Modern Money 8.85 Personal Perspective: What Will It Mean to You?

You will have more money to spend because everything will cost less and you will pay less in taxes. You will have more power in public decision-making – more control over the spending choices of your community at local, state and federal levels. You will face less stress and have more leisure and family time.


Banking will only see one change for individuals. You will make deposits, use your debit card or write checks just as you do today. You will be able to make deposits or take cash out of your bank. However, you will pay a specific fee for these banking services instead of paying fees buried and hidden in the system itself.

While it’s not an issue for most of us, the need for deposit insurance will disappear. In our current system, deposit insurance covers only $250,000 per depositor, per FDIC-insured bank, per ownership category. In a commonwealth money system, all deposits are held in a trust account at our national central bank and are as safe as the survival of our nation. No one’s deposits are vulnerable to loss from bankers’ decisions. However, banks, as they do now, will keep a certain level of cash on hand, depending on the needs of their customers. This cash would be insured by the bank, just as a business insures inventory on hand. Smaller local banks and branches usually have a higher need for cash on hand as a percentage of their deposits (think of the cash needs of a supermarket ATM branch and a bank on Wall Street). To support local banking, WE may want to subsidize the insurance of this cash inventory at smaller banks. That’s a policy choice.


Banks will still serve as intermediaries between investors and borrowers. There will be enough money to meet the credit needs of businesses and individuals. Remember that our reliance and devotion to borrowing is a product of our current system. In a system that does not require borrowing to create enough money for commerce, there will not be the pressure to continuously increase the amount of debt. As the pressure is eliminated, the demand for credit will diminish. People will still borrow for significant purchases, but we will be much less likely to impulse borrow.

We have come to believe that we just can’t function without our bank credit cards. But, remember, these are a relatively recent innovation. Within a lifetime ago, we did fine paying for our purchases or using a store credit system (e.g. a Nordstrom or Macy’s card, which was not a monetization of debt). You still do this when you buy a bed from a local store and pay them for it over time. Small businesses also maintained and often still maintain credit accounts with their suppliers, which again, do not monetize debt. This system of business-to-business or business-to-individual credit democratizes the issuance of credit. More people make decisions about who gets credit, and more decision-makers strengthens a system. None of this credit is monetized.

Banks can still issue credit cards, but the system behind the cards will have to change. The banks will no longer be able to create new money when you use your card. They must have an investment fund from which your credit transaction draws. Our financial industry is quite capable of creating a system that issues credit cards without creating new money. They demonstrate a masterful aptitude for creating arcane financial instruments, so fashioning a common wealth money credit card system is well within their capabilities.

The government will no longer be going into debt, which will free up that money for other investing in the economy – including making loans to individuals and small business. As of Q3 2017, total government debt was 104 percent of our gross domestic product (GDP) of almost $19 trillion. So, imagine the uses that money can be put to when government no longer needs to borrow. There will be plenty of money available for borrowing by individuals and business.