What would it take to get something like my proposal passed?
We could elect Ron Paul, but I don’t think even that would do it. He hasn’t proposed anything like what I have, to my knowledge, and many people think he’s nuts for even opposing the Fed. He would get it audited, for sure, which would be a very good thing. They have made many people very rich, and many of them not even Americans (as if it really matters; they are a class of their own), at the expense of the rest of us.
Here is what I would like to see: some country, say Brazil or Jamaica or someone else, should just use their central bank to write checks to all their creditors, declare themselves debt-free, then revalue their currency. This is all Weimar Germany did (although they didn’t get their war reparations paid: since they were printing literal paper money, they could not write checks).
You get long term inflation in places like Zimbabwe for the simple reason that the leaders spend more than they make constantly. If you pay off your bills, you cannot immediately go back to doing the same things. You must pay them off, then have a government that is the right size for the tax base. What I am proposing is a get rich slow scheme. Those are the sustainable ones.
There is little difference between what I am proposing and a default, except that my proposal is much cleaner. No one can say you failed to pay your bills. But for this to work, the follow up responsibility has to be there. Bankrupt nations like Greece can default. They can not pay their bills, but the cost will be that nobody will lend them money again. They have to be able to live with this outcome, and plainly they are not. They want their cake and to eat it too. Everyone recognizes this, so it is foolish to assume that the debacle will end prior to Greece being expelled from the EU.
The fundamental problem with my idea, for much of the developing world, is that the rulers rule by appealing to the greed of ordinary people. They say they can take from the rich, and share, but of course this never works. Hugo Chavez has caused tremendous amounts of wealth–and the talents it represented–to leave the country, and ordinary Venezuelans are in fact much worse off for it.
As I have said a number of times, salt water can slake anyone’s thirst, for a time. But those who drink it do not live long.
Still, I hope there is a nation out there led well enough, and populated by sufficiently mature and sober people that they can and will pull this off. In its essence, this is a very simple idea. It takes the logic of the system and applies it to the problem of creating generalized wealth, rather than wealth shared among a very few.