Community Planet Forums Tag: Debt

Community Planet Forums Tag: Debt http://www.communityplanet.org/forums/ Community Planet Forums Tag: Debt en Mon, 06 Feb 2012 09:48:14 +0000 Rob on "KISS Economics" http://www.communityplanet.org/forums/topic/kiss-economics#post-22 Tue, 21 Jul 2009 00:04:36 +0000 Rob 22@http://www.communityplanet.org/forums/ KISS is a neat acronym for KEEP IT SIMPLE STUPID. =============================== Although this may not be the solution that saves the world, I think it deserves a hearty debate because of its elegant simplicity. Its not mine. It belongs to members of the Economic fraternity who have been developing this idea for many years. Please consider helping clarify my interpretation, joining the debate and sharing the topic. The source: - <a href="http://mises.org/books/desoto.pdf" rel="nofollow">http://mises.org/books/desoto.pdf</a> (chapter 9 for those with limited time) The concept as at 14th July 2009 (**original interpretation no corrections yet**). First the simple inexpensive actions ------------------------------------------ 1. As its final act of Monetary Policy a government should print money to restore all on demand savings in banks and "gift" this money to the private banks. 2. Preceding this act the laws should be amended to protect 100% of savings and abandon Fractional Reserve Policies. 3. Bank Assets equivalent to the "Gift" (this does not impact on Bank Equity) are consumed by a Mutual Fund run by the banks. 4. The Government because of the "Gift" holds claim to the original assets in the Mutual Fund and uses these assets ,e.g. bank loans and govt.bonds, to cancel its debts to an amount equivalent to the money printed. 5. Governments accept the peace challenge. Its just a signature. <a href="http://www.facebook.com/group.php?gid=75806570350" rel="nofollow">http://www.facebook.com/group.php?gid=75806570350</a> In summary <Govt> prints money<$X> to restore the money that backs savings<$X> in return for existing equivalent bank assets<$X> owed to depositors to pay down <$X> of <Govt> debt. Does not impact on the money supply so the actions are non inflationary. And make some simple changes at law. The consequences ----------------------- That relatively tiny effort, is it. The rest follows automatically and includes. (Note: I've included some graphics to facilitate discussions . See the images section) -Developing Economies could start on a better footing and avoid the problems of boom, bust, massive debts, inappropriate privilege and over consumption. - Does not change the existing Money Supply. Deposits do not change only their guarantee status. Government Debt pay down does not affect the Money Supply. - A massive reduction in NATIONAL DEBTS and the associated budgeted INTEREST payments. The "traded" bank assets such as loans have their own interest components so Bond Holders should not be disadvantaged. - A 100% guarantee of all demand SAVINGS. The economists recommend that this is initially backed by gold because it is one of the best forms of money and defies manipulation. - Existing Bank equity is not affected. Future equity depends on banks charging competitive fees for financial services such as trading advice, transactions and security. - Market demand for investment does not change but is only satisfied by meeting the demands of people willing to invest their savings. This is a more powerful and direct form of investment supply where vested interest demands quality. - Governments can still intervene by banning harmful investments and sponsoring investments that bring the community positive outcomes. This would be done via the legal instrument that governs banking. -The banks are regulated through the legal arm of government. And perhaps audited. - Significant taxation reduction by canceling monetary governance. - Should appeal to Government because it simplifies their role and raises integrity. All economic agents combine to make the best informed decisions for themselves and also the efficiency of the economy. - In democratic nations, it improves the quality of the principle of the separation of power. - Governments are more openly accountable and simple. Funding should come from taxation, meaning voters are better informed. - Decisions on war become more of a public policy with funding being direct from taxation. - Annual Expenditure savings (perhaps even military) can be diverted to supporting and sponsoring large scale infrastructure development for more appropriate energy and water solutions. That's work and good sustainable investment isn't it. <a href="http://www.euronews.net/2009/07/13/sahara-solar-power-plants-plan/" rel="nofollow">http://www.euronews.net/2009/07/13/sahara-solar-power-plants-plan/</a> -Its thought that it could eliminate boom and bust cycles So think, Ive got it wrong. Let's debate and see if there really is a KISS that can save the world :-) " EARTH has her own ways, following is the best choice. ECONOMICS is about allocation of scarce resources hopefully respectful of equality in equity and sustainability. It's not about money:-) Being truly selfless resolves the SPIRITual question. Problems solved." - RB 2009 Closing thoughts ... Spirit: <a href="http://www.facebook.com/note.php?note_id=98275164927" rel="nofollow">http://www.facebook.com/note.php?note_id=98275164927</a> Earth interacts with Spirit. Where is the joy in the Selfish or the Selfless. <a href="http://www.youtube.com/watch?v=luAteAz3WQ0" rel="nofollow">http://www.youtube.com/watch?v=luAteAz3WQ0</a> Earth: <a href="http://www.facebook.com/note.php?note_id=98319949927" rel="nofollow">http://www.facebook.com/note.php?note_id=98319949927</a> Economy: <a href="http://www.facebook.com/note.php?note_id=98325124927" rel="nofollow">http://www.facebook.com/note.php?note_id=98325124927</a>