16 Jun 2012

A Radical Proposal for Monetary Reform : My latest Youtube presentation

Here's my latest opus.

It actually brings together two of my favorite ideas. First the need to use debt-free central bank lending to create the money supply instead of allowing commercial banks to create money and charge us interest. That's an idea that is shared by an increasing number of authors, including Ellen Brown, Bill Still, James Robertson, and the Positive Money Network. It's also been pushed by many others across history - including Thomas Jefferson, Andrew Jackson, Abraham Lincoln, Thomas Edison, JRR Tolkein etc...

One new idea is that I propose that central bank money creation should be spent into the economy for ANY project that recieves the support of overwhelming majority. I honestly think that the criterion for deciding whether to enact money creation could require at least 90% of the population to allow it to take place. Only the 1% would oppose most of the projects that involve public finance.

The other  really new bit is my suggestion of combining money creation for public works with an automatically regulated Financial Transaction Tax. Seen from this persepective, the FTT is not like an ordinary tax since in fact, the money doesn't even go to the government. It is simple withdrawn from the system to keep the money supply stable. It's by far the easiest and simplest way to remove excess money out of the system - painless, cheap to implement, extremely rapid, completely fair, and very difficult to avoid.

I find the idea very appealing. By having a balanced system in which the government creates as much money as is needed to allow the economy to grow naturally, and mopping up any excess by using the FTT mechanism to remove the excess, it seems that we could potentially reach a sort of utopian situation that would be radically different from the world we live in today.

In this new world, there would be money that could be used to pay ALL people to do something useful. Living off state subsidies would be a thing of the past.

But perhaps the most important point is that the automatic FTT mechanism shoots a hole in the standard argument which says that allowing governments to create money without interest would lead to rampant inflation. My mechanism makes this physically impossible.

If there is anyone who can explain why we should be paying trillions of euros and dollars in interest payments to banks for creating our money, then do let us know what the arguments are. I'm definitely prepared to take you on.

Here's the video. I hope you like it. If you do, don't hesitate to click on "Like" and send it to your friends.

Note added on Sunday 17th June : I've removed the original video and added a new revised version. Please see this link.

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