Please consider the effects of requiring sovereign debt to be backed with Commons shares.
Accepting that a Commons share may be claimed by each adult human, one only, that will cease to exist on the humans death, and shall be deposited in trust with a local financial institution along with execution of a social contract.
This would create a human backed economic system, as opposed to precious metals or full faith and credit/fiat.
Each share is backed by a human being, and provides a secure interest in society/the planet. Aside from the reasonable notion that all humans have some value, a person with a million dollar trust fund and a basic income, is certainly worth at least a million dollars.
The example I use of a share being worth $1 million USD is derived from a target of $1 thousand/mo basic income, and an interest rate that is compatible with a sustainable system.
The recognition of this value would make $1 million times the population available to finance sovereign debt, at a sustainable rate. 1.25% is within the generally accepted notion that 2% growth is sustainable. This capital would be invested by the local banks, and while a majority would likely need to be invested in government securities, whatever portion that can be prudently invested in the community will be available.
It is global economic enfranchisement. In order to be enfranchised in a capitalistic society, one must have some minimum level of secure capital. This is how society can secure the public capital, provide a basic income, establish each person’s relationship with society as a sovereign individual, while stabilizing trade and exchange.
A basic income is a vote in capitalism, what gets produced, by whom, what projects can attract sufficient support.
The suggested system arbitrarily values the human Capital at $1 million USD equivalent times the adult population, so about $6 quadrillion. One might observe that this much wealth does not exist, and would take centuries to create the way money/wealth is currently created.
We can also observe that this much debt, distributed as suggested, can sustainably be repaid or serviced, and represents a far more reasonable valuation of our society. The maintenance of this debt will create, and make available, sufficient new capital globally, without “poor” countries, or “poor” individuals, having to beg for overpriced loans.
The existing Capital, in most of the world is highly undervalued, especially the human capital.
Land value alone, with all humans enfranchised, will increase the Capital valuation significantly, based on demand, also increasing land tax revenue.
Also observe that the structure is not funded with capital, it only makes credit available, and is funded with income.
At the inception, current sovereign debt is being serviced, so the limited income stream exists, it will just be diverted to service Commons shares, and current sovereign debt holders will need to reinvest, stimulating economic activity.
The expansion of the structure to increase Basic Income can proceed as Capital valuation increases, along with income/revenue.
The structure does these things without interfering with any government, though the people will be significantly more empowered to affect whatever changes they desire, and we may expect human desires to be more rational, with the establishment of a rational relationship between and among humans and governments.
In order for a Basic Income to be paid, the money has to be collected.
In any given state, the rules for collecting money vary, and change, this will not change, but the arguments will.
Instead of directly taxing and paying citizens, each state/sovereign entity, will collect funds to make the payments on their sovereign debt, and each human will receive payment from their bank, as interest on their share.
In this way, the argument becomes; “How can we collect sufficient revenue to support the debt we have to our citizens?” As opposed to; “How will we collect enough more taxes to support the lazy bums who cause such a drain on my personal finances?”
The actual social contracts will specify the responsibility of government to protect and support the Commons, through rational action, and by making regular sovereign debt payments.
The major change in this, is that because of double entry accounting, each sovereign entity will acquire a treasury/secure investment along with acceptance of their debt, and this treasury will be sufficient, when prudently applied, to produce more than enough income to make the payments. (Interest payments could be made for five years without collecting additional taxes, and >90% of the treasury would still be on deposit, or like the US where the current debt is already nearly 10% of the suggested debt, there are plenty of sources for the required revenue.)
As public works increase economic activity, revenue is generated. If we examine the scale of suggested debt, and sustainable debt service, it becomes clear that generating sufficient revenue will be possible.
In this way each human will receive equal interest payments from sovereign debt.
This establishes the sovereignty of each human.
As a sovereign entity, each individual would have access to sovereign debt for home, farm, or secure interest in employment, relative to a portion of the value of their Share.
For illustration, in round numbers, a share with a value of $1 million would return about $1 thousand/month, if it all was borrowed, at a growth sustainable rate around 1.25%.
Current sovereign debt would return about $10/month, $20 if corporate government debt is included, (observing that corporations are governments subordinate to their charters) which would be significant in many parts of the world. Individuals could borrow a significant fraction, but maximum return would likely require states to borrow all remaining shares.
I suspect that a nation with 1 million residents could borrow the entire $1 trillion (equivalent) of resident shares as reserve cash and devise a plan to increase revenue by the $12 billion/yr (equivalent) required to pay the interest. The U.S. example of a $268 trillion debt, a $250 trillion treasury, and $3 trillion annual interest payment seems equally optimistic.
If a similar system was attempted in a single state, the currency of that state would be devalued, as other countries will not accept at full value a diluted currency. With all currencies tied to the Commons, and the proportional increase in wealth flow in all states, all currencies will be expanded simultaneously, proportional to population, creating disadvantage to no one, exchange rates and trade can stabilize.
The value of a share need not fluctuate, and sets a natural sovereign debt limit. The return on a share though, would depend on how much of that value is borrowed. The ideal state, I suppose, would be for the entire value to be loaned interest only, maintaining the basic economic activity and the state of indebtedness owed by the various states to the individuals who comprise them, and to the Commons.
The increased spending on basic needs will necessarily reduce the cost of providing them.
Since the spending of money is restricted by the availability of materials and labor, and “full employment” is restricted by the availability of money, recognizing and distributing the value of the Commons in this way would simply “fill the reservoir” so the world economic system may act more like a “Free Market.” This restriction, and most familiar others, can enable an orderly increase in money supply, with most new money in reserves and increased valuation.
Please consider the notion, and as you view the worlds problems, and crises, imagine how this would alter those conditions. The perspective change for each individual so enfranchised is critically needed.
Thanks so much for your kind indulgence,