by Charles Pinwill
Democratic Money Creation (DMC) is a proposal to change the
way in which money is created, owned, and distributed.
Over 95% of modern money is now in the form of bank
deposits. Less than 5% is in the form of notes or coins made by the mint.
The 95% is created by our banking system. This is done by
banks making loans which, when spent, become someone’s bank deposit. Since no
one’s deposit is ever reduced to make a loan, the amount of deposits is
increased by the amount of new loans.
When deposits are used to repay loans, this cancels out
deposits, and reduces the money in existence.
This system has several
At the point of creation, all
money is the property of the banking system.
Since all new money is created
as loans, all of society’s money is owed to the banks as debt. The
community has no money at all in net
As the cost of consumer
production includes the incomes paid to us to
plus capital costs and overheads, our incomes alone cannot buy it all. If
all consumer products are to be sold, the money supply must be regularly
increased to enable this. All countries must increase the money (debt) in
existence each year by at least 10%, and they do.
This results in burgeoning
debt. In trillions, America’s debt is $90, and the world’s is $200.
Costs and prices must forever
this increased debt. Inflation is the consequence, as is widespread
Because banking elites have the power to costlessly create
our money and own it, their influence over the media, education and public
policy in all areas is enormous, and usually decisive. If political democracy
struggles against this, it is usually ineffectual.
So, what does DMC suggest?
That a National Credit
Authority be established with court-like powers to determine the amount of
any needed money supply increase. This would be done by measuring the
national economy with National Profit and Loss Accounts and Balance
Sheets, in the same way that companies do these accounts.
This NCA would be empowered to
create money to the extent that a deficiency of consumer purchasing power
exists, and to distribute this money as a national dividend
the basis that all people would
receive an equal share.
Banks would continue to finance
production in the normal way, but would no longer be permitted to finance
consumption, as this would be done through the National Dividend.
This would mean that:
The National debt would no
longer increase every year. Indeed, the national dividend’s debt free
funds would be available to progressively pay it down.
Debt charges in prices and
taxes would atrophy thus reducing costs and prices.
Mortgage and debt repayments
would no longer dominate our lives and public policy.
In receiving “money votes” on
the same basis that ballot papers are distributed, we would add economic
democracy to political democracy.
The mega-funding for the Great Reset would be disabled.
The increase in personal sovereignty which DMC offers, while
beyond the reach of so short an explanation, would bring cultural, social,
economic, and political benefits which, while perhaps dimly perceived at
present, will progressively be available to ourselves and future generations.
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