A New (Old) Cycle for Money
by Jeff Limpert from Ohio
History
History tells us that small economies are plagued by a shortage of money and causes no end to difficulty when someone wants to buy something. They have either goods or services to offer, but not the cash to pay for it. The person who has something to sell may not need what the buyer has to offer in exchange, so a third party comes into the picture to help. That could be someone with enough money to buy the product the original buyer wants to give to the seller thus giving the buyer the cash needed to complete the purchase. The third party now has to find a way to sell what he bought from the original buyer.
The introduction of money fixed all of this. It allowed the establishment of a standard unit of exchange which everyone could accept and eventually led to a relative stabilization of prices compared to before. The problem still remained of how to get money in the first place.
I have had a couple of history teachers who loved to use the examples from the early years of our country, and the colonial period before that. People had to come up with all sorts of inventive ways to exchange one thing for another and were starving for cash or "specie" as coin was referred to. Fortunately we do not have to worry about that, for the moment.
Current Status
Fast forward to today; we still may not have enough money do to all the things we want, but it is a whole lot easier. We have solved the problem of not having enough money by institutionalizing the process of promising to pay based on future expected income through loans. And we have made money more readily available -- by being able to effectively create it out of thin air.
Additionally, we have the appearance of wealth because we have been able to convince people here and in other countries around the world that the money is valuable. Like all good ideas it works until someone figures out how to game the system. As a result, we have wound up with money everywhere. People are scrambling to get as much as they can without asking the question, "Will the way we're doing it have a good long-term impact or not?". Add to that a government that, for some reason, decided to give a whole bunch of money (that also didn't exist) to just about anyone with a good cause, or "special interest."
Now the pigeons are coming home to roost.
Uncle Sam is fixing this with the Tax Rebate Stimulus package to put money in our pockets in the hope it will keep the wheels of our economy going. For that to work, we need to break our old habits of throwing whatever we have available to fix an immediate problem (rather than be proactive, or consider the consequences).
Try Something New
We suggest that we stop doing the same things that got us into this mess. In order to have a vibrant economy we need to have at a minimum:
1) People able to obtain goods and services they need to sustain and improve their lives
2) Know that whatever changes we have to go through, that we will have everything we need to adapt and continue to provide for our families
3) Each be confident in our ability to offer our children a better world
This list is just a reflection of the moment, made as broadly and simply as can be done while doing dozens of other tasks (necessary to launch this web site). You can make your own list of what society needs now, and in the long run. We would love to see your comments to this article.
Our Solution
We need to return to a simpler model to keep going. A lot of people talk about "sustainability" as if there is some grand solution that can be administered by a few wise people who know everything. It won't happen. Here is our suggestion for the best use of the tax rebate in the absence of any better plan coming out of Washington:
Take the money from the rebate and use as much of it as you can to stimulate the small businesses and individual self-employed people in your cities, towns, and neighborhoods with they understanding that they will also attempt to keep as much of what you give them local by also spending it close to home.
To do this, you can make inquiries, legal contracts, form associations & co-ops, talk to civic leaders to get them involved and so many more actions that we will never think of simply because we are not you and we do not know what your community (or you as an individual) need the most.
To make it more noticeable, we are also
asking that when you pay cash that you take the time to mark each
bill with a small inverted triangle
in the top margin over the portrait of the president. It will serve
as a reminder to you and others who see it that the money is local
and still working for the community.
Then tell the people (that you are doing business with) what the mark means.
And finally, ask the business owners to visit our site and print out the materials we offer. It will help inform shoppers that the business will do it's best to extend the circulation (life of the money) in the local economy.
