Saturday, 6 December 2008

Green Economics in The Times and FT

Samuel Britten in the FT on Thursday described an early paper by Milton Friedman which examined a 'Framework for a stable economy': "budget deficits would be financed entirely by the creation of money by the Fed and surpluses used to retire money. This would best be accomplished by adopting the 100 per cent reserve proposal for banks, “thereby separating the depositary from the lending functions of the banking system”."

The following day John-Paul Flintoff wrote on The Times' blog: "With the news dominated this week by ongoing cash shortages, rising joblessness and the need to protect the benefit system against fraud, I'm wondering if the time has come for a Citizens' Income."

While monetary reform isn't Green Party policy (yet - some of us are quite keen), it is radical and has some great supporters. I remain gobsmacked that Greidman considered it though.

Citizen's income is Green Party policy and is a fantastic idea. Paying every citizen a single income that they can top up with income from work removes the stigma and benefit trap associated with the current system. It is cost neutral to the overall tax burden (the tax that you pay gets repaid as CI - obviously if you are on a higher income you'll lose a bit and on a lower income you'll gain a bit). Pensioners should get more than the basic CI level reflecting the lower chances that they con top up their income with work.

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