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The Individual Estate Account

To: "The New Forum" <TheNewForum@xxxxxxxxxxxxxxx>, "Proceedings of PKT Forum" <pkt@xxxxxxxxxxxxxxxx>, "Proceedings of the Cyberspace Society" <cyber-soc@xxxxxxxxxx>
Subject: The Individual Estate Account
From: "John Gelles" <indexed-savings@xxxxxxxxxxxxx>
Date: Fri, 2 Jan 2004 18:50:49 -0800

Dear Members,

The Zarlenga Book, as so many of you know,

is exactly what we need to move from money

crank to proponents of legal reform, monetary

reform, and cultural reform.

Although written in popular language -- dare

I say demotic -- it ranks with Keynes and Adam

Smith as a bible of sorts. What follows is a copy

of an email from me to the author.

John Gelles

TIPS-BOND-TYPE SAVINGS ACCOUNTS IN

SUPPORT OF DEBT-FREE MONEY---TO PUT

THE MONEY POWER BEHIND DEMOCRATIC

LAWS ON LEGAL TENDER, TAXES AND

SPENDING IN THE PUBLIC INTEREST

Dear Stephen Zarlenga, ami@xxxxxxxxxxx

I have just received from Amazon Market Place the

bible you recently authored. I'm only at page four---but

I am pleased I parted with more than sixty bucks to get

it by my side.

I have been at this money, banking and justice problem

since 1984. I wrote a pamphlet, "The Constitutional Right

to Work". It proposed we finance full employment via

loans to employers and self-employers from a "Bank of

the United States" for full employment.

It called for a monetary system reflecting the affordability

of all that can in fact be produced. It reflected wartime

financing in World War II, applied to production of peace-

time need---including infinite needs for science, technology,

infrastructure, health care, education, etc., whose effect

would be to guarantee efficient real and complete full

employment at a union wage of all who wanted to work.

In promoting these ideas on internet forums I added the

idea of savings accounts, modeled on TIPS bonds, that

would absorb private incomes---to ease the pressure on

price as government spent the full amount necessary to

meet national priorities.

Today I keep the remnants of former sites on www.tiea.us

where such savings accounts are called an Individual Estate

Account (IEA). They are based on government spending

of some money into circulation, debt-free, and on people

saving some of their earnings, tax-free when saved, and taxed

as lightly as possible when spent.

The site is not much good at present -- but is used by me,

together with discussion forums, to promote monetary

reform in the public interest. I see Lincoln's greenbacks

and World War II's unsold Treasury Bonds (supporting

Treasury overdraft financing) as the direction we have to

take. Very low or even no taxes are part of the solution

---to gain whatever acceptance we can from all who hate

taxes in general. Very low interest, too, is necessary to

woo entrepreneurs.

For the moment I believe your book is a Godsend. It is

a work around which can be built both popular and estab-

lishment support for reform. I see a need for a movement

focused on "The Lost Science of Money" that will resemble

www.moveon.org and www.meetup.com in creating

a grass roots element of activists whose specific spending

and taxation policies may differ but whose "religion" is

largely drawn from www.monetary.org .

I understand you recently briefed the Treasury. I trust useful

recruiting material will come from that session and will appear

on your monetary site.

My own thoughts in this matter were influenced by Keynes

and Lerner: Lerner's functional finance related spending

to price effect not tax revenues, as the constraint to watch

at macro level.

Also Stuart Chase in "The Proper Study of Mankind" made

popular the slogan from the ILO assembled in Canada in 1944:

"A nation can afford whatever it can produce."

Moreover, Roosevelt's Second Bill of Rights authored in 1944,

is a sound human rights approach. As is the UN Declaration.

Personally I am a retried lawyer-accountant. I'm 78 and a half.

I'm not in these matters for money or fame. But I'm in them

for good till I die.

I believe a popular movement might involve something like

the extract below from www.tiea.us/did This was written

before I received my copy of your book. Now I see things

more closely aligned with your book as the glue for a

movement that may evolve popular agendas under its

umbrella.

Sincerely,

John Gelles

A Virtual Assembly To Design and Promote
Debt-free Inflation-protected Dollars
D I D

PURPOSE

The purpose of this assembly is to reform our system of money.

