by Steve Cook
As stated previously one of the four primary duties of government is the provision of a stable means of exchange that facilitates the smooth exchange of goods and services between producer and consumer. It is the right of all citizens to produce goods and services and exchange them with others for other goods and services. The basic form of exchange, the direct swap of goods for goods, is known as barter. However, barter is too cumbersome for an advanced, sophisticated society.
For example, if you want the services of a taxi, what goods or service do you offer the taxi driver in exchange? Therefore, some clever person long ago solved this problem by inventing money to replace barter with a far more smooth and versatile system.
Money is defined as that agreed upon system of tokens or symbols that represent or stand proxy for goods and services, which people exchange among themselves, confident they can exchange them at any time for real goods and services.
Money can take many agreed-upon forms such as notes and coins, cheques and symbols in computer memories .All these forms must be and remain in perpetuity available to The People as and when they wish to use them. It shall be illegal for government or any person or agency to deny this right.
People’s confidence in it is key.
Stability of value is key as this bolsters confidence and enables one to predict the purchasing power or “acquisition- power” of the money one possesses.
It should also be pointed out that one of the primary duties of government is to bring about and maintain an orderly environment in which people can go about their business in safety and peace and stability and predictability of the purchasing power of money contributes to an orderly environment. Allowing or creating scarcity, superfluousness or instability of the means of exchange brings about a stressed and disorderly environment.
Thus we arrive at some key policies:
Withdraw from the banking industry the right to create new money and loan it into circulation at interest.
The sole right to create money shall be restored to the democratically elected government. Having created new money so as to fulfil the economy’s need for a means of exchange, the government shall not be allowed to lend it into circulation but must instead SPEND it into circulation on public works, roads, schools or whatever the government has promised in its mandate it will spend it on.
Thus the creation of new money according to the economy’s need for money will comprise a source of debt-free revenue that will offset and reduce the tax burden hitherto inflicted on the citizenry. This system will mean that in order to increase its revenue, the government will have to do all in its power to help, foster, reward and encourage INCREASED PRODUCTION.
Establish a National agency whose sole job is to calculate the economy’s need for money. An expanding economy will require new money to be created by the government and spent into circulation. The agency shall be empowered to instruct the government as to how much new money to create. The government MUST then spend that new money INTO THE HOME ECONOMY. It may not spend new money on imports. It should be stressed that the Agency shall only be empowered to instruct the government as to how much money to create and spend into the economy. The Agency shall not be empowered to instruct the government as to what to spend it on: that will be a matter for the government’s contract with the People via its mandate and in line with government’s basic duties to provide via practical administration, infrastructure and a safe environment via law, order and justice.
How can the government avoid inflation or recession under this system? Simple: it issues new money in such quantity as to keep the purchasing power of the pound as stable as possible. In other words it avoids creating too little money (and thus avoids the relative scarcity of spending power (money) known as recession or the superfluousness of spending power known as inflation. Any decline in purchasing power means inflation so the government simply eases off on money creation and increases production until the spending-power of money stabilises. Doubtless, errors will be made especially as the new system is grooved in but any errors will be easily rectifiable by a sensible monitoring of the money supply.
Cancel ALL taxes, overt or hidden, including such taxes as national insurance and especially the INCOME TAX, which penalises production and is probably the most iniquitous tax known to man. Thus, ALL citizens shall keep, to spend as they will, ALL the money they earn.
Replace the current complex and onerous web of taxation with a SINGLE PURCHASE TAX levied as a simple percentage at the point of sale.
Thus, government will have a second source of revenue alongside money creation touched upon above.
The current complex system of taxation is expensive to administer and serves to hide from the citizenry exactly how much tax they are paying overall. The purchase tax will enable all citizens to see clearly how much tax they are paying and thus how well the government is running the economy.
The purchase tax will also remove the iniquities of tax avoidance that enable the rich and powerful to cheat the current system whilst dumping the tax burden more heavily on the ordinary citizen.
Some will of course seek to avoid paying the purchase tax by buying goods and services abroad. This would encourage imports and discourage/penalise home production. Therefore in order to keep the playing field level, imported goods shall be subject at point of entry into the country to a purchase tax dubbed “import tax”. This tax will be set at the same rate as the purchase tax.
It should be noted that the current system of money creation by the banking cartels, in which they create money out of nothing and lend it into circulation at interest, means that the interest on these loans comprises a tax or rental charge that the citizenry pays for the use of its own means of exchange. Under the new system that tax will also cease to be.
The purchase tax will be collected at local (county or district) level. The tax revenues shall be then apportioned in part to local government and in part to central government for the financing of their various services according to a fixed percentage. In other words, having collected the tax, the local authority will then send a fixed percentage thereof to central government.
The government can then work to REDUCE the purchase tax by sound management and by increasing its other source of revenue: new money and can only do so by helping, fostering and encouraging the increase of production.
Goods or services not produced or impossible to produce in the home economy shall be exempt from the import tax. Thus bananas or coconuts that cannot be grown in the UK would not be subject to an import tax but apples, which can be produced locally, will be subject to an import tax. The goal of the import tax will not be to stifle imports but simply to give home producers every assistance on home soil.
The government shall henceforth be forbidden to borrow money (and thereby pass the cost thereof on to future generations) and can only finance its operations by the above two methods of acquiring revenue. This will also help prevent profligacy or imprudence from being hidden by borrowing to finance it.
NOTE the government will have at its disposal, in all, THREE sources of revenue: the two sources mentioned above plus a third source, which is the levying of tolls and charges where possible on the services it provides. This we call the Pay-as-you-use (PayU) system. Clearly the provision of some services such as pavements and street lighting etc cannot be financed by a PAYU system and will have to be financed by purchase tax revenues or the revenue provided by new money (see above) but some services could be financed or part-financed by affordable tolls and charges, such as libraries, sports facilities and water and energy supply etc. So a government will have these three sources of revenue to play with and how it does this will be a matter for an elected government’s manifesto and its contract with the People.
EARLIER IN THIS SERIES:
PART ONE -PEOPLE’S MANIFESTO
PART TWO – FIRST -SOME BASIC PRINCIPLES
MORE TO FOLLOW
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