Steve Keen says it will take us 15 years to deleverage this much debt. But a 15 year Depression will mean mass starvation and a lot of wars. The only rational alternative is a Debt Jubilee Now.
I would make government debt illegal. Using his numbers, we would have to cut debt levels by 240% from the current 300% of our 15 trillion GDP. US federal debt is 16 trillion or 100% of GDP. We need to eliminate all state and local debt -another 3 trillion dollars – as well. We also need to eliminate another 15 trillion or so from privately held debt. Keen says we should give every adult citizen a $20.000 credit against their debts. That is less than 6 trillion dollars. I would seize assets from bankers and use it to eliminate all taxes on a family of four for the first 3 years. I would also pay half of all consumer utility bills for 3 years until Tesla technology the government has been hiding from us can cut utility rates even further.
(I posted the above after having written this first essay in a series on debt cancellation plus pension and healthcare reform. You will need both together to systematicall solve this current crisis.)
I cannot separate my healthcare reform plans from my debt cancellation plans because I want to maximize self-determination so financial decisions are removed from the government and financiers in Wall Street and the City of London.
I want to make all government debt illegal and to issue a money that does not pay interest to privately owned banks. Presently, the federal government issues bonds and then pays interest to bankers who create checking account money out of nothing and collect interest from the taxpayers. The US federal government pays 535 billion dollars in interest bonds the banks purchased by creating money out of thin air. If we increase the money supply at the same rate as the growth in the economy, then the ratio of money to goods and services is nearly constant which means price stability. Prices are merely a ration of the money supply to the to goods and services for sale. In the present environment this would mean we could spend 500 billion dollars a year into circulation without risking inflation. If we cancel all government debts and issued a non-interest bearing currency like President Lincoln’s Greenbacks, the current federal deficit would immediately be cut 1.035 trillion dollars.
I want to cancel all government debt which includes state and local government bonds. With no interest to be paid for state and local bonds, we will have to cut state income and sales taxes as well as local property taxes. This will further reduce the tax burden on individuals.
I would follow the advice of Professor Steve Keen and give every adult citizen a $20,000 credit against their debts though I have a better funding source. I would get a lot of money from the bankers as part of a restitution agreement.
I would also like to make government and private pensions illegal. A pension is a promise to pay you a certain amount of money at a future date though this money can be stolen by third parties like banks and brokerages even if the people entrusted with the pension funds are trustworthy. Vulture capital funds have been known to bankrupt firms and to rob the pensioners. City officials have taken bribes and paid billions in fees to Wall Street firms like Goldman Sachs and J P Morgan which bankrupted towns and forced pay and pension cuts.
This is how I would want pension reform to work. Instead of promising you a certain amount of money in the future they will be required to set aside money this year to fund your retirement into an account in your name to be held in a cooperatively owned trust. Those co-operative trusts could offer fire, auto, life and health insurance. Those insurance reserve funds set aside money to pay expected losses would be under the control of people in your community.
I would like those cooperatively owned trusts to also run credit unions that would issue small loans and most credit cards. Commercial banks can sell off most of their buildings to the trusts and reopen after re-capitalization from the federal government as banks who cater to businesses as well as wealthy individuals.
I would also expect the trusts to network and share risks so no one institution is wiped out if the largest factory in town is shut down or several in one part of a state are hit by a tornado. This should include earthquakes. A repeat of the New Madrid earthquakes of 1811-1812 could easily do a trillion dollars in damage. We would need a federally managed 2 trillion dollar fund which would charge insurance fees based on risk for potential losses from quakes, hurricanes. floods and tornadoes.
So where does all this money come from to cancel those debts and to fund civil service pensions? Three sources. One is restitution from criminal bankers and their co-conspirators who have stolen tens of trillions of dollars from us. I would use Steve Keen’s only source as well. In a debt based money system if we create a trillion dollars in credit and destroy simultaneously a trillion dollars in debt, then the total money supply has not grown by one penny. Another source would be tens of trillions of dollars held by government agencies. Please see http://www.cafr1.com as a reference.
I want the co-operative trust funds to replace Social Security retirement and disability funds. Older workers would get ten trillion dollars in income producing stock shares in exchange for the government bonds they paid for and are held in the alleged Social Security trust accounts. The rest would come from their share of the restitution money, I would eliminate the Social Security tax on individuals.
Younger workers would get growth stocks as part of the restitution settlement.. The US government is sitting on advanced technology 30 years ahead of our times. For example, they have planes that fly 40,000 mph and and make round trips to Mars. The plane is made from a material that does not burn up in the atmosphere. That plane could revolutionize the airlines. The plane is mining Mars and that is worth money. It takes minerals from Mars and can smelt them in zero gravity. Glass made in zero gravity becomes as strong as steel. Gold will likely become a near perfect superconductor which means we can take Nikola Tesla’s technology and the advances we made over the last 7 decades to produce electricity in near unlimited amounts at a very low cost. This will cut utility bills and eliminate both nuclear power and gasoline engines. Cheap electricity means abundant water from desalination for farming and lush green zones both of which will counteract in part our ozone depletion.
I have previously noted that the famous basketball player Magic Johnson announced he had AIDS on November 7, 1991 and believe he might have benefited from a Universal vaccines that makes us healthier. A release of this technology will enable us to create new industries and to give us a way to make money other than by participating in mortgage and student loan Bubbles. We were intentionally given a Bubble economy by the bankers when they decided to ship 12 million jobs overseas.
I believe we will have to make these reforms to survive. I also believe the US military will want to avoid World War III and have to mutiny. We are very near a catastrophic economic collapse which MIT estimated will kill at least half a billion people. I estimate that at least 9 million Americans will die of starvation if we do not cancel debts. In the past bankers engineered Depressions and then started wars to solve the disasters they created. We can cancel Wars and Depressions by cancelling debts.
If we cancel wars, we are going to have to open new opportunities for all those veterans. We can use part of that 500 billion dollars a year we will be spending into circulation to fund infrastructure repairs and the building of new hospitals and schools so the states and local governments do not to sell bonds to finance themselves. The rest of the money would fund disability and retirement payments.
I would also give preferential treatment to veterans in those growth industries related to advances in superconductors, zero gravity, materials sciences, free energy, Universal vaccines, computers and communications.
The US military might consider invading the Cayman islands and other island hot money bank havens to seize the assets of the wealthy who believe they have the right to steal from us. They could even invade the British Channel Islands and the Isle of Man to offer a repeal of the 20% VAT (sales tax) and debt cancellation to the people of Britain and Ireland. America will need allies to make debt cancellation work worldwide.
I realize my writings about money are difficult for some to follow so I promise to write a fictional account of a young man being released from prison for a non-violent drug offense. He is released into a new world where there is debt cancellation. And jobs pay a living wages through a negative income tax.
Notes: This article proves Austerity budgets will not work.
The Mathematics Of Austerity: Proving Austerity Never Was Even Intended To Work
Nine Myths And Misconceptions About Money That Can Literally Kill You
Professor Keen, The 11th Marble, Debt Based Money And Fractional Reserve Banking
This article speculates about a possible future in which the US military has to mutiny to stop WW III and to cancel debts to save half a billion people from starvation. There is no army willing to kill 500 million hungry people. At least, none I would want to protect me.
Will Brits Approve An American Military Invasion Of The City Of London?