Learning to love and use our currency to its full potential is one key to a return to shared prosperity.
Hope is a powerful word, but only when it’s based on substance. We’ve all seen the harm done by false hope – the kind that makes promises, but without the means or perhaps even the intent to bring about meaningful change. However, when solutions to challenges become accessible, those struggling with a problem will alter their forward-looking expectations. This kind of hope instills a confident expectation of a better future. It causes many to begin to work toward that solution with a renewed vigor and collaborate with others who are inspired by a vision of what can be realized.
Real hope, like fear, creates its own future. As a nation, we get to choose which kind of future we want.
Our nation has been far too preoccupied with fear and anger, and in the process we have been creating self-fulfilling negative prophecies: economically, racially, socially and politically. We need a heavy dose of real hope and a new vision of what good we can do together once again, and in doing so we will begin to create that future together. We are better than just the poor choices of our past. Beneath all the frustrations, there lives a great people who truly want to make a positive impact on the world. A people that believe they are part of a truly great nation that can do truly amazing things.
Yes, there is reason to hope and to dream big once again.
We have limited ourselves with unfounded fears. Our greatest economic fears have largely played out in a series of unnecessary self-inflicted wounds. We are a nation with tremendous wealth and resources, but we act as if we’re broke.
- We trade with other nations to gain additional real wealth but then we complain about domestic job losses and currency manipulations and how many of our bonds are held by China.
- We open up trade to support the profits of our corporations, but don’t simultaneously create more opportunity at home for affected workers.
- We allow financial crises to overflow unchecked into the real economy sending millions of our wonderful citizens into a decade of lost work, wages and personal development.
We will look back at this period and wonder why we were so foolish when it was all so unnecessary. You see, the hope that has been hiding in plain sight is the power of our sovereign currency. It’s a really big deal and we need to get serious about its proper use.
I consider a sovereign currency one of mankind’s greatest inventions. It allows a democratic and peaceful nation to move available real resources to the public domain in order to achieve things we couldn’t do individually or that profit-seeking private sector actors will not do with their own money. Our representatives in Congress simply issue as much of our currency as is necessary to procure whatever resources the public authorizes, while maintaining a sufficient level of taxation to stabilize demand for the currency.
A nation like the USA that is fully “monetarily sovereign” (i) issues its own currency, (ii) makes no promises to convert that currency to gold or another currency, (iii) allows its currency to freely float in exchange with other nations’ currencies, (iv) maintains its own central bank and (v) does not accumulate debt in a foreign currency.
Currency issuers always first spend their money into existence – that’s what issuance means – then require that just enough is taken back out of the economy via taxes to maintain stable demand, while leaving enough for savers and foreign trade. Here is where we failed ourselves. We didn’t maintain the necessary currency issuance to compensate for our trade deficits and domestic savings, and as a result, we needlessly hurt a lot of our own citizens.
A monetarily sovereign nation can never become insolvent or be unable to make a payment denominated in its currency unit.
- If foreign nations accumulate our currency as a result of trade, we can always issue more to support domestic employment policies.
- If the world seeks to hold large sums of our currency in the form of our interest-bearing bonds, we are still never limited in the use of our currency domestically to maintain and invest in our infrastructure.
- If the financial sector gets itself into speculative trouble, we can always ensure that those that comprise the real economy have sufficient support for incomes and jobs so our businesses can make it through trouble.
- No matter what the current or future balance of any so-called trust funds are, we can always maintain our promise to retirees and those needing medical care that the government’s check won’t bounce. Ever.
Now of course we are limited by the availability of real resources, which includes the people who have the training and skills to do what is needed or desired. Issuing currency when there is no available capacity can result in harmful inflation. That’s the inverse of our current problem of issuing too little and causing systemic unemployment. However, whatever we imagine and have the will to accomplish, if it requires resources that can be purchased in US Dollars we can do it. Isn’t that a liberating idea?
Our currency is the primary tool to carry out public purpose. It’s there to be used, not artificially constrained. We’ve layered so many restrictions on its authorized use that we leave our people unemployed, our economy barely growing, our scientists underfunded, our businesses burdened, our elderly fearful, our infrastructure unsafe and our national pride cramped. There’s so much more we can do and we have both the currency and the real resources to do it.
This is the time to end the fear and begin building with hope – hope in the kind of nation we can build and be together.
Geoff Coventry is a founding member and owner of Tradewind Energy, Inc. Prior to this position, Geoff was a co-founder and vice president of NetSales, Inc. Additional postings by Geoff can be found on his blog "It's The People's Money."