Save rural communities, democratize money by monetizing citizens.

Over the years I have seen news stories and read newspaper articles about small rural communities loosing population and dying for lack of economic (employment) opportunities. I read one article recently about a Michigan community where a retired man did the snow plowing as no one else was available. These stories reflect the reverse of how the communities started and grew over decades. For example, a family might have homesteaders, another family moved nearby, eventually the families started churches and schools which in turn attracted both teachers, a doctor and retail businesses. Roads, rail and other infrastructure quickly followed. However, first a variety of reasons ranging from agribusiness to urbanization in areas not too distant, these small communities began to diminish in size and economic activity. Loss of population means loss of support for local retail business which in turn means a loss in local employment opportunities. A viscous cycle.

Now consider if a family could receive two regular payments a month from the Federal Reserve Bank under the plan to democratize money by monetizing citizens. https://www.amazon.com/Democratize-Money-Monetize-Citizens-Proposal/dp/1549614487 They could make a go of it in one of these communities undergoing, err downsizing. Indeed, housing costs would be significantly lower than in urban areas. They also have opportunities for partial self sufficiency with gardens and even raising livestock. An interesting irony as that is how these communities originally formed. Then with the potential for more families using their monetization payments from the Federal Reserve under the plan to democratize money, the consumer base in the community would eventually become large enough to attract businesses (employment opportunities) back to the area. In short, monetizing citizens could reverse the decline we see in small communities that are too far away from urban centers to be bedroom communities.

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Answering the Question of Who will Pay or How programs will be Paid For?

The predominant issue in American politics is how is a proposed (or existing one for that matter) program going to be paid for (or, often more to the point, who is going to pay for it)? I heard a talking head, a black woman who was raised in lower income, four jobs for the breadwinner family, arguing that the rich should not be taxed because they provide the opportunity for her father to work at four jobs and they would not have been able to do that if they had paid more in taxes. She wanted more families to have the opportunity of working at four jobs so their children could enjoy the benefits she has because of her father’s hard work. I have heard politicians argue that a rising tide raises all boats. However, they fail to indicate how boats with holes in their bottoms because the tide that went out and dropped it on rocks that put holes in the boat. Other politicians have asserted that lowering taxes on the rich will provide more jobs and create a boom in the lower economic strata. As I recall that was the justification for the Trump Tax cut to the wealthy that resulted in corporations buying back stock and increasing dividends while the middle class taxpayers are receiving lower tax refunds this year. In short, those who think the new program will cost them are opposed and those who will benefit are in favor. That means those with money generally are opposed as it will come out of tax dollars they pay. Those who are opposed label the new ideas for programs Socialism and/or label the party advocating the new programs, Tax and Spend. While it is a gross oversimplification, those who spread the labels have theirs and want to keep what they have and get more. Yes, there are those who do not have who are persuaded that if they just keep their noses to the grindstone they too will get theirs and will want to keep it when they do. There are others who, for a variety of fears, follow the lead of those with.

My thoughts this morning were triggered by a political cartoon https://www.msn.com/en-us/news/opinion/the-news-in-cartoons/ss-AAylz6W?ocid=spartanntp by Gary Vavel dealing with the launch of the Bernie Sanders 2020 Presidential Campaign—“Bernie, I love your promises of free stuff. How are you going to pay for it?” My first reaction was a snide one “By not building a damned wall.” But, the problem with the question of “How are you going to pay for it?” is that the question assumes a rigidity to our existing economic and political system. It assumes we continue to keep the rich rich by funneling new money through them. We could, on the other hand, treat the rich the same way we treat the rest of the citizenry and not give them a monopoly over the introduction of new money into our economy. Rather, give every citizen an equal share of new money created every year—democratize money by monetizing citizens. https://www.amazon.com/Democratize-Money-Monetize-Citizens-Proposal-ebook/dp/B0756RQRPG
That is not to say the banking and monetary functions the Federal Reserve Bank currently uses would be eliminated. No, they would just be operated at the margin of the economic system rather than bearing the weight of keeping the whole system afloat.

So one answer to the question of ”How will you pay for it?” regardless of what it is could be new money the government gets under the Democratize Money, Monetize Citizens plan. Another answer could be from taxes after taxes have been adjusted to reflect the new found economic equality—perhaps a one tax rate on ALL income. However, I am not at all sure one would want to continue taxes. Franklin in an 1889 letter to the a French Scientist said, “…in this world, nothing is certain except death and taxes.” I am not sure we need to keep taxes as we know them on a par with death. But, until we get out of this box of insisting we keep the wealthy wealthy by funneling newly created money through them into the economic system we are doomed to this stupid dichotomy created by the issue of who or what will pay for a program. Democratize money by treating all citizens as equal by monetizing them.

