In the United States House of Representatives, the “Jubilee Act for Responsible Lending” (otherwise known as H.R. 2634) was passed on April 24, 2008. The heading of that Act explains the concept behind what it covers:
“H. R. 2634
IN THE SENATE OF THE UNITED STATES
April 24, 2008
Received; read twice and referred to the Committee on Foreign Relations
To provide for greater responsibility in lending and expanded cancellation of debts owed to the United States and the international financial institutions by low-income countries, and for other purposes.
SECTION 1. SHORT TITLE.
This Act may be cited as the `Jubilee Act for Responsible Lending and Expanded Debt Cancellation of 2008′.”
In other words, the United States wants to cancel the debts owed to it by international financial institutions in low-income countries.This is a little like a man who stands on the street starving while offering to buy the rest of the world dinner – using a credit card, of course.
You can read the rest of the Jubilee Act H.R. 2634 HERE.
It doesn’t take a lot of mathematical skill to figure this out.The dollar, or more accurately stated the Federal Reserve Note, has depreciated to the point where its value (being generous) is about 6 or 7 cents when compared to the 100 cents it was worth when the Federal Reserve Act was passed on December 23, 1913 and the unlawfully established Federal Reserve System took over the reins of America’s monetary management.
The 100-year contract established with this privately-owned corporation known as “The Federal Reserve” will come to an end on December 23, 2013.On its 100th anniversary, the Federal Reserve System leaves the American people about 17 trillion dollars in debt – times five in long-term debt.As of 2012, the Gross Domestic Product of the United States was close to $16.5 trillion.Comparatively, Spain’s Gross Domestic Product for 2012 was about $1.3 trillion.Spain’s debt was $2.3 trillion.Spain has a 167 debt-to-GDP ratio.The United States has a 106 percent debt-to-GDP; Italy’s debt at $2.5 trillion is 108 percent debt-to-GDP.The European Union was at 85 percent at year-end 2012.
When you take all of the above and input it into my brain, it comes out this way:For every dollar we print to repay our debt, we go 46 cents more in debt than we were before we printed the currency (or sold the bond or keyed a number into a computer) to reduce our debt.In other words, as things stand at this moment in time it is impossible for America to repay her debt.You can find the statistical data for debt-to-GDP HERE.And this is just the tip of the iceberg as it relates to actual US debt.Or, look at it this way.One trillion seconds is almost 32,000 years. So to pay off the debt, if Congress put a hundred dollar bill per second into an account to pay the debt, it would take well over 4,000 years to get the job done.
There is much history regarding the concept of what is called odious debt.Americans need to pay attention to what it is and learn to use the concept to tell the US Treasury and Federal Reserve System where to go look for the trillions of dollars they say the American people owe in government debt.According to the Doctrine of Odious Debt, we the people owe about 25 percent of what the Federal Government and the Federal Reserve System tell us we owe.
The concept of odious – or immoral – debt is not a bee I got in my bonnet one day and decided to dream a little dream of reduced debt, fewer taxes, more jobs, and a return to the Rule of Law.This is a serious matter and is one with which the nations of France, Russia, Germany and the United States are very familiar because it has been used by those nations and others.
After the Civil War, it was found that the Confederate States incurred great debt in its attempt to secede from the Union.The North won that war.It would have been immoral for the taxpayers of the United States (North and South) to be forced to pay the debts of the Confederacy which had seceded from the Union during the time the debt was incurred.The 14th Amendment of the United States Constitution repudiated those debts.
The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. But neither the United States nor any state shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void.
Section 4 of Amendment 14 raises some very interesting questions regarding “insurrection” or “rebellion” as, it can be argued, Citizens of this nation had an economic war declared against them by too big to jail banksters when the protections of the Glass Steagall Act and the McFadden Act were, with careless disregard for the outcome, over-ridden.For close to ten years, Washington’s political machine has used debt to enslave the American populace… what else can you call debt that is so huge it is not repayable?The only thing that stands behind the value of the US Federal Reserve Note – American currency, regardless of what you call it – is the blood, sweat and tears of the American people.If you don’t pay your taxes, you go to jail.According to the 14th Amendment, public debt must be authorized by law.From where does our Rule of Law in America flow?The Constitution!
We do not honor debts resulting from dishonorable purposes.We did not honor the debts of the Confederacy.After the Spanish-American War ended in 1898, the US turned to the Doctrine of Odious Debt when it rejected Cuba’s debts to Spain.We said the debts “…were imposed upon the people of Cuba without their consent and by force of arms.”
The peace negotiators argued that much of the debt was used to crush the efforts of the Cuban people to revolt against the domination of the Spanish.The money was spent in a way that was contrary to the interests of the Cuban people.To ask them to pay for debts incurred to help continue keeping them in a perpetual state of slavery would be immoral… it was odious debt – or, unlawful debt.To command the people of any nation to keep their shoulders to the rock of debt and keep pushing it uphill under threat of imprisonment if they do not is… slavery.Does that mean that any funds spent by the NSA for PRISM to spy on the American people are odious – immoral?How about the funds spent by the IRS in an effort to crush the efforts of some of the American people from revolting against unconstitutional domination?
