Saving The World, Revised Edition, Part III

Continuing with our revised proposal, then:

3.  A one year moratorium on taxation of any kind.  The government(s) will retain a sizable portion of the monetary wealth of the nation:  in the US, 10% of the available gold would remain with the federal government under what I have proposed, and another 10% would be distributed pro-rata to the state governments.  Thus, between them, the governments will start out with 20% of the dollars in existence.  They know how many “dollars” they have, in other words, and they can easily determine from there what they will need to make it through a year of operations assuming no new revenue from taxation.

This, then, is what the governments must do.  The private economy will have endured such an incredible shock from the jubilee event that it will need time to recalibrate, free from the concern that it must fund the government as well through the payment of taxes.

Also, there is an important corollary effect of the government’s determinations regarding how it will fund itself for a one year period out of a finite pool of money with no new revenue coming in:  the dollar numbers the government comes up with will suggest – not dictate, obviously, but suggest – beginning wage and price levels in the wider economy.

So in that sense, this is another important public service the government can perform in monetary matters, to ease uncertainty and facilitate trade and commerce generally.

And continuing on to the last two steps:

Saving The World, Revised Edition, Part II

The law can do all these things.  But it would have to be the most fundamental and unarguable kind of law:  in the US, for example, it would mean a constitutional amendment.  But in any case, these things can be done only by the most undisputed authority, whether king or pope or constitution.

1.  Universal debt jubilee:  This remains the centerpiece of the proposal.  Don’t let the word “jubilee” fool you.  It’s not all partying and celebration.  The vast majority of people will probably gain, or at least gain as much as they lose if a jubilee occurs.  But there are some people who would not gain while at the same time losing a great deal, and so many things that people are used to relying upon would disappear:  pensions, social security, bonds, t-bills, the entire derivative architecture, however many trillions or even quadrillions it “nominally” is.

All gone.

The only exceptions to the debt cancellation are bank deposits and government currency, what most people think of as being “money” proper.    Conveniently, the “dollar” (or any other nominal unit of account in any other country with a central bank) amounts of both can be determined with near absolute certainty.

Now.  Why does a debt jubilee need to be done this way?

If you wish to review, see here and here, along with some following explanatory posts.  We have to do it for the children.  Of course.

Briefly, though, we have to exempt the currency and bank deposits because otherwise they would be cancelled too, and there would then be no existing money, since money that actually circulates is pretty much always debt, paper or (in more modern times) electronic.

You see, it is misleading when people derisively refer to “paper” money or even “debt” money.  Neither of those is the problem in and of itself.  The problem is that the debt or paper or computer digit – that is, no matter what form it takes – is irredeemable.  That can never be the case, not even for the government.

Saving The World, Revised Edition, Part I

Well, somebody’s gotta do it.

I’m kidding, of course.  Well, half kidding anyway.  I’ve been making proposals all along, really, that have half serious components like offing the Secretary of the Treasury if he acts in bad faith.  I hope people don’t get carried away.  That’s part of the point, of course.

But let’s review.

The “financial crisis” is really a “rule of law” crisis and as such it is a crisis of civilization itself.  It’s not like nothing works, and for that we should be grateful:  the trains run more or less on time, there is food in the grocery stores.  People shopped and bought this Christmas.  Things could be worse.

Of course, they’ll get worse if something isn’t done. And they are far worse than they appear, at least to people whose information on events in the wider world comes from officially approved sources.

The year 2011 saw the first major manifestation of what is an increasingly brutal reality underneath it all:  the so-called “occupy” movement.  This movement is an early and relatively benign form of civil unrest.  Such movements rarely remain benign when they continue.

That’s one problem.

At this writing the occupiers have been rousted by the powers that be from their downtown tent cities that cropped up in major urban areas all over the United States.  But they have not disappeared.