Give the Money to People, Not the Banks
The world’s population is huge and growing. It currently stands at 6.7 billion. In some quarters there is a virtual state of panic over how many people there are and the effects of so-called overpopulation on the earth and its resources.
But no one knows how many people the earth could support because we don’t have an economic system that provides a fair distribution of resources. Countries like the U.S. are choking on a surplus of goods and services. Elsewhere in the world people are starving.
The problem with the world economy does not lie on the side of production. Modern technology is an incredible dynamo of productivity. The worldwide auto industry, for instance, is capable of producing far more cars than can be sold.
Today’s economic downturn is not happening because of a failure of production. It is happening because of a failure of consumption. This points to a fundamental flaw in the system of distribution. It really indicates a failure of the monetary system. We are in this recession because consumers in the U.S. and elsewhere don’t have money to buy what they want or need. Their ability to buy is decreasing because unemployment is rising.
What had fueled the economic expansion that preceded the current recession was bank lending–debt. But lending and debt have a limit. When people can no longer pay off their loans they can no longer buy things, so they quit spending. The economy then contracts. Governments try to prime the pump by encouraging more production and more lending. This is the rationale for supply-side economics. But it’s crazy to try to get people to produce more when we don’t have enough money to buy what we need.
The answer is to introduce consumer purchasing power without requiring people to borrow. It’s literally to give away money at the level of individuals and families. If we had an international authority such as the U.N. which gave every person on earth sufficient money to provide themselves and their loved ones with a subsistence living–food, shelter, clothing, and transportation–this money would then feed into the economy at the grassroots level. The production system would find entirely new sources of markets. Corporations would find the outlets for their products they lack, and the economic system would begin to move into equilibrium. I believe that such a system applied worldwide could support the present population with room to spare.
Where would the money come from to do this? It would be invented out of thin air the way banks do today. Except instead of being loaned at high rates of interest so the financiers can prosper at the expense of everyone else, it would be given directly to people. The U.S. government is in the process of giving $6 trillion to the financial industry to restart lending. It should and could be given to citizens and taxpayers instead.
Don’t believe me? Let’s try it and see.
In January 1986 Cook became the first NASA official to testify publicly on the space agency's prior knowledge of flaws in the solid rocket booster O-ring joints that destroyed Challenger and took the lives of its seven astronauts. He told his story in the book Challenger Revealed, published in 2007. Publisher's Weekly wrote of the book: "Easily the most informative and important book on the disaster."
if there is $400 trillion of the equivalent of world bank dollars in circulation, to pay everyone an international dividend of $2-4/year would cause a yearly rate of 3-6% inflation on top of normal inflation caused by economic growth. the world dollars would devalue quickly. to give up national sovereignty of monetary policy to something like the united nations wouldn’t go over well in developed nations for $2-4/year and high inflation.
by implementing a national or state georgist citizen dividend paid with land value taxes and what is left over from a sales tax, you can negate the 3-6% inflation rate by subtracting $2-4/year from the citizen dividend, resulting in usury-free and inflation currency, a fair system of taxation, and real economic growth by ending land slavery. you would still need to use consumer price indexes and consider money market influences, but that is the cost of providing a robust means of exchange with democratic and local oversight while avoiding centralization of power at a global level. you can always start a private, non-profit international organization to promote georgism nation-wide and world-wide, which i would highly encourage and support.
what you’re describing is fantasy, a complete distortion of georgism though i appreciate seeing the influence, all for high inflation, centralized power into the world bank, an unmanageable, practically undemocratic, and easily corrupted world government bureacracy, to manipulate the economy as a whole, as the united nations distributes a small bag of peanuts to every person in the world.
however, thanks for the implied idea of using the citizen dividend of georgism as a tool to manage a constitutional, usury-free, and inflation-neutral fiat currency where national sovereignty and standard of living is not compromised. i’d rather try to restore and keep our own constitutional standards before we even dare to form something strife with corruption at the global level.
Comment by jeepndesert on November 29, 2009eliminate fractional reserve banking and use 1:1 ratios for savings and loans, and you would have a very stable currency and would likely have to add to the citizen dividend to prevent deflation. some might argue loans wouldn’t be as available, but i’m sure we could come up for a solution for that without having to distort the means of exchange with chronic manipulation of the currency.
Comment by jeepndesert on November 29, 2009i probably should retract some of the criticisms due to the fact i calculated the dividend wrong using 6 trillion people rather than 6 billion people. a dividend that would cause an additional 3-6% rate of inflation on $400 trillion for 6 billion people would be $2,000-4,000/year rather than $2-4/year, which would be more substantial of $166/month than the $0.17-0.33/month.
nonetheless, i still disagree with the premise of creating free lunches out of inflationary monetary policy. while it is better than inflationary monetary policy given to the bankers, it is still an inflationary wealth redistribution scheme not based on valid justification like georgism. monetary policy should be inflation-neutral. if you want to redistribute wealth, you do it through valid agrarian justice, not inflation snake oil.
Comment by jeepndesert on November 29, 2009if there is $400 trillion in circulation and you create a 3-6% inflation rate through giving 6 billion people a monetary dividend, you’re giving everyone $167-333/month.
while better than the current inflationary fiat where the dividend goes to the banksters, it is still a globalist wealth redistribution scheme based on inflation.
wealth redistribution should be done at the local, state, or national level with valid agrarian justice principles, not inflation. the currency should remain inflation-neutral so people who save aren’t having their labor stolen from them through inflation.
interesting point here is that an inflation-neutral currency can be managed when combined with a valid-funded georgist dividend by subtracting/adding from the dividend to control for inflation/deflation. you eliminate the biggest causes of inflation, fractional reserve banking, and you help control the other biggest cause of inflation, increasing population competiting for limited natural resources and land, with valid georgist land value/sales tax and citizen dividend policy to make land and natural resources more affordable to all.
Comment by jeepndesert on November 29, 2009