, the country is now living even farther beyond its means, as its debt is now greater than the money supply created with the loan. The total debt can never be repaid, as more borrowing is required to create the money needed to pay the interest. This unpayable interest must be added to the costs of living creating a growing spread between the money supply and prices, between the     price  of raw products and the price of finished products. Most students and citizens are never taught that the loan principal is uncreated when repaid or that government bonds used as ‘collateral’ for the money created by the Federal Reserve System form the ‘reserves’ for more debt creation (money) as loans to businesses and individuals through private commercial banks. They are never taught that the ever-expanding debt is caused by the creation and circulation of all money as unpayable interest bearing debts, that the government and the people must keep borrowing more or the system cannot keep functioning, that eventually, most will have so much debt that they cannot afford to borrow.

Our educational system never tells us that the ‘money’ we have earned and are told to save and invest, is money (numbers) that has been created as a loan to someone somewhere. We have only captured it (loan principal) in the process of commerce. It is still owned by the bank that created the money (numbers) and the interest bill is still growing for the original borrower. While the ‘money’ exists the interest debt on it is continually increasing the debt owed but not increasing the money supply. Time does not increase the money supply. Time only increases the debt.

Our educational system never seems to teach that the constitutions of the federal and state governments are the supreme law of the land. No laws are to be passed that do not conform to those Constitutions and that those Constitutions were based on the Ten Commandments; that the so-called collective welfare (greater good) can’t trump personal rights. Our educational system never teaches that the purpose of our constitutional ‘republican form’ of government (not majority rule democracy) was to protect the peoples’ God given right to have Justice (the quality of being righteous), Tranquility (permanent peace) and to prosper from their own production. We can only have these things when we have an honest money system where money is spent into circulation debt and interest-free, representing an earned payment to the people based upon their production rather than money based on a ‘promise to pay’ that the people can only obtain by borrowing from a banking system at interest.

Education never teaches that a people or their country with the authority to coin money need never borrow, owe or lack for money. Given the current state of affairs, has education helped “….to provide for the general welfare”?

Clean water, air and energy, high-mileage cars, saving, investing, cutting back, increasing taxes, money for early childhood education, efficiencies and other ‘solutions’ will not create economic freedom, pay the debt, pay the interest, slow the growth of the debt, resolve our growing money shortages or our other economic problems. We do not need more money for education. We need more education for the money from educators who know and teach the monetary truth and knowledge that will result in social construction not social destruction.

David Brooks of New York Times wrongly stated that America would no longer be the ‘leader’ of the world but a ‘crossroads’ nation. However, America should be and can again be unquestionably the greatest, freest nation and world leader by spending new money into circulation debt and interest-free based on and representing a payment to the people for their production. America can again show the world the way by leading with wealth not debt and get a return on its educational investment, if education would do its job.

Proposed state legislation titled the Minnesota Economic Recovery Act, Senate File 65 and House File 610, provide for increasing the money supply by state regulated banks creating and spending, not lending, new numbers into circulation debt and interest free in lieu of taxation or borrowing to build and maintain our public roads and bridges.

This could be accomplished at the federal level by Combining the 3 powers of Congress provided in Article 1 Section 8 of the United States Constitution to provide for the general Welfare, coin Money and established post Roads into one act.

That act would monetize the value of building, upgrading and maintaining our public roads debt-free as a wealth to the people. The Treasury, by-passing the banking industry, would create the numbers and spend them into circulation debt-free in lieu of taxation or bonding as a payment earned as wages by the people who did the production (work) that benefits the general public. 

Implementing this legislation at the state or preferably, the federal level, will create income  to pay wages for thousands of new jobs and demand for products and services in construction, solar and geo-thermal energy, water-treatment and electric, provide the cash flow the economy desperately needs and increase sales and income tax revenues.

You can help Minnesota, any state or America get a return on its ‘educational investment’ by telling your legislators to support and pass state or federal legislation as described herein and by demanding that ‘education’ teach the monetary truth.