America’s Producer Bias and will it impact Democratizing Money?

My first semester taking graduate courses in political science, Spring of 1964, I was in an American Government Seminar at Indiana University. We read and discussed a book a week, One of the books we read was An Economic Theory of Democracy by Anthony Downs (Harper& Row, 1957). While I can not recall any of the discussion or points made in the seminar about the book, the book has stayed with me as it does a good job of structuring the logical consequences of democratic governance by deduction. The book is an axiomatic, nominological model of a democracy rather than an attempt at a representational model of any given democracy. Nonetheless, it is a good model for understanding how the American Democracy works.

When I say the book structures democratic governance by deduction it, for example, deduces that in a democracy government will have a producer bias. Beginning with an assessment of income stream of consumers and producers, Downs notes that any given government rule or regulation will have only a minimal or marginal impact on consumers because, so many areas of government impact the consumer’s (read citizen’s) income and expenditures. However, since a producer of a good or service is heavily impacted by government rules and regulations dealing with their good or service or the raw materials and labor going into production of that good or service, it is in the interests of the producer to keep informed of pending government rules and regulations that impact their income stream. So, since consumers of that good or service are only marginally impacted by changes in the rules and regulations that structure the permissible ways that good or service and be produced, consumers are not induced to keep informed of the pending rules and regulations. Simply put the rules and regulation for producing a good or service do not impact enough of a consumer’s utility flow for consumer’s to pay the costs of informing themselves of pending rules in that area.

Since producers’ utility flows are impacted and they keep abreast of the pending rules and regulations if for no other reason than to prepare to implement any new rules, they, for a small additional cost, can inform rule and regulation makers of the cost of proposed changes and the impact on both themselves and their customers or clients. In short, producers have an incentive to lobby rule and regulation makers to structure rules and regulations to keep their costs down and profits up.

Hence, because of the economics of keeping informed in any given policy area, producers in that area are more immediately, directly, and heavily impacted by changes than are their consumers and have a profit and cost incentive to keep informed and attempt to guide what rule and regulation makers are about to do. However, the consumers of any particular good or service, generally consume it in such a small proportion to their total consumption that it is not rational for consumers to spend the resources to keep abreast of pending changes (additions and modifications as well as subtractions from the rules and regulations) in the multitude of areas in which they consume goods and services. Hence, Downs concludes that policy in a democracy will have a producer bias.

In the real world, compared to Down’s model world, some reformers pay attention to the rules and regulations in specific policy areas from time to time. The Muckrakers of the Progressive Era immediately come to mind as does Ralph Nader from the middle of the 20th Century. For a variety of reasons, individuals who are not producers in a given industry focus on the ways firms in that industry make a profit at the cost, not just in dollars, but often at costs in human safety, human health and to the environment we pass on to our progeny.

However, reforms of producer biases in rules and regulations are short lived efforts and face a long term loss of consumer attention. But producer efforts to keep their costs down and profits up are present at all times. In the real world keeping track of rules and regulations the hold production costs down and maintain higher profits is augmented by producers making campaign contributions to the rule makers—legislators and executives.

Yes, there have been a variety of laws over the years specifying who can donate, how much they can legally donate and the like. But those laws do not regulate how donations can be made. To give a crude example of bundling, a known representative of a firm or industry can hand an envelope to a candidate that includes checks from a variety of individuals legally qualifier to donate to a campaign. The candidate knows the money comes from that firm or industry. By unspoken implication, once in office, the candidate, now office holder, is beholden to the campaign donors. In America today we say that last sentence is not true. That large sums of money are given to candidates for public office for civic reasons and not to buy access or influence the officeholder’s votes on issues pertaining to the rules dealing with raw materials, employment issues or environmental concerns of that firm or industry.

