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A Reply to: Is Capitalism the Problem, or Is It Something Else?

By: N Sparling | Published: 1/30/2021

Money from above?Image from the New Yorker (Heller, 2018)
 

After reading the article posted By Rita Jacobs, I must comment on the paragraph noted below:

 

The government could reverse these problems by simply creating its own money and spending it directly into the economy through guaranteed basic income to citizens or by funding of programs necessary for infrastructure and new solutions to combat the climate crisis that looms large in the near future. President Lincoln used Greenbacks – government created money – to fund the civil war. This was the last time that Congress exercised its authority under the Constitution to create money. With the banks and corporations owning our representatives in government, the necessary changes are not going to happen unless people rise up and demand an end to this special privilege and subsidy granted to private banks. There should be no reason why Congress needs to ask the question, "How are we going to pay for that"? Congress has the ability to pay for whatever is needed.(Jacobs, 2021)

 

While the sentiment is genuine, I feel we are forgetting the economic reality.  Just printing money doesn’t create value.  In a myriad of examples, we see governments try to print their way out of debt with new money.  Monetary reform and social equity are two different animals (Rankin, 1998) when it comes to redistribution of wealth.  Universal Basic Income is a long overdue program that has shown an alternative to pure basic capitalism (which we do not have now). 

 

Redistribution is the key, not printing more…  We have seen positive effects of direct support that did not create economic uncertainty.   Japan following WWII is a prime example of what can be done with a system that distributes and creates wealth for the populous.  “Rather than trying to spur private-sector spending through asset purchases or interest-rate changes, central banks, such as the Fed, should hand consumers cash directly.” (Blyth & Lonergan, 2014).

 

Before hitting the bandwagon, let’s make sure the undercarriage is strong enough to carry the load!

 

Just a thought… ; )

 

References:

Blyth, M., & Lonergan, E. (2014). Print less but Transfer More: Why Central Banks Should Give Money Directly to the People. Foreign Affairs, 93, 98.

Heller, N. (n.d.). Who Really Stands to Win from Universal Basic Income? The New Yorker. Retrieved January 30, 2021, from https://www.newyorker.com/magazine/2018/07/09/who-really-stands-to-win-from-universal-basic-income

Jacobs, R. (2021, January 2). Is Capitalism the Problem, or Is It Something Else? - Michigan Green Party [Political]. Green Party of Michigan. https://www.migreenparty.org/Home/Article?ArticleID=203

Rankin, K. (1998). The Grip of Death, a Study of Modern Money, Debt Slavery and Destructive Economics,. International Journal of Social Economics, 26(6), 818–820.

 
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