Universal Basic Income (UBI) & Pandemic-Proof Money
The following will be an ongoing conversation. I've not yet had time to add graphics to make this lengthy piece seem less 'daunting,' but I hope those of you who have clicked through to this first draft will forge ahead regardless. I know you understand how important this subject is, but thank you, all the same, for taking the time to read on.
The idea of a Universal Basic Income has always been controversial.
I've mentioned the subject many times over past year and often speak of the UBI in upbeat terms. As a result, I'm occasionally asked, quite pointedly (almost as a challenge it seems) – “so are you for it or against it”?
Things are rarely so black and white. As with everything in this world, there's a good side and a bad side; so my answer is always:
“The UBI could be our worst nightmare, or the very best thing that could happen
The UBI is coming, 'make no mistake about it' (as those wartime politicians always like to say). So we must understand, what it is and how it could work in our best interest. If we don't understand and sit back passively, waiting for the role out, it is absolutely certain this program will not work for the benefit of the people.
I will make this point now, as it maybe the most important take away from this (in case you don't have time to read through this introduction); we must not give up physical cash, as a trade off, at any point in this transition.
It is almost certain that the UBI will be come into being in tandem with the new Central Bank Digital Currency (CBDC), and we must dig more deeply into this later. For now though (should you be interested to see where things stand at present), here is a recent Rotman business school forum on this subject, in which three teams introduce their vision for how this new system could work.
Not surprisingly, Adam Smith and I (and several others, far various monetary reform groups) signed up and watched this April 6th Zoom event. (More on this in a separate piece later.)
Given the direction the 'Global' economy has been taking for some time now, the UBI is almost unavoidable; Covid-19 has simply speeded up a process that was already underway. This Pandemic, such as it may be, came along at the most convenient time; and now, of course, this health 'crisis' will take the blame for everything that's happened, and everything that's to come.
For the bankers and politicians, happily for them, blame for mismanaging the economy is unlikely to fall quite so obviously at their feet now. Instead, if they play their cards right, they might even come out of this looking like the good guys. That is the goal, of course, and their PR departments are working furiously to make sure this is what we all think.
Some of you may recall my 2017 report from Island of Man, and my meetings with the Treasury and Bank Supervision Authority there. As I mentioned earlier, our current monetary system was at the point of a major 'Reset' even then. The money system (as it existed until March 2020) has been described as a Ponzi Scheme, and it is the nature of such constructs that they can only function for so long before collapsing in on themselves. We have talked about the nature of systems that depend on perpetual growth before of course.
What most people don't realize yet, is that the collapse of the old system already happened. It was more in the nature of a controlled demolition though, precipitated by the lock downs. While the old edifice folded in on itself, newly issued Central Bank money flooded into the economy to replace the bank credit that was draining away – and, of course, to replace the income so many businesses and individuals had lost. While everyone was distracted by the Covid chatter, the system was held together by temporarily allowing for the creation of new sovereign Canadian dollars, which were then distributed (largely) through CERB payments to individuals.
That was the most noticeable emergency measure, and despite the fact there was no alternative, the move has been hugely criticized by those who believe these 'handouts' were based on conventional debt (the way they understand it). Nevertheless, this development is something we should be hugely optimistic about. Temporarily, at least, we are winning this battle against International, Globalist, interests, but we will only be able to hold the ground we have gained so far if we understand the nature of this game.
Appropriately, I am writing these words on April 19th, as Minister of Finance, Chrystia Freeland delivers the 2021 Liberal Budget. If you didn't read 'Political Theatre' piece before, please feel free to revisit this, and of course, there'll be lots to say on the Budget later... While the neoliberal Liberals are busy delivering us into the arms of the Globalist interests, the conservatives are arguing for a course of action that will leave us equally beholden to corporate interests here at home. As mentioned in the 'Political Theatre' piece, both are perpetuating the ages old, mythology of money, debt and taxes – which are patently and demonstrably wrong.
Our Central Banks, thankfully, did a pretty good job buffering the immediate shock of the economic shut down. But this is what Central Banks are designed to do, as the 'Lenders of last resort.' The BoC started buying government bonds directly (not the usual practice – and not even permissible by law in some jurisdictions, such as the EU), so that governments could send money directly to individuals and small business ('Helicopter Money'), at the same time as they helped sure up the balance sheets of banks and large corporations, with good old-fashioned Quantitative Easing (QE) – by purchasing bonds from these institutions too. As the 'issuer of the currency' the Central Bank (an organ of the Government) doesn't actually have the money on hand to make these purchases; it creates the money to purchase the bonds – 'out of thin air' as some like to say. The same way banks create money when they make a loan.
