By J.D. ALT Let’s jump ahead to the day (surely it will come, right?) when we realize a general consensus has actually been established that, yes, it IS possible to sustainably pay for collective goods and services by the direct issuing of sovereign fiat dollars―that our federal government doesn’t have to collect taxes in order to have dollars to spend, that it doesn’t have to issue Treasury bonds to get the dollars it needs but imagines it doesn’t have. Now that we’re here in this future moment, it’s clear we have an even BIGGER problem than we had before! Back then the problem was we couldn’t collect enough tax dollars to even begin to pay for all the things we really needed to do for ourselves as a collective society. Nor would we allow ourselves (being “fiscally sound” Americans) to borrow the dollars to make up the difference because we couldn’t mathematically figure out how we’d ever pay the dollars back. And we needed a LOT of dollars. We needed .6 trillion IMMEDIATELY, just to keep our public infrastructure―roads, bridges, transit systems, electric grids, etc.―repaired and functioning. We needed .9 billion AS QUICKLY AS POSSIBLE to develop a Zika vaccine. We needed billion ANNUALLY to build, staff, and operate pre-school learning and day-care centers in every American neighborhood.
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By J.D. ALT
Let’s jump ahead to the day (surely it will come, right?) when we realize a general consensus has actually been established that, yes, it IS possible to sustainably pay for collective goods and services by the direct issuing of sovereign fiat dollars―that our federal government doesn’t have to collect taxes in order to have dollars to spend, that it doesn’t have to issue Treasury bonds to get the dollars it needs but imagines it doesn’t have.
Now that we’re here in this future moment, it’s clear we have an even BIGGER problem than we had before!
Back then the problem was we couldn’t collect enough tax dollars to even begin to pay for all the things we really needed to do for ourselves as a collective society. Nor would we allow ourselves (being “fiscally sound” Americans) to borrow the dollars to make up the difference because we couldn’t mathematically figure out how we’d ever pay the dollars back. And we needed a LOT of dollars. We needed $3.6 trillion IMMEDIATELY, just to keep our public infrastructure―roads, bridges, transit systems, electric grids, etc.―repaired and functioning. We needed $1.9 billion AS QUICKLY AS POSSIBLE to develop a Zika vaccine. We needed $10 billion ANNUALLY to build, staff, and operate pre-school learning and day-care centers in every American neighborhood. We had everything we needed to actually accomplish each of those things―the tools, materials, labor, technology and know-how―but we couldn’t allow ourselves to do them because we couldn’t tax ourselves enough dollars to be able to then pay ourselves to undertake the work.
This was a serious problem we had back then. We had highway overpasses collapsing, we had babies being born with heart-breaking birth-defects, we had children entering grade school without ever having been read to. We also had millions of young adults who wanted to do something useful to earn their living, but instead were camped out in their parents’ basements with nothing to do―except play video games and wonder about how they could pay off their college loans. It was a difficult and frustrating time, and a lot of American citizens were seriously suffering, and angry, and cantankerous―and worried.
But now in this future moment, as I said, we have this even bigger problem. Now that we realize there exists this general consensus about how our modern money system actually works, we have to DECIDE―and agree, as an entire sovereign nation, that we have decided―what our “direct sovereign spending” should be targeted to achieve.
This is a really big mess and horribly difficult. In retrospect, it was so easy NOT to spend sovereign-issued dollars because it meant we never had to agree with anyone. All we had to do was disagree with each other (which, of course, comes naturally to us) because there was no point in agreeing what to spend dollars on if there weren’t any dollars to spend. But now we have to AGREE with everybody, because if we don’t or can’t, the sovereign dollars we now understand we have an infinite supply of will not get spent― nothing will be undertaken or accomplished, and our millennials will continue to camp uselessly in their parents’ basements.
But how can we possibly hope to actually decide and agree? First of all, it will take forever. There will be endless arguments and claims and counterclaims and lawsuits. There will be accusations of “give aways” and cronyism and waste. It’s almost ludicrous to imagine our political system being able to manage this opportunity, to turn it into the ongoing series of positive outcomes which are certainly possible.
