College Board deletes discussion on monetary/banking reforms as ‘not related to teaching AP Economics;’ Emperor’s New Clothes naked debt waddles further down US pot-holed streets

“At first blush, a man is not capable of reporting truth; he must be drenched and saturated with it first.”

Henry David Thoreau, I to myself: an annotated selection from the journal of Henry D. Thoreau, 1837. Thoreau, like Abraham Lincoln in a speech on the floor of the House of Representatives, recognized the claimed “reasons” for a “defensive war” against Mexico were obvious lies when inspected.

This article documents a discussion among Advanced Placement Macroeconomic teachers I initiated on our discussion board. Because this topic concerns literally ~$1,000,000 near-instant benefits for each average US household, and in Emperor’s New Clothes obviousness, Americans literally have nothing more valuable for their attention.

Highlights of this discussion:

  • Game-changing data revealing our .01% looting of trillions, along with solutions to reverse this condition were met with two leading teachers’ denial and straw man arguments. Of course, this is the opposite of professional academic discussion. Zero colleagues spoke-up in support or interest of this data.
  • My pointing to these two colleagues’ straw man arguments with a step-by-step introduction to see the data was met with silence; both from the two opposing colleagues and everyone else.
  • The College Board asked for the entire discussion to be deleted. Our moderator, another outstanding expert on AP Economics course content, agreed with the reason that monetary and banking reforms are “not related to teaching AP Economics.”

Analysis: These events are significant for two reasons:

  1. The two colleagues (Expert 1 and 2 in the following discussion) are indeed experts in the course material all AP teachers coach students to recognize. They are both also genuine leaders to assist colleagues to understand and present challenging course material. Our moderator has over 20 years of experience in AP content and test design, with work in college-level economics teaching. Because colleagues and I working with these reforms are unaware of any refutation of our factual claims, this seems to mean that colleagues and experts are under cognitive dissonance delusion. The effect of cognitive dissonance is irresponsibility in two ways: literal non-responsiveness to factual reality, and avoiding any need to respond to those facts from the delusional rhetoric that “everything’s ok.” This one specific case is among a literal ~100 areas of crucial importance, and consistent with my previous e-mails to each and every economics professor at each and every University of California site, and Cal State University site regarding monetary and bank reforms that received zero responses (that article was deleted from, as endnotes explain).
  2. The good news is that I believe if just one colleague spoke-up, this discussion would at least exist, and with possibility for victory of these obvious reforms among this important community. The bad news is that we still don’t have one single colleague finding these trillions looted by a parasitic .01% as factual reality, nor solutions for monetary and banking reforms that quickly add to tens of trillions and worth ~$1,000,000 per average US household in near-instant benefits. After eight years of communicating similar topics to this community and 40 total years beginning with work for ending poverty, I would personally prefer if planetary management (in contrast to we human guests) took a more active role to reveal the facts.

One day, perhaps sooner than later, this will be helpful historical documentation of how darkly captured Earth became.

Perhaps Matt Damon will star in a movie to honor his neighbor and mentor, Howard Zinn, playing the role of one of us “Rebel leaders” to artistically communicate humanity’s tragic-comedy. Matt’s 5-minute reading from Zinn on our requirement to reject the Orwellian and inverted .01%’s state is powerfully appropriate:

Our discussion:

Macroeconomics: New Discussions

Carl B Herman posted the following on 04/09/2016 20:15 EDT

GAO reports US government won’t comply with audits

Analysis: The Emperor’s New Clothes obvious conclusion of a society that creates what it uses for money as negative numbers added forever is that “leaders” are operating for their own private interests rather than societal benefits. Reports such as this from three days ago to the US Senate are to be expected, to the degree honest testimony is allowed. The magnitude of debt in a “non-monetary” system that only creates debt can only and always increase. The endgame will be some combination of public discovery of this fraud to call debt as “money,” fraud to attempt to hide the debt, and collapse of the system from odious debt.

The good news is that solutions have been ready since Ben Franklin operated colonial Pennsylvania without taxes.

The great news is that none of us working for these reforms have ever received any refutation of our factual assertions, including our fine AP Econ teachers since 2009.

Article: excerpt:

Moreover, the Pentagon hasn’t even attempted to comply with government audits …  and “$8.5 trillion in taxpayer money doled out by Congress to the Pentagon [between] 1996 [and 2013] has never been accounted for.”  The military wastes and “loses” trillions of dollars.