The money created is entered on one side its balance sheet (as a liability), while the bonds purchased are added to the other side of its balance sheet (as an asset). This is how money comes into being. So long as those bonds stay with the Central Bank, they are an asset, not just for the BoC, but for the government and the people of the country. They earn us money, as Adam Smith puts it, because the interest paid on these bonds (secured by the government through taxes) comes back to the Government, and into the Treasury, as interest payments. It is a closed loop, as compared to that 'leaky bucket,' which is a more appropriate analogy for the old system (of 'bank credit' as money).
Actually, 'blood letting' is is probably more apt – an expression often used. We've had the components of a closed loop system for a long time, but leaches (speaking metaphorically of course), have attached themselves to the main arteries of our economy and have been syphoning off its life blood for many years now. Without a major infusion (of new sovereign money in the form of CERB), the economy would have simply bled out last year.
Colourful analogies aside, the above is a description of how billions of dollars 'magically' appeared to prevent the economy from collapsing. Importantly, these dollars were not 'borrowed' – as politicians, economists and bankers would lead us to believe.
I would go so far as to say the language is carefully chosen. It serves their purposes to have the people (taxpayers especially) think this way. Asset stripping through increased taxes and privatization will be easier if the public believe the mythology of debt, taxes and austerity. If they believe this money was borrowed and that it will need to be paid back; then raising taxes and selling public assets will be more acceptable to the public – selling assets before increasing taxes, especially so.
This is new Central Bank money, however. It is sovereign money – everlasting money, as some describe it – and it can circulate as long as required (unless taxed back). By comparison, bank-issued money ('bank credit') is necessarily ephemeral; this form of currency stays in circulation only so long as the loan that created this money is not fully paid back (and all the while this money earns interest for the bank). The Central Bank money, to underscore this key point, earns interest for us – the people and the nation.
Ninety-seven percent of the money that circulated in our economy prior to the Covid 'crisis' was not money at all (as most of us once understood it), but rather 'bank credit' masquerading as money. The thing with credit though, is that it starts to disappear the moment people won't, or can't, take out new loans. Or (a lesson learned in the 2007/2008 financial crisis) when banks themselves sit on their QE money and don't make loans.
So giving money to banks in the form of Quantitative Easing (QE), in order that they might make new loans, doesn't mean that money gets into circulation. “You can't push a rope,” the saying goes, and similarly, you can't quickly and easily 'push' new money out into an economy in the from of loans – when business activity has stalled.
No new loans - no new money in circulation. And the money that is out there circulating already (loans made previously), is 'bled off ' continually, with every payment made back to the bank or credit card company that created that money.
The only way to get money into circulation in an emergency situation like this, is for the government to send money directly to people, who will then spend it into circulation. In the UK, this process has come to be known as 'QE for the people' – just as some people (quite rightly) refer to regular QE as 'Welfare for the banks.' Milton Friedman is credited with coining the term 'Helicopter Money' (referring to a kind of QE for the people); he envisioning a natural disaster in which bags of money would have to be dropped from helicopters (along with provisions presumably) to get economic activity started again.
'But this emergency will end soon,' some say, suggesting the Bank of Canada should stop issuing money as quickly as possible. In fact, just today, someone sent me the following: ('Bond purchases expected to slow'). The banks want nothing more than to have their own money circulating again, earning them interest, instead of the BoC (profits which are then passed back to the government and the people).
Covid isn't over, of course, and is predicted to continue, 'with lock downs 75% of the time through until July of 2022' (this from the original modelling of the pandemic).* Irrespective of this, an economic slowing is to be expected due the maturing of major economies and aging populations (in the many places), according to OECD studies. All of this is covered in a book published last year (much discussed in monetary reform circles): Doughnut Economics: 7 Ways to Think Like a 21st Century Economist. It's an insightful work in terms of identifying the problems we confront today; as economies stall, and even start to shrink. Workable solutions though, are few and far between (we will revisit this work another time). Even the Rockefeller Foundation describes a similar scenario in a 2010 paper, Scenarios for the Future of Technology and International Development:
'An economically depressed world in which individuals and communities develop localized, makeshift solutions to a growing set of problems. . .'