Through out my 50 plus years of watching campaigns and legislators voting, I have no firm evidence that the civic reasons firms and industries (nay even wealthy individuals) make large campaign contributions is valid. None. However, a close examination of committee votes of legislators and their campaign donors will show a bias. The argument is made that those office holders had a predisposition to vote that way and that is why firms or an industry made the campaign donations. So, the argument continues, no access buying. However, a close look at who get into see a legislator, other than a constituent, will reveal that campaign contributors’ and their lobbyist have more access to legislators out side of their geographic constituency than any other identifiable group of outside appointments. (As a side note, remember the Obama call for Members of Congress to open their appointment calendars for all to see and the lack of an enthusiastic response from Members of Congress?) Could it be that the lack of transparency between campaign donations and the influence donors have in legislative committees and the rules that result belies the fantasy of “no influence peddling occurs in the Halls of Congress or the Halls of our State Legislative Chambers?”

Least the answer to my rhetorical question is glossed over, let me assert there is a direct connection between campaign contributions and the producer bias in our democracy. Campagin contributions are a cost firms and industries pay to maintain favorable rules and regulations, favorable to their bottom lines.

Rather than make a case for publicly funded political campaigns here, I and others have made that case elsewhere, let me use this as the launching pad to point to one source of organized opposition to implementing a program of issuing new money to citizens—banking and finance industries. In addition to those in this nation who do not believe in equality or sharing or both, the banking and finance industries, a major source of money creation and campaign contributions, will likely oppose democratizing money by monetizing citizens. I could be wrong for democratizing money will increase the number of account holders and deposits in financial institutions which accept them—banks, credit unions, and the like. Primary dealers in treasury auctions may oppose as they may feel that democratizing money will cut back on demand for the financial instruments they hold by the Federal Reserve Banks in their open market operations. But, there are fewer than 30 primary dealers. Then too there are how many military aircraft manufacturers in the US? Few in number does not mean limited in influence in the hall of Congress (what are the campaign donations attributable to primary dealers?).

Now, I raise these ‘speculations’ about opposition in Congress to legislation empowering the Federal Reserve to deposit new money in citizen accounts, or send citizens checks. However, I need to point out that since democratizing money does not require money to be spent by Congress, no apportion is required so would oppostion form? I further need to point out that the chunk of new money deposited into the U. S. and state treasuries as a result still will require appropriations to spend, but no taxation to collect, so will opposition form here? Democratizing money by monetizing citizens begins to change the political debate from the tax and spend issue only to a spend issue. So, it is a bit difficult to see exactly who serves to loose if we monetize citizens. Clearly citizens benefit. Just as clearly citizens will have more immediate and steady, rather than trickle down and cyclic, buying power. I wonder, and I know this is far fetched, would producers in general support democratizing money in America? Think of the bottom lines with immediate and steady buying power.

Money is a human creation and should benefit all of humanity.

 

Money is a human creation and should benefit all of humanity.

Money is a human creation. I can only imagine how humans initially used something to be an intermediary between the exchange of a good now for a good received later by the recipient of that what was used for money—that is, after all, the basic concept behind money. I did not include service in this early money creative act, for it is unlikely, not impossible, but unlikely that something was given as an intermediary between a service received now and a later good or service received by the provider of the service now. Regardless, what that intermediate thing was is beyond my imagination. I suspect one would have had to have been there and fully attuned to the environment at the time.

Text books about and histories of money and most Googled or Binged results on the Internet will put the creation of modern coinage in the Kingdom of Lydia around 9000 years ago. https://www.thoughtco.com/history-of-money-1992150 . Metals, especially gold, silver and copper began being used as money 7000 to 9000 years ago in what we think of as Europe and Asia. But money largely makes the modern world go round. We have left barter so far behind that it is a retro activity with a certain charm, value and appeal today. But even behind barter systems as we know it there is a monetary investment initiating the barter or maintaining the system that allows for barter to take place and continue.

Yet, money still is a human creation. Earlier in this effort, I discussed the phases of how economies adapted to coinage and notes and eventually to fiat money—all were non theoretical adaptations on an earlier version of money that just seemed to work. Paper representations of gold were easier to transport and did the job. We used paper notes so much that the gold or silver behind them was not accessed. We gave up accessing the gold behind the notes in 1913 in Britain and 1933 in the US. The US gave up Silver in 1965 and abandoned all aspects of gold and silver backing currency in 1971. Fiat money replaced silver and gold notes without much notice and much less comment.

