I have a possible answer to the current economic distress.
The way out, if there is a way out, lies in creating a new bank across this land. We'll call it the American Savings Bank. It's charter, provided by our wonderful Congress, will exclude it from being affiliated with the Federal Reserve. It will not make loans. It will be a repository for nothing but cash. A bank guard and a teller will be all that is needed to run the bank. No 'suits' walking around smiling at everyone and drawing large salaries. The banks will go in at various unrented buildings that dot the landscape across our fair land. The fedgov will generously pay for a large vault being installed at each location. The buildings will be made as burglar proof as humanly possible. This will give our construction people a lot of work and pay them wages. There will be a charge of maybe 3/4 of 1% for keeping your money in the American Savings Bank. This will pay for the Teller and the Guard and the rent and the electric bill and water bill. All sorts of nefarious people will be brought in to test the Bank's accounting software to make it sure it is accurate. Remember, this is not a bank for loaning money but rather for saving money.
Eventually the banks will be given authority to make commercial and home mortgage loans. Again, without benefit or influence of the Federal Reserve. There will be no fractional reserve banking. The depositor reserve will be kept at a majority of the banks' deposits. The money to be loaned will come directly from cash on hand and be loaned at a very low rate. All loan officers will be under laws defining any fiduciary crime and the penalties will be spelled out very clearly. A bank loan officer who makes a bad loan will be examined by a group of depositors and upon their determination will be prosecuted to the fullest extent of the law if found lacking in banking security. All aspects of the bank will be under heavy penalty if any shenanigans are caught placing bank money at extra risk. All penalties will be harsh. There will not be any bank runs on this bank. The money will be there.
My next plan for getting us out of this banking bullshit and stagnant economy is to take back the 700 billion dollars Congress appropriated to give the bankers. Paulson is planning on taking a tenth of it for fees and wages and bonuses for his banking buddies anyhow so we may as well get it back while it is still around. Then we take back all the money we have loaned the banks for overnight and 30 days and 60 days and all that crap. After we have this safely in hand we issue a stimulus package to the American people in the form of a check drawn on the US Treasury and it goes to every citizen 18 years and older. Tax free. All the checks will be for the same amount so there is no figuring to do. We could have a Merry Christmas or a Happy New Year for real! After we have paid the stimulus money we can bring in a trillion or two of the fiat money that is out there for a good public burning and maybe strengthen the currency a little bit.
And that is about all I have for my cure of the financial woes, at least for today. After we set up our new bank we will let the banks out there on Wall Street and pother places settle their differences as best they can. It can go to "HIGH NOON" style for all I care. They can fight it out like the pack of dogs that they are. If they ever get their mess cleaned up we can talk to them about joining the new system. Good, conservative banking with no go-go loan officers and no shysters. A heavy legal penalty with lots of jail time for transgressors. Depositor committees with their own CPA in tow, keeping an eye on them. I do not know what else to do but abandon the old system. It has failed and it has gotten us in deep shit. But we can dig our way out if folks will only do it. Won't happen, but at least we can dream of sanity and and decency.