7 page 3 Money under the mattress

MONEY UNDER THE MATTRESS

Money, under the mattress, stands for money saved and not spent into circulation. It used to mean that money was not safe in the bank. But it has much to be said in its favor when banks are safe—and money is saved in bank accounts, protected from inflation by government.

Such inflation protected accounts (IPA) are an element of this plan—and they are expected to be key to its success.

Imagine, if you will, a world where everyone had a very substantial IPA. As long as the money saved was not spent, inflation would be easily prevented. And there would be no need for taxes at all.

Why not? Because government would spend new money circulation to build a heaven on earth. And people who were paid what was spent, for labor, materials, parts or anything else, would save as much as they could. After all, the money savings would never lose purchasing power as long as the nation state worked to satisfy the people who lived there because it was an economic democracy which they loved from the day they were born.

As money accumulated in IPA's, people would eventually be free of all debt and living securely in luxury digs.

This possibility exists for fiat money, where it is based on government's promise to deliver a money system that works. The system we have today is based on debt and does not work.

We would not have to take debt out of the picture. We would only have to civilize and rationalize the relation of debt to real wealth and the real economic needs of people.

In effect, the above money system would have to protect the value of real work in producing the necessities of life. Luxuries could be priced on the basis of supply and demand. Necessities would have to be priced based on their cost. Such cost accounting systems have enabled our mass production supply chains to end poverty where they make sense. Elsewhere, they have created poverty because they over-produced in comparison with the money system that was supposed to support them.

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