However, while we were still on a precious metal standard, a way of creating money was invented, fractional reserve banking around 12000 in Venice with deposit transfers. https://www.mercatus.org/publication/fractional-reserve-banking Simply put the goldsmith would issue a receipt that proclaimed so and so had x ounce of gold on deposit with him. It was only a short step to issuing notes redeemable in gold from the gold smith for which the goldsmith could only cover part of the total amount of the face of the note. As long as most of the goldsmith’s notes were circulated and not redeems all is well in a fractional-reserve-banking world. Indeed, with land, houses, fur coats, livestocke and the like put up as collateral, modern banks could issue more currency (notes or money) then they had gold or silver to back up. That had some interesting conseqniencs. See for example the 1946 film Its a Wonderful Life https://en.wikipedia.org/wiki/It%27s_a_Wonderful_Life
(or https://www.bing.com/videos/search?q=it%27s+a+wonderful+life&view=detail&mid=279092F6AEAE25795D4E279092F6AEAE25795D4E&FORM=VIRE ). A run on a bank.

Notice that we jumped from goldsmith issuing receipts for gold to banks issuing currency. Banks created money. They did so, as we have discussed elsewhere in this blog in issuing debt instruments: mortgages or business loans which would be repaid. Note that once the loan is repaid, the money banks created by making a load is out of circulation. However, the money supply still continued to grow. We noted at the time if a bank loan were not repaid, that money would stay in circulation. However, loans that are not repaid would soon cause lending institutions to go out of business, so those defaulted loans are rare. But, the money supply still grows. This is because the Federal Reserve Banks, in the US, issue new money. Yes they do it though the vehicle of buying debt, but they do not reduce their debt holdings, they continue to issue new money to cover debt instruments that have matured in heir custody and more.

So, for both new and temporary money created, the basis for the creation is debt. We monetize debt. Not only that, we monetize debts of large institutions and on property. The consequences of this form of monetary creation is more broad than one might first imagine. First, we have shown, elsewhere in this blog, that it is responsible for the swings in the business cycle—booms and busts (better know and expansion and contractions in economic circles or inflation and deflation or even growth and depression or recession in reality). As we discussed in a bolg entitled “The Death of Property Tas Abatments,’\” https://wordpress.com/post/democratizemoney.wordpress.com/339 the way we create money is responsible for the growth and decline of urban areas. As we discussed in the book version, https://www.amazon.com/Democratize-Money-Monetize-Citizens-Proposal/dp/1549614487
the way we create money is responsible for the transfer payment system in which the middle class in American supports both the wealthy and poor. Also in the book version, we show that the way we create money is the reason money plays such a central role in who is elected to political office in America.

There is nothing natural about the way we create money in America. It is a result of a series of adjustments that had to be made to the original creation of coins to make intermediate exchanges of goods and services when one party to the exchange had nothing else to exchange other than something like money which represented things the person giving up the good or service could expects something from later.

Every-time we have expanded the number of viable participants in our economy we have grown in leaps and bounds. By changing to whom we funnel newly created money to every citizen, we will experience the same grown. Only, this time, there is not built in a boom and bust cycle. The neat thing is does not require a change in the notes we use, the book keeping we use or any actual change for the users of money and banking. The only slight change will be the increase in the number of owners of demand deposit financial institution accounts to receive the newly created money. The other minor change is that every citizen will immediately benefit from new money creation and will not have to wait to see if trickle down economics will work this time. This time, we might know what we are doing when we modify the exiting money creation system. (To be sure read the book https://www.amazon.com/Democratize-Money-Monetize-Citizens-Proposal/dp/1549614487
or all of the posts in this blog.) Money, after all, is a human creation and should benefit all of humanity.

A Post Script to my last post on Tax Abatments–a note on ‘fully depreciated.”

In my last posting, I used the term “fully depreciated” to refer to the old and presumably obsolete buildings and physical equipment (capital) of the automobile industry in the Detroit area at the point when the firms in the industry moved production out of the Detroit area. However, I did not study accounting long enough (after I retired, I finished the coursework to sit for the CPA exam, but never sat as I found retirement more attractive than a new career in accounting in the post-Enron environment) to get to the point where a firm had obsolete equipment it had fully depreciated and presumably sold off what it could for scrap value. It seems to me that at some point there is still something left of the equipment or the bolts that held equipment in place that have to be removed at a cost. Hence, once a physical plant has had its physical materials salvages to the utmost, something must remain that has to be removed at a cost to use the land for another purpose. So, even fully depreciated and scrapped physical plants may still have a negative value or a land resale value that is lower because of removal or restoration costs prior to next use. I can well imagine that a firm may well decide to deed the land and its appurtenances to the unit of government which taxes that land and receive the tax benefits of a donation to a unit of government. Deeding the land would shut of any further costs to the firm for that land and former plant. So the unit of government, if it provided a tax abatement as an incentive for the firm to move in, now has the land with the costs associated with restoring the land to some other use.

