Why We Need Modern Monetary Theory (MMT) and Why It Needs Universal Basic Income (UBI)

Going from “can we pay for it?” to “can we resource it?” is the mindset shift needed for a human-centered resource-based economy built with a mindset of abundance on a foundation of human rights.

In the beginning, man said, Let there be money: and there was money. Centuries later, on March 27, 2020, the United States passed into law the Coronavirus Aid, Relief, and Economic Security Act and with the stroke of a pen, over $2 trillion was spent without first taxing or borrowing from anyone. It included $1,200 stimulus checks for adults and $500 for kids. Another $900 billion was spent without first taxing or borrowing from anyone nine months later as the Consolidated Appropriations Act. It included $600 stimulus checks per adult and kid. Another $1.9 trillion was spent without first taxing or borrowing from anyone another three months later when a third stimulus check went out thanks to the American Rescue Plan Act, this one for $1,400 per adult and kid. It was followed in July by the first of six monthly payments of $250 to $300 more per kid. All told, within one year, $1 trillion in cash was sent directly to the bank accounts and mailboxes of about 85% of Americans, no strings attached.

We didn’t “pay for” any of this. We just did it. None of it was made possible by taxing or borrowing from anyone first, and that’s the big lesson I believe everyone needs to take away from the COVID-19 pandemic besides the effectiveness of direct cash payments and dangers of politicizing science and public health. Americans needed money, so it was created out of nothing. The thing is, that’s not new. It’s how money works in any country that issues its own currency.

Here’s the now less secret truth: the US government is not funded by taxes. It creates its own currency out of nothing. It spends it into existence. Taxes then remove money from the money supply to maintain its value (among other things). For the cryptocurrency enthusiasts out there, the US dollar utilizes a mint and burn model. The eater address is the IRS.

In other words, yes there is in fact a “magical money tree.” All money is a human invention and there is in fact no limit to the amount of money that can be created. There is however a limit at any point in time to the goods and services that can be exchanged for money at that point in time, and that real and always changing limit depends entirely on the amount of natural resources, human labor, machine labor, knowledge, skills, time, energy, etc. that is available to meet demand with supply at that point in time. That’s what really matters – what money is meant to measure – not money itself. Money is only a human construct created to very roughly measure the stuff it’s traded for, and taxation is important for a multitude of reasons, but making spending possible by a currency issuing government just isn’t one of them. This is the heart of what’s come to be known as Modern Monetary Theory (or MMT).

Conventional thinking says that the US government first needs to obtain money from taxes or borrowing in order to spend it. MMT says that the government first spends money, then it taxes or borrows money to remove it from circulation. That may seem like a somewhat silly difference, but I’ve come to believe it’s actually an extremely important one, and one that once adopted, is the most likely path to a better future that includes a truly Universal Basic Income — like Alaska’s annual dividend but monthly and larger — that’s the highest it can be without surpassing inflation targets.

I’ve never been against MMT as a descriptive theory, but for years I’ve just seen it as an alternative way of looking at federal spending and taxes, but having just lived through the year 2020, and having read Stephanie Kelton’s book The Deficit Myth, I’ve come to believe MMT may just be the key to achieving UBI, and perhaps even the only way.

Now to begin this MMT-UBI journey (which I admit will take some time to fully explore) let’s first imagine a very special bathtub…

The Magical Bathtub

Imagine a bathtub where our goal is to fill the tub as close to the brim as possible without spilling over onto the floor. Water flowing into the tub represents government spending and water flowing down the drain represents taxation. The tub itself represents the economy and an overflowing tub is inflation. If more money flows into the tub than down the drain, the water level rises. That’s what running a federal budget deficit looks like, because a deficit is spending more than taxing, and the government’s deficit is the private sector’s surplus. A balanced budget would be matching the rate of water flowing in with the rate draining out, which would keep the water level steady where it is. If the tub is full, that would make more sense, but if it isn’t, it makes sense to either increase the flow rate, or decrease the drain rate to fill the tub all the way.

Curious for the ending?  You can read further  on https://vocal.media/theSwamp/why-we-need-modern-monetary-theory-mmt-and-why-it-needs-universal-basic-income-ubi

or buy the book

or download the pdf: Why We Need Modern Monetary Theory (MMT) and Why It Needs Universal Basic Income (UBI) _ The Swamp (PDF)

What is happening with money?

The following program deals with a controversial subject. The theories expressed are not the only possible interpretation. Viewers are invited to make a judgement based on all available information. Everyone watching now please share this link via the sidebar to any and all of your social media channels. This is important. Simply ask your friends and family to give us 15 minutes. That’s all we ask.