Fortunately, however, I just realized there IS a proven, fail-safe, and politically painless way to actually accomplish this otherwise impossible kind of agreeing. It’s called “crowdsourcing,” a term coined by the editors of Wired magazine in 2005. It actually was the process whereby the Wikipedia article that taught me that piece of factual information was produced. It obviously works—in the case of Wikipedia, it works really well. But how might it work in the particular case of the “direct sovereign spending” dilemma we now confront? Here’s a brief outline of ideas:
First, we have to create the list of the possibilities for direct sovereign investments. I would suggest doing this in categories―in the manner of a crowd-funding website, like Kickstarter. The categories might be, for example, Public Infrastructure, Medical Research, Early Childhood Care & Education, Affordable Housing, National Retirement Infrastructures, Art Therapy, Climate Change Mitigation, Addiction Therapies, etc. Those kinds of things. The kinds of things, in other words, that the profit-oriented private sector economy (which we still want to keep going strong!) isn’t interested in undertaking or even thinking about.
Once the categories are established, any “qualified” person or organization can post a “Direct Sovereign Investment Project” (DSIP) proposal in one of the categories. For the moment, we’ll avoid going into details about how a person or organization is “qualified,” or what a DSIP proposal would entail, what questions it would have to answer, etc. To keep things simple, we’ll just say, at this point, that the posted proposals would be explanatory, descriptive, and illustrated in a manner that allows them to be evaluated fairly quickly by lay-people―i.e. by the American citizens who are now going to judge them by a process of crowdsourcing.
To make the crowdsourcing process itself transparently fair, it would be accomplished as follows: Every U.S. social security number is assigned, every month, a certain number of points, to be used during that month. Every social security number gets the same number of points. If they are not used during the month assigned, they disappear―and are replaced by the new points for the following month. The owner of each U.S. social security number, on a completely voluntary basis, can go to the crowdsourcing website and use their points to “vote” for the DSIP proposal, or proposals, they choose. After they’ve cast all their points, they’re done until the following month.
At the end of each month, the top five (or ten or twenty?) point-getting DSIP proposals in each category become qualified for the Direct Sovereign Investment Program. That is to say, they can now requisition payments from the U.S. Treasury for the work described in their DSIP. The dollars to make the payments would be created by the U.S. Federal Reserve in exactly the same way it creates, every day, the dollars to cover the profits in the private sector economy (which it would also, of course, continue to do as well). In other words, the dollars would simply be electronically “issued”—not debited from some tax account, not offset by some borrowing in the bond market.
It’s important to consider that this process is completely apolitical and outside of the federal “budget.” Congress is not involved. Congress would continue to establish tax policy, and approve and appropriate dollars for federal budgets, just like always. Congress would continue to pass the laws of the land, just like always. The Treasury would continue to auction Treasury bonds for people to hold as safe, interest-paying savings accounts. Presidents would continue to give state-of-the-union addresses and propose directions the country should go in, things it should strive to achieve. Politicians and the courts would still debate about whether the federal government can or should regulate this thing or that thing. American politics doesn’t change at all. Let the Hatfield and McCoys do what they will and fight it out.
In the meantime, what’s important is that now there’s this other thing going on as well—this other process whereby American citizens, on a continuing basis, are agreeing to pay themselves dollars to accomplish specific tasks which, in crowdsourcing aggregate, they have decided are important and worthwhile things to accomplish. No one can argue with or complain about the crowdsourcing decisions. No one can claim that the American citizens, in their crowdsourcing wisdom, decided to accomplish the wrong thing. The collective “We”—which, in point of fact, is the entity with the unlimited supply of dollars—begins to achieve a kind of “consciousness” that everyone can, to a certain degree, perceive and participate in. Great and important things could be accomplished. But first we have to actually get to that future moment.