Post #4122954

RE: https://mastox.eu/@ZackPolanski/116988641358814326 @ZackPolanski@mastox.eu You could also look at an equity-based monetary system. The current debt-based broad money system is the root cause of everyone but banks getting more in debt over time in the aggregate, and is why we need growth, and is therefore an ecological disaster. From the BoE, explains how the current system works (but doesn't explicitly show the debt increase over time) "Money Creation in the Modern Economy" https://www.bankofengland.co.uk/-/media/boe/files/quarterly-bulletin/2014/money-creation-in-the-modern-economy.pdf This IMF research paper revisits the equity-based Chicago Plan with modern data and finds it solves the current challenges: https://www.imf.org/en/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2012/_wp12202.pdf - Id recommend just reading the introduction for now, it explains the concepts very well. The Plan laid out the four following advantages of an equity-based banking system: 1 - preventing banks from creating their own funds during credit booms, and then destroying these funds during subsequent contractions, would allow for a much better control of credit cycles, which were perceived to be the major source of business cycle fluctuations. 2 -100% reserve backing would completely eliminate bank runs. 3 - Allowing the government to issue money directly at zero interest, rather than borrowing that same money from banks at interest, would lead to a reduction in the interest burden on government finances and to a dramatic reduction of (net) government debt, given that irredeemable government-issued money represents equity in the commonwealth rather than debt. 4 - given that money creation would no longer require the simultaneous creation of mostly private debts on bank balance sheets, the economy could see a dramatic reduction not only of government debt but also of private debt levels. To which I'd add the systemic need for growth to sustain ever increasing interest payments is removed, allowing an ecological transition rather than constant extractive pressure. Finally, here's an Icelandic report after the 2008 crash on a similar "Sovereign" Money system, that's more accessible than the IMF document IMO. https://www.government.is/media/forsaetisraduneyti-media/media/Skyrslur/monetary-reform.pdf