The Death of Property Tax Abatements?

 

One of the consequences of democratizing money, giving new money to all citizens, would be the change in how hamlets, villages, towns, cities and metropolitan areas would be able to economically survive. Currently communities have an economic growth and decline, for lack of a better word, cycle. For example, Detroit grew because the automobile industry centered itself there and grew there. Then when the automobile industry began to spread out and the factories in the Detroit area became, again for lack of a better work, fully depreciated, Detroit went into economic decline. Granted this took place over a number of decades, but the decline was faster than the grow. As the automobile industry and its support industries left Detroit and their depreciated plants there, they left the population with fewer jobs and hence fewer ways for workers to support their families. Housing stock fell empty and prices for real estate and rentals plummeted. In many ways the cost of living in the Detroit Area, on aggregate, fell. However, the infrastructure remained and the upkeep on that infrastructure needed a larger population (property tax) base to support it.

Contrast Detroit’s recent experience with San Francisco where a man I know left because growth there pushed the cost of housing too high for him (in his case, the cost of housing was the largest share of his living costs). I would wager that if we examined the incentives that San Francisco and the surrounding municipalities provided in tax abatement for attracting the industries that eventually attracted the workers who drove up the cost of housing we would find indeed, San Francisco did get grown by trading it for tax relief for those firms.

If real estate prices are driven up, so then are the costs of doing business in those cities—higher store front rents means higher prices. After-all retailers have to pay the rent or cover the economic opportunity cost of not using their “expensive” property to make returns in other ways. Hence, real estate prices are an indicator of the cost of living in a metropolitan area.

From this, I conclude that if people had a steady income, such as the $20,000 a year per adult I am proposing in my democratize money proposal, they would have the wherewithal to move into places with less expensive real-estate, rentals, where ever it was located. Then by doing so, they would provide the work force base that itself would attract firms looking for available workers. The mere presence of people with some income would attract businesses to service the wants and needs of that population. It may even obviate the practice of governmental units offering a tax abatement to attract firms which was the initial force for driving up real-estate prices in the first place.

 

The poor need money, so let’s give everyone money and phase out the poverty programs (welfare state)

“. . . 55% of Americans are living paycheck-to-paycheck (and these are the folks who have online access, which one would assume are better off than those who don’t). Actually, that’s inaccurate. 36% are living paycheck-to-paycheck, 19% are actually worse off than that – accruing debt.’ https://20somethingfinance.com/percentage-of-americans-living-paycheck-to-paycheck/

“46.2 million Americans, or 15 percent of the population, were living in poverty, and the number of homeless people on a single night in January 2012 was 633,782. “
https://www.rt.com/usa/us-food-percent-emergency-612/
“More than a million children regularly go to bed hungry in the US, according to a government report that shows a startling increase in the number of families struggling to put food on the table.” https://www.theguardian.com/world/2009/nov/17/millions-hungry-households-us-report

373,187 viewsJan 23, 2014, 09:01am
“The 85 Richest People In The World Have As Much Wealth As The 3.5 Billion Poorest” [THAT IS CLOSE TO ½ OF THE WORLD POPULATION!] https://www.forbes.com/sites/laurashin/2014/01/23/the-85-richest-people-in-the-world-have-as-much-wealth-as-the-3-5-billion-poorest/#b112d6e17531
WORLD POPULATION  2019  7,714,576,923  https://www.worldometers.info/world-population/

I have presented apparently random facts above. The point is quite simple, money goes to the rich and not to the poor. Why do the rich deserve so much and the rest deserve so little? Quite frankly an old joke about a fellow born with a silver spoon in his mouth who got an inheritance and thought he hit a tipple tells the bulk of the tale. Wealth and poverty are inherited. Yes, there is the Horatio Alger myth of rags to riches stories in America-a few actually happen and we hear about those folks, bit time. https://en.wikipedia.org/wiki/Horatio_Alger Those whose lives parallel those stories are damn few compared to those who inherited their “stater fortunes.” However, if more poor people had an income how many of them would parley that income into a respectable accumulation or nest egg? If you think about the many impediments to the survival of the poor, they have to be fairly adept at making ends meet to stay alive. Yes, poverty may be easier for them to master than wealth, but if they have a proper and regular income, they may have a chance to master how to survive with an income. Think about it.

