I urge a major all points mobilization in support of Sen Elizabeth Warren's Bank on Students bill mandating that the Federal Reserve provide 0.75% cheap federal credit for federal student loans (Stafford loans) via the US Department of Education. This is so far as we know the first bill which proposes to force the Fed to provide cheap credit to something other than banks and financial institutions. The substantial benefits in interest savings to American students groaning under $1 trillion of high-interest student debt are obvious.
It is vital to point out that Warren's bill will not cost the US Treasury or US taxpayers one penny to generate these formidable benefits. It represents federal lending, not federal spending. It simply mandates the use of credit creating power which the Fed has always had, but has insisted using for the benefit of financial institutions only. The bill would relieve pressure on the federal budget by freeing up general revenue for other uses. It is a step toward the restoration not of Keynes, but of Hamilton's vastly superior American System of Political Economy.
This bill also represents the first pilot project for how to get out of the current world economic depression - by forcing the central bank to act like a national bank, using federal credit creation to serve not just zombie banks, but also the real economy.
Clearly Wall Street forces will attempt to suppress Warren's proposal. All persons and organizations of good will need to do everything possible to publicize this bill on internet, social media, and TV/radio talk shows and GET IT PASSED AND SIGNED BY OBAMA this spring. Take the news of this bill to campuses and urge students to demonstrate their strong support before the end of the academic year. We suggest urgent amendments to extend this debt relief to additional categories of student loans so as to afford them protection from the scheduled doubling of the interest rate from 3.4% to 6.8% on July 1.
The principle embodied in this bill is the key to rebuilding US infrastructure and creating 30 million new productive jobs through a large-scale credit stimulus from the Fed. It takes us beyond squabbling over the limited funds of the US Treasury into the virtually limitless realm of Fed credit creation to finance the needs of the nation. Any politicians groups or media who claim to be progressive must mobilize at once for the Warren bill or be relegated to irrelevance. Anybody who refuses to support it with the claim that the Fed needs instead to be ended will be exposed as a Wall Street agent. We urge all economists who care about our nation's future to come out in support of this bill.
This bill represents an historical turning point. It must now become law!
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