LaRouche To LPAC Policy Committee · Glass-Steagall Defined: Cancel Wall Street's Worthless Debts!
July 8, 2013 • 11:28PM

The following is a transcription of opening remarks delivered by Lyndon LaRouche during a video discussion with the LaRouchePAC Policy Committee on July 8, 2013, broadcast on LaRouchePAC.com 1larouchepac.com/node/27275

LAROUCHE: If we’re going to save civilization, that means that the leading action on which this depends, is Glass-Steagall. Glass-Steagall must be installed, first, from the United States, because the other nations have difficulties in doing the job correctly if they have to start it. We, in the United States, if we are prepared, and can prepare ourselves, can start a process of Glass-Steagall from us, first. Then it makes it easier for other regions of the world, to jump in on the same pattern that we set.
Because they’re going to have some difficulties. Most people around the world are not used to Glass-Steagall. They know about it, but when it comes to, actually, the implementation of it, they’re not quite so clear. They don’t understand, really, all the things, and we had some discussion of this repeatedly, and I think more of our people are gradually getting a clear indication of what Glass-Steagall is.

Because it’s not just turning on electronic connections. What you’re dealing with is you have to set up a system in which you actually organize, a Glass-Steagall system, and put it into work. If we in the United States do it first, it can be done. After we’ve done it, then other nations simply have to jump on the same pattern we will have predetermined for them. I’m not saying we’re going to start Glass-Steagall spreading from other countries, in just random fashion. We’re going to have to help them, because they’re going to have to understand what Glass-Steagall involves: Most nations of this planet have no idea of what Glass-Steagall, properly defined, requires. And that’s the difference.

So, if we start the job, we can give them the indications of what the measures are they have to take. In other words, what we’re going to do, is we’re going to cancel all the things that should not be paid. That simple. This means most of the money out there, which are so-called debts, by us in the United States, will be cancelled. Why? Because it’s worthless. And I dealt with this, of course, last Friday. 2larouchepac.com/node/27230

What we’re going to have to do, essentially, is recognize that most of the money which is attributed to the present banking system, is worthless. That is, it represents an amount of debt which should not be paid—should not be paid. Why? Because what’s hanging out there is a vast debt, which is not covered by anything! So what you’ve got is actually a giant fraud, it’s just as if you were playing some kind of game, of dominoes or something. And if you take the expansion of the debt involved in this system, that’s now pretty much worldwide, you find out that most of the debt is worthless.

So the idea of using this debt as something you can put forward as a means of payment ain’t true, and can not be allowed by the world. Because most of the big debt is worthless! Which means we’re effectively going to have to shut down all the banks that do not qualify in a real banking system. And we’re going to have to reorganize the process and say, “what is left that is real among all the garbage which is being posted up there?” In other words, we’re going to kill entirely, what is planned, for the world.
And we’re going to have to depend on creating a credit system, because you have a situation, where, if we take all the honest money which is in banking in the United States today, we find that’s not enough to keep the economy moving. We’re getting now a loss of the ability to maintain the people of this nation. Because they’ve been robbed, and so therefore, if you have to say, they are the people who are going to put up the credit, or be involved in putting up the credit on which the economy is going to function, they can’t do it in the present system. We have to create a supplemental credit system, where the United States government, through a real banking system, will organize a credit system to back it up. And therefore, we’re going to have to proceed very carefully.

I laid this out last Friday [in the weekly LaRouchePAC webcast] — generally what the principles are. But we’re going to have to organize that kind of process. We’re going to take each debtor of this crazy system, and we’re going to call ‘em into a room. And when they come in, they’re going to tell you how rich they are, how much they’ve got coming to them. And by the time they go out, they’re going to be lucky if they have anything left, because most of it will be cancelled. A few questions we’ll ask: How old is this debt? How much is it? What amount of this debt is actually worth anything? And you’re going to say, “Well, buddy, that stuff, you’re rid of! You are relieved of that burden. You never have to worry about that money again, because you’re never going to see it again! That’s a blessing for you. Now, if there’s anything left, of all these trillions of dollars that you claim you had, when you’re down to almost nothing, well, we’re going to say: this is good and this worthless, so here’s what you’ve got. Now, you can walk out with the assurance that you have what we allow you to have, because it’s honestly creditworthy.”

So we’re not going to cheat anybody, but we’re not going to cheat the U.S. government, either, or allow that to happen. What is not worth anything is going to be cancelled.
Now, that puts us in a three-part program: On the one hand, we have what is in the banking system, honestly — what is there, and worthwhile. You have, again, dealing with this phony money system, and trying to find out if there’s something in the phony money system which has some intrinsic value or which is creditworthy, relatively speaking. And that’s going to be essentially it.

Then we have to come up with a third category: The Federal government, having cleaned itself of all these other debts which were worthless debts, is now going to have to undertake a new debt, the debt of our real Federal banking system. After that, we’re going to have to consign with a credit facility, by which we’ll make up for a significant amount of what we can not cover, from the money that’s already in the honest banks. And we’re going to have to expand that.

