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In the current system, you have to get money by convincing other people to give it to you. There are plenty of flaws in that which we know all too well, but I

by Natsu 11y ago

In the current system, you have to get money by convincing other people to give it to you. There are plenty of flaws in that which we know all too well, but I couldn't find any description of how "positivemoney" was actually supposed to work, only lists of problems and appeals for donations. There were no descriptions of what it would do to actually solve the issues in the text. Their description of the problems with debt is particularly confusing because it's not clear how they intend to avoid any of those things. There seems to be a lot of concern about numbers shown in bank accounts and no concern for what happens to production of and access to goods and services, which is what's really important. The comments there are more interesting than the main article: http://positivemoney.org/issues/debt/ http://positivemoney.org/issues/debt/

ZenoArrow 11y ago
> "I couldn't find any description of how "positivemoney" was actually supposed to work, only lists of problems and appeals for donations. There were no descriptions of what it would do to actually solve the issues in the text." Thank you for the feedback about the website. I've been attending Positive Money meetings close to where I live, I'll be sure to raise those points at the next meeting I attend. With regards to the plan, I'll try to give a short summary. I would say there are three central ideas, the rest of the details follow on from these ideas: 1. Control over how much money is created would be moved away from those with the power to spend it. 2. The group in charge of creating money would base their decisions on how much new money to make on economic data, for example keeping unemployment low. 3. The money that was created would be debt-free. Interest would not need to be paid back to the creators of new money. I can go into some of the implications, but before then do you have any questions about the three points above?
- Natsu 11y ago
  1) Money is created by giving out loans (fractional reserve banking), so I assume you're talking about some other way of creating money. What, exactly, would you do to the Fed to change governance? 2) I believe that's already a goal, though there are certainly perverse incentives. How does this plan correct those incentives, specifically? I'm looking less for goals and more for action plans. 3) This sounds like bitcoin, but I don't see how you can abolish the idea of debt entirely or even why that's desirable. Say I don't have enough money for food (or whatever). If I don't even have the option of going into debt, I starve? I could see more use for something like debt horizons or forgiveness (i.e. debt expires after a time), but we more or less have this already with bankruptcy, though obviously there are plenty of flaws in that. And then it's hard to get anyone to give you more money because, well, you've already shown that you probably won't be able to pay it back. I do find some fundamental disconnects on what money is, though. It seems like the idea conveyed there is a simple number in a bank account, but in actuality it's far more complex than that. Ultimately the numbers on your account aren't what's important: access to goods and services is. There are also issues with the idea of trying to rate limit everyone from becoming "too rich." You might prevent future Rockafellers, but you'll also get rid of future Elon Musks. It seems more useful to prevent people from falling off the bottom than trying to shave off the peaks at the top.
  - ZenoArrow 11y ago
    > "1) Money is created by giving out loans (fractional reserve banking), so I assume you're talking about some other way of creating money. What, exactly, would you do to the Fed to change governance?" Let's look at this in more detail, as it's clear I haven't explained the plan well enough yet. First, I should clarify the Positive Money campaign I linked to is about money reform in the UK banking sector, but the general ideas can apply equally to the US, even if the implementation details would be different. Okay, so let's look at the situation in the US. Money in the US is generated in two different ways: 1. Federal Reserve generates money for the US government to spend through the sale of government bonds. 2. Banking system generates money through making loans. I'm going to leave the problems with the current systems for the time being, so let's skip to what we would change if we wanted to have a single central body in charge of new money. Firstly, you would take the power to create money away from the banks. Banks could only lend money they had available to lend. This could work through lending out the savings of other bank customers, with customers able to choose how much or little of their money they wanted to invest, and what risk/reward ratio they wanted to have with their investments. Secondly, you would want to change how money reached into the economy. If banks couldn't create new money, who can? Should government take on this role? The risk with giving governments this power is they might end up printing more money than is needed in order to fund extravagant government projects. How do you get around this? If the Positive Money ideas were applied in the US, you wouldn't have the Fed selling bonds. In some sense the Fed wouldn't exist. What you'd have instead is one central, transparently-run group controlling how much new money was created, which sets the budget for the government to spend. All new money would be spent into the economy through government programs. There would be no need to sell bonds, the money would be created without debt (i.e. without the need to pay interest to groups willing to buy government bonds), it would simply be new units of exchange available for use in the economy. Any questions on the above?
    - Natsu 11y ago
      Who is the transparent group? How are they held accountable? Aren't they a de facto part of the government by virtue of being able to govern the flow of money, whether or not they're a de jure part of the government? What is the incentive structure and how does it penalize gamesmanship? How is the group ruled and why can't 51% of it say that we want to create all of the money for ourselves? Aren't people already paid for using their money as loans in the form of interest rates and being able to structure how and when the money can be withdrawn (money market vs. savings, etc.)? What advantages are there to this? How do you get banks to offer that and what does the average guy like me even know about trying to control the money supply? And even in that case, don't you still run contrary to the goal in that those with larger amounts of money still manipulate the money supply by choosing investments?

