(THE MOST IDEAL) Option #4: Mobilizing the credit resources of the government and the banking system for the purpose of launching an ambitious program of infrastructure construction and development.  Two aspects differentiate this option from Keynesian policies.  First is the emphasis of government lending over spending, such as forcing the central bank or national bank to issue cheap credit only for productive and large-scale projects which develop infrastructure that is clearly in the public interest.  Such credit would not be made available for speculative, sociopathic, or criminal activity.  The second point distinguishing it from Keynesian policy is the fact that Keynes insisted that the spending to stimulate the economy would have to be nonproductive, so that it would not compete with existing productive capacity which would lower the rate of profit.  “Keynes thought it was fine for ditch diggers to dig ditches and then fill them up as a way of earning their daily wage from the government, but he was hostile to the idea of building new and more modern rail lines among the cities of Great Britain.”

— Lautenbach proposed that the German government launch an ambitious large scale program of infrastructure construction and modernization that would create many modern productive jobs paying decent wages, with benefits cascading through the German industries and economy.  The key to the strategy was to force the central bank to honor a “rediscount guarantee,” which meant that any contractor or a subcontractor who was involved with working on the national infrastructure programs could be guaranteed that all of their commercial papers could be turned into cash by local banks, because those bankers could then immediately cash those papers with the central bank.  This method allows credit to be supplied to productive and necessary parts of the economy without allowing money to flow into speculative or parasitical activities.

— Lautenbach’s infrastructure program could have “science drivers” added to it to get the economy going through technical spinoffs which would modernize the productive process in the workplace.  Past examples include the space program of the 1960s which has led to the information technology and the internet today.

— “The idea of a rediscount guarantee was built into the New Deal program which finally and definitively ended the Great Depression in the United States during 1941 by reducing unemployment to lower levels.  This was Lend-Lease, which harnessed the Federal Reserve and the banking system to provide credit for defense production.  Each contractor and subcontractor was guaranteed that relevant commercial paper and bills of exchange would be automatically discounted by local bankers and turned into cash, since each local banker could be sure of commanding the support of the Federal Reserve system.  This amounted to a de facto nationalization during wartime of the Federal Reserve system for national goals, not the whims of cliques of unelected and unaccountable bankers.  It is clear that Lautenbach’s fourth option is the one we need to implement today.”