In addition:

▪Nobel prize-winning economist Joe Stiglitz says the World Bank would view any country which had a banking structure like the Fed as being corrupt and untrustworthy. The former vice president at the Federal Reserve Bank of Dallas said said he worried that the failure of the government to provide more information about its rescue spending could signal corruption. “Nontransparency in government programs is always associated with corruption in other countries, so I don’t see why it wouldn’t be here,” he said

▪We’ve known for a long time that the Bureau of Labor Statistics fudges the numbers to make unemployment look lower than it is really is. BLS itself has admitted that its “adjustments” skew unemployment data during recessions. Indeed, the former head of the BLS recently said BLS statistics are B.S. … and that unemployment is much higher than the government is letting on

▪The Bureau of Economic Analysis is revising 84 years of economic history … which will make the economy magically look better

▪The U.S. (and British) governments encouraged interest rate manipulation. And central banks have been directly manipulating interest rates for hundreds of years

▪The government has long ignored energy and food prices when reporting on inflation

▪Paulson and Bernanke falsely stated that the big banks receiving Tarp money were healthywhen they were not. The Treasury Secretary also falsely told Congress that the bailouts would be used to dispose of toxic assets … but then used the money for something else entirely

▪The Commodity Futures Trading Commission has conspired with big banks to manipulate commodities prices for decades

▪The government-sponsored rating agencies committed massive fraud (and see this)

▪The Treasury department allowed banks to “cook their books”

▪Regulators knew of and allowed the use of debt-hiding accounting tricks by the big banks

▪The SEC has been shredding Wall Street documents for decades to help the big banks cover up their fraud

▪The Secretary of Treasury (Tim Geithner) was complicit in Lehman’s accounting fraud, (and see this)

▪The government knew about mortgage fraud a long time ago. For example, the FBI warned of an “epidemic” of mortgage fraud in 2004. However, the FBI, DOJ and other government agencies then stood down and did nothing. See this and this. For example, the Federal Reserve turned its cheek and allowed massive fraud, and the SEC has repeatedly ignored accounting fraud (a whistleblower also “gift-wrapped and delivered” the Madoff scandal to the SEC, but they refused to take action). Indeed, Alan Greenspan took the position that fraud could never happen


(Expert 1) posted the following on 04/10/2016 05:48 EDT

RE: GAO reports US government won’t comply with audits

Hi Carl,

You wrote:

The Emperor’s New Clothes obvious conclusion of a society that creates what it uses for money as negative numbers added forever is that “leaders” are operating for their own private interests rather than societal benefits.

And my response:

Your “we need overhaul” theme on these types of posts seems too extreme, in my opinion, and often not even accurate. For example, I don’t view government leaders as “operating for their own private interests”. Sure, I would expect a certain mix of our current politicians to be incompetent, lazy, untrustworthy, and corrupt, but I do believe the vast majority of them ARE working for our public interests. I, for one, feel protected, trust our economy & banking system, and am pleased with my family’s future opportunity and our human rights. It sure ain’t perfect as only my wife is!

You keep focusing on debt as some type of ponzi scheme, but I just don’t see it that way. There is nothing wrong with debt, in my opinion, if managed wisely. I, for example, have leveraged debt throughout my entire life in order to pull future income into the present for things like our family’s education, access to own and use cars, and to purchase our family homes. I have done the same in my role as CFO for the businesses that I have worked for. The federal government is being willingly lent to by households & institutions. You seem to often say we are using debt as money, but I don’t consider debt to be money. Debt is simply the transfer of existing money from someone that does not need to spend it currently to someone that does.

As Econ teachers, we are in the unique position to understand that the government debt will grow into perpetuity, assuming no bankruptcy or foreign takeover, and the debt will be a minimum of $50 trillion in 50 years and that will be no more of a problem than our $19T of debt is today! Said another way, as long as the growth of the national debt does not exceed the growth in income (GDP), the system should be secure from a debt panic. All throughout my life, my debt has also continued to grow as my family’s income has grown but I am more financially secure now because my family income has grown faster than my family debt. But, yes, it is a critical issue that our government keep its debt/GDP ratio in check, and we need to make key adjustments to the social security & medicare programs to do so, and, yes, it is important to rid the financial system of inefficiency and fraud so we should continue to do so through leadership, policy, and audits.