The traditional 'solution' to slowing economies (and birth rates) has always been increased immigration; but this no longer holds true. Governments, bereft of ideas, still cling to this easy fix however. In many places, economic citizenship can be purchased by the wealthy, to attract people who already have money to spend. To bring in workers though, only keeps the economy going if there is demand for labour. That these folk might stimulate the economy remains something of a 'chicken and egg' scenario, but the main problem here is that this solution is based on the already out-moded model that requires perpetual growth in order for the economy to continue functioning.
The World Economic Forum (WEF), notoriously, is suggesting that the economy is about to change radically because of Covid (and possibly ongoing pandemics), and they are putting a 'feel-good' Green spin on this to justify their ludicrous schemes. The WEF folk are also suggestion that future generations will receive a UBI as a means of support, because there won't be traditional work, and robots will do everything for us anyway. Here we veer into uncharted territory, but also, into their nightmarish technocratic vision for how life should be under the new Universal Basic Income.
From my previous March commentary (A House United):
“For what is this 'new society' advocated by the World Economic Forum but a new form of feudalism? As the WEF openly states (promotes and celebrates) 'you will own nothing.' . . .”
“Can anyone really believe that the ruling elite would provide a Universal Basic Income (UBI) to support the growing ranks of technology displaced or pandemic lock down unemployed, in perpetuity? In this situation, feudalism isn't even the worst case scenario, as social theory, and even popular culture, describes (another story entirely).”
In this earlier piece, I referred to the 2000 essay by founder of Sun Microsystems, Bill Joy:
This is a prescient commentary, and a 'must read.'
Returning momentarily to the idea of a Pandemic-Proof money (some of which would be distributed in the form of a UBI). As suggested above, no thinking person could believe that a ruling elite, whether a democratically elected government here at home, and a supranational shadow government in Davos, will send us pocket money every month so that we can pay the rent, feed ourselves and shop online all day. Especially, as they are telling us (at the same time), that consumerism is consuming the planet. This may be, and that's the reason a 'steady-state' economics is so important – an economic model that can function in a no-growth, or even de-growth, situation. Otherwise, the only other prominent alternative is the UN's Agenda 2030. The 'rewilding' of America (and the world), with something akin to the Land Clearances of the 19th century. It is curious that so much housing is still being built in city centers.
The recent Covid crisis, real or contrived, is effectively destroying the traditional economy (though we haven't really felt this yet, as the economy is being kept inflated). In this 'scenario,' democracy as we once knew it (or hoped it was) could well be at an end too. Ending democracy and ushering in '[a] world of tighter top-down government control and more authoritarian leadership. . .' is a stated agenda of the supranational ruling elite. These words directly from the Rockefeller Foundation's paper mentioned above – (the pandemic scenario) 'Lock Step' p18
If this present pandemic does go on until 2022, there's not likely to be much more than box stores and Amazon left standing. However, should we understand the mechanisms behind money creation (and particularly behind the UBI) the resources can be allocated in ways that allow us to build the kind of society and community we would chose to live in. If we don't understand this process (and the myth of austerity and scarcity continues) our politicians will deliver us, helpless, into the care to billionaire technocrats – who have state emphatically that the world is over populated. Again, that may well be (the may indeed by over populated), but with a steady-state economy, the need for perpetual grow ends, and we already know that comfortable populations automatically begin to decline in number, naturally, without any kind of intervention.
We must also remember that however bad Covid has appeared, it might have been worse; and future events could very easily be worse. We've been warned about this, and the Health Security State is already in place. Organizations such as The Bloomberg Center for Heath Security, for instance, which 'predicted' the Covid scenario at Event 201, in October 2019 (This event was co-sponsored, incidentally, by with the WEF and Bill and Melinda Gates Foundation). For 2025 (just as we hope things will be back to normal after Covid-19) the Bloomberg Center for Heath Security is predicting the 'SPARS' pandemic.
They were not kidding when they spoke of the 'new normal' – And the moment Covid hit, the world's Heads of State, in 'lock step,' began parroting the World Economic Forum's rhetoric.
We need our sovereign, Pandemic-Proof Money back as soon as possible, before technocratic, Heath Security State authoritarianism becomes the new way of life.
The most chilling suggestion from Event 201: 'Those who speak out against pandemic measure are to be arrested.' In 2025, there will likely not be the opportunity to circulate ideas suggest as those I'm outlining here.
