New Money is Needed to Close Income Gaps

By MARK ANDERSON

The June 5 Swiss ballot proposal to introduce a guaranteed basic income—an unconditional allowance for everyone in that neutral Alpine nation—was defeated largely on the basis of the Swiss government’s claim that the idea would “cost too much.”

Reuters added: “Swiss voters rejected by a wide margin ... a proposal to introduce a guaranteed basic income for everyone living in the wealthy country after an uneasy debate about the future of work at a time of increasing automation. (Emphasis added).”

Yet, the plutocratic Financial Times acknowledged, “The Swiss may have just voted to reject a proposal for a guaranteed minimum income ... but that hardly means the idea is dead. Pilot projects and feasibility studies are in the works across the developed world, from the Netherlands [and Finland] to California. In Canada, the federal Liberals, along with governments in Ontario, Quebec and Alberta have expressed interest in the concept.”

However, the nearly universal misunderstanding of money is a major obstacle. For too long we’ve allowed a small coterie of bankers and “court economists” to hold the keys and “tutor” us. So, it’s time for total openness.

First, regarding the claim that the Swiss proposal would’ve been too costly, what’s entirely omitted from the discussion is that the proposal (and similar proposals elsewhere) appear to call for re-distribution of existing money—taking money from certain sectors through taxation and re-allocating it to the people at-large.

The implication is that the money supply is basically static and that re-distributing limited funds would require tough budget decisions—sparking tax hikes and associated spending increases in several areas; hence the claim “costs too much.”

But a successful basic-income plan can and must be based on the creation of new money, or distributism, not on reshuffling existing money, which is re-distributism. That’s the “state secret” that no one wants to touch.

The issuance of new money needs to happen to overcome the huge “gap” between today’s paltry purchasing power and the massive mountain of debt and the towering totality of prices on all available goods and services. We have full stores and empty wallets. (Ideally and importantly, governments should reclaim their interest-free money-creation rights and forbid private central banks from creating money any longer).

Given such matters, the social credit movement—rarely mentioned in basic-income circles—took root in the early 20th Century via Scottish engineer-author C.H. Douglas, followed by American academic-author Gorham Munson, among others. As it became widely evident that a basic income to supplement employment earnings was (and still is) needed, social credit proponents were quick to explain their concept of introducing new money to bridge that gap and provide a universal allowance with new money.

The amount of money would be equated with production data so empowered consumers could boost overall demand and liquidate inventories, which keep factory orders flowing properly. Yet the amount would not exceed the quantity of available goods, thereby avoiding a type of price inflation.

Our price increases mainly come from the cost-push process, where excessive taxes, interest charges and operational costs are pushed on to the end consumer—meaning that “printing too much money” is not the inflation-causing bogeyman that so many fright artists claim it is.

This is especially important to point out, given that the world largely operates on an all-borrowed money supply, wherein new loans are constantly taken out to pay off old ones, public and private—a vicious cycle which stacks debts ever higher and depletes purchasing power via “interest drain.” Price increases and money shortages have become institutionalized.

As for the automation paradox, social creditors and other visionaries for years have spoken of the “wage of the machine,” meaning that we must cancel the rule that income can only come from jobs via human labor.

Instead, under social credit, a basic income would come in the form of a regular dividend paid to the population at-large calculated, as noted above, on production output—regardless of whether that production required human labor or whether it was largely or completely automated. That critical distinction means increased leisure time along with better income, which makes automation a friend, not a foe.

Other social credit components would stabilize and lower prices. Thus, increased leisure, much more spending power and lower prices are all within reach, which could foster a renaissance in human thought and action, because the unforgiving yoke of the obligatory “work state” would be lifted off our backs.

Put another way: We were born to do more than just go to work, pay bills and die.

Mark Anderson is a veteran journalist who divides his time between Texas and Michigan. Email him at truthhound2@yahoo.com.

From The Progressive Populist, July 1-15, 2016

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