During the last few months we have worked to promote a discussion of the idea of re-introducing government-issued money to help with the nation’s debt-and-austerity dilemma. It seems easy enough – it was easy enough – in the U.S., Canada, Germany, Austria, the islands of Jersey and Guernsey and other places to use government-issued money requiring no government debt during multiple periods and very long periods of time. Records abound. No one can say that it is something that has not been done before or cannot be readily researched.
We have calculated, in the October, 2013 Policy Winners, that with less than 5% of new money creation done by the government this old-fashioned way - the Constitutional way, instead of by our present fractional reserve banking way - we could completely eliminate our current deficit with no change to our current budget and therefore no inflationary or deflationary effect. Note that this would not take away from the banks 5% of their potential to create new money through the fractional reserve system as they lend. With a CBO-determined trillion dollar output gap, we are nowhere near the conditions where the Fed would want to restrict the money supply. With many good potentials to lend and super-abundant reserves in the system, the only constraint on the banks in the creation of more credit and money is their illicit dealings in derivatives through the shadow banking system. See or request the September, 2013 Policy Winners or the recent article by Ellen Brown.
For 109 years (1862-1971), Treasury-issued US Dollars called United States Notes (originating as Lincoln’s “Greenbacks”) were issued and used to pay some of the government’s expenses. They circulated side-by-side with Federal Reserve Notes from 1903 on (some are still in circulation today). Even if we used them on the basis of an authorization with a one-year sunset, our proposal would save $500 - $600 billion by eliminating the current deficit and make some headway on reducing the national debt without causing any economic ill effect.
We could do other things with zero-cost money in future years, if Congress so determined as a separate decision based on economic conditions at the time. As an example: It’s pretty hard to make a bad loan or investment when your cost of funds is zero. We could invest in revenue-generating infrastructure which would add to the government’s balance sheet something much beloved by the private sector: income-producing assets!
Among our select readership, we are looking for contributors of comments of any length from two sentences up and from any point of view. We are seeking responses to the following question: Under any set of restrictions or limitations, should we consider re-introduction of government-issued money for use by the government in paying some bills without debt cost to the government? Participation is essential to get a discussion going.
Please e-mail us at your earliest convenience but by the end of October any questions, comments or comments contributed for publication in Policy Winners in one of the Fall issues to info@policywinners.org.
LEARNING FROM REHOBOTH (Eat your hearts out Las Vegas, Venturi and Scott-Brown)
Last year’s August newsletter consisted of musings from our “yacht” on the theme of gaining perspective in the simpler world offshore. In the middle of the budget crisis, it was such a stressful time! This year we had prepared a piece titled “Learning from Rehoboth” (Washington’s go-to seaside resort) concerning the just and humane economy of summertime Rehoboth Beach, DE. It is a place where there is work for all who want it, where community-mindedness abounds, where people are in a frame of mind to be good to each other, profligately, and where everyone has the simple things they most need in an always-refreshing environment. But perhaps no full-blown article is needed to encourage all our readers who have not yet done so to find time for a restorative visit to their own Rehoboth during these remaining days of summer.
We have calculated, in the October, 2013 Policy Winners, that with less than 5% of new money creation done by the government this old-fashioned way - the Constitutional way, instead of by our present fractional reserve banking way - we could completely eliminate our current deficit with no change to our current budget and therefore no inflationary or deflationary effect. Note that this would not take away from the banks 5% of their potential to create new money through the fractional reserve system as they lend. With a CBO-determined trillion dollar output gap, we are nowhere near the conditions where the Fed would want to restrict the money supply. With many good potentials to lend and super-abundant reserves in the system, the only constraint on the banks in the creation of more credit and money is their illicit dealings in derivatives through the shadow banking system. See or request the September, 2013 Policy Winners or the recent article by Ellen Brown.
For 109 years (1862-1971), Treasury-issued US Dollars called United States Notes (originating as Lincoln’s “Greenbacks”) were issued and used to pay some of the government’s expenses. They circulated side-by-side with Federal Reserve Notes from 1903 on (some are still in circulation today). Even if we used them on the basis of an authorization with a one-year sunset, our proposal would save $500 - $600 billion by eliminating the current deficit and make some headway on reducing the national debt without causing any economic ill effect.
We could do other things with zero-cost money in future years, if Congress so determined as a separate decision based on economic conditions at the time. As an example: It’s pretty hard to make a bad loan or investment when your cost of funds is zero. We could invest in revenue-generating infrastructure which would add to the government’s balance sheet something much beloved by the private sector: income-producing assets!
Among our select readership, we are looking for contributors of comments of any length from two sentences up and from any point of view. We are seeking responses to the following question: Under any set of restrictions or limitations, should we consider re-introduction of government-issued money for use by the government in paying some bills without debt cost to the government? Participation is essential to get a discussion going.
Please e-mail us at your earliest convenience but by the end of October any questions, comments or comments contributed for publication in Policy Winners in one of the Fall issues to info@policywinners.org.
LEARNING FROM REHOBOTH (Eat your hearts out Las Vegas, Venturi and Scott-Brown)
Last year’s August newsletter consisted of musings from our “yacht” on the theme of gaining perspective in the simpler world offshore. In the middle of the budget crisis, it was such a stressful time! This year we had prepared a piece titled “Learning from Rehoboth” (Washington’s go-to seaside resort) concerning the just and humane economy of summertime Rehoboth Beach, DE. It is a place where there is work for all who want it, where community-mindedness abounds, where people are in a frame of mind to be good to each other, profligately, and where everyone has the simple things they most need in an always-refreshing environment. But perhaps no full-blown article is needed to encourage all our readers who have not yet done so to find time for a restorative visit to their own Rehoboth during these remaining days of summer.
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