As should be evident from the previous postings on this blog
regarding Delegate Bob Marshall’s proposal for a study of currency reform, the
Commonwealth of Virginia has a unique opportunity to lead the rest of the
country in a fundamental financial reform that has the potential to revitalize
the entire U.S. economy.
That is why it was so gratifying to receive some very
positive commentary about the “campaign” to get Bob Marshall to talk to Norman
Kurland from Dr. Norman Bailey, a prominent economist who supports the goals of
Capital Homesteading. It also
represented another opportunity to write to Mr. Marshall, who might appreciate
some brief e-mails of support from other people — whether or not they live in
Virginia. He can be reached at
delegatebobmarshall [at] Hotmail [dot] com.
February 15, 2013
Dear Mr. Marshall:
Yesterday, Dr. Norman Bailey, former Director of Planning and Evaluation for the National
Security Council under President Ronald Reagan, later appointed Special
Assistant to the President and Senior Director of International Economic
Affairs at the White House, sent me an e-mail after reading the letters
I’ve been sending to you.
Dr. Bailey, who has contributed numerous articles to the Yale Law Review and other periodicals, is
a leading authority on monetary theory and its sound application. He has, to a significant degree, guided CESJ
in developing the proposed monetary and tax reforms embodied in Capital
Homesteading. More about Dr. Bailey’s
impressive credentials can be found if you click on this link.
While it didn’t occur to me, Dr. Bailey noted something that
should be obvious the moment it is pointed out.
As he said,
“Why not suggest that instead of trying to ‘return’ to a gold
currency, the Commonwealth lobby the Richmond Federal Reserve Bank to refuse to
accept for discounting anything but real bills? I believe you will find
that although the right has not been exercised for many decades, the regional Fed
banks can adopt their own policies in this area. In fact, that was the
whole point of having not a ‘central bank’ as such, but a series of regional
banks to supply liquidity as needed to the commercial banks in their respective
regions.”
Dr. Bailey’s suggestion answers any objections that might
remain once the critical issue of collateralization is addressed with capital
credit insurance and reinsurance. By
rediscounting bills used to finance expanded ownership of new capital, the
Richmond Federal Reserve — or any other regional Federal Reserve Bank, for that
matter — could provide financing for all feasible capital projects without
being limited by existing accumulations of savings.
Further, this would be done without redistributing existing
wealth through inflation, or by putting it on the backs of the taxpayers. By financing new capital formation with the
present value of future increases in production instead of past cuts in
consumption, mass consumption power would not only be sustained, but increased,
stimulating economic growth and, yes, creating meaningful and productive jobs
without subsidies or raising the minimum wage.
Again, this would be done without the standard Keynesian
tools of inflation or taxation. It would
institute an elastic, stable, and asset-backed currency to replace the
inflationary and volatile currency backed by government debt — but without the
necessity of a “Virginia-Only” or parallel monetary system. Consistent with the principles of social
justice, this approach would reform and restructure, not undermine or destroy
the existing system.
Dr. Bailey’s comments open up a means of realizing the
program presented in CESJ’s book, Curing
World Poverty (1994), within a very short time, and with significant
benefits not only to the Commonwealth of Virginia, but to every citizen. As you commented to Norman Kurland, the
book’s principal author,
“Your free-enterprise approach to solving poverty with the
founding of the Center for Economic and Social Justice is the fundamental
perspective needed to bring people to economic independence. Your years of study and research in order to
write Curing World Poverty: The New Role of Property is a
generous contribution to the betterment of much more than our local community.”
Again, I urge you to call Norman Kurland at your earliest
convenience to discuss this critical issue.
Yours, etc.
#30#
