Wednesday, December 22, 2004

A concept of money

I just recently had a novel idea about money. I have little knowledge of what the actual effects of this kind of money would be, but I thought of it in the shower, and believed it interesting none the less.

Quintessentially money would be divided into several types of credits, all valuated at roughly the same transferrable amounts, but useful for different purposes. Wages would be paid in 3 tiers:

These are called "Buy credits", firstly roughly a third of buy credits would have an expiration date of say 3-6 months, this represents disposable or rapidly spent consumption, usually on staple goods or consumer commodities. Second tier buy credits would have an expiration date of 5 to ten years, this representing more long term spending and short term investment. The third would be money given without an expiration date (when exchanged however, it turns into money with expiration dates), this money is in a type of account used for loans to government or private investment, and thus this account would develop interest at a stable rate. This means a certain portion of everyone's wage goes directly to their retirement. This all works on the assumption that people are less likely to rapidly spend money that expires less rapidly.

Expired money turns into "Demand Credits" demand credits can be spent in the following ways: They turn into a direct credit rating to the consumer, allowing them to borrow up to the amount let expired. Secondly, they can be exchanged for "Staple Credits" which would work much like food stamps do now. Thirdly they could be used to stimulate demand into new technologies or new products, that is those not yet in the consumer field, by having them transfered to producers in the form of (on their end) as "Development credits". This gives producers the knowledge directly of what consumers want by reversing the advertisement process essentially. The other type of credit would be a "Producer Credit" used directly in line with buy credits, at the production end.

In my conceptual theory, this would essentially mean large portions of money would turn into development credits, and thus technological growth, actual consumptual demand would fall or stabilize to sustainable levels.

How all of this would work out in actuality, I have no idea. Any comments, criticism, or any insights from real economicists would be appreciated.


As another note: This money would likely not be "printed" in the traditional sense, but would rather work like an ATM.

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