NEED Act

The NEED or National Emergency Employment Defense Act (), is a proposed law that calls for full employment and nationwide reconstruction of civil infrastructure in the United States by reforming the monetary system. It was introduced in the United States House of Representatives by Congressman Dennis Kucinich (D-OH) in 2011 and is a reintroduction of .
Declaring that "the creation of money by private financial institutions as interest-bearing debts should cease once and for all," the NEED Act would abolish what is referred to as fractional reserve banking by prohibiting the creation of credit lent out against deposits held by private institutions; eliminate the quasi-independent status of the Federal Reserve System; and grant the U.S. Department of the Treasury, on behalf of Congress, the exclusive authority to originate money.
The legislation would also bar the federal government from all future borrowing, institute an 8% cap on interest rates across the country, mandate that new money spent into circulation include annual block grants to the States, and establish a Monetary Authority inside the Treasury to manage national monetary policy.
, the bill is considered to have died in committee. The Federal Reserve System would be incorporated into the Treasury as a subordinate bureau while any reserves held by its twelve regional Federal Reserve Banks would be returned to its member banks in the form of United States Money. A new Monetary Authority would be created within the Treasury to regulate the money supply in a neither inflationary or deflationary manner.
All deposits in the banking system, excluding long-term savings inaccessible for fixed periods of time, would convert to US Money and be prohibited from accruing interest or being used to fund investments. Outstanding loans would become interest-bearing liabilities to the federal government, so as debts are paid off to depository institutions payment would in turn flow to the government, to be placed in a Revolving Fund managed by the new Bureau of the Federal Reserve for the purpose of re-lending to other depository institutions as an instrument of monetary stability.
Banks would continue to be encouraged to make profit-making loans, but every dollar deposited therein would be physically on hand, or in a federal government account, legally unavailable to be used for credit creation. Interest rates would be capped at 8% and the total amount of interest charged by financial institutions on any extension of a loan, not including mortgages, would be prohibited from exceeding the amount extended. As the Act would legally prohibit the federal government from borrowing, budget shortfalls would be addressed by the creation of United States Money by the Treasury as authorized by Congress, with 25% of all new Money created in the first year spent on block grants to the States for broad-based purposes, and subsequent annual disbursements to the States equal to 25% of the previous year's total amount of Money created.
To ensure sufficient liquidity to the banking system before infrastructure expenditures are able to work into circulation, the Treasury Secretary would make recommendations to Congress for a tax-free Citizens Dividend granted to all U.S. citizens living in the United States. Within 180 days of passage of the NEED Act, the Treasury Secretary would also be required to make recommendations for the interest-free lending of United States Money to state and local government entities for infrastructure improvement, based on per capita amounts as determined by the Monetary Authority.
Historical background
Pre-20th century
In North America, the issue of money directly into circulation by government dates back to the colonial era. Early examples include Massachusetts bills of credit—considered by some the "first authorized government-backed issue of paper money in the western world"—which were spent into the economy by colonial authorities to pay creditors starting in 1690, and later Pennsylvania pounds, which were lent into the economy to private individuals at interest.
Continentals were issued by the revolutionary Continental Congress to fund the American War of Independence, though their value was seriously depreciated by organized British counterfeiting efforts. Later United States Notes, or "Greenbacks," were issued by Congress during the Civil War, soon after inspiring the populist Greenback Party.
20th Century—Present
Proponents of eliminating banking institutions' power to create credit against deposits have included such individuals as chemist Frederick Soddy, economists Frank H. Knight, Henry C. Simons, Aaron Director, U.S. Senator Paul H. Douglas, and Irving Fisher. Contemporary advocates include economist Michael Hudson, former Florida gubernatorial candidate Michael E. Arth, and Stephen Zarlenga of the American Monetary Institute.

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