Money creation and inequality – an underexposed topic for monetary reformers
by Lino Zeddies
Posted June 4, 2018
It is beyond doubt that the current money system has a huge impact on the distribution of power and wealth and heavily contributing to systemically worsening inequality. Even though there is growing public awareness and debate about the problem of inequality, so far the focus has been on the distribution of existing money and wealth, while the distributive effect of how and for what purpose money is created in the first place, seems to be a complete blind spot.
A sovereign money system creates a much fairer economic playground compatible with the ideals of a free market economy and a thriving democracy.
Firstly, when transitioning to a sovereign money system, there would be a considerable one-time debt relief as credit money would be replaced by debt-free sovereign money. Depending on a country’s level of debt and the amount of bank money in circulation, this would typically allow a huge reduction of government debt just due to the transition. Less government debt means less interest expenses for the public, allowing lower taxes and better public services and better infrastructure. More…