Energy Independence US Treasury Savings Bonds

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Comment by Michael Shawn Kendall on April 14, 2009 at 11:18am

Mary, That was an excellent post and I can tell you are one of our great thinkers as well as the level of knowledge is amazing. I am really grateful for you and others like you who are participating in this group.
Sincerely,
Mike Kendall

Comment by Mary Putnam on April 14, 2009 at 9:01am

Because every coin has two sides, I hope that all Pickens Plan Members will read this and make the choice that best fits their ideals. The only ideals that I will discuss here are economic. This is not about partisan politics. There are multiple theories of economics, when modeled mathematically may not represent reality. Predicting the effect of economic “tweaking” is like trying to predict the weather. What we can do is look at the history of economic outcomes and choose to follow those that have brought strong economy.

A free market is a market that is free of government intervention and regulation, besides the minimal function of maintaining the legal system and protecting property rights, and is also free of private force and fraud. In a free market, property rights are voluntarily exchanged at a price arranged solely by the mutual consent of sellers and buyers. By definition, buyers and sellers do not coerce each other, in the sense that they obtain each other's property without the use of physical force, threat of physical force, or fraud, nor is the coerced by a third party (such as by government via transfer payments). In addition, in a free market, force is not used to prevent competition among buyers or among sellers (called free competition). Therefore, force is not a determinant of price, but rather price is the effect of buying and selling decisions en masse as described by the law of supply and demand.

A planned economy or directed economy is an economic system in which the government or workers' councils manage the economy. It is an economic system in which the central government makes all decisions on the production and consumption of goods and services. In such economies, central economic planning by the state or government is so extensive that it controls all major sectors of the economy and formulates all decisions about their use and about the distribution of income. The planners decide what should be produced and direct enterprises to produce those goods.
A planned economy may consist of state-owned enterprises, private enterprises directed by the state, or a combination of both. Though "planned economy" and "command economy" are often used as synonyms, some make the distinction that under a command economy, the means of production are publicly owned. That is, a planned economy is "an economic system in which the government controls and regulates production, distribution, prices, etc." but a command economy, while also having this type of regulation, necessarily has substantial public ownership of industry.
Less extensive forms of planned economies include those that use indicative planning, in which the state employs "influence, subsidies, grants, and taxes, but does not compel.” This latter is sometimes referred to as a "planned market economy". America has used this extensively to attempt to steer the economy.

Some people believe that Article 6 of the constitution gives the right of banking. It basically states that debts incurred before the Constitution are valid. http://en.wikipedia.org/wiki/Article_Six_of_the_United_States_Constitution

Others claim that since the US Government formed a bank in 1791 that set the precedence of intention. The purpose was to
1) Establish financial order in the new nation
2) Establish credit for the new nation, domestically and internationally.
3) Resolve the issue of multiple currencies in trade at that time.
The issues were hotly debated and many considered it unconstitutional. President Washington was hesitant to act. The sponsor of the bill, Hamilton, positioned the bill thus
• Any government by its very nature was sovereign "and includes by force of the term a right to attainment of the ends...which are not precluded by restrictions & exceptions specified in the constitution...[6]
Washington did not veto, he simply did not answer. Thus the Bill was passed and the bank was formed. Some years later another bill came to pass to sell the bank in lieu of raising taxes. Hamilton was against this because the design of the bank was to use profits to eliminate debt. He lost the argument and the bank was sold off. http://en.wikipedia.org/wiki/First_Bank_of_the_United_States

Establishment of Federal Reserve System after the Great Depression was an attempt to flush money into the failed economy. It has resulted in the removal of the US from the gold standard. Which, has eroded confidence in the American dollar over time. It is interesting to note that the national budget has not been balanced since this occurred.

The government has attempted to steer the economy with mixed results. Oftentimes they have gained short term success, which has resulted in long term problems. Politicians measure their success by votes. Establishing a bank, that is marketed as solving the sustainable energy crisis, is not sound economically or politically. It is exactly this type of government interference that has led us to the state we are in today.

