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Economic Error #17: The Banking System Should Be Run Like the Post Office.
Ellen Brown believes that governments are efficient organizations. As a model of efficiency, she chooses the United States Postal Service. She says that the entire banking system should be run like the old postal savings system.
We need a safe place to keep our money and a practical way to transfer it to others. These services should be performed by a government agency on the model of the now-defunct U.S. Postal Savings System, which operated successfully from 1911 to 1967, providing a safe and efficient place for customers to save and transfer funds. It issued U.S. Postal Savings Bonds in various denominations that paid annual interest, as well as postal savings certificates and domestic money orders. [Web of Debt, p. 401]
I think it is safe to say that Ellen Brown lives in a mental fantasy world. The unfortunate thing is that she invites conservatives to join her in that fantasy world.
The thought of the entire banking system being run with the efficiency of the Postal Service is enough to terrify anybody. Think of standing in line to get money out of the bank or into the bank. Think of trying to get a loan from somebody employed by this new, improved, government-run banking system. Think of the paperwork involved. Think of how well the Postal Service delivers other services.
That Brown expects conservatives to believe that the banking system should be run like the old U.S. Postal Savings Bonds program is mind-boggling. Yet, the fact the matter is, conservatives read her book, and they recommend it to their friends. I know this, because I am constantly being sent recommendations for the book. Liberals do not send me recommendations to help me. Only conservatives do that.
The reason why the Postal Service could offer interest on its bonds is it was acting as an agency of the United States government. The money was turned over to the Treasury, and it was instantly spent on various government projects. The Treasury increased the government's debt, and it paid interest on those savings bonds. The call for the banks of America to be run by government agency is a call for all of the savings of Americans to be turned over to the United States government and spent on government projects. This is what she recommends. She wants to create a welfare state. She says this over and over in her book. Doubt me? Click here. She wants a welfare state funded by the savings of Americans, combined with fiat money.
The old US Postal Savings System had nothing to do with the private sector. None of the money was transferred to individuals seeking loans for businesses, or to buy consumer goods, or anything else. The money was all turned over to the government.
How in the world can this woman get support from conservatives for her ideas? Yet she does. This is indicative of the abysmal economic ignorance of sections of the conservative movement. These people cannot possibly be committed to the free market. They believe in government. Why they think that they should join the Tea Party in order to shrink government, and then read Ellen Brown's Web of Debt, is a mystery to me. I hope it is a mystery to you.
A friend of mine used to stand in line at Christmas at the Post Office. The line stretched on forever, as it usually does at Christmas. As a joke, he said to no one in particular, "This outfit ought to be turned over to the government." I do not think Ellen Brown would have gotten the joke.
For a detailed critique of Ellen Brown's economics, go here: