As is the case with any power—whether fire, knowledge, dynamite, or fission—such power may be used for good or ill. This is also the case with banking. When Alexander Hamilton first proposed his National Bank, part of the opposition he faced was simply based upon the bad experiences people had had with banks in the past. On the other hand, had he proposed the same institution by another name, he would have faced the problem that people would have been even more clueless about his idea. And Hamilton’s National Bank was completely different from any bank which had ever been created before.
Today, we have the benefit of the experience from his First National Bank, then the Second National Bank, the Lincoln Greenback and National Banking System, and the Reconstruction Finance Corporation. So let’s try to avoid words with contradictory meanings and look at what we have, and how we will use what we have to get where we are going.
What We Have
First, despite the poor reflection of this in Washington, we have incredible people with incredible knowledge, creativity, and work ethics. Most of our people are not able to apply their talents to solving our national problems because the long arm of the British Empire has so infiltrated our governing, cultural, and financial institutions that the good that people do (or would do if allowed) is suppressed, and the evil that some do is promoted and facilitated.
Second, we have unmatched natural resources, from fresh water, to fuels, to minerals, to suitable agricultural lands.
Third, we have demand. We aim to spread the American Dream not only to all Americans, but around the world and out to the Moon, Mars, and beyond.
The function of the National Bank is to facilitate bringing these three assets together in a smooth process of industrial progress. We start with our goals and work backwards to the present.
The World in 2123
Our view of 2123 is quite hazy. We cannot forecast clearly, but we should aim for minimally a fusion-based economy in which power has become too cheap to meter (the way long distance calling became too cheap to meter), and we have productive industries, agriculture, and cities on the Moon and Mars. The technologies used to terraform portions of the Moon and Mars are applied on Earth to turn vast regions of wasteland into beautiful and productive areas. Robots do most types of repetitive work, while people are able to apply themselves to research, solving problems, and efforts aimed at societal contributions and improvements.
The World of 2073
The world of 2073 is a little easier to foresee. It is the world founded on the implementation of President Trump’s Agenda 47. We’ll see new mines, nuclear power plants, cities, NAWAPA, initial bases on the Moon and Mars, etc. Robotics, AI, and automation will be make much more of a contribution to our productivity and overall prosperity. The Unites States will again become a large exporter of fission and now fusion power plants and all kinds of electrical and heavy equipment.
The Role of the National Bank
This is where the National Bank comes in. You look at where we are going and ask, “How do we get there?” We lack mines, we lack machines, we lack electrical capacity, our railroads are in a sorry state, etc. In the Civil War we had to create a steel industry from nothing. In World War II we had to create a synthetic rubber industry without even having a very good idea about what chemical process could create synthetic rubber to replace the natural rubber sources taken over by the Japanese. But national credit was applied in each case to create those industries from scratch.
The function of the National Bank is to provide the credit to bring potentials to realization. Every productive process requires massive outlays of capital for land, plant, equipment, R&D, and training long before any revenue comes back from customers. In the case of public-infrastructure-building there might never be a direct return revenue—only an indirect increase in tax revenues. And with any project or business, there is always the possibility that future revenues returned will not be enough to meet obligations—resulting in bankruptcy.
So the primary function of the National Bank is to bring the entrepreneur (or government body) together with the resources, plant, equipment, and the workforce capable of turning a good and necessary idea into a profitable product or project. Here we must make a couple of clarifications. The word “profitable,” like the word “bank,” has many meanings. Of course, when we use the term “profit” we mean it in the LaRouchean sense—the physical remainder left from a productive cycle after all of the input costs are deducted. We are not talking about money profit attained by any of the various types of price manipulations we associate with the Federal Reserve and the British Empire/Wall Street.
So the National Bank will use the funds allocated to it by the U.S. Congress under Article I Section 8 of the U.S. Constitution to loan money to the entities which will realize the future we seek. It will not just throw money around as Biden likes to do. Instead, local banks, savings and loans, and credit unions will take vetted loan applications to the National Bank. If the local bank has performed its proper work to evaluate the proposal and finds that the borrower meets the general requirements of the National Bank and has a reasonable chance of paying back the loan to the point that the local bank will agree to lend 5% of the total, the National Bank will lend the other 95%. However, the borrower does not receive a pile of money, but a credit line. Project costs—i.e. land, plant, equipment, payroll, etc.—are drawn against the credit line provided by the National Bank through the local bank. No credit will be made available for such things as stock buybacks or “entertainment.”
The main constraint is the shortages which would occur if every good idea were attempted all at once. It would be a bit like the “supply chain” disruptions we experienced in 2021-2022, or the inflation which the Biden administration fostered by throwing huge sums at its insane Green schemes. So, even though the National Bank will be a very apolitical institution, it will be guided by the policies worked out by the Secretary of the Treasury of the new Trump administration. The first priority is to invest in those areas on which the further growth of the physical economy will depend—i.e. research and development, power plants, electrical equipment, steel and other metals, mining, water supplies and flood control, engineering and construction schools, etc. This will create what LaRouche called a “two tier credit system.” Investments in the favored areas will get long-term, low-interest loans from the National Bank (2% to 4% simple interest with perhaps an additional 1% added for the local bank to cover its loan administration costs) while investments in movie studios, fast food franchises, etc. will have to pay the going rate.
As the work of the National Bank begins to draw more and more workers and private investments into the foundations of the physical economy to create more of a surplus of capabilities, the National Bank will then be able to expand its participation into other areas of manufacturing and production.
It is important to note that the Federal Reserve will cease to exist. There will be no institution able to bail out the arms of Empire and loot the general citizenry. However, as the National Bank takes over the facilities of the Federal Reserve, the routine functions currently performed by the Federal Reserve, such as check clearing, will be continued by the same people and facilities now doing such work. And Federal Reserve notes will continue in circulation until they are gradually replaced by United States dollars.
It is also important to remember that the successful establishment of the National Bank and associated prosperity will minimally require implementation of the other items stipulated by Lyndon LaRouche in his Four Laws. And successful return of markets for American exports will require implementation of a New Bretton Woods agreement for fixed exchange rates internationally, as long advocated by LaRouche.
So we have reviewed the operation of the National Bank with the clearest possible language. In the main we simply speak of facilitating the growth of the Good, and the withering away of Evil.