This means we’re going to invest in — or commit ourselves to — certain elements of investment, which will be actually productive. For example, the agricultural system is virtually destroyed, right now, in the United States. Therefore, we’re going to have to have a massive amount of credit, to rebuild the production of food, the food system. You have other things; we’re going to have to do things to change the weather system. We’re going to have to increase the amount of moisture which is being conduited through the weather system. Health care, and other kinds of things like that, are going to have to get on the payroll, so to speak, as fast as they can be put on the payroll, because we have to regrow the U.S. government very fast.

And then we’re going to have to work on this, on an international basis: For example, Europe is in the worst possible condition in the northern hemisphere. Because it’s been more raped that any other part of the world, that northern part of the world. Then you have the problem of the southern part of the world, which is generally poorer. And that’s a problem we are going to have to deal with.

So we’re going to have to reorganize a credit system, which will be built on the basis of a wedge-end in terms of the legitimate banking practices which will be available to us, after Glass-Steagall.

In other words, Glass-Steagall; you have only a part of the whole banking system, the regular banking system, which is actually legitimate, legitimate money: That’s there. That is not enough to keep the legitimate banking system operating: You have to have a commitment of the Federal government, in the case of the United States, for more credit for development, like rebuilding the agricultural process, the water systems, health-care systems, and these kinds of things.

We’re going to have to see how much we can do, by having the Federal government go into debt in its own way, in order to supply the means for people who are going to invest, to invest. Because they have to have backing. And the backing will be based on the credit system. Which is really a return to the original credit system set up by Alexander Hamilton. So, a complete Hamiltonian system. And most people in the world do not understand—governments and so forth—do not understand what a Hamiltonian system is.

What we have to do, therefore, now—right now!—before anything else happens, this week, we have to go with this question of setting into motion the credit system which is required to ensure the continued existence of the United States, and to give similar benefits to other parts of the world.

Therefore, we have to actually not only know this ourselves, we have to tell other people. We have to make clear to other people what this program is. Because without it, you’re going to have the greatest rate of debt throughout this planet, you ever dreamed of! And that is exactly what we—you and I, and others involved in other aspects of the same program—that’s what we have to make clear to the audience out there! And you have to make it very clear, because if it’s not clear to them, this whole effort to save civilization is not going to work.

And you, in the LaRouchePAC organization in the United States, are keystones, for making sure, that the world survives. Because the means to do what we have to do—to save the world, so to speak—is there, and we know what it is, or should know what it is. The problem is, you’ve got to take other people and bring them in on the information. You’ve got to make it clear to them what is required and what this means.

You’re not just saying “we’re going to have Glass-Steagall.” Glass-Steagall involves the requirement of all these kinds of things, which I have specifically indicated here, now, as before. Without that, you don’t have Glass-Steagall. You think you have Glass-Steagall, but you don’t have the mechanisms in order to make it work! So if you can’t make it work, that’s not very good. So, you and I, and you, each of you, especially, are now responsible for making clear, to a lot of institutions in the United States and around the world, what a credit system is, under the present world conditions, but starting with U.S. conditions.

So you are first responsible to make clear what the United States has to do, and then, once you say that, now you’ve got to go from the United States, into the question of Europe and into other parts of the world. If we do that, we can save the world. That’s not a simple matter of a promise, that’s a great difficulty, because the world does not have the resources in play now which are needed to maintain civilization.

This thing has to be clearly understood, and no fooling around with silly ideas. We can save civilization, but it ain’t going to be easy! And the most important thing is that you, and others, have to clear their minds, of the usual, customary opinions, and realize that we have a responsibility—that you and I have that responsibility more than anyone else! Because we represent the people on this planet who really could understand exactly what has to be done.

I’ve seen people who assume that somehow Glass-Steagall by itself is going to solve the whole problem — it won’t! We have to understand what Glass-Steagall is, and most people in the world, when you tell them what you’re talking about, don’t know what you’re talking about! Because they don’t understand the principle of a credit system, which I had the opportunity of laying out, this past Friday, in explaining what the credit system does.

We have to understand what the credit system does and how it works, and if you don’t understand that, you really can’t just push Glass-Steagall. Glass-Steagall involves a principle, brought forward by Franklin Roosevelt. But the conditions which we have to meet—the challenge we have to meet—is different than the challenge that Roosevelt had to deal with then. The world was under a different kind of condition; the options were different; the preconditions were different.

Therefore, you have to be the geniuses, who can walk into a room and explain to people, exactly what Glass-Steagall really means. Not what some people around the Congress think it means. We’re going to have re-educate the Congress and people in other institutions. We have to be the scientists, who teach them how to make Glass-Steagall actually work.

We have to do it, first of all, because we represent the United States. We are part of the United States, we represent the United States as a system, in terms of economics as laid down by Alexander Hamilton. We’re going to have to teach people how to make the Hamilton system work. It does work—it’s perfectly well designed—but most people don’t know how to operate the machinery, and that’s what you, and I, and others, are responsible for, for the entire world.

Footnotes

1larouchepac.com/node/27275
2larouchepac.com/node/27230