Christmas Gifts for All: Shares of Brand, New Money
|December 25, 2013||Posted by Staff under Editorials|
These two excerpts are of (1) Huffington Post, last year, Oct 3, by Mike Sandler on sharing the commons and (2) Web of Debt, 2013, Dec 7, on the Fed by Ellen Brown, rerun by Alternet as “Here’s an Idea! Let the Fed Drop Money into Your Bank Account Instead of Raining it Down on the Rich”
Citizen’s Dividends: Basic Income from your Share of the Commons
Cap & Dividend system: greenhouse gas emissions from upstream fossil fuel companies are limited, and the revenues generated by the sale of permits are returned to individuals as a dividend. The reasoning is that we all share the sky, and so as the now-scarce resource becomes valuable, we should all be given our share.
“Quantitative Easing” (QE) is a form of bailout where the central bank purchases bank assets with newly created money. By flooding Wall Street (big banks) with money, it may have prevented more bank failures, but it is unclear if any of that new money is being lent to the productive parts of the economy, or that it goes any farther than bonuses to the 1%, which may end up sitting in tax-haven accounts in the Cayman Islands.
If the Fed wants to really stimulate the economy, it needs the money to actually reach the actual people who will spend it into circulation and create the demand so that employers will begin hiring again. The answer is simple: send the money to the people as a citizen’s dividend. William Greider, in an article in The Nation: Roads and bridges are great, but with a citizen’s dividend some of the trillions would go straight to the people. Chairman Ben Bernanke just announced the third round of quantitative easing, QE3. He should make QE4 a citizen’s dividend.
A Helicopter Drop That Missed Its Target
December 23rd marks the 100th anniversary of the Federal Reserve.
The helicopter drop was proposed by Ben Bernanke in 2002 as a quick fix for deflation. He told the Japanese, “The U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost.” Later in the speech he discussed “a money-financed tax cut,” which he said was “essentially equivalent to Milton Friedman’s famous ‘helicopter drop’ of money.” Deflation could be cured, said Professor Friedman, simply by dropping money from helicopters.
But there has been no cloudburst of money raining down on the people. The money has gotten only into the reserve accounts of banks. John Lounsbury, writing in Econintersect, observes that Friedman’s idea of a helicopter drop involved debt-free money printed by the government and landing in people’s bank accounts. “He foresaw the money entering the economy through bank deposits, not through bank reserves.”
The fatal flaw of QE is that it delivers money to the accounts of the creditors and does nothing for the accounts of the debtors. Bad debts remain unserviced and the debt crisis continues.
The Federal Reserve Act was drafted by bankers to create a banker’s bank that would serve their interests. A century after the Fed’s creation, a sober look at its history leads to the conclusion that it is a privately controlled institution whose corporate owners use it to direct our entire economy for their own ends, without democratic influence or accountability. For the central bank to become an institution that serves all the people, not just the 1%, the Fed needs fundamental reform.
Ed. Notes: The one thing the Fed should not have is a monopoly on issuing new money. If the Fed faced competition from other, sounder currencies, it could try any trick it wanted but none would work. As they printed too much new money and its currency lost its purchasing power, people would abandon it in favor of a currency that held its value by not being over-issued (more new notes than the output of new goods and services).
However, all of this becomes another non-issue in a just economy. Why would there be such a pressing need to constantly create new money if the cost of living were constantly falling? In a just economy, the advance of technology would ceaselessly shrivel the cost of new goods and services. People simply would not need as much money to mediate their exchanges.
What would make an economy just? No more corporate welfare. No more taxes on our efforts: on our earnings, purchases, and houses. And no more overlooking the common wealth, which is the worth of Earth. Instead, government would redirect all our spending for land and resources back to everyone. How? We’d pay land dues or land taxes into the public treasury and get rent shares or Citizen’s Dividends back.
It’s not necessary to print up new notes to grant people economic security. In fact, it’d probably only end up creating inflation. All that’s needed is to redirect the money that already exists and is spent to own or use some portion of Earth, and channel the flow to everyone.
It’d become the Citizen’s Dividend (a phrase I coined decades ago, good to see it catching on; maybe Huffington Post will soon help spread the rest of geonomic policy will, too) — the key feature of geonomics, and potentially regular Christmas gifts for everybody.