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Alternative Monetary And Benefits System

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(partly inspired by this older thread here: http://www.housepricecrash.co.uk/forum/ind...showtopic=77410 but a bit OT)

I missed the above thread when it came up, but I think it's an interesting point.

I would take the concept further though - why charge any interest at all? I know the idea is to stop people borrowing ever increasing amounts of money, but why not just restrain supply? Is that not all interest is attempting to do, while causing the bankers to get rich at the same time?

Ok, there is a trust issue with the government. Law would need enacting, which couldn't be turned over without a referendum and full disclosure of the reasons why the law was made in the first place - as part of a constitution or some such.

What would the law decree? To keep inflation at zero (over a business cycle). That is, the money going in to the system, must be returned as taxes. Whether that means big government (tax and spend) or small government (less tax + spend) would be up to the electorate.

Banks would have to operate with full reserves to stop them from causing temporary inflation chaos with loose credit (and many would argue it is fraud anyway!). They would fund business borrowing as usual, as well as any consumer lending which they felt was deserving.

How would you get money moving? Increase taxes and spending. How would you slow it down? The reverse. There would be no banks in the way, deciding to give umbrellas in the fair weather and then taking them away again when it rains (ie. lending too much when times are good + hoarding when times are bad).

To be more radical, how about using a citizens income to help share the wealth and control the money supply in a direct way? Whether it be high (which would verge on communism, I suppose!) or low (keep the poorest out of extreme poverty), it would be a counter balance to taxation. Somewhere between the two would be my political preference, but could again be decided by the electorate.

How about the only thing - a house - that a person really needs to borrow for? Have interest free loans, direct from the government. The money is created from thin air anyway (not unlike current banking), so there is no need to charge for it (except a small admin fee via taxes). This money should never be able to be MEWed or otherwise withdrawn into the money supply as a "free" loan (which could cause credit inflation issue again). The amount could be rationed by circumstance (2-3x wage multiple, deposit etc - whatever is defined) as is currently done, but the multiples would be strictly controlled to meet the building and land costs. Land could be zoned and paid for by compulsory purchase (it is our land, not the preserve of a few).

As far as I can see, this would create an inflation free, sustainable system. Low growth would be encouraged, but not a return to huge booms/busts caused by loose credit. Money would not be skimmed off by bankers and the government, and the people who elect them, would be in control of the system, rather than the bankers (which we are debt slaves to).

I'm sure there are practicalities I have not considered, but we seem conditioned to accept the current debt based system, whether it is the best/right way or not. I think it is flawed and there are much better alternatives.

Is the above workable? Are there obvious flaws? This topic needs debating, imo, as there must be many decent alternatives.

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People who do violence very readily and have lots of weapons prefer the system we have now. Freedom is not usually won by suggestion, there is cost involved.

Very true, but it doesn't stop us forming a blue print for a better solution. If we don't think of a better solution, we will be condemned to live with the current one indefinitely.

I wouldn't trust the government to run a piss-up in a brewery.

But you trust the bankers more?

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But you trust the bankers more?

Nope. We'd need to fix the government first. Scaling back all of the excess thats creeped in over the years would cut expenditure a lot.

Edited by HPC001

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Nope. We'd need to fix the government first. Scaling back all of the excess thats creeped in over the years would cut expenditure a lot.

No argument from me there, yet people keep voting either one lot in or the other. People mostly vote for a party just because they have done for all their lives - some even because their parents did too.

Maybe it is a problem of there being no real choice. However, the fewer people vote, the more chance there is for a real change of guard (as a smaller number of votes will count). Unlikely, but I try to live in hope.

Anyway, it's a bit OT - the point is whether the system would/could work, should there be an opportunity to change the current one for another (either by state collapse or otherwise).

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No argument from me there, yet people keep voting either one lot in or the other. People mostly vote for a party just because they have done for all their lives - some even because their parents did too.

Maybe it is a problem of there being no real choice. However, the fewer people vote, the more chance there is for a real change of guard (as a smaller number of votes will count). Unlikely, but I try to live in hope.

Anyway, it's a bit OT - the point is whether the system would/could work, should there be an opportunity to change the current one for another (either by state collapse or otherwise).

I'd say a total collapse of the system is probably the best case we can hope for, with a continuation of the current oligarchic kleptocracy (and its further encroachment) as the worst case scenario.

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