Overall I favor specific, incremental policy actions to shore up the financial viability of our current system rather than complete overhauls as you seem to favor. I honestly see your suggestions as impractical, not because they would not work as I think they could/would, but because you would never be able to get the system (electorate/Congress/President) to accept them.


(Expert 1)


Carl B Herman posted the following on 04/10/2016 08:59 EDT

RE: GAO reports US government won’t comply with audits

Hi (Expert 1),

Thank you for your reply.

First, you are certainly welcome to any opinions you wish about our macroeconomic institutions and data.

That said, if we translate the single point of “private interests” into numbers, how can you hold your position given public banking and monetary reform seem to show ~$1,000,000 per US household near-instant benefits?

I do not hold the strawman position you state of any “debt as some type of ponzi scheme,” but that the above data of public banking and monetary reform demonstrate that a society/government only and always creating what is used for money as debt is a ponzi scheme; in this case we can count that hard-working people like you have lost ~$1,000,000 to this debt design.

(Expert 1), and again with all respect for your shared expertise within our current system that we all teach and coach students to understand, I don’t think you’ve ever invested the time to understand the mechanics that Ben Franklin, Thomas Edison, and colleagues and I are pointing to, with game-changing data.

Have you?



(Expert 1) posted the following on 04/10/2016 10:13 EDT

RE: GAO reports US government won’t comply with audits

Hi Carl,

You are correct in that I have not taken much time to explore these ideas. Here is my rationale for not spending more time:

1) I am generally pleased and happy with the current economic system, including our debt system, as it has worked well for our country and for my extended family, thus, I have no incentive to change it. I am concerned, however, over the many national issues (national debt growth & medicare/social security, terrorism, income inequality & poverty, etc.) but I think they can be and will be appropriately addressed within the current economic framework. In short, I am a marginal problem solver and these ideas are too radical/big for me.

2) It is my belief that yours & others’ proposed changes to our current economic system would never be acted upon as the electorate does not understand these types of complex issues nor would they see them relating to them, and I beleive that few US leaders (it would have to be the US President) would undertake ideas as dramatic as these, unless our economy comes crashing down and we have to make a brand new start where new ideas will be more welcome. Our leaders  have difficulty passing even a single bill and these types of sweeping economic reform would not be acted upon, in my opinion. Even if they were entertained and pushed forward, this type of reform would get bogged down in never-ending lobbying and confusion.

3) The almost-instant benefits touted of $1M per family are misleading, in my opinion, to the average person. If I understand these proposed changes correctly, the “$1M per family in nearly instant benefits” really is a calculation of the estimated collective national money savings derived, driven by a more efficient banking, debt, and infrastructure process, divided by the number of US families. OK, mathematically that is correct, but the average person would think they would be instantly better off economically, which they would not be.  That’s like saying the National Debt per person is $60K per person, and if that debt goes away a family of 5 is instantly $300,000 better off, which isn’t true. No single family will see or realize $1M in instant benefits or anywhere close to that amount, but, yes, I do understand that massive cost savings of your proposed solutions could occur due to a more efficient economic process, making our resources go farther, ultimately reducing our tax burdens as well as improving certain government benefits (infrastructure, etc.). Yes, I DO believe we could get massive national savings with these new ideas, but the thought of getting these changes off the ground takes me back to my reason #2 above.

Thanks, though, for posting these ideas as it is people like you (the “entrepreneurs of financial reform”) that sometime succeed and are needed to challenge the status quo! We need new ideas! Conservatives like me tend to want to keep what we currently have and try to improve it. Entreprenuers like you like to often tear it down and start over as the waste, fraud, and inefficiency can drive you to drink. Kudos to you!


(Expert 1)


Carl B Herman posted the following on 04/11/2016 08:55 EDT

RE: GAO reports US government won’t comply with audits

(Expert 1), we share the idea that policies/actions that are conservative (essential maintenance) and progressive (attempted upgrade) work together.

