This is a copy of the letter I originally emailed to the President, several key Congressmen and women, and news agencies, with no response. I am now sending it out to everyone I can, hoping it won’t be discounted before someone qualified will take a moment, to investigate and evaluate the concepts. For all our sakes, I pray someone will have the vision.
Granted, these are radical ideas, but radical measures are needed, and quickly.
To the President, or anyone who can reach him,
I previously wrote to you, about some ideas I have to restore a robust economy, hoping you could evaluate them. The President keeps saying he wants everyone’s ideas, but so far, no response to mine. Since then, in my economics history reading, I think I may have found something, a method that’s been used successfully to stem economic collapse in other countries, and, in several banking circles, during our own Great Depression.
Basically, it’s the introduction of a temporary, substitute currency, like a scrip, that the government can give out freely to its people, to spend like the US dollar. This idea was originally detailed in 1933, in the US, by Irving Fisher, the prominent economist. Silvio Gesell, a German “quasi-economist”, used one such currency, the wära, to revitalize Schwanenkirchen, a Bavarian coal mining village, in 1931. It worked and prosperity returned to them, after which, they phased the wära out. Here’s a link to a website about it:
Apparently, Roosevelt also considered the use of a national scrip, but opted for Federal Reserve notes instead. This was a mistake that may have prolonged the depression, but some bankers saw the potential of scrip, and there were locally introduced versions that worked very effectively, and quickly, within their small circles. These circles expanded as the word spread of new prosperity, and may have actually been more instrumental in pulling us out of the depression, along with Roosevelt’s measures, which included a price freeze, to stem inflation. The name “scrip”, which originally had been a private currency used by company towns, until federal law outlawed all such tender, may put some people off, but I believe a nationally used version would effectively stop the meltdown. Below is a link to a historian’s EBAY website. His narrative details Roosevelt’s actions. Contacting him directly to pick his brain would be a good idea. He sells original notes of scrip on EBAY.
So how could we do it here?
Introduce a scrip, a temporary proprietary currency, or substitute new money, which the President would decree to be legal tender, like cash, until the emergency eases. The government would distribute it directly to the people, free, to spend at the stores, for food, bills, vehicles, construction, mortgage payments, wherever. Each household, every homeless family, would get a designated amount each month, according to their individual needs. The only requirements would be that they spend it that month, to get the next month’s allotment, and they must be actively, and verifiably, seeking their own new income sources. The ripple effect would immediately stop the meltdown and kick start the economy. An agency (more new jobs!) would be needed to administer and monitor this process.
People would love it, and the President who augmented it: free money!
The new money wouldn’t replace the existing, but work side-by-side with it. People could use either one, but they must spend their Scrip allotment every month. It would only be for the US, not a world currency, and, as things picked up again, we would phase it out, back to the greenback. It would also stop inflation and devaluation of the USD, and it would stop the need to borrow trillions from China, or other scary sources. As the situation improved, the scrip flow would eventually begin to terminate at the banks, for exchange to the Fed for USD again.
This brings me to the second part of the plan: the banks. Instead of inundating them with cash, hoping they’ll decide to ignore the present freefall and use the funds to begin lending again, we need to federally guarantee the loans, at the bank-to-bank, and bank-to-borrower levels. With the loans all federally guaranteed, and the infusion of the scrip making people flush with cash, the banks would free up credit, and the money would start flowing again.
I don’t think I’m off base with this. Please, please, for all of our sakes, check out the above websites about this method, and share these ideas with others for evaluation. The positive changes would come fast, but we must act fast. It should be becoming evident that, because of the speed and scope of our economic collapse, the present government bailouts will be needed monthly, and only temporarily ease the symptoms, not the cause. We need to address the root of the problem: the flow of money. Bail us out at the root, the American people, and don’t use USD as our working currency, until our economy is better again.. This will avoid major inflation and deflation, possibly simultaneously. With scrip, who cares if there’s some inflation, it’s a discard after we’re back in the saddle again.