How to Finance the National Dividend?
Response to a Reader:
The question is always the same–how to finance the National Dividend, which would be somewhere in the range of $2-$3.5T U.S., depending on whether it is taxed and if there is an allowance for children.
To be brief, blunt, and brutal–the government would print it and give it away. When people stop swooning, you explain to them that of course all Western governments–esp. the U.S.–do this anyway by rolling over central bank debt.
Yes, they do pay it off– through inflation. But much of the inflation is due to interest paid to the banking system for the privilege of solvency.
If the idea of printing it and giving it away is politically unacceptable, then you can have the government sell “dividend bonds” to the central bank, which bonds are kept in a vault somewhere, with the bank distributing the dividend. Or it can be done through the Treasury.
The only difference from current practice is that with the National Dividend, you give the money directly to the people rather than routing it through the government or the banks; today the government spends much of it on the horror of the military-industrial complex; banks skim the cream through interest on lending.
With a National Dividend paid directly to the people, this money immediately goes into circulation at the local level and produces many more jobs and much more economic growth than through the other routes. So it becomes, in practice, self-financing. It also pays down debt, reduces net interest payments, and results in more savings than at present.
What I call “The Cook Plan” calls for the dividend to be paid via vouchers which are then deposited in a network of community savings banks to capitalize low-interest lending at the local level for individuals, students, small businesses, and family farms.
This program would shift money creation from bank lending to local income, thereby overcoming the constant tendency for jobs to disappear due to technological innovation.
From the standpoint of economic theory, the dividend monetizes national savings which occur chiefly through corporate retained earnings. Today that savings is largely eaten up by interest. So the banks get rich while everyone else becomes poor.
Total debt in the U.S. today is around $60 trillion. If interest is 4% that’s $2.4T out of a $14T GDP. $2.4T is a figure curiously almost identical to my proposed National Dividend.
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."
Thank You Richard C. Cook:
Every freedom-loving American needs to understand why the creation of money must be placed in the hands of the people. To that end, your book, “We Hold These Truths-The Hope for Monetary Reform”, is a must read.
If people are swooning about the National Dividend, it just means that they have not a clue about the diabolical tyranny which is behind the bogus Federal Reserve Notes (FRNs) which we now pass around. Unlike the FRNs, the National Dividend of $2.0-$3.5 T is not a phony IOU with interest on the backs of the people. Unlike the Federal Reserve System, Dividend Economics serves the people and not the Globalists who are now robbing us of everything we own.
Comment by Bob Walton on August 8, 2009Richard,
Here is a post I made today on one of the largest economics blogs on the internet, http://globaleconomicanalysis.blogspot.com/
in response to their trying to figure out how to proceed in the current crisis.
All you guys are doing is tinkering, and conjecturing about how the system actually works. Economics was not dubbed “the dismal science” without reason. The machinations of the wealthy and connected will forever preclude an honest and comprehensive “science” of economics….even if we cognite on the efficacy of Social Credit. The difference however, is that we will have made changes that WILL extricate ourselves from this mess which is unresolvable under the current ways of doing things without incredible human suffering and the risk that the loss of trust will end violently. Do we want to cling to our outmoded allegiances so long that we over look and risk such possibilities? Someone once said that the strongest intention in the universe is the intention to be right. This leads to very strong allegiances to ideas whose time has ended, and too often a refusal to accept ideas that change our ways of thinking. Suffering results. Give up your allegiance to ideas that have caused our problems and look for truly evolutionary ideas that resolve them. The risk of not doing so is too high.
Comment by Steve on August 24, 2009Richard,
I send you this with the knowledge that I stand on the shoulders of a giant, and that its structure at least is derivative.
In 1776 our Fathers wisely crafted a political framework that has endured now these 233 years. And yet, all of this time later, we the people, are not yet economically or monetarily free. 233 years later, we the people, are sadly crippled by the manacles of a debt based monetary system and the chains of inequality laid upon us by a minority’s rule of that system. We live increasingly on lonely and debt enslaved islands amidst a vast ocean of plenty and prosperity. 233 years later, we the people, are pushed to the corners of American society and find ourselves almost exiles in our own land. I am here today to say that we must overcome this shameful condition.
233 years ago America promised rich and poor alike they would be guaranteed our inalienable rights of “Life, Liberty and the Pursuit of Happiness” as well as a government that would act to promote “the general welfare.” It is obvious today that America is defaulting on this promissory note. Instead of honoring this sacred obligation this government has enabled the financiers and their wealthy stockholders to hand us all back a note that says we now owe them. And not only that we owe them a usurious burden of debt but our trust and confidence.