Transcript:
That is the foundation of human control. This cult is constantly dictating when it goes up and when it goes down, but no one ever talks about it. Why? This is fundamental and I never hear any political party talk about this. I don’t hear the wokers talk about it. I don’t know any of them talk about. This cult has achieved economic dominance on an ever more extreme scale, thus dominance of the choices of freedom of the population by creating a situation in which they can lend money that doesn’t exist, called credi/t to the population and then charge interest on it. and taking as collateral wealth that does exist, land resources homes businesses. and if the population doesn’t pay back, the credit money that is a figment of the imagination created out of nothing basically, then the people issuing the credit, ie the banking system owned by the cult, gets your wealth that does exist. And through the generations this exchange of non-existent theoretical money called credit, for real wealth and resources, has sucked the wealth of the world into the hands of the few.

And through that dominance of financial control, they dictate the choices or lack of them of the population. And they dictate the choices of black people, white people, asian people, all different kinds of people and sexualities. Why are government’s borrowing money from private banking systems? And the population paying interest upon that borrowing? Why aren’t the government’s issuing their own currency interest free? And lending it to the population interest free to go about their commerce and go about their lives, creating opportunities and choices that they wouldn’t otherwise have.

Why are we allowing a privately owned, in the end by a tiny few people, banking system to issue non-existent credit money and then be able to take the wealth of the people, if they don’t pay it back. And there’s another thing on this the same people that lend the money the credit dictate if the economy goes up, or the economy goes down. Thus they can lend lots of money, and there’s a boom, and then they can crash the economy and people can’t pay back the loans that they took out. So what happens then. Those that have lent the non-existent credit and crashed the economy, can then suck up all the wealth that was put as collateral for the non-existent money.

Now what we’re going to see in relation to what i’ve just said is a frenzy of repossession of properties. Are frenzied as the cult, which owns the banking systemm, sucks up more of the wealth and resources of the world because of a pandemic hoax that crash the world economy. Which the ones that control the banking system were behind. Because the same people the same cult that’s behind the banking system.

If people want to focus on how we get our freedom back then private banks lending money at interest non-existent money called credit has to end or at least it has to be an add-on. We need a systemm not a communistic system, but a system where governments are able to issue the currency interest-free. Because you say to people how is money created? and they say oh the government does it well almost entirely it doesn’tm money comes into circulation by private banks lending creditm and when they lend lots of credit then there’s the opportunity for lots of economic activity and when they squeeze the credit what did they say in 2008? “A credit crunch”. when they squeeze the credit they’re taking out of circulation units of exchange, and economic activity cannot take place and so we go into a recession.

And this cult via the banking system of by this system is constantly dictating when it goes up and when it goes down. Cuz what their masters are making it go up and down so they know when it’s going up and down and that an idiot could make vast amounts of money if you know when the economy and the stock market’s going up or when it’s going down. And this is how it works. Changing the banking system, taking control of our economic lives our livelihoods our choice out of the hands of private banks that would change everything on the level that we are talking about.

But no one ever talks about it politically why? Because britain is a one-party state, we have a one-party state labour party. A one-party state conservative party, in america you have a one-party state republican party, a one-party state democratic party, and these one-party groupings all these major political parties are ultimately controlled by the same network that controls: the banking system. And because of that the politicians controlled by those people are not going to challenge the banking system controlled by those same people.

What this whole marxism tyranny wants to sell is that everyone should be equal. But what does that mean? Everyone should be equal. I would like to play in goal for Manchester United. i’m 68 and I have an arthritic hand, ain’t gonna happen. So what i’m gonna do is something that I can do. And i’m not going to complain that i’m limited and i’m not going to say that i’m disabled and that it’s the system that means I can’t play for Manchester United. I look at the situation i’m in and I achieve or seek to achieve on the basis of who I am. I’m a unique individual, so I will achieve in a unique way.

This idea that everyone must be the same it’s a race to the bottom. What we need is equality of opportunity, so that someone’s race or background is not a block on their ability to achieve what they want to achieve as long as they have the ability to do it, we all have different abilities and different gifts. But what we don’t want surely is equality of outcome. because that’s a race to the bottom. Give people opportunity and then what they do with that opportunity is entirely up to them. They might say no i don’t want to take the opportunity I want to go walking India. All right fine well you know enjoy. But just because you go walking in India and this person achieves something with their opportunity, doesn’t mean that they’re privileged. It means they they just took the opportunity and direction of life that was different to yours. To create this equality of opportunity, it’s to create a massively fundamentally more fair economic system, where wealth is shared out. Doesn’t mean everyone gets the same, because you know you take motivation and incentive out of life. It’s a race to the bottom, because you know well no matter what I do it’s still the same, you know.

So incentives a very important thing. But what has happened in the system that we have is that it’s been completely hijacked financially by a tiny few people. And I said earlier that freedom is actually choice. The more choices you can make the freer you are, the fewer choices the less free you are. And what dictates the choices in the system and the world that we have today? It’s money.

Overwhelmingly, not always, far from always but it is central money. So if you’re the cult and you want to take people’s freedom away then you take their access to money away. Because you’re taking their access to choice away. It’s the private banking system issuing non-existent theoretical money called credit. That’s the whole basis of it. And if I demanded that someone take from me money that doesn’t exist or I tried to give people money that didn’t exist telling him it was real i’d get fricken arrested. But banks can make loans have credit which has never, does not, will never exist, except in theory, and they don’t get arrested they become the 1%. And that’s how they’ve done it. The number of people that are driving this is tiny I mean it’s ridiculous. At its core you’d get it in a room.

