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Bill: Lex Vinicia de Argentaria Centrale
Details
Submitted by[?]: Factio Republicana Socialistica
Status[?]: passed
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: September 4429
Description[?]:
| Vinician Law on the Central Bank Senators, The Black Thursday stock exchange collapse in Istalia (http://forum.particracy.net/viewtopic.php?f=17&p=137159#p137159) threatens to spread throughout all Majatran and Terran markets and cause unspeakable economic damage. And as we have learned from the long history of financial crises, during a crisis it is the poor that suffer and the rich are bailed out. This is undemocratic and unrepublican, and should the crisis spread to Selucia our liberties themselves are at stake. A key cause of financial crises is the harmful buildup of over-indebtedness that is at the heart of modern banking systems all over Terra. And that indebtedness stems directly from the power of private banks to create money. Most people think of money as the banknotes and coins they use for shopping, which is legal tender and is issued by the Central Bank. But what they don't know is that the vast majority of money in circulation is not created by the government or any of its agencies. It is created out of thin air by private banks, and as a consequence they have usurped the money-making power of the people to themselves, with the tacit or open consent of the Central Banks. Banks create money ex nihilo with a simple stroke off the key whenever they pay non-banks, such as when they issue loans or sell securities. This makes financial crises unavoidable and more harmful than they would otherwise be, as the banks' creation of money always overshoots during financial crises. The banking sector creates volumes of credit out of proportion to economic growth, which causes inflation and financial bubbles, pushing financial cycles to extremes. And it is the state and the citizens that have to pay for banking crashes, as they cause falls in real income, employment, and the public budget. In order to remedy this situation and restore public power over the creation of money we propose the introduction of Sovereign Money into the Selucian monetary system by nationalizing all money, including bank money. The coin monopoly that the Central Bank already enjoys shall be extended to money on bank accounts in public circulation, to mobile money stores, and to digital wallets, granting the Central Bank full currency monopoly. The Central Bank will as a consequence control the money supply and all checking accounts, which will no longer pay interest. The Central Bank will then be allowed to distribute the money it creates to provincial and municipal governments and directly to citizens as a Citizens' Dividend. The Central Bank will become a fourth independent branch of government, under democratic control and accountable to the people, but independent of shortsighted political pressures, just like how the judiciary is a branch of government but is independent of the executive and the legislative. We propose the gradual introduction of this reform through the following steps: I. The Central Bank shall become the sole issuing authority for all money, not just cash but also book money in current accounts, which will become legal tender. II. The creation and use of other means of payment are permitted provided they are compatible with the statutory mandate of the Central Bank. III. The new Sovereign Money will be created by the Central Bank and will come into circulation by payment by the Central Bank to the Republic's budget (including by repaying state debt) and subsequent public expenditure and through direct transfers to local governments and to the citizens. IV. Current accounts shall be excluded from bank balance sheets and current accounts will no longer be in the possession of the bank but the customers will be the owners of the money in their current accounts. Previous current account balances shall be rebooked as debts owed to the Central Bank. V. Lending by private banks will occur through transfers from the Central Bank to the private payment institutions, which will then lend the money to customers. Banks will then become intermediaries between savers and borrowers and will no longer be able to create money through the act of lending. VI. The Central Bank shall be guaranteed independence in its activities but will be accountable to the elected public officials of the Republic. The Governor and the Executive Board of the Central Bank shall be appointed by the Minister of Finance and shall be confirmed by the Senate. The Governor and Executive Board of the Central Bank shall serve for a non-renewable mandate of 10 years. VII. The Central Bank shall have the power to increase or decrease the money supply on an annual basis, within guidelines issued by the Senate annually, based on macroeconomic indicators including the growth potential of the economy at full capacity, the stability of consumer prices, interest rates, the exchange value of the currency, balance of payments, and the ratio of financial assets and debt to GDP. With this proposal we shall introduce a radical reform to our banking system by abandoning orthodox fractional reserve banking, issuing debt-free money, reducing public and private debt, and most importantly by returning the power of seigniorage to the people through the establishment of a democratic but independent Central Bank. Through Sovereign Money the power of private banks to create money will be abolished and returned to the Republic. Irresponsible financial behavior will be avoided, making us more resilient in times of crisis. And by reducing debt we will finally be able to be free of our dependency on economic growth, allowing us to reduce economic activity and pursue degrowth policies without the risk of economic collapse. Iennifer Vinicia Opis Princeps Senatus |
Proposals
Article 1
Proposal[?] to change Central Bank oversight and regulation (if a central bank exists)
Old value:: The central bank is underneath the direct oversight of the national legislature.
Current: The government appoints the head of the central bank and an executive board to manage the central bank but does not otherwise interfere in its operations.
Proposed: The government appoints the head of the central bank and an executive board to manage the central bank but does not otherwise interfere in its operations.
Article 2
Proposal[?] to change Exchange rate regime
Old value:: The exchange rate of the national currency is allowed to float, but the government is permitted to intervene when necessary.
Current: The exchange rate of the national currency is allowed to float, but the government is permitted to intervene when necessary.
Proposed: The exchange rate of the national currency is fixed by the government.
Debate
These messages have been posted to debate on this bill:
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| Vote | Seats | ||||
| yes | Total Seats: 476 | ||||
| no | Total Seats: 0 | ||||
| abstain |
Total Seats: 274 |
| Random fact: In general, role-play requires the consent of all players. |
| Random quote: "What difference does it make to the dead, the orphans, and the homeless, whether the mad destruction is wrought under the name of totalitarianism or the holy name of liberty and democracy?" - Mahatma Gandhi. |