I suggest to my Econ and US Gov students that on average, people seem to be ~90% conservative. That is, we have much of our time spent on actions that are essential maintenance (sleeping, eating, exercise, school/work, cleaning, shopping, recreation, etc.) which are variations of known ideas and essential. That said, every once in a while, we see and/or imagine an upgrade and try it. The paradox is that if this progressive idea works (and most do not), it changes status to “conservative”! This means that all our conservative ideas began as progressive.

So yes, we should all encourage progressives to invest their time and energy to explore new ideas, as all of us can benefit if those ideas work, and none of us are harmed much if small-scale explorations prove unfruitful. Btw: I never advocate “overhaul” but pilot projects to conservatively explore policies with apparent positive cost-benefit results.

Regarding this topic: with all respect, the $1 M/average US household are game-changing in Emperor’s New Clothes status. You ignore the most powerful data that are indeed near-instant; perhaps as you suggest, you haven’t invested the time to understand them.

The one point you make is again a straw man argument: paying the national debt saves ~$400 billion/year in gross interest cost (perhaps $300 net savings when we subtract intra-governmental holdings of debt). That’s ~$3,000 per average US household benefit; nice, and just 1/3 of 1% of saving $ 1M.

I will show the $1 M again with factual assertion of accuracy, and ongoing invitation that Benjamin Franklin’s history of operating a government without taxes, Thomas Edison’s endorsement, and the powerful conclusions of 84% of Economics Professors when directly asked are worthy of anyone’s attention.

From the article on benefits of public banking and monetary reform:

The top 3 game-changing benefits of monetary reform:

  1. We pay the national debt in proportion to removing private banks’ ability to create what we use for money as debt in order to prevent inflation. We retire national debt forever.
  2. We fully fund infrastructure that returns more economic output than investment cost for triple upgrades: the best infrastructure we can imagine, up to full-employment, and lower overall costs.
  3. We stop the ongoing Robber Barons who McKinsey’s Chief Economist documents having ~$30 TRILLION in tax havens, and the Fed finding the US top seven banks creating shell companies to hide $10 trillion. This amount is about 30 times needed to end all global poverty, which has killed more people since 1995 than all wars and violence in all human history.

Public banking creates at-cost and in-house credit to pay for public goods and services without the expense and for-profit interest of selling debt-securities. North Dakota has a public bank for at-cost credit that results in it being the only state with annual increasing surpluses rather than deficits.

Top 3 game-changing benefits of public banking:

  1. a state-owned bank could abundantly fund all state programs and eliminate all taxes with just a 5% mortgage and credit card.
  2. a state-owned bank could create in-house and at-cost credit to fund infrastructure. This cuts nominal costs in half because, as you know, selling debt securities typically doubles the cost. For example, where I live we’re still dismantling the old Bay Bridge in NoCal from the upgrade that cost $6 billion, but the debt-service costs will add another $6 billion when it’s all paid.
  3. CAFRs (Comprehensive Annual Financial Reports) stash “rainy day” funds no longer required with a credit line from a public bank. In addition, the so-called “retirement funds” currently deliver net returns of just a few percent on good years, and negative returns on bad years (herehere). California’s ~14,000 various government entities’ CAFRs have a sampled-data total estimate of $8 trillion in surplus taxpayer assets ($650,000 non-disclosed assets per household, among California’s ~12.5 million households).

$1,000,000 of benefits per US household:

▪ California’s CAFR data of ~$650,000 of assets per household is evidence of huge cash assets of similar magnitude in every state.

▪ Paying the US national debt of ~$18 trillion saves ~$180,000 per household.

▪ Ending state taxes in California to pay a budget of ~$170 billion saves each household ~$15,000, with similar savings in every state.

▪ ~$30,000 per household savings annually: the American public would no longer pay over $400 billion every year for national debt interest payments (because almost 30% of the debt is intra-governmental transfers, this is a savings of ~$300 billion/year). If lending is run at a non-profit rate or at nominal interest returned to the American public (for infrastructure, schools, fire and police protection, etc.) rather than profiting the banks, the savings to the US public is conservatively $2 trillion (1). If the US Federal government increased the money supply by 3% a year to keep up with population increase and economic growth, we could spend an additional $500 billion yearly into public programs, or refund it as a public dividend (2). This savings would allow us to simplify or eliminate the income tax (3). The estimated savings of eliminating the income tax with all its complexity, loopholes, and evasion is $250 billion/year (4). The total benefits for monetary reform are conservatively over three trillion dollars every year to the American public. Three trillion is $3,000,000,000,000. This saves the ~100 million US households an average of $30,000 every year. Another way to calculate the savings is to figure those amounts per $50,000 annual household income (for example, if your household earns $100,000/year, you save ~$60,000 every year with these reforms). This savings represents a 60% raise for every US household’s income.