You know people say you know what we’re gonna do? Well you can look for a solution and you know where does solutions usually lead? They lead to more problems that need more solutions. You see it all the time now what’s the best way to remove a problem. To remove the frickin cause of it. You take away the cause of a problem don’t find a solution to it. Take away the cause and the problem must cease to exist because its cause has been deleted. And i’ve talked about the cause length today.

It’s human acquiescence to or authority. Authority that tells you what to believe and what to do and wants to give you consequences for not believing it and doing it. You acquiesce to that and you’re giving your freedom away. Acquiesce to that collectively humanity gives its freedom away to a tiny few people.

For a Central Bank serving the citizen

 7500 euros: this is the amount that every citizen of the euro area would have received if the European Central Bank (ECB) had distributed directly to the population the 2.6 trillion euros it has preferred to inject into the financial markets since Four years.

This shocking figure, revealed by the NGO Positive Money Europe, poses a simple and radical question: would not monetary policy be more effective if the newly created money was directly paid to European households? Continue reading “For a Central Bank serving the citizen”

Basicincome & EuroDividend as sociopolitical pillars of the EU and its member countries

BASIC INCOME AND THE EURO-DIVIDEND AS SOCIOPOLITICAL
PILLARS OF THE EU AND ITS MEMBER COUNTRIES

Interdisciplinary Conference at the University of Freiburg, Germany October 11-12, 2018

In Europe, the public debate about a universal basic income (UBI) is usually a national one. In recent years a European version of a UBI has attracted more and more attention – primarily pushed by the suggestion of Philippe Van Parijs titled a “Euro-Dividend”.

This conference aims to shed light at pros and cons of a EU wide UBI regulation and its relation to national approaches from an interdisciplinary perspective. Both UBI approaches shall be analysed and discussed with respect to justice, economic and migration effects, legal aspects, creation of
solidarity in the EU, and political viability. On the first day, the conference will address general issues about UBI while the schedule of the second day contains EU-related concepts just like the Euro-Dividend.

CALL FOR PAPERS Continue reading “Basicincome & EuroDividend as sociopolitical pillars of the EU and its member countries”

  Helicopter money and a basic income

How the Bank of England might create new money to pay into the economy as  a Basic Income

In televised debates during the recent general election campaign, several politicians made reference to there being no “magic money tree”. When in fact, there sort of is. This, together with a survey in 2014 that showed that only one in ten MPs know where money comes from, exposes a huge education gap amongst our most powerful elected officials, on one of the most important aspects of our economy: money. Continue reading ”  Helicopter money and a basic income”

Can the ECB create money for a universal basic income?

Funding basic income through taxation is costly. At the same time, low consumer demand is a major worry. The European Central Bank could kill two birds with one stone by giving money directly to citizens.

Finnish social welfare agency KELA’s basic income experiment has got plenty of attention in Finland and elsewhere. This is not surprising: in recent years various proposals for a basic income have been submitted by a growing number of scientists, politicians and non-governmental organizations in several countries. Continue reading “Can the ECB create money for a universal basic income?”

ECB confirms ‘Helicopter Money’ is Legally Feasible under Conditions

Mario Draghi first discussed the notion of ‘helicopter money’ in March 2016, saying “it is an interesting concept.” Since then however, the head of the European Central Bank repeatedly stated that the idea that central banks could distribute money directly to citizens, was fraught with accounting-wise, technical and legal complexity.” However the ECB had declined at several occasion to specify in detail which were the foreseen legal obstacles.

In a letter dated 29 November to Spanish MEP Jonas Fernandez, the ECB finally provides clarifications. And our interpretation of the letter lead to the conclusion that those legal issues are very weak and solvable.

The QE for People campaign praises the ECB for finally providing this legal clarification. “By providing a detailed answer on this point, the ECB acknowledges its understanding of our proposal, which many economists say could bring significant benefits to the economy” said Stan Jourdan, QE for People campaign coordinator.

Helicopter money must be designed as monetary policy

Continue reading “ECB confirms ‘Helicopter Money’ is Legally Feasible under Conditions”

MEPs call on Mario Draghi to consider helicopter money

Eighteen members of the European Parliament have signed an open letter to the Head of the European Central Bank, emphasizing the need to consider “helicopter money” — a proposal to distribute money directly to people as a citizens’ dividend.

Some advocates argue that a basic income should be financed by “helicopter money” — the printing of new money by central banks for direct distribution to individuals. To be sure, the policy is contested, even among basic income supporters. Many suggest redistributive policies to fund a basic income, as opposed to the creation of new money, and some have vocally opposed helicopter money. Continue reading “MEPs call on Mario Draghi to consider helicopter money”