According to an excellent research article written by Patricia Adams, executive director of Probe International and author of “Odious Debts:Loose Lending, Corruption, and the Third World’s Environmental Legacy” (London:Earthscan, 1991), the legal Doctrine of Odious Debts was shaped and hones by Alexander Nahum Sack about 25 years after the settlement of the Spanish-American War.If you are interested in a more in-depth overview, you can find Ms. Adams’ article reprinted at the LUDWIG VON MISES INSTITUTE SITE.She said:
“After the Russian Revolution of 1917, the Bolsheviks repudiated Russia’s debts indiscriminately. Sack, a professor of law in Paris and former minister in the Tsarist government, authored two major works on the obligations of successor systems and defined in law which debts are legitimate and which illegitimate. With colonial territories becoming independent nation states and colonies changing hands, with monarchies being replaced by republics and military rule by civilians, with constantly changing borders throughout Europe, and with the ascendant new ideologies of socialism, communism, and fascism overthrowing old orders, Sack’s debt theories dealt with the practical problems created by such transformations of state. Like many others, Sack believed that liability for public debts should remain intact, for these debts represent obligations of the state–the state being the territory, rather than a specific governmental structure. This he based not on some strict
dictate of natural justice but on the exigencies of international commerce. Without strong rules, he believed, chaos would reign in relations between nations and international trade and finance would break down. But Sack believed that debts not created in the interests of “the state” should not be bound to this general rule. Some debts, he said, were “dettes odieuses.” If a despotic power incurs a debt not for the needs or in the interest of the State, but to strengthen its despotic regime, to repress the population that fights against it, etc., this debt is Odious for the population of all the State,”
As I understand what is said in this well researched article, “…if a government becomes despotic and incurs debt not for the needs or in the interest of the State but to strengthen its despotic regime, to repress the population that fights against it,”it sounds to me like all of the quantitative easing from TARP to TALF to the multi-trillion dollar loans made by the Federal Reserve System to Wall Street investment banks and international banks (as well as corporations — $16 trillion alone in 2011), can be considered “odious debt” and stricken from the books – and the backs – of the American (and French, and German, and British, and Greek, and Italian, and Spanish) people.
Since 2002, Argentina has fought the International Monetary Fund’s (IMF’s) attempts to impose restrictive measures of economic austerity on the country. The IMF wanted to do what the IMF is known worldwide for doing:It wanted to finance infrastructure, pay for research… you know the routine:Make a country borrow and spend money building roads and airports and bridges and other “shovel ready projects.” Such strategies force any nation deeper and deeper and deeper in debt until it is in economic ruin.Sound familiar?
On the other hand, it is equally true that Argentina seems to lack character as a state when it comes to repaying its loans.They seem to believe that banks in other nations should lend them money but they can choose not to repay – and other nations and banks should keep lending them money.They have not yet figured out that the credit process is a two-way street:“I lend you money; you repay the money.”
Aside from nations that view the Doctrine of Odious Debt as a means to get out of debt every ten years, this concept may lend itself to an exit strategy for sovereign nations of the world to escape the crushing debt being heaped on the heads of people worldwide.The idea does hold some thoughtful possibilities. Iceland thought so – and its crooked bankers and its crooked politicians sit in Icelandic prisons rather than getting multi-million dollar bonuses annually… and Iceland thrives.Too bad the Greeks and Spanish haven’t followed in their footsteps.
What the Doctrine of Odious Debt makes quite clear is that a lie has been forced upon the majority of the world’s population by oligarchic elites.They like the concept of a two-class system with them as the elitists, running things, while the rest of us who used to be middle class are shoved into the labor class forced into careers they, not we, decide are best for us.
Undoubtedly, one reason Julian Assange sits in the Ecuadorian Embassy in London is because he gave copies of documented conversations between elitist bankers and others about how to cripple the economies of South America.The conversations Assange theoretically gave the South American governments focused on how to take South America’s energy resources, prevent economic recovery, and force the governments of the continent to pursue a neo-colonialist policy “so Spain, Italy and Germany can, with British capital, benefit from the difficulties sure to follow when the recommended policies are followed.”Anyone who has read Confessions of an Economic Hit Man will recognize the parallels.
And, without intending to, Ecuador has exposed a great weakness in the world financial systems.
On December 16, 2008, Ecuadorian President Rafael Correa didn’t make a scheduled interest payment on private bonds.Ecuador had defaulted in 1998 when going through a financial crisis.This time, however, was different.Correa told the world that his small nation was not going to pay “obviously immoral and illegitimate debts.”
