Tereza Coraggio wrote an interesting article:
This proposes a new financial system which is quite intriguing.
Tereza states, “I’m concerned not at all with the puppet governments in front. My concern is with the system of money that empowers the rulers behind, and how we can take that back.” Likewise, I’m not particularly concerned with the puppet governments that officially rule our world. To accomplish real progress, we need to reach behind the governments to those who control them.
“Bankers claim ownership of the homes by issuing credit against them with a few keystrokes, which we repay with 60 years labor from dual incomes.” This seems like an exaggeration as I believe the most common mortgage is a 30 year mortgage and many of us have paid it on a single income. The mistake I believe most people make is to keep upgrading to a more expensive home which tends to keep people in debt forever.
“Inflation is the artificial dilution of saving compared to the housing it buys, manipulated through the interest rate.” Inflation is the increase in money supply. Bankers and governments have been pulling this scam over and over through history. “Print money” and pretend everything is wonderful until the entire system collapses and we start over again.
“So this post skips over ‘how will it happen?’ and goes straight to ‘what do we want next?’” This is one of the most important concepts. We need to stop complaining and start dreaming up the solution and what future we want.
“This is the one system change needed: Only public banks owned by commonwealths under 200,000 people have the right to issue, tax, or set the exchange rate of credit used for internal trade backed by the properties within its borders. I call this commonwealth credit a caret (^).” The need to organize by smaller communities is something that I feel may help a lot!
Tereza’s “Social Security” system isn’t making sense to me. I’ll need this explained to me in different words and perhaps some examples.
If I’m understanding the caret system, the caret is used as local money. Which as far as I can tell would be 99% just spent on real estate. Although it seems to have a very steep protectionist tariff (50%) to encourage local production (paid for in carets).
When people exchange dollars for carets, who is getting the dollars?
The concept of not having a minimum wage, yet having a maximum wage is extremely intriguing!
Also the capping of interest rates to 5% is excellent.
This sort of brainstorming on alternative approaches for the future is very, very valuable.
This is a bit of a rushed article, but I wanted to capture a few thoughts and keep the discussion going.
Definitely some interesting thoughts.
Oh yay! I did the obvious and clicked on your stack to go to the article. Thank you for featuring my plan here and with such a lovely picture of fine, healthy carrots!
I'll respond to some of your points and questions here and link to your article in my episode. So happy you want to keep the discussion going!
My book gives a lot of the background on the current economic system that I couldn't include in my article. One book it cites is The Two-Income Trap by Elizabeth Warren and her daughter. It talks about the over-consumption myth that people are buying McMansions and spending more on unnecessary stuff. It shows that people spend less of their income on food, clothes, and stuff than 50 years ago. We buy new cars less often. We live in fewer square feet per person but pay a far greater proportion of our income for it. Most of our income goes to what I call the Unaffordable 4H: Housing, Healthcare, Higher Education and Hope for Retirement. Universities have gone up 700%. Most bankruptcies are from medical expenses, not consumer purchases.
But as it says in the title, two incomes were a trap. We bid against others with as much debt as we can afford for the same house. If you're bidding with two incomes, you'll get the house. For my parents, women rarely worked outside the home. I was able to do that because I bought my home 40 yrs ago (before I met my husband) and never sold, as you recommend. But unless they live in my house, my daughters will never have that choice. Two incomes are the norm in the housing market.
Another important thing to understand is that since the Federal Reserve Act, the Federal Government doesn't have the right to issue credit or bills of currency. The Constitution, when it says that only the Federal Government can issue coins, has been legally rendered literally. That's why your dollar bills say Federal Reserve Note and not US Treasury Note. The Constitution was written to prevent states from issuing their own currency but it ended up preventing it when usurped by the bankers.
So that's why the right of seignorage is the last loophole for money not borrowed from the central bankers. The Federal Government (it burns me that they even stole the short version of Fed) can issue coins and give them any value it wants. So it could print three platinum coins, give them the fiat value of a trillion dollars each, and use them to replace the Social Security Trust Fund, issuing $9000 per person as capital to each commonwealth bank. This is also a bribe to the gov't because the trust fund has been a slush fund so they don't have it to give back. This plan saves their bacon ;-)
Social Security is a beautifully designed system and I'd put Frances Perkins on those platinum coins. It just needs to be fulfilled at what was promised to participants when they put the money in. Commonwealths would be collecting the tax and investing the trust fund in their own mortgage-backed bank, so they just need to make sure they're distributing benefits. In my own fiefdom, there's only one thing I'd change. I'd up the maximum for a married couple, even if it came out of one income, and I'd divide the benefit equally whether still married or divorced. Currently the non-working spouse gets half of what the working spouse does and it maxes out at full retirement age. Since the non-working spouse is typically more involved with the kids, that doesn't make sense to me whether they stay married or not.
As the interest on the SS Trust Fund builds up, I think I'd look at lowering retirement age back down to 65 and late retirement to 68. But I'd save that as a reward for when the system's working!
Right now 97% of money is created through mortgages. But with 5.3% interest, 194% of that money is being spent on real estate because double that amount needs to go back. That's why inflation is built in. Under my system, the carets to pay it back are generated monthly but it can't be used for that without being earned from someone else. As a targeted dividend, it needs to create at least one exchange of goods or services before it can be used to pay the rent or mortgage--which is how it differs from just distributing it as UBI.
And yes! When people exchange dollars for carets, it goes into the commonwealth cash reserves. So let's say that you let people who earn dollars to do a 1:1 exchange up to $3000 per month to spend tax-free on housing, local services and goods. The $3000 can then allow ^6000 carets to be issued as dividends in the commonwealth, because they could only be cashed out with half going to tax. So the dollars coming in benefit everyone.
Glad you appreciate the maximum wage! And it's Ben Franklin, whose system mine is based on, who thought that 5% was the right interest on a house and 3% to finance one already paid off (an equity loan in today's jargon). Thank you for being in my brainstorming thinktank, John!