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Bill: The Central Bank of Beiteynu Act, 4355
Details
Submitted by[?]: Haaretz (הארץ)
Status[?]: defeated
Votes: This is an ordinary bill. It requires more yes votes than no votes. This bill will not pass any sooner than the deadline.
Voting deadline: June 4357
Description[?]:
| For a nation to succeed, it may to have some financial institution. This independent, regulatory body is commonly known as a "central bank", and performs numerous functions including: - Managing the state currency - Managing the money supply - Managing the interest rate - Maintaining national solvency - Maintaining solvency of financial institutions - Preventing runaway inflation - Preventing reckless/fraudulent banking practices. To allow for the creation of such a body, we hereby establish the Central Bank of Beiteynu. (OOC: How come we don't have a central bank already??) |
Proposals
Article 1
Proposal[?] to change The banking system.
Old value:: All banks are privately owned.
Current: The government operates a central bank and all other banks are private.
Proposed: The government operates a central bank and all other banks are private.
Debate
These messages have been posted to debate on this bill:
| Date | 12:52:12, February 28, 2018 CET | From | Miflaga Libralit Beiteynu | To | Debating the The Central Bank of Beiteynu Act, 4355 |
| Message | My party hereby declares it's opposition to the aforementioned bill. |
| Date | 02:20:46, March 01, 2018 CET | From | Haaretz (הארץ) | To | Debating the The Central Bank of Beiteynu Act, 4355 |
| Message | Reasons? |
| Date | 20:17:25, March 01, 2018 CET | From | Miflaga Libralit Beiteynu | To | Debating the The Central Bank of Beiteynu Act, 4355 |
| Message | My party does not wish to see the supply of currency under the control of the government nor do we wish to see the artificial stimulation of the economy as a direct result of a central bank's establishment. |
| Date | 20:23:43, March 01, 2018 CET | From | Miflaga Libralit Beiteynu | To | Debating the The Central Bank of Beiteynu Act, 4355 |
| Message | The Establishment of a central bank would result in the devaluing of our currency, bureaucracy, and the lowering of interest rates which would lead to a false boom in the economy followed up by a depression something Beiteynu cannot afford. https://en.m.wikipedia.org/wiki/Austrian_business_cycle_theory?wprov=sfla1 |
| Date | 06:08:51, March 02, 2018 CET | From | Haaretz (הארץ) | To | Debating the The Central Bank of Beiteynu Act, 4355 |
| Message | Let's start with the basics... How can the nation have a stable currency without a single unified bank? The purpose of money is to allow citizens to trade with one another. With everyone working with different banks (or none at all), accepting different forms of currency, money become meaningless; this is closer to a barter system than a true economic market. How much "devaluing of our currency" do you suppose there would be if currency itself is unreliable? How much of a depression will we enter if we eschew traditional monetary trade for a barter-like free-for-all? The argument you're proposing relies on the assumption that a Central Bank will naturally push for economic booms, which will eventually cause busts; this is a false premise. A Central Bank's purpose is to 1) provide a central, uniform, agreed upon currency, and 2) to keep that currency's value stable and reliable. In keeping with that second premise, it is not the duty of a central bank to stimulate economic booms. A Central Bank only intervenes when the value of currency rises (or falls) to levels beyond which they become stable. Also, Central Banks are not government bodies. Typically, the Central Bank appoints its own members and acts independently of the government. The only thing that makes a bank a "Central Bank" is that it has responsibility for the nation's money supply, distributing the money that banks and citizens rely on (thus, it is "Central" to the nation's financial system). That's it. |
| Date | 18:36:47, March 02, 2018 CET | From | Kadima Beiteynu | To | Debating the The Central Bank of Beiteynu Act, 4355 |
| Message | Different banks wouldn't mean different currencies. There seems to be a misunderstanding over what a central bank does, and how it's different from a mint. Our country already has a mint, otherwise, our currency wouldn't be being produced. Mints can be privatized so that they only supply currency when there is demand for it so that they don't lose money. This is a very organic way of printing new money that doesn't devalue it artificially. It's under government supervision, of course, to make sure that they print the currency correctly. There doesn't seem to be any laws in relation to a mint, so I'll assume we have one, seeing as having a currency is a fundamental part of being a nation. Otherwise, our currency wouldn't exist. Banks store, invest, and loan money. Privately owned banks don't print currency. Central banks are possibly worse than usual when they aren't a government body; because their very powerful people aren't democratically elected. As opposed to mints, central banks are very powerful, and nosey. They do all kinds of things: set artificial inflation/deflation rates, have a monopoly on currency printing (so that private mints can't compete to print it cheaper or better), artificially set exchange rates for our currency, engage in quantitive easing (which is when the central bank buys private financial assets with tax money, as an artificial economic stimulus), and worst of all, they act as a lender of last resort. A lender of last resort is the role central banks take on when they give loans to the government that controls them. This can be disastrous, because, when a government is so fiscally irresponsible that it can't get a loan form anyone but it's own bank, it needs to be told no. The central bank acts as an enabler of deficit spending in this regard. In summary, we have a mint, private minting creates competition which can lower the cost of printing currency, and central banks do a laundry list of things that my party opposes. |
| Date | 19:51:06, March 02, 2018 CET | From | Haaretz (הארץ) | To | Debating the The Central Bank of Beiteynu Act, 4355 |
| Message | I believe we have a misunderstanding... A mint creates coins. Back when there was a gold standard, this was essential and important. But we have moved past the gold standard, and in the modern age of paper and even online currency, the function of a mint is somewhat limited. The chief goal of a central bank is to limit/increase the flow of currency, preventing drastic swings in its value. The only way it can do this is by setting a monopoly on printed currency, which ensures a uniform standard that for all trade in the nation. There are numerous issues If private banks were allowed to print their own currency. First, the lack of uniformity. Notes printed by one may not match with notes printed by another; this would be confusing and devalue the purchasing power of currency. Second, the creation of a volatile, higher-risk market. If a bank can no longer turn a profit, anyone who used that bank will either withdraw from it (hastening the bank's demise) or lose their finances entirely. This creates a scenario where, in order for citizens' money to maintain its value, people will hop from bank to bank depending on which one offers the best value. While this might work for an economist with a keen eye for market fluctuations, the average person is not an economist. When the average person deposits into a bank, they expect their money to maintain its value. In private banking, the purchasing power of the money you deposit largely depends on that individual bank's success. Put another way: if a bank were to suddenly fail, the consumer risks a massive loss. With central banking, every transaction ultimately contributes to the overall strength of the financial system, distributing this risk rather than concentrating it in small, volatile pockets. The success of a currency depends not on an individual bank's success but on the strength of the general populace. It seems your main concern is with runaway government spending and fiscal irresponsibility; since you are a part of the government, is it not your job to curtail this? Our main concern is that the people of this nation have stable finances, and a Central Bank seems like the best way to do that. We cannot be hamstrung by the fear of government. It is our job to govern, and to do what is in the best interest of the people of Beiteynu. Anyways, we will put this to a vote, even though it will likely fail. |
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Voting
| Vote | Seats | ||
| yes |
Total Seats: 36 | ||
| no |
Total Seats: 67 | ||
| abstain |
Total Seats: 17 |
| Random fact: If there are no parties in your nation with seats, feel free to visit the forum and request an early election on the Early Election Requests thread: http://forum.particracy.net/viewtopic.php?f=11&t=4362 |
| Random quote: "The honest politician is one who, when he is bought, stays bought." - Simon Cameron |