by Natsu 11y ago

ZenoArrow 11y ago

> "I couldn't find any description of how "positivemoney" was actually supposed to work, only lists of problems and appeals for donations. There were no descriptions of what it would do to actually solve the issues in the text." Thank you for the feedback about the website. I've been attending Positive Money meetings close to where I live, I'll be sure to raise those points at the next meeting I attend. With regards to the plan, I'll try to give a short summary. I would say there are three central ideas, the rest of the details follow on from these ideas: 1. Control over how much money is created would be moved away from those with the power to spend it. 2. The group in charge of creating money would base their decisions on how much new money to make on economic data, for example keeping unemployment low. 3. The money that was created would be debt-free. Interest would not need to be paid back to the creators of new money. I can go into some of the implications, but before then do you have any questions about the three points above?

Natsu 11y ago
1) Money is created by giving out loans (fractional reserve banking), so I assume you're talking about some other way of creating money. What, exactly, would you do to the Fed to change governance? 2) I believe that's already a goal, though there are certainly perverse incentives. How does this plan correct those incentives, specifically? I'm looking less for goals and more for action plans. 3) This sounds like bitcoin, but I don't see how you can abolish the idea of debt entirely or even why that's desirable. Say I don't have enough money for food (or whatever). If I don't even have the option of going into debt, I starve? I could see more use for something like debt horizons or forgiveness (i.e. debt expires after a time), but we more or less have this already with bankruptcy, though obviously there are plenty of flaws in that. And then it's hard to get anyone to give you more money because, well, you've already shown that you probably won't be able to pay it back. I do find some fundamental disconnects on what money is, though. It seems like the idea conveyed there is a simple number in a bank account, but in actuality it's far more complex than that. Ultimately the numbers on your account aren't what's important: access to goods and services is. There are also issues with the idea of trying to rate limit everyone from becoming "too rich." You might prevent future Rockafellers, but you'll also get rid of future Elon Musks. It seems more useful to prevent people from falling off the bottom than trying to shave off the peaks at the top.
- ZenoArrow 11y ago
  > "1) Money is created by giving out loans (fractional reserve banking), so I assume you're talking about some other way of creating money. What, exactly, would you do to the Fed to change governance?" Let's look at this in more detail, as it's clear I haven't explained the plan well enough yet. First, I should clarify the Positive Money campaign I linked to is about money reform in the UK banking sector, but the general ideas can apply equally to the US, even if the implementation details would be different. Okay, so let's look at the situation in the US. Money in the US is generated in two different ways: 1. Federal Reserve generates money for the US government to spend through the sale of government bonds. 2. Banking system generates money through making loans. I'm going to leave the problems with the current systems for the time being, so let's skip to what we would change if we wanted to have a single central body in charge of new money. Firstly, you would take the power to create money away from the banks. Banks could only lend money they had available to lend. This could work through lending out the savings of other bank customers, with customers able to choose how much or little of their money they wanted to invest, and what risk/reward ratio they wanted to have with their investments. Secondly, you would want to change how money reached into the economy. If banks couldn't create new money, who can? Should government take on this role? The risk with giving governments this power is they might end up printing more money than is needed in order to fund extravagant government projects. How do you get around this? If the Positive Money ideas were applied in the US, you wouldn't have the Fed selling bonds. In some sense the Fed wouldn't exist. What you'd have instead is one central, transparently-run group controlling how much new money was created, which sets the budget for the government to spend. All new money would be spent into the economy through government programs. There would be no need to sell bonds, the money would be created without debt (i.e. without the need to pay interest to groups willing to buy government bonds), it would simply be new units of exchange available for use in the economy. Any questions on the above?
  - Natsu 11y ago
    Who is the transparent group? How are they held accountable? Aren't they a de facto part of the government by virtue of being able to govern the flow of money, whether or not they're a de jure part of the government? What is the incentive structure and how does it penalize gamesmanship? How is the group ruled and why can't 51% of it say that we want to create all of the money for ourselves? Aren't people already paid for using their money as loans in the form of interest rates and being able to structure how and when the money can be withdrawn (money market vs. savings, etc.)? What advantages are there to this? How do you get banks to offer that and what does the average guy like me even know about trying to control the money supply? And even in that case, don't you still run contrary to the goal in that those with larger amounts of money still manipulate the money supply by choosing investments?