Ecuador’s gross domestic product (GDP) is close to 50 billion euros and its “immoral debt” is about 11 billion euros.It’s a small country.But that isn’t the point.The “immoral debt” point made by Rafael Correa, was announced on television on December 12, 2008.He said immoral and illegitimate debts were those debts that violated the Ecuadorian Constitution and oppressed his people.
The question, then, becomes:What debts are “odious” or “immoral,” and which are not?What is an illegitimate debt?President Correa related the Ecuadorian “immoral debt” to violations of that nation’s Constitution.If the Tea Party and Liberty Action Groups have any understanding of the significance of what is being said here, they will find access to constitutional legal and accounting expertise that can answer the question:What debts are odious or immoral?Which debts are not?
In America, we can look at mortgage-backed derivatives and millions of unlawful foreclosures and costing the people trillions of dollars to immediately identify trillions of dollars of property value and profits by banks that can be defined no way other than immoral.Well, perhaps unlawful, too.These debts and the government funds loaned to the banksters that created them and who got bailed out by additional funds from taxes on American citizens can probably make the best claim of “immoral” or “odious” debt of any citizens in the world.
What else might represent “immoral debt?”
If, as Ecuadorian President Rafael Correa says, “illegitimate debts violate the Ecuadorian Constitution and oppressed his people,” every other country that is drowning in immoral debt can make the same logical and lawful claim.If debt is defined as anything unconstitutional, a claim can be made that the entire Federal Reserve System is “unconstitutional.”
Article One, Section 8 of the United States Constitution says “The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United State;” Section 8 also says Congress has the responsibility “To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;”.
There is a lawful way to change the Constitution of the United States.It involves both the House of Representatives and the Senate.Each must approve by a two-thirds supermajority vote a joint resolution amending the Constitution.The joint resolution does not require the signature of the President but is sent directly to the states for ratification.Once ratified via a vote by the People, the Constitution is lawfully amended.That is the process put in place by our Founding Fathers.
As anyone who is familiar with the history of the Federal Reserve Act of 1913 knows, this procedure was not followed.Instead, politicians who supported the concept of a central bank (which America had only briefly on two occasions until 1913) let their opponents go home for Christmas on December 23rd and proceeded to pass this Act unconstitutionally.The Congress cannot, under its own limited power, change the Constitution of the United States.The Federal Reserve Act of 1913 and the banking system that evolved from it have never been constitutional.
Foreign nations should be aware:You may be doing business with an unlawful Corporation if you’re doing business within the Federal Reserve System.The Federal Reserve System continues to be in violation of the US Constitution and not qualified to create debt in the name of the people of the United States of America… the debt of the Fed being thus “immoral” or “odious.”That means it may be debt we, the citizens of this Great Nation, can write off.
Even by-passing the unlawful – which means “odious” and/or “immoral” – debt created by the Federal Reserve System, there is much debt from equally unconstitutional sources.For example, only the Congress has the constitutional (moral) authority to declare war.Could that mean that any debt from non-declared wars represents “immoral debt?”It’s certainly a good argument!
Eduador’s President Rafael Correa says immoral and illegitimate debts violated the Constitution of his country and oppressed his people.He refused to pay them.If that is the standard by which we define “immoral debt,” it is of critical importance.It presents to the American people – to the people of the world – a strategy for getting rid of a lot of debt… immoral debt.“Oh, Immoral Debt, How do I define thee?Let me count the ways…”
It sounds like what we Americans needs is a good, old fashioned South American style refusal to repay “immoral debt.”If you really look closely at the debt incurred since 1988, a vast majority of it could easily be defined as unconstitutional and, thus, immoral – or, if you prefer, “odious.”
I love irony… especially when it bites someone in the butt who really deserves it.
Marilyn MacGruder Barnewall began her career in 1956 as a journalist with the Wyoming Eagle in Cheyenne. During her 20 years (plus) as a banker and bank consultant, she wrote extensively for The American Banker, Bank Marketing Magazine, Trust Marketing Magazine, was U.S. Consulting Editor for Private Banker International (London/Dublin), and other major banking industry publications. She has given speeches to bankers worldwide.
She has written seven non-fiction books about banking and taught private banking in Singapore; also at Colorado University for the American Bankers Association. She has authored seven banking books, one dog book, a biography, and two works of fiction (about banking, of course). She has served on numerous Boards in her community.
Barnewall is the former editor of The National Peace Officer Magazine and as a journalist has written guest editorials for the Denver Post, Rocky Mountain News, and Newsweek, among others. On the Internet, she has written for News With Views, World Net Daily, Canada Free Press, Christian Business Daily, Business Reform, the Post & Email, and others.
She has been quoted in Time, Forbes, Wall Street Journal, and other national and international publications. She can be found in Who’s Who in America, Who’s Who of American Women, Who’s Who in Finance and Business, and Who’s Who in the World.