▪ Related, if the ~$30 trillion hidden in tax havens by the .01% have $10-$15 trillion from Americans, and we count the Federal Reserve report that the US top seven banks have over $10 trillion stored, then the average US household could clawback ~$200,000 to ~$250,000.


(Expert 2) posted the following on 04/11/2016 12:25 EDT

RE: GAO reports US government won’t comply with audits

I must admit I am intrigued by this idea; but I agree with (Expert 1) that is isn’t at all likely to happen and I’m not sure it wouldn’t cause a lot of unintended consequences.

I do have two questions:

1. Under this plan how would the the effects of the business cycle be limited to help prevent high unemployment and/or inflation? What agency would be responsible for doing so? Would they be independent or directly accountable to the voters?

2. What safe investments will pension funds, etc have if treasury bonds are gone?

(Expert 2)

(leading AP Econ website)


Carl B Herman posted the following on 04/12/2016 09:01 EDT

RE: GAO reports US government won’t comply with audits

Hi (Expert 2),

Thank you for your thinking on this trillions-valued topic 🙂

For your points:

1. ”isn’t at all likely to happen”: let’s take one point of a state-owned bank to provide at-cost and in-house credit to fund infrastructure at half the cost of selling debt securities. This is perhaps the easiest point to embrace, as it closely models our current way of funding infrastructure through debt. (Expert 2) (and anyone) do you see this one point as somehow too difficult and/or unlikely, or achievable for pilot projects based on apparent game-changing benefits? On this point, colleagues and I successfully lobbied California’s Assembly and Senate to fund a professional economic cost-benefit analysis as the first step to document public benefits. We anticipated attack from the Big Banks, and found them with Governor Brown’s veto of the study (after we secured his promise of full support for anything that came to his desk). Specific documentation here and here.

2. The monetary policy tool to create debt-free money as a positive number to directly fund public goods and services can provide up to full-employment for any infrastructure that provides more economic benefits than costs. That is, all surplus labor can be offered work for the best infrastructure we can imagine, and we should do this for all projects that provide greater GDP than investment cost. Milton Friedman stated that his number one recommendation to improve the US economy was this one idea: create debt-free money to buy infrastructure. He also proposed, with colleagues and I in agreement, that money supply be an open topic for public, professional, and academic study in order to best use tools of creating money (positive number), subtracting money (taxes and public credit) to manage the value of money (inflation). This data must must must be transparent and accountable, with Congressional policy easily linked to their proposals. This part, (Expert 2), is unimaginable from our current status of hiding financial dealings in the trillions, as I also document. McKinsey’s research of $30 trillion stored in tax havens, the Panama Papers, and Goldman forking over $5 billion without admitting wrongdoing are examples of the current gaming of the system in non-transparency. You saw the movie, “The Big Short”? That’s what we currently have. More info on the tools to manage inflation here.

3. The “pension fund” model is perhaps the greatest area of game-changing data: CAFRs (Comprehensive Annual Financial Reports) stash “rainy day” funds no longer required with a credit line from a public bank. In addition, the so-called “retirement funds” currently deliver net returns of just a few percent on good years, and negative returns on bad years (herehere). California’s ~14,000 various government entities’ CAFRs have a sampled-data total estimate of $8 trillion in surplus taxpayer assets ($650,000 non-disclosed assets per household, among California’s ~12.5 million households).

Because pension costs are funded by the current model at a rate of return of less than 1% (10 years of data for California), this is another Emperor’s New Clothes data point that reveals an embarrassment of riches available. To help explain our good fortune, if we can grasp the data:

▪The state’s $600 billion cash and investment fund is explained as designated for funding state pensions. The CAFR data show the opposite: $27 billion in pension cost receives only $1 billion income from $600 billion in withheld taxpayer assets, fund “managers” receive over twice the net income as California pensions receive, and a massive $68 billion increase in “fair value of investments” doesn’t translate to actual funding of pensions.

