subscribeThe TFD system and the euromess
Post By gaia1 in American Monetary Matters
Paul Krugman in today’s New York Times argues that the real story of the euromess lies “not the profligacy of politicians, but in the arrogance of elites” because these policy elites “pushed
My focus here is to make a couple of observations about the euro experiment for the implementation of the Tierra Fee & Dividend system.
First, the Tierra Fee & Dividend system does not start out with a vehicle currency for a region, let alone the world. It starts out as an international reserve currency in its phase 1. Thus, nations can conduct their economic and fiscal policies without being LEGALLY constrained by the Tierra Treaty.
Second, by agreeing to the Tierra as a reserve currency nations learn to work together, so that greater political union will come possible in their efforts to have the Tierra become a vehicle currency. The 16 euro-zone nations will have profited in several ways by engaging in a monetary union without having a strong legally binding political union. They are now in a difficult patch, but their way out of this difficult patch is, as Krugman states, not a breakup which is “very nearly unthinkable, as a sheer matter of practicality.”
Thirdly, the euro-zone nations and their 11 non-euro-zone EU member states will engage in the next couple of years in muddling through their high unemployment, deflation and other monetary, financial, fiscal economic and commercial problems while at the same time dealing with the demands of the climate crisis. They will probably come to the realization that 1. they cannot solve their regional problems without solving them in their international context; 2. that the international monetary, financial, economic and commercial systems have to overhauled in fundamental ways to deal with both the economic and climate crises, to mention only the two most important and pressing ones.
Fourthly, once that realization sets in and is being taking seriously they and the rest of the international community will be ready to consider the Tierra Fee & Dividend system and agree to establish the UN Commission on Monetary Transformation and the Climate Crisis as a major channel of investigation and negotiation that also would include the results of the two ad hoc working groups (AWG-LCA and AWG-KP) of the UNFCCC and the main demands in the Copenhagen conference’s Klima-Forum’s People's Declaration.