So I hope we can put aside the old ideas about 'handouts' (in the form of a UBI) encouraging laziness, because the subject is far more complex. Central Bank created sovereign money, distributed where necessary by means of a UBI, and handled (preferably) by the Post Office and Public Banks, is (I would suggest) OUR BIG OPPORTUNITY to resist the mad-scientist machinations of the WEF and their ilk. If we wish to preserve modern democracy, civil society and our freedoms – and save the planet at the same time – we must become informed about this issue as quickly as possible.
In this article, which really only scratches the surface, I hope I've shown the UBI in a very different light. Money has to be put into circulation, one way or another, for the economy to function. Economies need a medium of exchange (or we reduced to barter again) and there are really only two ways to put money into circulation:
As debt, when banks issue this money in the form of loans – which profits the banks.
As 'public equity' ('commonwealth') when governments issue money and put it into circulation through public spending (in this case, as a UBI) – which profits the people and the nation.
The choice is ours.
It could be argued that those who sit at home and collect their 'handout' with no intention of working or bettering themselves (this is generally the tone of such arguments) are still being productive, in a way. They will go to the supermarket with this money, to the corner store. They will also, quite possibly, go to the beer store and maybe even the local pot dispensary too. The point is, they will be spending money into circulation, and this keeps other working people in gainful employment. In this way, even the most shiftless will be performing a useful function; something no one can do as effectively as the individual 'rational agent' in his or her own local community.
Maybe we will have a 'lost generation' that does nothing but this as the transition occurs. Once we emerge at the other side, however, a whole new set of values may have developed. If the drift of power and influence that has turned the world into a corporotocracy can be reversed, new opportunities will open for the creative and the motivated, and a whole new ethos will be born. Down our present path awaits a corporate techno-fuedalism, transhumanism and groupthink – something resembling the Borg it would seem (if the WEF manifesto is to be our roadmap) – and down the other, a successful transition of society; something that may well be regarded by future generations as the second Renaissance. This is an idea – an aspiration – we must continue to explore.
Postmodernism (a nihilistic 'anti-culture') has been steadily undermining our society for the past five decades. It has been the destruction of our culture that brought us to this point, because our culture shapes the way think and perceive the world; and it is culture that will allow us to find our way again – if we 'de-construct' postmodernism, and embrace once again the values of the Romantics.
Another renassaince, a literal rebirth, will be required if we are are to finally escape the cultural wasteland this is postmodern era.
I must wrap this piece up on ironic, postmodern note however, by relaying the story of our most esteemed Premier, and his loathing of anything related to the Universal Basic Income. Doug Ford is much in the news these days, and in light of my earlier piece on the 407 and 413, I can't resist sharing his shenanigans on another front:
The Ford Government's 'Friends with benefits?'
Some may recall, back in 2018, when Doug Ford shut down a basic income test program in Hamilton, Brantford and various other communities. I've always argued that he did the program a favour here, by leaving the concept of 'basic income' an open question; while he appeared mean-spirited and ideologically driven.
How would the project have worked out if it hadn't been shut down? We can't know, but even if this small scale program had improved the lives of those involved, and even if there had been a positive ripple effect in their communities, on a larger scale it would be a different question. If this money had to be come out of taxes, or be borrowed by the provincial government, the project was bound to fail in the long term.
But now, I hope anyone reading this will understand the mechanism behind the UBI is far more nuanced. The difference here, is that the Federal government, as issuer of the currency, must be the body behind such a program. Those who understand the mechanisms behind money too, will understand how this program could (as suggested in the opening passage), 'be the best thing that could happen right now.' And when I say the 'best thing' I mean 'essential,' because this method of implementing a new sovereign money system, in conjunction with a publicly-controlled CBDC, could be the only thing that will let sovereign nation states, and liberal democratic societies worldwide, wrestle back their independence and freedom. The powerful supranational elite, that has been steering the world for the past few years, is now ready and willing (as they have stated) to assume full control of the global economy, and the governance of the world's new 'post-nation states' – to use one of our Prime Minister's expressions
I hope this piece will spark some conversations, and I look forward to expanding on a few more of the ideas here. Also, next time, I will also include the pieces on direct democracy and electoral reform, from Adam Smith and Gary Landon, that I promised in the last mailing. There's enough material here already.
To receive updates of Independent Culture and New Regionalism
projects, events and news, join our