I believe that the American people contain within them a level of desire to exceed and excel. I recently met with an executive, of a state owned monopoly, in Algeria. His deliemma is that he has a dream to improve the way the company does business. He has employees whose jobs are secure due to “tenure” or politics. He stated clearly they do not care if we improve they only care to keep their paycheck. Watch this short video clip on how free market economies have helped the world. http://www.youtube.com/watch?v=MBB7l-SfoK4&feature=PlayList&p=07D6FD1DD256E0F4&index=8&playnext=2&playnext_from=PL

I have spent considerable time researching world economies. The reality is the US has historically been the strongest. History has shown when a government provides secure infrastructure in the form of roads, energy water and communications the economy flourishes. When the government controls manufacturing, banking, transportation etc the economy disintegrates. Let us encourage our government to give us what we need to succeed, anything more will undo the good that has been done.

My two cents
Mary Putnam

Comment by Debra Goldenberg on April 9, 2009 at 8:53pm

Thanks for the welcome. This is a great idea and I hope it gets off the ground!

Comment by Michael Shawn Kendall on April 9, 2009 at 8:01pm

Welcome aboard to Debrah who joined the group.
On a different note, I appear to have pretty good internet availability for now so I'll be able to stay active for the near term.
Best Regards to all,
Mike

Comment by Michael Shawn Kendall on April 6, 2009 at 6:41pm

Hello group, If anyone sends a messge to me with recommended links on the green bank program I will happily put them up with the html to the link. I wonder if the energy indendence savings bonds can exist as a sub-entity within the green bank initiative? Maybe that will be a new way to promote the idea. A small bond that youth can get involved in will be fantastic. I'm not so sure that youth will want to buy small bonds to support clean coal or nuclear energy but I'm certain that other green energy that is renewable coudl be supported. I'd personally leave the nuclear and clean coal in a different category so that the renewable energy folks will not shy away from it. Please send me recommended links so we can get smart on this.
best regards,
Mike

Comment by Jack Costantino on April 4, 2009 at 8:07pm

Mike

Here is my follow-up to Ellen Brown's comments....

Ms. Brown

I have read the Bill, but must admit, as a carpenter I get rather lost in the theory and regulation of how this would actually work. I wasn't clear that the Bonds would be available for purchase directly by the public. It seemed as if they were being written from the Treasury (AKA the collective Public) to the new GREEN BANK entity. I'm not sure how exactly the repayment would be accomplished.

In that vein a colleague at the Pickens Plan, Michael Shawn Kendall, USN, has proposed creating publicly available Treasury Savings Bonds specifically earmarked for the development of Clean Energy pursuits. He models them on the 1940's War Bond program. The Bonds would be identified categorically for specific projects. For instance, W-Bonds for wind turbine, S-Bonds for Solar projects and so on.

The appealing aspect is that the public would participate in ownership and derive interest income from their investment in the resources which need to be developed to achieve the objectives of independence from foreign oil, rebuilding the economy with the resulting energy related jobs, increase national security and positively affect our environment.

Since the principal investment would come from the grass roots...the Treasury would avoid writing any big checks. I'm not sure exactly how and where the interest payments to Bond holders would come from; but I suppose the source would be similar to US Treasury Savings Bonds.

I know it all sounds too simple...but that may not mean it lacks feasibility. Just a thought.

Comment by Jack Costantino on April 4, 2009 at 8:05pm

Mary
Here is a response about the GREEN BANK from a noted author on banking and finance Ellen Brown. Check out her BLOG.

The only hitch is, it's being financed with bonds, which means debt. Bonds will evidently be sold to the public on which interest will be paid, driving up the federal debt even further. The better alternative would be to simply create credit on the books of the bank against the projects to be created, using double-entry bookkeeping or accrual accounting. Checks could be drawn against this credit at very low interest or even zero interest to pay for workers and materials. The income from the projects would then return to repay the loans, canceling them out.

Comment by Mary Putnam on April 4, 2009 at 9:00am

Hello Jack,
I agree with you at first look I thought someone is promoting Mikes idea of Energy Independence Bonds. But this is different . This actually opens the door for the government to own a bank. FYI they Federal Reserve Bank is a quasi government entity, that essentially prints money. You can research that on your own.

There is already a government entity in place to manage Treasury Bonds. Ask yourself do we really need another government entity? Treasury Bonds are issued to everyday folks who buy them and hold them for the future interest they pay. The Green Bank will be a lending institution, with all the powers vested in a bank. They will only lend money to businesses for technology that reduce C02 emissions. That can include conservation, or coverting the TVA Coal fired Electric Plant to "Clean Coal", or building a Nuclear Facility, or a number of other things.

In no case do we have any gurantee that any of that money will go to monetize the manufacture or install of wind or solar farms. You can bet that big money lobbyists will be putting their bid in to get that nice low interest money for their companies.