▪Californians are taxed $19 billion to pay for pensions (95% of the public cost) while also losing $50,000 in assets the state withholds in cash and investments.

▪The $600 billion fund in cash and investments contributed 4% of the state’s $27 billion pension costs, but since 2008 has been “managed” to cost taxpayers more than the net income it produces.

I can explain this one point in a 23-minute interview for television/Internet/YouTube from 2012.

So again, what do you think? One of my colleagues is a former Goldman exec who found her heart and left. Her summary of these benefits is that the choice for public use of credit compared to feeding Goldman is a “no brainer,” and easily documented as having trillions in public benefits. Our one example of the Bay Bridge is easy for anyone to grasp, and similar to the example Thomas Edison and Henry Ford used in their media tour of 1921 to offer this “breakthrough” for public consideration.



(Expert 2) posted the following on 04/12/2016 10:26 EDT

RE: GAO reports US government won’t comply with audits

Thank you for helping me understand this a little more Carl.

I have a couple follow up questions if you don’t mind.

1. I get the expansionary effect on the economy. But what can be done under this system to reign in inflation to slow down the economy when needed? If the economy picks up and inflation occurs bringing with it an increase in the velocity of money, what can be done then?

2. I don’t think I got an answer as to what agency would be in charge of deciding how much debt free money is created and if this agency would be autonomous or directly accountable to the voters. Is that part of this plan?

(Expert 2)

(leading AP Econ website)


Carl B Herman posted the following on 04/13/2016 09:44 EDT

RE: GAO reports US government won’t comply with audits

You’re welcome, (Expert 2).

1. You asked: “what can be done under this system to reign in inflation to slow down the economy when needed?” First, let’s be clear what we currently have with how we create what is used for money: debt/credit created by private banks (adding negative numbers forever).

As we know, of course, these ideas would all have to be tested conservatively through pilot projects and subject to the excellent economic tools we have when unleashed for transparent data. That said, monetary reform and public banking create four new game-changing tools to manage money supply: 1) Creating debt-free money by vote of Congress (start conservatively with pilot projects, with possibility to expand to state levels) as a positive number for direct payment of public goods and services. If these infrastructure investments are cost-positive, then the net effect will be bringing overall prices down. 2) As private banks are reduced in ability to create credit to prevent this inflationary pressure (and allowed to lend actual deposits) as this is shifted to a public service through public banks, a 5% mortgage and credit card abundantly pays for all current state taxes. This tax/interest rate can be adjusted to help manage money supply and value/inflation. 3) Public goods and services can therefore be paid by a combination of positive and negative numbers (debt-free money [+] and at-cost public bank credit [-]), with adjustable interest rates to manage inflation. 4) Transparent data available to full public, professional, political, and academic consideration will give maximum power to understand and respond for monetary value/inflation.

And, to also be clear of what we have now in our current system, read here for manipulated numbers in the Fed’s statutory purposes of stable prices, maximum employment, and moderate interest rates. OBVIOUSLY, we are subject to inflation masked by manipulation, the only policy for maximum employment is full investment in cost-positive infrastructure, and the lowest interest is the game-changer to make credit a public service that in this one example of 5% mortgage and credit card eliminates all state taxes.

2) You asked: what agency would be in charge of deciding how much debt free money is created? Milton Friedman imagined this to be Congress, with unprecedented accountability and public/academic consideration of proposals of how much money to create (he imagined 3%/year of GDP). He saw political parties making proposals on this topic and subject to public debate, with voters holding the parties responsible for economic effects. The leading organization for monetary reform, the American Monetary Institute imagines this responsibility would become the #1 topic for economic consideration, and would evolve into a US Treasury department to best understand and communicate prices/inflation, possible public infrastructure advancements, and employment opportunities. The Venus Project looks beyond this breakthrough to resource-based economics. These are energy producing self-contained cities.

And (Expert 2), please answer my last question for you: regarding just one simple idea like a state-owned bank to create in-house and at cost credit that reduces nominal infrastructure costs by half (like our Bay Bridge $6 billion upgrade that also has $6 billion interest/debt-service costs), and with the model of North Dakota’s state bank with the only state having increasing budget surpluses rather than deficits, please explain to me how this is somehow too difficult to understand or start implementing in modest pilot projects? How is this one idea “not at all likely to happen” if brought to full public and cost-benefit consideration?