We believe that not all money should initially depend on debt (and require more debt as it grows.) We believe a mix of money, including legal tender only, and banknotes reflecting debt, can better support prices, profits, wages and the public interest, to make possible our objectives:

ending involuntary unemployment
achieving a higher minimum standard of living
progressing toward a cleaner, kinder, gentler world

Such reform demands an agenda that is brief and clear to help voters choose candidates, and to impact the law they consent to obey.

The choices we make when we shop (compared to those we make when we vote) do not sufficiently support profits and wages at levels high enough to protect our jobs and sustain business prosperity. And they do not protect our children's future. Only in the voting booth are such choices possible.

OBJECTIVES AND PRINCIPLES

To join the power of money to the power of democratic ideas for the benefit of all? not the few.
To maintain the power of money to buy and own property for sale.
To use the power of ideas to inform belief of how best to plan for the future.
To support money as wealth to be saved and invested by individuals and nations? wealth with the power to encourage, organize and reward work.
To protect the value of money by creating an abundance of things and a related abundance of money in markets reasonably free of monopoly and protected from unfair trade.
To grant government the power to create money as legal tender and conform and protect deposit accounts. Such money (as paper or record of account) shall be the same in appearance, essence and function? whether initially created by government or lent into circulation by authorized banks under law.
Congress shall be responsible for money created on government order or lent by banks under applicable law.
To grant government the power to license and regulate banks to lend money? in expectation of borrowers' profit and loan repayment at a lawful rate of interest ? under an independent central bank empowered to protect bank credit from imprudent risk.
To grant government the power to spend and lend money into circulation? avoiding higher taxes and/or sale of additional federal bonds? to protect the nation from economic stress and defend the national and public interest against economic threat of foreign or domestic origin.
With this power, Congress may order the central bank to credit government accounts for the sums involved. The order will add to the stock and flow of money not the national debt.
Said additions to the stock and flow of money shall be limited to keep the flow of money consistent with what the nation can afford.

A nation can afford the stock and flow of money that reflects? not just private and national debt? but also:

what is produced and for sale,
what will soon be produced for sale,
what is owned and could be for sale,
money in circulation, and
money saved as wealth? in inflation-protected accounts.

To the degree determined by law and sound administrative judgment, inflation-protected savings will replace:

national and private debt,
income and personal taxes.

Such reductions in debt and taxes shall be limited to debt and taxes not necessary, in fact, to prevent hyper-inflation.

This new system, featuring inflation protected savings, defines money created, saved and circulating in the public interest? also referred to here as debt-free inflation-protected dollars (DID).

Additions to private debt, which traditionally augment the supply of money, will diminish? as money saved away from trade increases.
The combination of higher current (and future) economic output, higher profits and wages, and more savings ? together with lower taxes, interest, and private debt ? will end unemployment and poverty.
The combination will increase the economic power of government to provide national and economic security in an age of nuclear, chemical and biological peril.
That age should give way to one of peace with that new economic power harnessed for environmental and social good.

STRUCTURE

DID is a virtual assembly of round table discussions with rules and recommendations adopted in its proceedings.
Tables will elect chairpersons (or a no-chair structure) as they like.
Tables will elect representatives to a directors table above multiple levels of concentrated continuing discussion? preventing any table below the top from exceeding a size that promotes effective discourse.
Horizontal access by any person at any table to read proceedings and decisions of any other table will be provided. Freedom to write by any member to any member or table will be preserved under rules that overcome the problem of limited read-time at tables elected to represent large numbers of members.
A graphical display of all tables will be maintained to illustrate representation from level to level.
Initially there will be but one table. When that table divides in two it will follow its own rules. Subsequent divisions of tables will follow their own rules.
Since tables will be of varying sizes, key decisions that affect the whole assembly, and DID and its objectives, will be based on a majority of assembly members? not a count of tables or units less than the whole assembly.
Minority opinion will be preserved when votes are not unanimous.
Proceedings are voluminous? and not recorded? unless otherwise agreed.
Decisions are few? and recorded as numbered pages.
All documents remain open to revision and editing? but earlier versions may be retained in archives.