Some will argue that “they” are different from us (the some mean “me.”) However, in day to day interactions most people behave the same, follow the same norms, obey the same rules (laws) and fit in nicely. Most people are civilized, not criminal and just like us. “They” is a shorthand for those using the term to suggest others are not up to snuff. However, the evidence suggests most people are the same. Those who argue that “they” are different from us tend to want others to do what those who argue they are different want done. Somehow the argument makes the person putting it forward better, or special or different. Notice who is different from most of us (ironic, no?).

Have you ever heard the phrase, “They will not use what we give them wisely?” Or, they will spend it on drugs, beer, or worse. This is an offshoot of “they are different from us.” Actually, “they” are different, for they do not have an income or resources. So, exactly how does the person asserting “they will not use what we give them wisely,” know how they will use it? Is the person making the assertion working from a sample of one and externalizing how the person making the assertion would use money if we gave it to him or her? Do I detect an undercurrent of the “special or better” people wanting to use drugs, booze or worse? Ironic, isn’t it?

Indeed, I suspect the problem that most people will have in hanging on to their money or using it wisely is the number of wealthy people cooking up schemes to get their money—you know like Cut-Me-Own-Throat Dibbler in Terry Pratchett’s Discworld novels or characters like Donald J. Trump in real life. So to minimize that risk, the plan includes a provision to not allow for the garnishment or other attachments of this basic income when we democratize money.

The bottom line is that what the poor need is money!

“But,” most people will add, “we have programs to assist the poor, food stamps, rent vouchers, Medicaid, to name a three. So, why give them money?” And under their breath add “and “waste my hard earned money.”

Most of those social welfare programs are viewed by taxpayers as progrmas they fund with the taxes on their hard earned income—transfer payments. And a good number of taxpayers resent them. We have all heard the criticism of a family shopping with food stamps spending our money on t-bones and Twinkies. A good number of taxpayers resent the fact they don’t receive similar benefits such as medial assistance, rental or hoursing assistance and food stamps. The thing is if you take from some to give to others you build in resentment toward those in need. One further complicates their lives by creating shame. Strangely we taxpayers transfer more of our tax dollars to large corporations in the form of subsidies, tax breaks granted by local government, price floors for agricultural products, and under the current administration increases we in the form of tariffs that we pay to rise the price of foreign goods. Tariffs that a government places on imported goods raises the price of foreign goods. Tariffs are subsidies to domestic corporations—taxpayers and all consumers in a country pay higher prices because of tariffs.

While once in a while we hear about these transfer payments to corporations, largely they are not as visible to the average taxpayer as are transfer payments to the poor. It should be noted that large corporations hire lobbyists to keep their interests before legislators, commissions and the executive branch in general. Corporate officers and board members make donations to political candidates who, once in office, know whom their donors were and strangely pass legislation that insures direct and indirect subsidies continue to those corporations whose officers and board members were major campaign donors. Far fewer “public interest” and not for profit organizations have lobbyists in the halls of government representing the poor. The poor can vote, but they are hardly in a position to make noticeable campaign contributions.

Notice the asymmetry in who is represented between voters and campaign contributors. This asymmetry is reflected in the public remarks of public officials—for example the former Speaker of the House stating that oil subsidies were good for small oil producers. Small oil producers are much better of financially than are those who qualify for food stamps. If subsidies were not available to small oil producers, they would simply change where they invest their money. In contrast how do the poor change how they live their poverty? In the same manner of thinking, the average taxpayer does not seem to notice the new luxury vehicle driven by small oil producers every year, but does notice the five to ten year vehicle, a luxury one when new, the poor person is in.

So, the transfer payments the taxpayer can see cause friction. The ones that they can not see do not. If we provide every citizen with a livable base income, then we can phase out the transfer payments to the poor, the visible ones. That will leave the taxpayer wondering where all their tax dollars are going. I suspect there will be some public concern for the transfer payments to the wealthy that currently are under the average taxpayer’s radar. Notice also, that the average taxpayer will receive new dollars just like the poor, and the same amount. It turns out, see the line about 55% of Americans living paycheck-to-paycheck above, a whole lot more people than the poor need money.

I would conclude this part of the discussion with the observation that criticizing payments to the poor when everyone receives them and they do not come from taxpayer dollars will only come from people who do not believe in equality, do not want to share and probably are mean spirited. Almost everyone, but the 85 wealthiest people in the world needs more money.

