Whole Reserve Banking to Fund Universal Income
To understand how whole reserve banking would enable the U.S. to finance a universal base income for the purposes of satisfying curiosity.
Preliminary research indicates that there is little information available on how a whole reserve banking system would enable the U.S. to finance a universal base income; however, there are several similar theories on how a UBI could be financed without raising taxes, slashing programs, or incurring more debt.
- "Qualitative easing" is a process in which "the money flows directly into the real economy rather than simply into banks" and would allow for a Universal Basic Income (UBI) without raising taxes, slashing programs, or incurring more debt.
- Essentially, "qualitative easing" is a reallocation of assets of a central bank that results in no change in the balance sheet.
- Qualitative easing is the opposite of quantitative easing (QE), which is the basis of the fractional reserve banking (i.e. banks generate more money in the form of credit).
- This so-called "helicopter money" would "would bypass banks as money creators, and is therefore one way for the central bank to maintain the money supply regardless of whether banks play their role as suppliers of money into the economy."
- In addition, qualitative easing or helicopter money would also bypass government treasuries and would therefore not be "legally prohibited under the monetary financing rule."
- What the qualitative easing theory proposes is that the U.S. reallocate money spent on welfare programs and social security to lower the cost of a UBI.
- Citizens would not be allowed to stack benefits, so if they get $300 in welfare, they would only get $700 in UBI.
- It is likely that people who are on welfare and are close to the income cap would drop welfare in favor of the full UBI because "after all, cash is clearly better than food stamps."
- Andrew Yang's UBI plan does not "create new money, it simply shuffles it around."
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