The Top Four Economic Reforms in terms of Impact
The following four multi-trillion dollar economic reforms would completely turn the American economy around to the positive, forever. The first three have been implemented to some degree at one time or another in our history, and all are consistent with American values of competition, fair play, economic and ecological sustainability, and profiting from one’s own labor.
1. Greenbacker Money: debt-free United States Notes that Congress is empowered to create anytime, for any reason, and DID create under the original Legal Tender Law (1862) by president Lincoln ($450 million) to defeat the South during the Civil War, continuing ($350 million) through 14 series in circulation until 1996. This money would not have to be borrowed, raised in taxes, or backed by gold. It need not be inflationary if dedicated towards those areas of society that are actually in deflation, such as Infrastructure. It is a “Public Option for Money.” Congress can authorize new U.S. Notes anytime, for any reason, in any amount. Perhaps $4 trillion, spread over 10 years, should be directed towards infrastructure, to start. The Kucinich Bill, HR2990, aims to do this, as part of a larger package of reforms, but we can re-issue U.S. Notes anytime.
2. Land Value Taxation, aka the Single Tax: This Henry George (1879) idea actually goes back to article 8 of the original articles of confederation. It would end the private collection of resource and locational rent and speculation, and by taxing these before booms could occur, eliminate Land-based booms and busts like the current one, forever. Furthermore, by taxing the 33%-40% of GDP that is “Rent” on location and natural resources, one could untax all actual production (wages, sales, fixed capital like buildings), thereby vastly simplifying the tax code (and removing opportunities for corruption), and freeing up vast American productive capacity in a naturally efficient, green, and sustainable way. This idea has been successfully applied in towns and cities all over the world and is perhaps the most established economic theorem in economics.
3. State Banks: like the wildly successful Bank of North Dakota (est. 1919) to force state accounts to be invested in state needs, and not in Wall Street speculative exercises – money which then has to be borrowed back, at interest rates of 4%-6%. The agency and pension funds of most states are invested in risky, often underperforming mutual fund type investments, where managers charge millions in fees. Why not put those funds into a State Bank, with more reliable, possibly even higher, returns, that could create jobs in the state, instead of being invested in everything from China to short positions? The Bank of North Dakota manages $4 billion in loans. Public Banks in larger states would have correspondingly larger reserves and could respond directly to community needs and even emergencies.
4. Audit the local, state, and national Comprehensive Annual Financial Reports (CAFRs). It’s estimated that there are 10s of trillions in assets in the 184,000 CAFRs nationwide. These funds, many of which are invested outside the country, could be used to pay a citizen’s dividend in perpetuity, guaranteeing a lifetime of support for every American citizen. We need impartial accountants to comb through the CAFRs and to do so every year, for the benefit of the American people.