I wish I could delete or edit my comment below. The sentence about HR 6550 should have read: "I wholly agree with HR 6550's ending the use of interest rates as a control mechanism and using instead 'the management of the amount of public money in circulation through governmental spending and tax policies.' "
The error was from a cut & paste from the following discussion of the same bill: http://www.linkedin.com/groupAnswers?viewQuestionAndAnswers=&discussionID=64151306&gid=2350080&trk=eml-anet_dig-b_pd-pmr-cn
This is a great first step, but I think more attention should be given to Silvio Gesell's ideas in 'The Natural Economic Order'. I hope that Maryland establishes a public bank soon.
I wholly agree with doing away with HR 6550's ending the use of interest rates as a control mechanism and using instead 'the management of the amount of public money in circulation through governmental spending and tax policies.' My question then concerns the nature of the tax code. I don't believe that taxing 'income' or 'net gain/profit' will deliver the kind of solution that Silvio Gesell proposes with his demurrage currency. I'd like to see them define the tax as a flat tax on currency which gives the same effect as a holding fee on currency.
Allowing the currency to have a privileged position in the market relative to consumables and labor is, in my opinion, the root of the problem that Gesell speaks to so well.
Demurrage currencies promote long term thinking by imposing the same 'storage fee on currency' that real assets have. Positive interest rate amounts to preferring short term gains since returns on long term projects are exponentially discounted to present value. Demurrage currencies have the opposite effect, it’s much more profitable to spend them on fruitful long term projects.
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