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Central Banking for All: A Public Option for Bank Accounts (2018) [pdf]

greatdemocracyinitiative.org

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Re: Central Banking for All: A Public Option for Bank Accounts (2018) [pdf]

#41

Post by pm90 »

_gx90 wrote: post #36
Spooky23 wrote: post #29

Earlier quoted context omitted.

The horse is out of the barn there. Many forms of credit are basically government lons anyway. The current model of thousands of retail and commercial banks isn’t sustainable. Most bank business could be done at a post office or gas station counter. They exist as a sales funnel.

It is not sustainable when we have an unsustainable and quite frankly insane monetary policy which is being pushed by central bankers. In a sane world credit provision would be decentralised and provided by local banks who are close to the borrower rather than people sitting 1,000 kilometres away. Remember: the most important role of banking is not the provision of payment services (although that is important too), i…

> What has been happening for the past 40 years is not natural, and what banks are doing now is almost entirely driven by central banks and not some natural order resulting from the free market (which throughout history has always selected a decentralised banking system with thousands of small local banks). In my opinion we need to protect what little we have left instead of just yielding to the central planners at the Fed, the ECB etc.

Yes, we've had sustained economic growth and wealth generation to a magnitude never seen before in the history of the world (although not equitable, but that's a different policy problem).

What does it mean that its not "natural"? There is nothing "natural" about the "free market"; its a way we decide to organize resource allocation. There are other ways to do so. Central banks have prevented catastrophic economic failures in the past few decades. I think I like this system better than one which results in "natural" destruction of economy and livelihoods like what happened in the Great Depression.

Re: Central Banking for All: A Public Option for Bank Accounts (2018) [pdf]

#42

Post by RobertoG »

solotronics wrote: post #18
yholio wrote: post #17

Banks as private middlemen providing society with a payment system is an outdated and baroque system. Today, the whole payment system of an average nation can work over a single cluster of computers in the basement of the central bank, there is absolutely no reason not to provide this service for free to all citizens and businesses since it's a critical part of living in a society. The whole superstructure of banks,…

I wonder why everyone is downplaying the moral and technical hazard of having a single entity controlling all the issuance and payments in a country? At least right now if some bank sucks I can take my money elsewhere.

The payments are already controlled by the central bank. How do you think a bank moves money to another?

If the financial system is a tree, the root node is the central bank, the second level nodes are the private banks and in the next level are the business and households.

By the way, this perspective makes clear that banks are not "only another business" as we hear sometimes.

Re: Central Banking for All: A Public Option for Bank Accounts (2018) [pdf]

#43

Post by marcell »

hammock wrote: post #24

So "Great Democracy" is how they are going to wrap this, huh. "This" being helicopter money AKA digital dollars AKA direct fiscal injection into private Americans' bank accounts. Been a long time coming. Who is The Great Democracy Initiative, and where does their funding come from?

It's a think tank: https://greatdemocracyinitiative.org/about/

Lindsay Owens - ... Senior Economic Policy Advisor to Senator Elizabeth Warren...

Suzanne Kahn, Deputy Director - ... Director of the Great Democracy Initiative ...

Julie Margetta Morgan - ... served as a senior counsel to Senator Elizabeth Warren...

Ganesh Sitaraman - ... professor of law at Vanderbilt University ...

Anna N. Smith - ... supports the Education, Jobs, and Worker Power program for the Roosevelt Institute ...

Re: Central Banking for All: A Public Option for Bank Accounts (2018) [pdf]

#44

Post by sbierwagen »

hammock wrote: post #24

So "Great Democracy" is how they are going to wrap this, huh. "This" being helicopter money AKA digital dollars AKA direct fiscal injection into private Americans' bank accounts. Been a long time coming. Who is The Great Democracy Initiative, and where does their funding come from?

https://greatdemocracyinitiative.org/about/

>The Great Democracy Initiative is housed at the Roosevelt Institute

https://en.wikipedia.org/wiki/Roosevelt_Institute

Re: Central Banking for All: A Public Option for Bank Accounts (2018) [pdf]

#45

Post by RobertoG »

jcbrand wrote: post #28
RobertoG wrote: post #5

Earlier quoted context omitted.

The USA is not, in percentage of their economy, the largest debtor nation. The dollar have a special status, because of the importance (economic and geopolitic) of the USA, but that's not what explain the untroubled existence of a big public debt. If that theory was true how they explain Japan?

37% of USA debt is held by foreigners, while it's just about 9% in Japan.

There is not reason why the Federal Reserve can't do the same that the Bank of Japan if they choose so.

Re: Central Banking for All: A Public Option for Bank Accounts (2018) [pdf]

#46

Post by rvense »

_gx90 wrote: post #36
Spooky23 wrote: post #29

Earlier quoted context omitted.

The horse is out of the barn there. Many forms of credit are basically government lons anyway. The current model of thousands of retail and commercial banks isn’t sustainable. Most bank business could be done at a post office or gas station counter. They exist as a sales funnel.

It is not sustainable when we have an unsustainable and quite frankly insane monetary policy which is being pushed by central bankers. In a sane world credit provision would be decentralised and provided by local banks who are close to the borrower rather than people sitting 1,000 kilometres away. Remember: the most important role of banking is not the provision of payment services (although that is important too), i…

> which throughout history has always selected a decentralised banking system with thousands of small local banks

The free market in my country has produced two banks that provide banking to 80% of the population (6M people). It has also more or less killed off cash in favour of credit cards and more recently a single, 100% privatized smartphone app. Accepting cash is still a legal requirement, ie. it is being kept alive by our government and central bank, but it is mostly old people and a few privacy/conspiracy kooks who use it.

Almost all of the private banks also have negative interest rates, at least for deposits over a certain amount. And they are all pushing investment (stocks) as an alternative for savings.

