Two Key Problems
1. Unemployment
2. Shortage of essential public services
Both problems have a common cause
Lack of money!
Euro has fundamental problems
When the economy is working well, the euro seems to be ok.
But when the economy suffers a downturn, the euro is not up to the task.
This is a problem facing all of Italy, and the Eurozone.
“What can one region do?”
Is there anything that one region can do to help, since we have serious problems and cannot wait for national politicians and European Union officials to fix things?
Many communities using complementary currencies
These regional currencies do not replace the Euro, they complement it.
There are hundreds, maybe thousands, of these in Europe, the U.S., the U.K., and all around the world, including in other parts of Italy and in Germany.
Complementary Currencies in History
These complementary currencies tend to appear during periods of crisis.
Many during the Great Depression, in the U.S., in Europe, including Italy.
Many Different Forms of Local Currencies
Some are just a record of barter systems.
Some have a fixed exchange rate with the national or territorial currency.
Recent examples include “Berkshares”, “Ithaca Hours”, “Brixton Bucks”, and “Bristol Pound.”
ARGENTINA – “PATACON”
UMKC “BUCKAROOS”
Student Community Service
To encourage students to do community service and learn about modern monetary systems and government budgets.
On the Buckaroo note it says: “this note represents one hour of community service by a UMKC student.” The note is denominated as “One ROO Hour”
Tax-driven Currency
Instead of just requiring students to do service, we tax them 4 Buckaroos per week for the semester.
Approved community service providers (state and local government offices, public schools, NGOs, and not-for-profit agencies) submit requests to the UMKC Economics Department “Treasury” for student hours and are awarded “special drawing rights” (SDRs) as long as basic health and safety and liability standards are met.
Buckaroo Program
Service providers pay students one Buckaroo per hour, which is equivalent to spending by the Treasury.
Students pay their tax with the Buckaroo notes.
UMKC Buckaroo Program
There is no limit to how many Buckaroos a student can earn.
Buckaroos are freely transferable (they may exchange for goods and services or other currencies)
Buckaroos are a floating exchange rate currency.
The Buckaroo is a sovereign currency, issued by a monopoly supplier who imposes a tax liability in its otherwise worthless currency.
The Buckaroo is a non-convertible (UMKC doesn’t promise to convert it to anything) floating currency (UMKC does not peg the exchange rate).
UMKC only promises it will accept Buckaroos in tax payment
U.S. monetary system
The $US is also a sovereign, non-convertible, floating currency, backed by the tax system.
The only promise the U.S. Treasury makes is that it will accept the $US in payment of taxes.
Buckaroo Implications
The Buckaroo is a case of public monopoly.
UMKC always runs a Buckaroo deficit, because students will earn more than their tax liability, they want to save some, they lose some, they keep some as souvenirs.
Buckaroo Implications
• UMKC's Buckaroo fiscal deficit is exactly equal to the Buckaroos saved by the students and their associates.
• The value of the Buckaroo is a function of what the students have to do to earn a Buckaroo from UMKC.
• The Buckaroo functions first to move student labor from the private to the public domain.
• The Buckaroo has operated and sustained its public purpose independently of foreign central bank policies.
More Implications
UMKC Buckaroo spending does not depend on collecting taxes.
UMKC does not need to borrow Buckaroos in order to spend.
If UMKC tried to reduce its fiscal deficit, it would deplete Buckaroo savings and create student unemployment.
Denison University DVDs
A UMKC graduate earned his Ph.D. and left to become an Assistant Professor at Denison University. He started a similar program there called “Denison Volunteer Dollars.”
If UMKC decided it would give up its currency, and join a monetary union with Denison, then UMKC could not pay students unless it collected taxes first, or borrowed DVDs in private markets.
If UMKC Joined Monetary Union
UMKC would no longer be a monetary sovereign. It would no longer be a money monopolist. It could no longer continue to run fiscal deficits to create full employment and satisfy the desire of students to save.
Denison would tell UMKC it better get its fiscal house in order, and so force UMKC to accept an austerity program.
Italy under the Euro
When Italy joined the Euro, it put itself in exactly the same position as UMKC, if UMKC gave up the Buckaroo and joined Denison in a monetary union (or pegged the Buckaroo to the DVD, etc.).
Italy under the Lira
Before adopting the Euro, Italy was also a monetary sovereign, and the lira was also a non-convertible floating currency backed by the tax system.
But when Italy adopted the Euro, it voluntarily gave up its monetary sovereignty. Italy is no longer a money monopolist. Italy is no longer a currency issuer, but is now, like households, a currency user.
How about “Nido dell’Aquila”
The nest is the home. The nest must be protected. The nest must be kept safe.
This is just a thought, please create your own name for the currency, have local artists submit drawings.
L’Aquila Issues the Nido
L’Aquila imposes a tax in Nido, say four Nido per week per household.
L’Aquila offers a community service job to anyone ready and willing to work, paying one Nido per hour.
Nido Program
Some will work more than four hours per week, some will work less.
Those who work, say, forty hours per week will pay their tax and have 36 left over.
Those who are too busy to work in the program (already working full time) will need to acquire them from those who have extra.
Nido Circulate
In this way, the Nido will circulate in the community.
Like the Buckaroo and the U.S. dollar, and unlike the Euro, the Nido would be a non-convertible, floating currency. Like UMKC and the United States, and unlike Italy under the Euro, L’Aquila would be a monetary sovereign.
The Heart of L’Aquila
This is a brief over view of the proposal. If you are interested, I would be happy to assist in any way I can and that you feel appropriate.
If not, whatever you decide, I will always have a special feeling for L’Aquila, Abruzzo, and Italy. The greatest resource of this country is the labor of the people. Not only the bodies and minds, but the hearts of the Italian people—and no price, no matter how high, can be put on the Italian Heart.
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