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The allocation
An account that always receives more money than what is removed will constantly grow. Until recently, money accounts mainly grew through compound interest, with increasing speed (speculative investments are not considered) and so also the total amount of all money accounts. But how long can money accounts grow?

Money accounts are always debts; therefore, accounts could grow as long as it is possible to find solvent debtors. Because money accounts grow constantly as long as the interest is higher than 0%, the society is constrained to get further into debt. For a single debtor, it is possible to pay his/her debt back, but not for the whole national economy in a currency area. Along with the growing total debt in a currency area, the interest burden rises. This causes constraints for austerity and increasing earnings (economic growth) are necessary for the society - in order to pay the interest at least.

But austerity threatens social peace and, by fighting social tensions, the national power inflates, while democratic participation loses importance. Economic growth devastates our livelihoods through the increasing demand on natural resources. As a result of these consequences, everyone - including the rich minority - suffers. What can be done to transform such a destructive economic system into a sustainable one?

The reforms package that is introduced below should help us reach this goal. The main pillars of these reforms comprise a basic income grant, which is financed through a levy of money on account, a demurrage on liquid money, and a land value tax.

Levy of money on account

The more the wealth someone owns, the easier it is for him/her to get richer. In a functional economic system, it would be relatively easy to gain average wealth, but it would be increasingly difficult to keep a certain level of personal wealth, as it is far away from the average. A levy of money on accounts should help us reach this goal.

In fact, from all money on account, a relatively low levy (e.g. 2%/a) will be collected. Most of the levy could be collected anonymously from all bank accounts. This revenue will be redistributed equally among the whole population in the relevant currency area. A household with an average monthly money account has no disadvantage, because it would pay as much as it gets. But because wealth is very unevenly distributed, only about 10% of all households pay more than what they get.

Also, in this one-tenth, there is a huge variation in the burden - it depends if a household is just above the average, or if it owns 1,000 (or even 10,000 times more) than the average e.g. those who can most easily afford automatically pay the most, and those who own nothing get the most. It is not necessary to define who is rich or poor. Marco-economically, evasion from the levy is impossible if the following points are followed.

Demurrage on liquid money

To preclude the possibility that investors escape the levy by hoarding cash, a demurrage on cash must be implemented. There are different technical solutions for such implementation.

A very important additional effect of this demurrage is that it would drive money into long-term investments. Now, the interest rate should perform this function, by rewarding investors to invest money over the long term. But with a low interest rate, this effect does not work properly. The demurrage can replace this function of the interest. Then the interest for a long-term investment is an indicator of supply and demand of credits, and should never be higher than the growth rate of the gross development product (GDP) of the relevant currency area. This means that the interest rate could become negative if the economy shrinks without negative effects, such as social tensions. Then the interest conforms to the market.

A market-conforming interest rate eliminates austerity and constraints on economic growth. Then, the reduced store of value function of money leads to an improved benchmark function. Because the amount of money in circulation and velocity of money can be better managed, inflation/deflation can be avoided.

Basic income grant (BIG), based on natural resources

Speculative investments must be strictly separated from money on account. Profits and losses of speculative investments must affect only speculators. Apportionment of speculative losses to uninvolved third parties should not be possible.

Speculation with our natural resources can be avoided through a basic income grant (BIG) based on natural resources. Here, the actual German property tax will be transformed into a land value tax and, so, income without effort from estates will be minimized. Furthermore, bit by bit, land (in the broadest sense) will be bought from public authorities. These lands will be leased to the highest bidder under the obligation of sustainable use. The earnings of the land value tax and from the lease will be equally distributed among members of the whole population.

These reforms of the land order are the most important among all reforms in this package, since these ensure equal participation in natural resources by all people, including future generations, and could also ensure protection of the natural resources. Here, the average use of natural resources entails no financial disadvantage for the user, because through the BIG, one would get back the same amount which one pays. Then the profligate user of natural resources will pay the frugal user for his/her voluntary restriction of consumption, so as to compensate for his/her prodigality.

Expansion of these reforms to other countries and currency areas

Generally, these reforms could be implemented from a single currency area, without acceptance by other countries. But other countries are welcome to join in, as long as they also launch these reforms and accept the high standards of human rights and environmental protection.

A common currency or accounting unit - between the countries involved - would be useful. Since there is a free market between these countries, goods, services and people could move freely between these countries. Migration driven by poverty would not occur, because automatically money will go to the places where it is needed the most. Then poor national economies would grow, and rich economies would shrink, without any disadvantage.

Through this reforms package, a majority of the population will have financial benefits. It can be expected that a political party that supports such reforms would gain more votes in elections, as long as it is possible to communicate the benefits successfully to the electorate. That is the aim of this calculator.

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