“Nothing is certain but death and taxes” – Benjamin Franklin November, 1789. “Nothing is certain but taxes” – T. Edward Westen February, 2019

Did we escape the certainty of taxation over the past 230 years? No, but, we could if we made one minor change in how governments create new money. Not that we we could immediately do away with them, but as the sole basis for providing for the collective goods and services in a society we could take the first step in their elimination. That first step would be to monetize citizens or to put it differently, put new money in the hands of every citizen rather than funneling new money to the small group of financial players whom the Federal Reserve Bank of the United States currently uses to put new money into circulation and, and this is an important and, at the same time put new money in the hands of the governments according to the numbers of their citizens. For a fuller treatment of how this could be done you can read earlier editions of this blog or read Democratize Money—Monetize Citizens on Kindel: https://www.amazon.com/Democratize-Money-Monetize-Citizens-Proposal/dp/1549614487

The thing is the way we currently create new money is an anachronistic carryover from the days in which new money was created by the discovery of new veins or washes or gold or silver (in them that hills). Taxes, on the other hand, appear to this writer to be an anachronistic carry over from the days when burly men with clubs extorted crops, domestic animals and precious metals from farmers, shop keepers and less burly citizens. Yes, early government was a protection racket, more or less. While much has been waxed eloquent about social compacts, and human beings in a state of nature, the noble savage, the evidence of how, at least in the feudal era and after in Europe and the dynasties and after in China government were formed, and replaced is the model gangs use and have used throughout history. Governments, and gangs, rule by intimidation, fear and the application of violence and extortion. Nowhere is this more true today than in the way monetary systems put new money into circulation. Money is distributed to those who already have money or resources that could be converted to money—security dealers and financial institutions.

While justly maligned by populists an workers, the mantra for justifying the practice of giving new money to those who already have wealth is called “trickle down economics.” The idea is if one gives new money to those with resources they will create things that people will buy. Notice, for people to buy things, they have to have money. No problem says those perpetuating the mantra, those with resources will uses some of the new money to hire worker to produce goods and services so those workers can buy things (the goods and services they are producing?). Yet, production of goods and services is based upon markets—firms produce goods and services for which they is existing or developing demand. Demand can exist in the abstract, but it a whole lot more real if those demanding a good or service have money to pay for the good or service.

Indeed, estimates of how the economy works is that 70% of domestic product is consumer driven. Yet. 100% of new money goes to producers and not consumers. Go figure. Something other than economics must be the driving force behind the current method of putting new money into circulation—ideology and the greed of the haves in every society.
The halves behave as if they skipped Kindergarten in which people learn to share. No matter, the haves have the state, an organized protection racket, to keep them in power and to keep the current political, societal and economic problems alive to justify the protection racket. After-all, we have to protect property from the poor and yet we need to tax a bit to provide welfare for those who do not have and can not get because trickle down economics only works up to a point. Then, it fails.
If the gentle reader review other postings in this blog or reads the Kindle book, Democratize Money—Monetize Citizens, the gentle reader will notice an increase in stridency in the tone of this piece compared to all the others. Yes, this writer has been radicalized by his inability to get his elected representatives to respond, even negatively at that, to his presentations. Those in power could head off the next revolution by listening. But then protection rackets only seem to understand their power to compel compliance with their edicts and distorted economic applications with threats of violence, incarnation or seizure.

I do hope that verbal stridency is all that is required, for a call to the barricades in this day and age with the weaponry available to the thugs in power will be very, shall we say, uncomfortable for those of us in the the masses. An the chief thug today, has shown every sign he would welcome a bloody display of his power.

As a post script, this writer contends that taxes can be eliminated over time if we implement the simple change in how new money is put into circulation proposed in Democratize Money–Monetize citizens. Indeed, most of the welfare state will, as Marx put it, wither away and die.

I am still trlying to figure out how to write so people can understant what I am saying

A short wile ago, I put out a call for help on how to publicize my plan to Democratize Money by Monetizing Citizens. I got one response that suggested the book was too difficult to read and that it, for lack of a better way to put it, needed to be written so that it is accessible to readers who are less well educated in the fields of accounting, economics, fiance and monetary policy. While, the comment did not give me a good idea what the problem in readability is, I decided to first attack the problem of readability by imposing an overview or outline or plan of the book at the front of the book for starters. Then do the same for each chapter. Also to take some pains to keep the writing as simple as possible. This later will be a challenge for me as I think in convoluted ways.

