Macroeconomic System for Climate Change
A U.S. Patent Application
Inventor: J.D. ALT (acknowledging all advocates of modern fiat money)
Assignment: To all citizens of democratic free societies
A macroeconomic system including the issuing of a fiat currency by a sovereign government; the establishment of a tax regime on the government’s citizens wherein the taxes levied can only be paid with the sovereign government’s fiat currency; the sovereign government’s debiting of its tax collection account to purchase goods and services from its citizens and their commerce; the sovereign government’s issuing of future fiat currency certificates—to be redefined as “treasury bonds”—which it trades, at a discount, for existing fiat currency held in private financial markets; the sovereign government then spending the traded-for existing fiat currency to purchase goods and services from its citizens and their commerce over and above what it is able to purchase by debiting its tax collection account; the management of the value of the said fiat currency relative to goods and services by the general means of draining the currency from circulation through the sovereign tax regime—and by the specific means of controlling the discount and time-to-maturity of the issued future fiat currency certificates (treasury bonds); and wherein the sovereign government’s spending is thereby enabled to be orders-of-magnitude greater than what the government collects in taxes—without encumbering the government with debt, and without devaluing the fiat currency with respect to the citizens’ commerce; said macroeconomic system thus enabling a sovereign government to spend whatever fiat currency is necessary to enable and assist its collective society to mitigate and adapt to climate-change.
Background of the Invention:
The present invention relates to the problem of a sovereign government paying for goods and services which are necessary for a collective society, represented by the sovereign government, to mitigate and adapt to climate-change; specifically, to the following general aspects of that problem:
If a collective society is to successfully mitigate and adapt to climate-change, therefore, it is advantageous for its sovereign government to be capable of spending currency several orders-of-magnitude greater than what the government can acquire by means of tax collections or borrowing from private financial markets. More specifically, it will be advantageous if the sovereign government has the means—without collecting additional taxes or borrowing—for issuing and spending whatever currency is found necessary to purchase the goods and services necessitated by collective society’s efforts to mitigate and adapt to climate change. Within the definitions, assumptions, and operations of the existing normative macroeconomic system, however, it is unobvious how to provide a sovereign government with this capability. Specifically, the needed capability is thwarted by the existing macroeconomic system as follows:
For all these reasons, the norms of the existing macroeconomic system make it virtually impossible for a sovereign government to spend the currency that will be necessary to assist and enable its collective society to successfully mitigate and adapt to climate-change; compounding this difficulty, the existing macroeconomic system furthermore makes it virtually impossible to curtail profit-making enterprises responsible for the carbon emissions driving the climate-change itself.
It is therefore advantageous to envision a macroeconomic system which will remove these disadvantages.
Description of the Prior Art:
It is known for a sovereign government to establish a Central Bank which issues fiat currency as necessary to enable its citizens to engage in the profit-seeking commerce they choose, the currency being provided through a central bank system which extends credit to the citizens and their profit-seeking enterprises, and which, in turn, earns financial profits itself through the accrual of interest on the debt, while the Central Bank issues the fiat currency, as necessary, to keep the system liquid. It is also known, in such a macroeconomic system, for the sovereign government to claim a share of the profits in the citizens’ commerce, for its own spending purposes, by levying taxes on those profits, and requiring that the taxes be paid with the fiat currency issued by the Central Bank—a requirement which renders the fiat currency itself the de facto unit of account for all financial transactions, public and private, within the sovereign’s realm.
It is further known, in such a macroeconomic system, where the sovereign government’s spending purposes are not met by its share of the profits of the citizens’ commerce, for the sovereign government to issue interest bearing treasury bond promissory notes, which are traded for fiat currency held by the private financial markets, the traded-for currency then being used for the government’s spending purposes. The treasury bond, in such a case, is understood to be a promissory note which commits the government to paying the interest the bond bears as well as the principal on the date of the bond’s maturity. This prior art, however, makes no provision for how the sovereign government is to obtain the future fiat currency that will be needed to meet the obligations of the promissory note—other than through the collection of future taxes, or the issuing of future treasury bond promissory notes—thus creating a Ponzi scheme which can only be maintained by continually expanding the aggregate size of the citizen’s profit-making commerce and, thus, the government’s future tax-claim on those profits (as well as the ability of the citizens’ commerce to purchase the future treasury bonds).
This prior art poses grave disadvantages to the sovereign government, to the citizens’ commerce, and to the well-being of the collective society the government represents, when a condition arises that imposes new, and very large, spending requirements on the sovereign government—as is specifically the case with the challenge of climate-change that now confronts modern human society. The prior art makes no provision for the government to spend additional fiat currency without dramatically growing the citizen’s profit-making commerce, while it is the most profitable components of that commerce itself—fossil energy—which most contribute to the onset of the climate-change being mitigated. Thus, the prior art sets in motion the operations of a macroeconomic system which is in direct conflict with what the system must undertake to accomplish.
Summary of the Invention:
It is the object of the present invention to overcome the above disadvantages of the prior art by describing a strategic modification to the known macroeconomic system which will enable it to accommodate the orders-of-magnitude increase in sovereign government spending necessitated to meet the challenges of climate-change—and to do so without committing the government to the repayment of an unsustainable debt requiring it to envision and justify a Ponzi scheme of profit-generated financial growth which, perversely, encourages the continued use of the fossil energies driving the climate-change collective society is seeking to mitigate and adapt to.
Specifically, it is the object of the present invention to describe a macroeconomic system which utilizes the principal features, components, and operations of the known system, but which strategically alters the normative understanding of just one of those components: namely, the treasury bond: Specifically, that a treasury bond shall not be understood, or operationally treated, as a promissory note committing the government to the payments of interest and future principal, but instead shall be understood and operationally treated as a direct issuing of future fiat currency which is traded, at a discount, for existing fiat currency in the private markets; said existing fiat currency received in trade for the treasury bond then being spent by the government to enable and assist the collective society in mitigating and adapting to climate-change. Thus, the private financial markets, because they can obtain the future fiat currency at a discount, are able to fully pursue their profit-oriented commerce, while the sovereign government is able to spend the appropriated existing fiat dollars in pursuit of climate change mitigation and adaptation without encumbering itself with a Ponzi scheme debt obligation.
Detailed Description of the Invention:
It will be noted that the present invention, in the interest of minimizing the difficulty of affecting change to social norms, makes the smallest modification possible to the existing macroeconomic system in order to achieve the stated goal of enabling a sovereign government to increase its spending by the orders-of-magnitude necessary to enable and assist the collective society it represents to mitigate and adapt to climate-change. Accordingly, it can be understood that the present invention assumes that the following normative operations of the existing macroeconomic system remain unchanged:
At this point the present invention is inserted in the macroeconomic system, by establishing a modified normative understanding of what the said treasury bond represents; namely that the treasury bond is a certificate of future fiat currency, issued by the sovereign treasury, with a pre-established and specified date upon which the fiat currency, thus certified, shall become acceptable as payment for all debts public and private.
The existing normative operations of the macroeconomic system, then, continue unchanged:
It can now be understood that the modified macroeconomic system described above has the following advantageous and beneficial results: