A Renaissance in L'Aquila: Revival, Renewal, Reconstruction

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Presentation made in L'Aquila, Abruzzo, Italia, in January 2013, proposing they consider: 1) issuing a local complementary currency, the Nido; 2) accept Nido in payment of taxes; 3) offer a Nido wage to anyone ready and willing to work a community service job.

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<ul><li> 1. A Renaissance in LAquila:Revival, Renewal, Reconstruction Mathew Forstater forstaterm@umkc.edu</li></ul> <p> 2. Two Key Problems1. Unemployment2. Shortage of essential public services 3. Both problems have a common causeLack of money! 4. Euro has fundamental problemsWhen the economy is working well, the euroseems to be ok.But when the economy suffers adownturn, the euro is not up to the task.This is a problem facing all of Italy, and theEurozone. 5. What can one region do?Is there anything that one region can do to help,since we have serious problems and cannot waitfor national politicians and European Unionofficials to fix things? 6. Many communities using complementary currenciesThese regional currencies do not replace theEuro, they complement it.There are hundreds, maybe thousands, of thesein Europe, the U.S., the U.K., and all around theworld, including in other parts of Italy and inGermany. 7. Complementary Currencies in HistoryThese complementary currencies tend to appearduring periods of crisis.Many during the Great Depression, in the U.S.,in Europe, including Italy. 8. Many Different Forms of LocalCurrenciesSome are just a record of barter systems.Some have a fixed exchange rate with thenational or territorial currency.Recent examples include Berkshares, IthacaHours, Brixton Bucks, and Bristol Pound. 9. ARGENTINA PATACON 10. UMKC BUCKAROOS 11. Student Community ServiceTo encourage students to do community serviceand learn about modern monetary systems andgovernment budgets.On the Buckaroo note it says: this noterepresents one hour of community service by aUMKC student. The note is denominated asOne ROO Hour 12. Tax-driven CurrencyInstead of just requiring students to do service, wetax them 4 Buckaroos per week for the semester.Approved community service providers (state andlocal government offices, public schools, NGOs, andnot-for-profit agencies) submit requests to theUMKC Economics Department Treasury forstudent hours and are awarded special drawingrights (SDRs) as long as basic health and safety andliability standards are met. 13. Buckaroo ProgramService providers pay students one Buckaroo perhour, which is equivalent to spending by theTreasury.Students pay their tax with the Buckaroo notes. 14. UMKC Buckaroo ProgramThere is no limit to how many Buckaroos astudent can earn.Buckaroos are freely transferable (they mayexchange for goods and services or othercurrencies)Buckaroos are a floating exchange rate currency. 15. The Buckaroo is a sovereign currency, issued by a monopolysupplier who imposes a tax liability in its otherwise worthlesscurrency.The Buckaroo is a non-convertible (UMKC doesnt promise toconvert it to anything) floating currency (UMKC does not pegthe exchange rate).UMKC only promises it will accept Buckaroos in tax payment 16. U.S. monetary systemThe $US is also a sovereign, non-convertible, floating currency, backed bythe tax system.The only promise the U.S. Treasurymakes is that it will accept the $US inpayment of taxes. 17. Buckaroo ImplicationsThe Buckaroo is a case of public monopoly.UMKC always runs a Buckaroo deficit, becausestudents will earn more than their taxliability, they want to save some, they losesome, they keep some as souvenirs. 18. Buckaroo Implications UMKCs Buckaroo fiscal deficit is exactly equal tothe Buckaroos saved by the students and theirassociates. The value of the Buckaroo is a function of whatthe students have to do to earn a Buckaroo fromUMKC. The Buckaroo functions first to move studentlabor from the private to the public domain. The Buckaroo has operated and sustained itspublic purpose independently of foreign centralbank policies. 19. More ImplicationsUMKC Buckaroo spending does not depend oncollecting taxes.UMKC does not need to borrow Buckaroos inorder to spend.If UMKC tried to reduce its fiscal deficit, it woulddeplete Buckaroo savings and create studentunemployment. 20. Denison University DVDsA UMKC graduate earned his Ph.D. and left tobecome an Assistant Professor at DenisonUniversity. He started a similar program there calledDenison Volunteer Dollars.If UMKC decided it would give up its currency, andjoin a monetary union with Denison, then UMKCcould not pay students unless it collected taxesfirst, or borrowed DVDs in private markets. 21. If UMKC Joined Monetary UnionUMKC would no longer be a monetarysovereign. It would no longer be a moneymonopolist. It could no longer continue to runfiscal deficits to create full employment andsatisfy the desire of students to save.Denison would tell UMKC it better get its fiscalhouse in order, and so force UMKC to accept anausterity program. 22. Italy under the EuroWhen Italy joined the Euro, it put itself in exactlythe same position as UMKC, if UMKC gave upthe Buckaroo and joined Denison in a monetaryunion (or pegged the Buckaroo to the DVD, etc.). 23. Italy under the LiraBefore adopting the Euro, Italy was also a monetarysovereign, and the lira was also a non-convertiblefloating currency backed by the tax system.But when Italy adopted the Euro, it voluntarily gaveup its monetary sovereignty. Italy is no longer amoney monopolist. Italy is no longer a currencyissuer, but is now, like households, a currency user. 24. How about Nido dellAquilaThe nest is the home. The nest must beprotected. The nest must be kept safe.This is just a thought, please create your ownname for the currency, have local artists submitdrawings. 25. LAquila Issues the NidoLAquila imposes a tax in Nido, say four Nido perweek per household.LAquila offers a community service job toanyone ready and willing to work, paying oneNido per hour. 26. Nido ProgramSome will work more than four hours per week,some will work less.Those who work, say, forty hours per week willpay their tax and have 36 left over.Those who are too busy to work in the program(already working full time) will need to acquirethem from those who have extra. 27. Nido CirculateIn this way, the Nido will circulate in thecommunity.Like the Buckaroo and the U.S. dollar, and unlikethe Euro, the Nido would be a non-convertible,floating currency. Like UMKC and the UnitedStates, and unlike Italy under the Euro, LAquilawould be a monetary sovereign. 28. The Heart of LAquilaThis is a brief over view of the proposal. If you areinterested, I would be happy to assist in any way Ican and that you feel appropriate.If not, whatever you decide, I will always have aspecial feeling for LAquila, Abruzzo, and Italy. Thegreatest resource of this country is the labor of thepeople. Not only the bodies and minds, but thehearts of the Italian peopleand no price, nomatter how high, can be put on the Italian Heart.</p>