FX MONETARY POLICIES


across the board would be with a UBI.


Why a UBI Need Not Be Inflationary


In a 2018 book called Te Road to Debt Bondage: How Banks Create Unpayable Debt, political economist Derryl H e r m a nut z proposes a c ent r a l -b ank- issued UBI of one thousand dollars per month, credited directly to people’s bank accounts. A s su m ing this payment went to all US residents over 18, or about 241 million people, the outlay would be close to $3 trillion annually. For people with overdue debt, Hermanutz proposes that it automatically go to pay down those debts. Since money is created as loans and extinguished when they are repaid, that portion of a UBI disbursement would be extinguished along with the debt.


People who were current on their debts could choose whether or not to pay them down, but many would also no doubt go for that option. Hermanutz estimates that roughly half of a UBI payout could be extinguished in this way through mandatory and voluntary


72 FX TRADER MAGAZINE January - March 2019


loan repayments. Tat money would not increase the money supply or demand. It would just allow debtors to spend on necessities with debt- free money rather than hocking their futures with unrepayable debt.


People who were current on their debts could choose whether or not to pay


expenditures. Tis money, too, would not be likely to drive up consumer prices, since it would go into investment and savings vehicles rather than circulating


in the consumer


economy. Tat leaves only about one-sixth of payouts, or $500 billion, that would actually be competing for goods and services; and that sum could easily be absorbed by the “output gap” between actual and forecasted productivity.


According to a July 2017 paper from the Roosevelt Institute called “What Recovery? Te Case for C o n ti n u ed Ex pa nsiona r y Policy at the Fed”:


them down, but many would also no doubt go for that option. Hermanutz estimates that roughly half of a UBI payout could be extinguished in this way through mandatory and voluntary loan repayments. Tat money would not increase the money supply or demand. It would just allow debtors to spend on necessities with debt- free money rather than hocking their futures with unrepayable debt.


He estimates that another third of a UBI disbursement would go to “savers” who did not need the money for


"GDP remains well below both the long-run trend and the level predicted by forecasters a decade ago. In 2016, real per capita GDP was 10% below the Congressional Budget Office’s (CBO) 2006 forecast, and shows no signs of returning to the predicted level."


Te report showed that the most likely explanation for this lackluster growth was inadequate demand. Wages have remained stagnant; and before producers will produce, they need customers knocking on their doors.


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62  |  Page 63  |  Page 64  |  Page 65  |  Page 66  |  Page 67  |  Page 68  |  Page 69  |  Page 70  |  Page 71  |  Page 72  |  Page 73  |  Page 74  |  Page 75  |  Page 76  |  Page 77  |  Page 78  |  Page 79