Download Statement to TFAC

Statement to the Transportation Finance Advisory Group
Byron Dale & Ayrlahn Johnson, Citizens for Better Transportation
October 15, 2012
Thank you for the opportunity to come before you and present the only truly workable plan to
provide full financing of Minnesota’s transportation and, at the same time, enhance Minnesotans’
quality of life and their economy.
Traditional investment approaches clearly have not and will not provide the needed funds nor in
the long run enhance the economy and quality of life for Minnesotan’s. This is because all
traditional investing centers on gaining a monetary profit for investors or higher taxes for the
people. The amount of funds needed limits investment to the very rich and to the ones who can
create the funds they invest. With traditional investments you may get up front money quicker but
the investors always want that money back plus a profit. This only makes the very rich richer and
increases the cost of transportation to all Minnesotans and in the long run leaves the people deeper
in debt and/or shorter of money. All you have to do to prove this is go to www.usdebtclock.org
and see how the debt is collectively growing.
However, there is a non-traditional, public-private partnership approach that will provide all the
funds needed and greatly improve the quality of life and the economy for all Minnesotans.
Republicans should love it because it will not increase taxes or the people’s indebtedness.
Democrats should love it because it will stimulate the economy and produce many jobs in the
transportation, solar, geo-thermal, electric, water purification and supporting industries.
This approach provides a great opportunity for a public-private partnership to improve the
economic life of all Minnesotans. The ‘private partner’ is the state-chartered banks who have the
power to create money. The ‘public partner’ is the State of Minnesota who has the power to
control how that newly created money is used.
Together, the State of Minnesota and State-regulated banks can create the money needed to
adequately fund the transportation needs of Minnesota in place of bonding, taxing, leasing or
selling the roads.
This solution requires you to put away all pre-conceived notions and open your minds to new
ideas. The real obstacle to changing the way things are done is that we have to actually change
something. From reading your meeting reports it seems you are trying to find solutions without
making any substantive changes.
This solution will require a small change in the way things currently are done but will produce a
very large change in terms of positive consequences.
The solution requires that we think about and understand how all the money we use is created and
put into circulation.
Most people have never really thought about how money is created and put into circulation. I have
spent a lot of time studying the process. In my research I wrote the United States Treasury and
asked how money was created. Russell L. Munk, Assistant General Council answered stating “The
actual creation of money always involves the extension of credit (loans) from private
commercial banks.”
It is clear that only the principal can be created when these loans are made. However, the lender
requires that both principal and interest be paid back. At this time there is no way to create the
money to pay the interest except for someone to borrow more. John M. Yetter, writing for the US
Treasury said, “The money that one borrower uses to pay interest on a loan has been created
somewhere else in the economy by another loan.” John B. Henderson, Senior Specialist in Price
Economics, of the Congressional Research Service, The Library of Congress stated “Money is
created when loans are issued and debts incurred, money is extinguished (ceases to exist in the
economy) when loans are repaid.” Robert H. Hemphill, credit manager of the Federal Reserve
Bank of Atlanta wrote, “If all bank loans were paid, no one would have a bank deposit and there
would not be a dollar of coin or currency in circulation.” MaryJo Wall writing for the Minnesota
Department of Commerce has stated that state chartered banks create money but only as loans.
These statements explain why Americans and their ‘different levels’ of government are over 58
Trillion dollars in debt, (www.usdebtclock.org) when almost everyone works to grain a profit or an
income. The IRS claims that most all of us are getting income or profit and they always want a
share.
Common sense and logic dictate that our current method of bringing money into circulation is
mathematically flawed and is not sustainable. This is the cause of our growing money shortages,
economic contention, and is the base cause of the problem you are here to find a solution too.
Lending all new money into circulation requires government, business and individuals to keep
borrowing more and more just to keep the economy moving. When money is borrowed to build
roads, houses or anything else, the interest on the borrowed money makes the cost of that project
two to three times as much as it would be if the money was created as a payment for the
production produced.
To make a real, fair, lasting and positive solution with public and private cooperation, only a small
change is needed. The new money needed must be created as an asset to the people not as a debt to
the people. Our transportation system is and should be an asset to the people and not a liability to
the people. Just a small change in the bookkeeping of state-regulated banks will solve Minnesota’s
Transportation Funding problem.
All that we need to solve the problem of transportation funding is for the Committee to take this
solution to the Governor and the people of Minnesota and get one new legislative bill passed.
This Committee has the duty as well as the power to see that this, the only truly workable solution,
is implemented.
There has never been a greater opportunity to serve the needs of the people of Minnesota.
The question is, will you serve the people of Minnesota or will you walk away, leaving the people
with nothing to look forward to but greater debt and tougher economic times?
For more information please contact: Byron Dale
7007 Lynmar Lane
Edina, MN 55435
612-925-6099
[email protected]
www.wealthmoney.org
www.moneyaswealth.blogspot.com