I am all for moving to sustainable energy. I just dont believe we have to shift to a social system where the government runs banks to get it. I believe in the ingenuity of the American people. I believe if you get government out of the way there is no stopping us.

America has a beautiful system. American free enterprise created a nation that has been the envy of the world. Ronald Reagn used free enterprise to bring down communisum. We need the government to set the rules of the game. But the government cannot be a player in the game.

I hope that everyone here, researches each of these issues. Read the bills being presented, look at the history of how we got into the mess we are in today. Ask your elders for they have seen more of the world then we have. None of this is rocket science, it is common sense. At the end of the day each of us has to decide what makes sense. What do I believe will make America stronger.
Kindest Regard
Mary Putnam

Comment by Jack Costantino on April 3, 2009 at 10:50pm

MIKE
I thought I would share this post from the District Leaders page. Good luck during your travels. Come back safe. We need you around here. Check in so we know you're good. My home eMail again is timbersRus@comcast.net.
Jack

************************
Missy and all...

After reading through the Green Bank Bill...it occurs to me that it is principally on target with the Kendall Energy Bonds introduced here by Michael Shawn Kendall; Individual investment to establish funding for the purpose of financing clean energy projects. Investors (US), receive dividends at prevailing rates while owning a piece of the clean energy industry we create.

I wonder if they've been reading our blogs? It seems like a no brainer. I know Mike has lots of supporters on this site and beyond. I'm sure he will be happy to see this. Although they don't use the word, conservation is included in the funding also. I believe it is the most important and immediate solution and can be done right now by all of us in simple common sense ways with very little sacrifice. The only piece missing is funding for early education K-12 as part of core curriculum. Like Pam, I’m not a big Nuke fan, but if education could be added I'd say we have the whole 360.

The thinking is finally moving in the right direction. Wouldn't it be nice to believe that forums like this and the many others on the web and around the country are actually motivating this kind of progress? Personally, I'll just choose to believe that until proven otherwise.

As for the Earth Day/Pickens connection...DL's can certainly do their own PICKEN'S thing as suggested on that same day in real time and virtually. Chantel's thought for emphasizing the day in schools is excellent. I believe the schools in our NJ District already do that annually as a regular thing. I'm old enough to remember May Poles! ANYONE?

Great thinking...great group...great to know you all in this virtual and increasingly real way. I sense a PICKENS CONVENTION in our future. Most importantly I'm sensing a....FUTURE!

Jack

Mary P.

I read through the bill pretty quickly and didn't catch the nuances you describe. Then again, as a carpenter most of that stuff is way beyond my pay grade. I'll digest it further. I'm encouraged by the concept and saw a great similarity to Kendall Bonds.

Thanks for your incisive description.

Comment by Mary Putnam on April 3, 2009 at 9:29am

America needs a comprehensive energy plan and we are looking to our leaders in Washington to help provide one.

To make this work, we have to move in three areas.
Part 1: Electric Grid
Part 2: National Renewable Electricity Standard
Part 3: Green Bank - I am against this one as it is drafted today

Part one is legislation that will establish a national electric transmission grid. Giving FERC same authority as it has for siting gas lines.

Part two is an achievable national Renewable Electricity Standard (RES) that would include tradable renewable energy credits as part of the transmission and grid effort. A national RES should be phased in as transmission becomes available to bring power from renewable sources to multi-state regions. Having the government do this makes it easier for generators and power companies. I would expect they should include urban generators in the mix, not merely commercial generators.

Oklahoma does not currently have an RES, we need one. But we dont need a federal agency dictating the rate a generator can sell at. Example, Oklahoma could make the energy cheaper in state than out of state. The constitution set governance of State production under the states, not the federal government.

Part three is an Energy Bank. Congressman Chris Van Hollen has introduced the Green Bank Act of 2009 as of March 25, 2009. This is not the Energy Bonds we strategized at Pickens Plan. This is the creation of a Bank wholly owned by the US Government, funded at 10 billion. The Board of Directors are the Presidents cabinet members. Loans can be made to any energy method that reduces C02, this would include "Clean Coal", Nuclear, new generation Bio Fuels, new methods of processing petroleum. These are not renewable energy. Once this bank is established, the government will have set a precedent for nationalizing banks.

The American people are looking for leadership in making a long-term commitment to renewable energy.

Kindest Regards
Mary Putnam

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