I really do hope our central bank wakes up and starts providing a way to store my savings without gambling them on the stock market soon, as well as a way to transfer money to other people without going through a privatized middle man. There is obviously a need for financial services like loans and mortgages, and even investment for people who want that, but storage and transfer of money should not rely on private businesses who then get to charge money for the use of money - the original definition of the word usury! - but be a publicly owned, publicly accessible infrastructure just like central bank cash was.

Re: Central Banking for All: A Public Option for Bank Accounts (2018) [pdf]

#47

Post by _gx90 »

pm90 wrote: post #41
_gx90 wrote: post #36

Earlier quoted context omitted.

It is not sustainable when we have an unsustainable and quite frankly insane monetary policy which is being pushed by central bankers. In a sane world credit provision would be decentralised and provided by local banks who are close to the borrower rather than people sitting 1,000 kilometres away. Remember: the most important role of banking is not the provision of payment services (although that is important too), i…

> What has been happening for the past 40 years is not natural, and what banks are doing now is almost entirely driven by central banks and not some natural order resulting from the free market (which throughout history has always selected a decentralised banking system with thousands of small local banks). In my opinion we need to protect what little we have left instead of just yielding to the central planners at t…

>Yes, we've had sustained economic growth and wealth generation to a magnitude never seen before in the history of the world (although not equitable, but that's a different policy problem).

There are many ways I'd like to rebut this, but instead I'll just ask for who and how? Technology has improved that is for sure as it is a incredibly deflationary, but what else has improved in your eyes? The vast majority in the U.S. and some parts of Europe while nominally earning more than what they did in the 1960's are in my opinion worse off than before. Minimum wage used to be 40-50 dollars inflation adjusted, and one lower middle-class salary could support an entire family and provide material comforts. I don't see much of that happening now as I and many others believe inflation has completely ravaged the middle-class in the West and is making it increasingly difficult to get ahead.

>What does it mean that its not "natural"? There is nothing "natural" about the "free market"; its a way we decide to organize resource allocation. There are other ways to do so. Central banks have prevented catastrophic economic failures in the past few decades. I think I like this system better than one which results in "natural" destruction of economy and livelihoods like what happened in the Great Depression.

We didn't "choose" to have a free market. A free market is simply the voluntary and spontaneous interaction between free individuals, nothing more, and is entirely natural. Central planning and using coercion to force market outcomes, on the other hand, is definitely not natural.

It is often taught that we have avoided a scenario like the Great Depression almost exclusively due to the enactment of a central bank, but this is outright false and is borderline malicious historical revisionism (in fact many economists, including some at the Fed, believe that the Fed was actually the cause of the credit bubble during the 1920's which eventually burst in 1929). We had periodic recessions before the Fed, but they almost always resolved themselves quite quickly and wasn't near the impact that recessions have today.

Ask yourself this, why is it that recessions seem to get worse and worse and more importantly affect everyone and not just localised sectors in an economy? 2008 was definitely worse than 2001, and the current covid recession is arguably worse than 2008 due to how overleveraged everyone is (a direct consequence of Fed monetary policy).

Re: Central Banking for All: A Public Option for Bank Accounts (2018) [pdf]

#48

Post by pm90 »

AnimalMuppet wrote: post #15

1. I question whether this role lies within the charter of the Fed, and whether they are equipped to do so. 2. I worry that this might threaten the political independence of the Fed, which is something that I think is really important to maintain.

These are both valid concerns. I worry the most about 2; because this would mean that the Government would now have very direct control over the financial records of all citizens, which currently requires a warrant to obtain today.

But it may still be doable; there do exist Federal Agencies that are supposed to be apolitical but we've seen how the current admin has corrupted even non political agencies like the CDC, EPA etc. So ... I don't know. There would need to be better safeguards.

Re: Central Banking for All: A Public Option for Bank Accounts (2018) [pdf]

#49

Post by pm90 »

true_religion wrote: post #20
Mountain_Skies wrote: post #9

Earlier quoted context omitted.

In exchange the United States act like the world's rent-a-cop, keeping shipping lanes open and getting rid of those who stand in the way of global commerce (sometimes violently). Inflation on the reserve currency is more or less a tax in exchange for these services. Who benefits the most? Pretty sure the answer isn't the common people of (insert any country name here, including the United States).

I have a really hard time naming any law that benefited the common people the most. Usually a good law will end up expanding the number of people who are elite, but still give marginal benefit to the commoner. For example, statutory jurisprudence as opposed to rule by nobility, let people who were only good at trading become part of the elite. Previously you had to also have a private army, in order to be elite.

Labor laws greatly expanded protections for the commoners, as did Social Security and other welfare programs.

Re: Central Banking for All: A Public Option for Bank Accounts (2018) [pdf]

#50

Post by _gx90 »

rvense wrote: post #46
_gx90 wrote: post #36

Earlier quoted context omitted.

It is not sustainable when we have an unsustainable and quite frankly insane monetary policy which is being pushed by central bankers. In a sane world credit provision would be decentralised and provided by local banks who are close to the borrower rather than people sitting 1,000 kilometres away. Remember: the most important role of banking is not the provision of payment services (although that is important too), i…

> which throughout history has always selected a decentralised banking system with thousands of small local banks The free market in my country has produced two banks that provide banking to 80% of the population (6M people). It has also more or less killed off cash in favour of credit cards and more recently a single, 100% privatized smartphone app. Accepting cash is still a legal requirement, ie. it is being kept a…

>The free market in my country has produced two banks that provide banking to 80% of the population (6M people).

I don't want to assume where you are from, but almost every developed country has incredibly complex, expensive, and insurmountable bank licensing procedures which make it impossible for startups to compete. That is not a free market, it is a crony capitalist market which shields incumbents.

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