An old paint sketch I found in my hard drive.
In the legacy economy, central bankers set benchmark interest rates to adjust the demand for credit in our debt-based system. New money is created as the principle amounts of loans while no new money is created to cover the interest on these loans, so there is never enough money in the system to repay all of the debts that are owed. The unaccountable private companies that mediate this system keep the poor poor and articulate structural racism. Many people consider this arrangement to be perfectly reasonable. I personally think it's bananas.
The US government supports this legacy economy in part by requiring taxes to be paid in dollars. Even if most of us decided to adopt a different common currency, we would all still need to use dollars to meet our tax obligations. This aspect of the economy is an immovable object. The credit system isn't an immovable object. It could be discarded entirely and replaced with a decentralized network of blockchain solutions.
Of course, I favor discarding many parts of the system that we presently consider normal. If I had my way, there are whole industries that would no longer exist. The medical billing industry is at the top of my list, right up there with the credit rating industry. And large swaths of the finance, real estate, and insurance industries. Not to mention certain military contractors, the fracking industry, and other comparably problematic industries.
One day I sat down to figure out how many people would be put out of work if my opinions were actually put into practice. The answer was tens of millions. If I had my way, tens of millions of people would be put out of work, and I think the country would be better for it.
The shortest path to making a situation like that acceptable would be the establishment of a Universal Basic Income. A 5% wealth tax, levied on all wealth regardless of the income of the earner, would be sufficient to pay for a UBI and universal healthcare, particularly after all of the bloat was taken out of other government programs that would be rendered obsolete.
Almost no one agrees with my opinion on these matters. The blues will never take the bloat out of public budgets. They're the party of government bloat. The reds will never go for a plan where poverty is eliminated and people are treated equally, with dignity. They're the party of shaming the poor for being poor. Just the universal healthcare part is already too much for either group to accept. And every industry I'd like to see gone has expensive lobbyists ensuring that the terrible general situation stays the same or gets worse.
This naturally raises the question of where our power to change things resides. I think our power here is social and technical. Socially, we can raise awareness of what all needs to change and why. Technically, we can build alternative systems that displace the control regime's power over our lives. Already, the crypto economy has displaced the power of the international remittance industry, which has long been a racket that preys on poor people who need to send money across borders. Because of crypto, money transfers are now free or close to it for anyone who knows how to use the tech.
Using a combination of crypto collateral, blockchain reputation, and smart contracts, a viable alternative to the credit system could be created. I should say is being created, because there are a growing number of projects operating in this space. In the US, mortgages and car loans represent the low hanging fruit, and it only takes one bank to begin issuing these loans based on an alternative credit scheme. Once one bank managed to navigate our antiquated regulatory environment to issue such loans, it would be game over for the legacy credit system.
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