Google Banking – With Zero Interest to Infinite Prosperity
Why do we actually pay interest at all? For What? To Whom?
This is not a political pamphlet, but a high-skilled economic analysis. More about the author…
or google him on google.de=
In order to justify a steady stream of income without labor or any effort, the “scientific” approach is to assume a natural time preference. This means that individuals prefere 100 Euros now to the same amount in the distant future, since we must make ends meet today. In this sense the necessary condition for the existence of an interest rate as a percent rate is matched for single individuals.
But in order to pay interest as an amount of money, the sufficient condition too must be matched. This requieres the existence of savings or the possibility of selling products with profit.
It is obvious that capital income can be created only by real production of goods and services. If interest yield is generated by mystery and imagination, it must end up finally in bankruptcy.
These theoretic arguments are valid for individuals, but not for the society or the state as a whole. There is no solid reason for discounting the purposes of future generations, which would implicate an interpersonal comparison of utility. In doing so by economic theorists, this is a crude violation of the axioms of neoclassic welfare theory!
Considering the existence of interest and compound interest on government debt, nor the needed neither the sufficient conditions are fulfilled!
Thus there is no reasonable argument for the existence of an “independant central bank” and the complete “bond market”. If government is able to print “Bonds” and sell them as “value papers”, it could also print money in the same way, with no need to squeeze taxpayers.
Since there is no way to change these matters by political actions, we will start this ultimate Financial Revolution as a fairy tale:
Suppose Google donates a Yougle to all 7-year-old children as a birthday present. A Yougle is a kind of baby phone which can be used for calling and texting, if it is loaded with prepaid cash. Children will learn easily in this way to calculate figures (German: Zahlen) and to pay money with sms (German: zahlen)
So children get educated in economic behavior as we are used to. As young adults they feel responsible to work and earn money, so that the supply of all goods and services can be taken for granted.
When finally the interest-free money transfer by SMS is common businesss, traditional banking business (mon[k]ey business) will disappear.
Students for example load up their phones with pocket money from their parents or with government subsidies, but they will not receive credits from Google until they have finished succesfully their final exams. On that day they receive an official Excel file which tells total educational expenditures. Soon they will find a suitable job and can begin to work until the account is balanced.
Others start their own business, which is financed by an interest-less lump sum fee. (Germalish: Flatrate). Since there are no opportunity costs involved in electronic money creation, the optimal price equals zero. These are basic facts of elementary micro economics.
In our experiment the initial flat rate will be set arbitratily at .01 % of the maximum total expenditure. An entrepreneur, who is ready to invest 1 Mio, will be charged with an annual flat rate of 1000 €. Other suppliers may charge other tariffs, different market prices will result reflecting the total costs, which are flat. If interest is flat, the economy will result in financial supra-conductability , which works as follows:
Since each individual expenditure is someone else’s revenue, the total sum of all money is always zero. The monetaristic aggregates M1, M2, M3 etc. will disappear, the monetary theories of Friedman, Keynes, etc. will no longer make any sense. Inflation is no matter, because nobody has an incentive for illegally printing fake money.
For monetarists: The aggregate “money supply” will always exactly match the transaction volume of the economy, there will never be too much nor too less, but always the_sufficient_ money in order to pay all transactions.
All institutions, public and private, and most entrepreneurs create their own money, which comes into existence spontanously where demand meets supply. Any economic subject is always ready to pay all outstanding bills. Those who are not, will order the next level of his individual flat rate, and that’s it. There is no more need for sophisticated economic theory, two basic arithmetic operations will be enough!
If you buy a new car for 49000 €, your account will be charged, while the dealer will receive the corresponding surplus, nothing else will happen. There is no bank officer who will see any trouble or reason for panic at all.
The same thing is true for all kinds of government expenditure. All invoices and salary-accounts are going to be typed in a computer and definitly sent away by pressing the enter-key. All financial holes will be closed smartly, the government debt will disappear suddenly. This is the “soft death of rentiers”, as Mr. Keynes said anciently (retranslated).
The Euro as the national currency unit of course will survive, but the ECB becomes superfluous. Similar will happen in other western nations, so it will be useful to freeze the exchange rates and create a new name for the same old thing.
We suggested KING, which sounds English, but really is a German abbreviation for komplementäres Internet-Geld. The major advantage is the fact that it can be spoken easily in any language. But if this final revolution is going to be started by Google, the new currency unit must of course be spelled with G. Perhaps G-Point?
Here we arrive at the Financial Orgasm of Mankind:
If government must no longer pay interest, all taxes and the whole cost for social security can be abolished completely. Everybody is going to be paid with the full yield of his working time, there will be no longer a difference between gross and net wages.
Since there is no longer need for old age pensions, we can all retire at the age of 35, if we like to do so. If somebody dies with a negative account, there is no other indiviual involved, who misses the complementary surplus. The whole financial industry including insurance companies will be deflated. Since nobody really needs gold as a currency reserve, the worldwide stockpile will be sold out. The gold price will approach Ground Zero, and reflect nothing else but the true material value of gold itself!
The Golden Age will begin soon: The Golden Gate Bridge will be gold-plated once and forever instead of painting it all day long. The Google headquarter will obtain the most upsiting Golden Entrance of the world!
