Better Democracy and Capitalism
A Timistic Vision of Humanity for the 3rd Millennium

Federal Reserve Bank:

Money and Time

If the Federal Reserve wants to end inflation and unemployment, it needs to change in two ways:
  1. how it distributes the money it creates, and,
  2. how it shortens the workweek.

1. Money Distribution:

The Federal Reserve came into existence in 1913, the same year that also gave birth to the Internal Revenue System and Richard Milhous Nixon. What an ominous year.

The primary reason for the Federal Reserve Bank is to manage the money supply so as not to have inflation or deflation. It expands the money supply in two problem-prone ways,

  • buying Treasury paper to finance the national debt which allows politicians to engage in budget deficits and deficit spending, and,
  • lending money to banks through the discount windows to relend to businesses and consumers.

This is not the way to manage the money suppy, through habitual politcians failing to solve problems and bankers who lend money often to risky, problem-plagued ventures. What is the solution?

The solution involves

  • organizing people to solve their own problems, and
  • rewarding them with money created to facilitate an more efficient marketplace.

Please note how two points of the solution correspond to the two points of problem.

  • The solution to politicians running deficits as they throw money at problems is to organize the problem-sufferers to solve their own problems. This is democracy, organizing the problem-sufferers to solve their problems.
  • The solution is quantifying the citizens' time spent solving community problems and rewarding them proportionally with the new money created by Federal Reserve for a more robust, less problem-prone economy. This is capitalism, rewarding the problem-solvers.

The solution is Democratic Capitalism. The solution is colfilperhone and lifehours. If Americans are organized to solve their problems, we won't need as much government. If the Federal Reserve rewards citizens, the money will eventually end up in the banks. The difference is that with democratic capitalism (instead of Necronomics), problems get solve before the money goes out for loans.

How would this work and how would the average person on Main Street benefit? We would have more time for self, family and community. Beneficiaries would be our schools, elderly and children.

2. Shortening the workweek

The current manner in which the Federal Reserve Bank manages the money supply through interest rate changes on the money it gives banks creates unemployment. This is a de facto reduction of the average workweek in a manner that creates "misemployment" problems: higher taxes and stress with reduced productivity.

Rather than the Fed, when faced with inflationary fears, raising interest rates, the Fed should be empowered to reduce the workweek by starting overtime at a lower hourly figure. Rather than raising the discount 1%, it would be better for the following reasons to reduce the workweek by 1% for the following reasons:

  1. Interest rates could be kept at a fix rate so businesses would always know their inventory carrying costs,
  2. The higher cost of doing business would remain in pockets of workers rather than non-working paper-holders,
  3. Taxes would not go up, for we would continue to have full employment,
  4. Stress would go down, for everyone would know that full employment would be guaranteed by adjusting the workweek,
  5. Crime would not go up, for the unemployment that is the fertilizer of crime would not grow,
  6. Family values would increase as parents have more time to be parents.

If the Federal Reserve had been empowered and had implemented this policy in 1930's, we would not have the Great Depression. And, we would have a shorter workweek in a safer, saner world with more time and money for self, family and community. Why? We wouldn't have the expensive social and economic problems from the misemployment policies of the Federal Reserve System.

Once this policy is implemented, we could re-capture the lost time in four years, that is, we could have a 24-hour workweek in 4 years with more time and money, again, for self, family and community. Why? Again, we will solve the problems that force us to work each week to babysit these problems.

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A key to a more civilized world is how the Federal Reserve System distributes the money it creates and how it responds to inflationary fears. Observing the principles of Democratic Capitalism, derived from timism, the Fed can bring about a better world.

If you have questions or comments, you can democratize them at On-Line Forum as well as review others' input.


Related Writings: 24 in 4 ... Loan Action ... Reform Law ... Federal Deficit ... Appeal


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 > #1 Homepage 071101 Timism: The Morality of More Time, aka, the periodic table of existence
 > #2 24 in 4 071101 The Federal Reserve: It Cuts the Workweek!
 > #3 Loan Action 071101 Currency, Chapter 9--Loan Action of the Federal Reserve
 > #4 Reform Law 120507 Federal Reserve Reform Law: Vote Please
 > #5 Federal Deficit 071111 Necronomics, Chapter 11, Federal Deficits and Inflation
 > #6 Appeal 071101 Federal Reserve: Press Release
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< #5 FedReserveReform 120507 Federal Reserve Reform Law: Vote Please
< #6 InvestmentInFuture 071101 Investing Lifehours for the Future
< #7 Ovu-Wealthfare 071101 Wealth Transfer by Law is Still Theft

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