In a society that has the capacity - and potential - to fully produce, domestically, everything we need for basic survival - food, clothing, housing and transportation - at minimal cost, there is simply and utterly no excuse for scarcity.
There must be a commitment to rethink and redefine our society as a culture of abundance and NOT a culture of scarcity. We CAN afford it and we MUST afford it.
How do we get the ability to afford it?
We must redesign and reform the financial system so that it actually works for the citizenry, for the people.
These ideas are based on the following previously published ideas:
There should be new, mandatory state banks chartered and established in the 49 states that do not yet have one, modeled after the highly successful
Bank of North Dakota, backed by the full faith and credit of each state, and by extension, the federal government. Each state, and all cities and counties therein, would be required by law to deposit all of its revenues in the state bank. Interest and profits are returned to the state government and to the local economy. Each state bank would deposit up to 5% of all its revenues in the US Treasury.
The primary new medium of exchange can be a a debt-free currency issued by each state bank. For the sake of convenience and discussion, I will refer to this new currency by an old, historic name: the greenback.
- This should eventually be done through a nationalized Federal Reserve under direct control of the United States Treasury with the existing Federal Reserve Notes transitioning into debt-free federal Treasury greenbacks
- State-issued greenbacks shall be accepted as legal tender and payment for:
- Basic necessities as food, clothing, housing and transportation
- Other uses such as leisure/business travel; books/magazines/movies; sporting events; Internet access; cable/satellite TV/radio
- Prohibitions and/or restrictions on other uses such as gaming/lottery, alcoholic beverages, tobacco and drugs
- Credit unions (NOT commercial banks) can be affiliates of the state bank for purposes of disbursement of the dividend but...
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US Postal Service shall be the primary issuer of greenback deposit accounts/debit cards as part of its service to the public
- Businesses would then deposit the greenbacks in the state bank, NOT commercial banks. Businesses would be required to keep a certain percentage of greenbacks on deposit to help capitalize low-cost/low-interest public/community lending by the state bank (and again, credit unions can be affiliates of the state bank to issue the low-cost/low-interest public/community loans).
- State-issued greenbacks shall have unconditional reciprocal acceptance as legal tender in all 50 states and all US territories and possessions
- Greenbacks can be completely virtual currency with no paper printed if so desired, just deposited on existing debit cards
- Banks/credit unions/card issuers cannot take more than 3% of dividend as direct fees for account service
- US Postal Service cannot take more than 1% of dividend as direct fees for account service
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Greenbacks CANNOT be traded like a commodity
- Federal taxes collected on greenback purchases shall be converted into conventional US dollars to pay necessary taxes, and also for debt/deficit reduction, and state and municipal taxes shall be deposited into the state banks for capitalization of the greenbacks
- It may be possible to reduce or eliminate taxation eventually
How is the greenback paid for? What is it backed by?
- Value of the greenbacks is pegged to the value of the US dollar at date of adoption by the first state that uses it, and all states agree to that value, which is frozen and set indefinitely. It is then matched 1:1 by the determined value of goods and services existing, as well as an equivalent level of production of new goods and services within the physical economy. This can be accurately determined and tracked; because of this the greenback cannot inflate.
- We have a surplus of productivity and goods in society
- No bank interest charges shall ever be added
- New greenbacks are issued as the need arises; the potential need can be quantified and tracked
- Once created a greenback remains in circulation because it never gets canceled as loans now do
- Any surplus greenbacks are held as surplus savings to eventually be released and redistributed
What can the greenbacks be used to pay for?
Any usage deemed reasonable, beneficial and necessary by the people.
- Guaranteed minimum income
- Single-payer healthcare
- Low-interest community loans
- Public transit infrastructure
- Complete funding for construction and operation of schools, colleges, universities, libraries
- Funding for certain operations of US Postal Service
Impact:
The "Great Recession" will end within one year because of the massive economic stimulus. Consumer spending shall skyrocket to levels not seen in years. Demand for goods and services will skyrocket. The greenback can quite literally eliminate poverty if used responsibly and never tied to the interest-based fractional reserve system that has bogged down and ceased its effectiveness for the public good.
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Ways to spend the greenback and fix the economy:
1. Guaranteed minimum income:
- $29,500 mandatory annual lifetime dividend to every adult US citizen beginning at age 18, payable without any other conditions or means testing
- non-taxable (except when buying taxable items)
- to completely replace SNAP, UI, EITC, Section 8, Social Security which are actually piecemeal, stop-gap, "Band-Aid" measures that are ineffective to end poverty
2. Abolish minimum wage BUT:
Implement major labor/workplace reform
- Require mandatory reduction of standard workweek from 40 to 32 hours
- require mandatory collective bargaining across all industries every two years with an agreement on basic wages.
- These will help discourage downward pressure on wages.
- Wages paid in either greenbacks or conventional, existing dollars that can be deposited in the same account as the dividend
- Banks/credit unions cannot take more than 3% of wages as fees for account service
Impact:
Companies may hire fewer workers, but will not totally cut back.
- Because of the GMI dividend, those people who truly do not want to be in the workforce, or who cannot for any reason, can safely drop out of the job market without risk of losing income to pay for basic needs.
- Base wages may initially come down sharply to compensate for dividend but...
- Companies that want to attract the best workers will need to keep base wages relatively high in relation to the guaranteed income dividend.
- This will be critical to keep service sector going in the face of increased consumer spending and demand.
- Companies will compete with one another to attract and retain the most qualified candidates.
- Some jobs will be permanently replaced or consolidated through increased efficiency/automation via machines and software.
- Some companies will eliminate certain positions altogether if they cannot find suitable talent at a price acceptable to their needs and business models.
- Some of the most unnecessary jobs (i.e. telemarketing) will eventually disappear for lack of demand on both employer and worker sides.
- Productivity will actually increase as technology makes it possible to produce the same amount of goods and services, if not more, with fewer workers, and fewer materials at the same or lower overall cost, with no decrease in quality.