But I, and we, refuse to believe that we are their slaves! We refuse to believe that there are not better ways to create opportunity for ourselves and our posterity! And so we come to this point and say that we intend to bring an end to their usurious systems; to replace them with systems that do not force us to pay an ever increasing burden of debt and despair; and to declare and demand liberty through economic democracy!
And we have come to remind the current rulers of our monetary system of the fierce urgency of Now! This is no time to engage in the luxury of mere conversation or to take the tranquilizing drug of gradualism. Now is the time to make real the promises of democracy! Now is the time to rise from the dark and desolate valley of debt slavery and the wicked and unwise strategy of a confidence killing inequality before the law to, the sunlit path of economic justice! Now is the time to lift our nation up from the quicksands of debt to the solid rock of REAL money. Now is the time to finally create economic democracy and justice for all American citizens!
And as we go forth, we must make the pledge that we shall always march ahead. We cannot turn back until we are satisfied! Until there is a complete and actual reform of the current system! And though we may face the difficulties of today and tomorrow we still have a dream. It is a dream deeply rooted in the American dream. I have a dream that this nation will rise up and live out the true meaning of its creed that it will “promote the general welfare” not legalize the rule of the wealthy!
I have a dream that men of knowledge, and insight and high principle will someday soon come to operate our monetary system for the greater good of the general population! I have a dream!
I have a dream that this new system can bring the benefits of true economic democracy—a liberation from poverty amongst plenty, a liberation from the despair of debt slavery, and a general rise in the fruits of true liberation, namely increased faith, hope and love! I have a dream!
I have a dream that our new system of money and our humane and enlightened goals will not only bring about the elimination of poverty, but a new Golden Age in which there is a renewal of and intensified participation in the Arts, the re-discovery of community and a general rise in the spirit of the people! I have a dream!
I have a dream that even those whose fear and loathing of government, mistakenly acquired perhaps by even a lifetime of listening to voices who did not have their true interests in mind, can see clear to understand that like the Civil Rights Act of 1964, like the Emancipation Proclamation and like The Declaration of Independence government can be a righteous tool for the greater good! I have a dream!
I have a dream that that this country will rise up and fulfill its true destiny of not only being a political democracy but also an economic democracy! A place where fast food workers and Investment Bank CEO’s, both stay at home mothers and fathers and Oligarchic Stock holders all receive their true and rightful share of the dividend of our incredible productive potential!
This is our hope, and this is our faith that we go forward with: From every mountainside, let freedom ring! And if America is to be a great nation, this must come true! And so let economic and monetary freedom ring from the outsourced textile mills of South Carolina, and the from the bankrupt auto plants of Michigan! Let freedom ring from the foreclosed subdivisions of California, Arizona and Florida! And yes let freedom ring in the minds of even those whose hands are on the levers of our current system…for they enslave not only us…but themselves also!
And when this happens, when we allow economic democracy and the freedom that it can bring, to ring from every valley and every hamlet, every state and every city, we will speed that day when every citizen, Black, White, Hispanic, Native American, Asian or Middle Eastern will be able to join hands and sing in the words of the old negro spiritual:
Free at last! Free at last! Thank God Almighty, we are free at last!
c copyright 2009-08-25
Comment by Steve on August 25, 2009Steve Hummel
Non-credit money can finance the national dividend.
Comment by stojan nenadovic on December 25, 2009Non-credit money is the necessary additional quantity of money in circulation (dM) as percentage (k) of existing quantity of money in circulation (M).
dM = kM ; k = (supply – demand)/demand ;
If non-credit money is emitted according to the cited formula, inflation cannot exist. Also, taxes are annulled for the amount of non-credit money. The consumers pay less and producers get more than today, in the order of credit money. All get the gift from non-credit money. The source of non-credit money is the growth of economic rationality. There is both national and world non-credit money. We must create both national and world order of non-credit money. Non-credit money as gift can solve economic crisis.
“From the standpoint of economic theory, the dividend monetizes national savings which occur chiefly through corporate retained earnings. Today that savings is largely eaten up by interest. So the banks get rich while everyone else becomes poor.”
Actually the dividend monetizes progress.
Comment by Igor on December 29, 2009A growing market needs ever more money to function.
Distribution of new money through dividend would serve this purpose well.