Money is more than a medium of exchange

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Written by James Gustav Speth

Money is much more than a neutral means of exchange.  The way almost all of it is created--by private banks making loans that give rise to debt that must be repaid with interest--has consequences.  Although regulated by government, the creation of money has been privatized, and the decisions about how money is allocated to various purposes is largely in the hands of private financial institutions that are in business to make a profit.  The idea that government should be responsible for creating all of the nation's money was abandoned, as was the idea that bank loans should be limited to what depositors put at their disposal.

Many of our country's early leaders warned against such concentration of power in the hands of a financial elite.  Thomas Jefferson said, "I sincerely believe...that banking establishments are more dangerous than standing armies."; President James Garfield, who had previously been chairman of the Banking Committee in the House of Representatives, said, "Whoever controls the money in any country is master of all its legislation and commerce."

James Gustave Speth, America the Possible, pp.119-120

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