To Fix the Existing Economy

as ‘easy’ as 1–2–3

Photo by Alexander Grey on Unsplash

The way to do it is a new monetary paradigm: a new approach to creating currency. It could be administered (with no discretionary authority) by the central bank, the central government, or a new entity established for that purpose. [In the U.S. the Social Security Administration could be extracted from government and repurposed that way: in the paradigm I developed (below) it would otherwise no longer be needed.]

Step 1: create money as needed — without involving debt in any way — to fund a democratically distributed income, i.e., one for which any (adult) citizen could become eligible. (To make it something a person could actually live on, base it on the existing median or average income — or even per capita GDP.)

Step 2: create money as needed — without involving debt in any way — to fund all government (from local to national) from now on. (Base it on the current per capita rate of total government spending.)

Step 3: create a mechanism to return money to the administrator of the currency (to prevent an infinite accumulation of money in the economy — still with no discretionary power on its part).

[added 9/29/25] While that is a vast amount of money that is regularly being created (the reason a mechanism for withdrawing money from the economy is necessary), it is, for any period of time, absolutely limited — by demographics: in the case of the income, it is limited by the number of people eligible for it (and availing themselves of it); in the case of the funding of government, it is limited by the population of the nation (including both citizens and permanent residents who are not citizens). Being limited (together with a mechanism for withdrawing money from the economy) gives the money economic viability: it serves the same economic function that having the money ‘backed’ by gold (or any other substance) does. At present, the amount of money that can be created is limited only by the amount the economy can absorb; inflating ‘values’ of assets makes that amount effectively infinite — with price inflation in consumer goods, along with other economic dislocations, as ‘collateral damage’.

I have developed one possible way* to accomplish that economic change. Obviously, with many people’s incomes (and benefits) increasing and all people’s taxes decreasing, the transition to the new paradigm would have to be a gradual process to avoid price inflation. As a final result . . .

1. the economy would be stable and self-regulating;
2. there would be no unemployment or poverty for any adult citizen (at any level of total output);
3. taxes and public debt could be eliminated (as long as spending by government anywhere did not exceed the allotted amount);
4. sustainability would be all but assured (as the amount of currency, therefore consumption, therefore total output would be governed, passively but effectively, by demographics).

In this paradigm, in addition to leaving the existing system intact, none of that requires redistributing anything, imposing any cost on any employer, imposing any limit on income/wealth, or requiring people to act any particular way, such as altruistically or selfishly, cooperatively or competitively, etc. Nothing in the paradigm precludes implementing measures via the political process for the further benefit of people (as workers or consumers) or the natural environment (you know: that thing on which human life depends).

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*Linked article is here in Medium, but not — for the benefit of any ‘guest readers’ — behind the paywall.