Thanks again for your thinking on these breakthrough models,



(Expert 2) posted the following on 04/13/2016 10:37 EDT

RE: GAO reports US government won’t comply with audits

I would not be opposed to piloting state owned banks. I consider banks to be infrastructure necessary for a well-functioning economy. As a result, state ownership of banks is not something I am philosophically opposed to.

But as for the rest, it sounds like a recipe for hyperinflation to me. Putting the brakes on an economy is never popular. As a result, I do not trust congress to do it and I don’t see enough contractionary mechanisms in this idea. Also, I have much more faith in the BLS measurement of inflation than I do Shadowstats. Prices simply haven’t doubled in the last 10 years as Shadowstats claims.

Thank you for helping me understand this idea a little better! I appreciate you taking the time to answer my questions.

(Expert 2)

(leading AP Econ website)


Carl B Herman posted the following on 04/14/2016 09:07 EDT

RE: GAO reports US government won’t comply with audits

Thanks for your consideration, (Expert 2) (and all interested readers).

Given that my colleagues and I factually assert game-changing value for public banking, I’d like to know if you (and any other readers) agree with my colleagues’ initial estimates of dollar amounts. First: do you agree that a state-owned bank could fund infrastructure at just half the nominal cost compared with selling debt securities? For example, California’s Bay Bridge upgrade that cost $6 billion will cost another $6 billion in debt-service costs, but if it was funded in-house and at-cost from our own bank, taxpayers would save almost all interest cost.

(Expert 2) and anyone interested, please feel confident in stating the obvious without any commitment; something like, “Gee, that certainly seems to be true. And it is true in our real-world example of North Dakota’s bank.” How we frame this to Bank Committee legislators is with a recommendation that a professional economic cost-benefit analysis should be conducted for public, political and academic consideration to best verify our initial understanding. So far in discussing this idea with committee members and connected economic/banking professionals, we’ve never encountered any refutation. As I mentioned, the most precise and concise affirmation we’ve received is from a former Goldman Sachs Managing Director who agreed with, “This is a no-brainer” (35-minute talk of her walking you through).

And (Expert 2), once I check if the dollar amounts seem “in the ballpark” with public banking, I’d like to check the monetary reform points to discover where/how you find concern for “a recipe for hyperinflation to me. Putting the brakes on an economy is never popular.” I’ve worked with this idea since 1996, and studied its history as likely the 2nd most considered US policy idea; we’ve found the argument you make a common concern, but so far without anyone able to link the concern with the mechanics of monetary reform.

With all respect for your professional commitment to optimize monetary policy worth trillions to us all,



I posted this following comment, but it was deleted along with then entire discussion:

By your silence, (Expert 2), I’ll take your answer as, “No.” If any other teacher is curious, I will proceed; but not otherwise.

(Expert 2), in this professional academic discussion group, given your claim to my information that, “it sounds like a recipe for hyperinflation to me. Putting the brakes on an economy is never popular”, please connect your claim to the mechanics of monetary reform and public banking, or withdraw it.

Perhaps you see something that 86% of economics professors missed when asked, but it’s perfectly acceptable to tell us that you haven’t invested enough time to really understand the mechanics.

Those of us working for reforms meet propaganda (I’m not accusing you), and Thomas Edison with Henry Ford addressed this:

“Certainly there is a complete set of misleading slogans kept on hand for just such outbreaks of common sense among the people. The people are so ignorant of what they think are the intricacies of the money system that they are easily impressed by big words. There would be new shrieks of ‘fiat money,’ and ‘paper money’ and ‘green-backism,’ and all the rest of it – the same old cries with which the people have been shouted down from the beginning.

But maybe we have passed beyond the time when the thoughtful 2 per cent – you know, I gather from my questionnaire that only 2 per cent of the people think,” and Mr. Edison smiled broadly. “Maybe they can’t shout down American thinkers any longer. The only dynamite that works in this country is the dynamite of a sound idea. I think we are getting a sound idea on the money question. The people have an instinct which tells them that something is wrong, and that the wrong somehow centers in money.”


After the entire discussion was “disappeared” from the website, I contacted the moderator.

AP Macro discussion censored?

Hi (Moderator),

First, thank you for ongoing leadership for education professionals to discuss economics topics for our AP courses.