So, I have a second draft of the overview, outline or plan of the book. It is not a final version, I should think, but, I offer it for criticism, comment, picking apart or the like. The object is to turn this in to something readily accessible to more readers:

The author proposes in this book, Democratize Money, that every US citizen should receive a basic annual, tax free income of $20,000 paid in equal monthly or biweekly payments. That the Federal Reserve Bank, the Fed, make these payments by depositing newly created money in each citizen’s draft account, electronic banking service or by mailing a check to those citizens who choose not to have a demand account in a financial institution or to utilize an electronic banking service. This newly created money will replace some of the money the Fed currently creates in another way (see the discussion of market operations later in the book). It will not be drawn from US Treasury funds. The Fed making payments to citizens of newly created money is the central feature of democratizing money. This way of putting new money is circulation which in effect monetizes citizens1 is the central feature of the plan. There are three other components of this plan. The first is that the Feds will annually deposit $2,000 in the US Treasury for each citizen in the US, Territories, and living abroad; and, the Fed will annually deposit $2,000 in each State or Territorial treasury for each US citizen resident in its jurisdiction. The second is that citizen’s income under this plan can not be garnisheed or otherwise seized or encumbered even by law. Hence, it can not be used to determine a citizen’s credit worthiness or ability to pay. The third additional component is that citizens are required to participate in elections by voting in elections and serving on juries when called to maintain their eligibility to receive new money payments from the Fed.

This book will detail how the democratizing money by monetizing citizens will work; how it monetizing citizens will impact existing policies: and the book will suggest some consequences of the Fed putting new money in circulation by making direct payments to citizens. To give the reader a context, the book will begin with a brief history of what money is and how money was and is created. The book will then follow with an argument for why the current manner in which the Fed creates money needs to be supplemented by monetizing citizens. 2 The book will then address how the Fed will avoid inflation as it puts newly created money in circulation by making direct distributions of newly created money to citizens. The book will address how the need for entitlement programs will drastically change and largely result in eliminating some entitlement programs. Monetizing citizens will have implications for immigration. Democratizing money will significantly modify the and the traditional ‘tax and spend’ political debate in America. Finally, the book will discuss income inequality and wealth distribution changes that are likely to occur as this plan is implemented, matures and becomes a part of the fabric defining political, social, and economic equality in America.
Footnotes

1. The author uses ‘monetize’ here to mean the thing that underlies the issuance of new money is a citizen—in effect, citizens are what make the currency under this proposal have value.

2. To whit, to smooth out the business cycle of busts and booms.
So, again, any help by way of addressing the clearness, accessibility or readability of what I have done in the overview, plan or outline of the book above would be more than welcome.

Warmest regards, Ed

Where should I go? Who shoud I hire?

I think it is time to advertise, publicize and otherwise get folks to read my proposal to change the us versus them politics that exist in America by publicizing my book. So far I have tried to tell people what is in the book and get their attention. Last night I drafted the followind “blurb” which doe not quite tell them but teases them:

“You would think that if I told you there was a way to smooth out the business cycle, stop poverty in it’s tracks in America, and not spend a tax dollars to do that and more that people would be clamoring at my door for more I formation, for details. The way to do this will also stimulate more voters to vote. The way to do this will gradually eliminate the vast bulk of the welfare state. And , I repeat the way to do all will not cost the tax payers a single penny nor will it create inflation. But, no one is clamoring at my door for details. Perhaps I have chosen to tell the wrong people. Perhaps I have not found the right words to explain the way to smooth out the business cycle, stop poverty in America in its tracks, increase voter participation in elections, and begin dismantling the welfare state without spending a single penny or causing inflation. Indeed, these are only the tip of the iceberg of positive economic, political and social improvements which will result in the way to smooth out the economy, stop poverty in its tracks at no cost to taxpayers.

That way I have named Democratizing Money. If at all interested read my Kindle book by that title. Then you get a politician’s attention and demand to know where your annual tax free $20,000 is. T. Edward Westen is my name and Democratize Money Monetize Citizens is the Kindle book I authored with answers to some of your questions.” https://www.amazon.com/Democratize-Money-Monetize-Citizens-Proposal/dp/1549614487

I wrote this last night and then slept on it. I would still face the same obstical of getting people to read or at least know what the basic plan is. So, another approach is needed. I think I need to hire a publicist or ad agency or promoter to do the selling. At 99¢ per e-book, of which Kindle gets the lion’s share, I am not looking to get rich. No, I really think the idea has merit and to back that up, I need to invest some money in some agency who will promote the book/idea. So, where should I go, whom should I hire. HELP!