THE BLOG

A Grand Bargain or a Grand Uprising?

11/19/2012 02:24 pm ET | Updated Jan 19, 2013
  • C. Robert Gibson Independent journalist published in Guardian, the Washington Post, Al Jazeera America, NPR, and other publications

Do you like word games? Here's one: In the next paragraph, replace the word "Greek" with "American."

In the Greek economy, international banks own the debt-based currency and most of the debt, which means endless bailouts from the government to prop up those banks whenever they piss away the last bailout. To pay for the bailout, the Greek government demands endless cuts from Greek public services. This can only lead to thousands of Greeks out of work, putting thousands of Greeks into the streets. This could all be avoided if the Greeks simply controlled their currency, punished the bankers and drafted a new constitution that establishes Greek sovereignty over banks.

Right now in America, the Federal Reserve is buying up $40 billion a month in worthless mortgage-backed securities during what is known as QE3. In layman's terms, this means that a private banking cartel that owns our currency, unaccountable to any government agency, is forking over $40 billion a month to the same Wall Street bankers that wrecked our economy with risky bets on imaginary financial instruments.

While this great robbery is happening, President Obama and Congress are preparing to sell us a "Grand Bargain" in January that will ask us to give up more of our already meager Social Security and Medicare benefits, to avoid a manufactured "fiscal cliff" that doesn't even really exist in the first place. The only difference between Americans and Greeks right now is that the Greeks have turned their streets into war zones to protest the aforementioned injustices, while we're all watching the NFL.

Here's the real truth: Social Security has nothing to do with the deficit, and simply raising the pay-in cap to $250,000 would make Social Security solvent for another 75 years. If our politicians really cared about our deficit, they wouldn't cut Medicare, but rather change it into a single-payer health care system, which would drastically cut costs for both sick people and the government by up to $1.1 trillion a decade.

But the truth is that even after this last election, too many members of Congress are too busy pandering to the rich to let the facts deter them. Speaker John Boehner said he would consider closing tax loopholes and ending deductions, but only if it was done to lower tax rates for the wealthy even further, meaning no new revenue would be gained. And President Obama might even appoint Erskine Bowles as Treasury Secretary -- the same Erskine Bowles who co-chaired Obama's deficit-reduction panel that recommended austerity for the poor and protection for the rich.

The Greek situation will be our situation soon if we leave our politicians to their own devices like we did after November of 2008. Now is the time to make clear demands of our government, both big and small. This means letting the Bush tax cuts for the wealthy expire, closing loopholes that allow corporations to offshore profits tax-free, instituting a 3-cent financial transaction tax on risky Wall Street bets, and new top tax brackets for incomes of $1 million, $10 million, $100 million, and $1 billion, at rates reminiscent of the Eisenhower years. But these are the small solutions that still won't loosen the bankers' iron grip on our economy and society.

By the end of next year, the people must demand, by an overwhelming consensus, that we wrest control of our money supply from the bankers, jail the financiers responsible for this crisis, and ensure that the nation's money supply will always be owned by the people and not private banks in our Constitution. Iceland did just that, and their economy is doing great. We can do something similar by repealing the McFadden-Pepper Act of 1927 (page 181 of this document), which allowed for indeterminate charters for Federal Reserve banks, followed by Congress nationalizing the existing Federal Reserve banks and owning our currency through public banking. We also have to renew the Glass-Steagall Act of 1932 and draw a line between banks that hold our checking accounts and negotiate our mortgages, and investment banks that make risky bets on Wall Street.

Iceland did something similar; when the banks defaulted on $85 billion in debt and tried telling the people they needed a bailout that had to come at the cost of people's jobs and pensions, Icelanders took to the streets and elected a government that jailed bankers and hunted down the ones who fled. Now, their banks have forgiven citizens' debt totaling up to 13 percent of national GDP, their economy has outgrown most of the developed world, and their citizens just voted to make their new constitution that everyone helped write with the help of social media, the basis for the country's new constitution.

What will we look like a year from today? Will we be another Greece, under the control of greedier banks and a crueler government, or will we take our economy back from the banks like Iceland did? The choice isn't up to our politicians; it's up to us. Let's get to work.