The AP Macro discussion thread on GAO’s Senate report on US government audit has vanished. Did you censor it?

If so, please cite the text that caused this and explain your reasoning.

The only possible area I can imagine is my asking a colleague to explain how an area of monetary mechanics would cause hyperinflation, or to withdraw that claim. Certainly a primary responsibility of teaching college-level courses is to model that factual claims can always be challenged, and that good-faith claims are always supported with documentation. In fact, if there’s one academic area modeling the ethical requirement for transparency of data, it’s economics.

On its face, given two colleagues’ questions, my invitation to walk any interested colleague through the data (but only upon such request, and not otherwise) supported by so many of America’s brightest historical minds from Ben Franklin to Thomas Edison, and with support of 86% of economics professors when directly asked should certainly be an acceptable area of promised “lively discussions.”

So what happened?

Enjoy the day,



Moderator’s response:

Hi Carl,

The College Board has asked me to take down such posts. They, and I, are getting a lot of complaints about posts not closely enough related to teaching AP economics.  Sorry, but as I’ve told you in the past we need to keep a tight focus on AP exam content and pedagogy.

(Moderator’s initials)


Bonus comment on a different topic of discussion as typical of the counter-points I’ve offered the last seven years. The usual response is that my comment ends further discussion.

Carl B Herman posted the following on 04/07/2016 09:13 EDT

RE: Why the Government (Congress) Cannot Change the Money Supply

With all respect to (Expert 1’s) expertise in understanding our current macroeconomic structure, and the test content we all coach our students to recognize and correctly identify, the statement of “government/Congress cannot change the money supply” is only true in our current system (and importantly what will be tested to know). Congress has the power to change the money supply/system by exercising its authority to change the law from our current Robber Baron-era debt-based so-called “monetary system.”

And, of course, (Expert 1’s) point is true only if we ignore Congress authorized the so-called “bailout” for $700 billion that expanded to $1.7 trillion, which of course went for the big banks to buy competitors and other fraudulent dealings that the Fed’s own transcripts now prove was intentional and planned fraud. That was Congress’ authorization and ignored oversight.

Given we teach our high schools’ brightest young minds, we should provide history as context, simple mechanics of creating money, and current events to understand this one issue is literally more valuable than any other.

Let’s look how important this is:

The Minneapolis Fed has committed to end this system that like the boardgame of Monopoly concentrates money in fewer and fewer hands; so much so that the 1% own more assets than the 99% combined, 40% of US children now live at least a year of their lives below the poverty line, and ~30,000 children die daily from preventable poverty. The total number of human beings dead from preventable poverty just since the Clinton administration is ~500 million – more than killed in all wars in all human history.

After the policy issue of slavery, the #2 policy issue in US history is who gets to create what we use for money.

Those of us who study this option of monetary reform and public banking assert ~$1,000,000 in near-instant benefits per US household that we can prove to anyone caring to look.

Ready to look at options beyond what we currently have?

Carl Herman

National Board Certified Teacher

National Board Certified Teacher Coach


Matt Damon might be interested in playing such a scene after we win. He seems to have known these issues for 20 years; as from this 2-minute clip:


Note: I make all factual assertions as a National Board Certified Teacher of US Government, Economics, and History, with all economics factual claims receiving zero refutation since I began writing in 2008 among Advanced Placement Macroeconomics teachers on our discussion board, public audiences of these articles, and international conferences. I invite readers to empower their civic voices with the strongest comprehensive facts most important to building a brighter future. I challenge professionals, academics, and citizens to add their voices for the benefit of all Earth’s inhabitants.


Carl Herman is a National Board Certified Teacher of US Government, Economics, and History; also credentialed in Mathematics. He worked with both US political parties over 18 years and two UN Summits with the citizen’s lobby, RESULTS, for US domestic and foreign policy to end poverty. He can be reached at

Note: has blocked public access to my articles on their site (and from other whistleblowers), so some links in my previous work are blocked. If you’d like to search for those articles other sites may have republished, use words from the article title within the blocked link. Or, go to, paste the expired link into the box, click “Browse history,” then click onto the screenshots of that page for each time it was screen-shot and uploaded to webarchive. I’ll update as “hobby time” allows; including my earliest work from 2009 to 2011 (blocked author pages: here, here).


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