Fair Money

I'm putting this up for feedback. It's written at first hand.

The way current money works is fundamentally flawed. They are created out of thin air aka inflation, and with their creation a correlated debt is also instituted.

Let’s exemplify. U.S. government needs 1 trillion $, so the FED creates 1 trillion $ of never existing before fresh money, and it also emits bonds of that value that the U.S. government promises to pay back. But who should they really pay back for that trillion?
Let’s say total money supply is 100 trillion when this new 1 trillion is created and credited to the government. Before it’s creation, the existing supply of 100 trillions was distributed among the various entities such as private individuals, corporations and so on. An entity who owned say 1 trillion $, had an 1% share of the money supply or of purchasing power. Once the new 1 trillion is created, the share of money that entity owns gets diluted by 1%, so now it roughly owns only 0.99% share of the money supply. And this dilution of the share of money owned applies to everyone. So that new trillion created is actually created from the sum total of the shares of money supply lost by all entities. Basically, without me knowing, the money i hold in my pocket now have less value, because they represent a smaller share of the money supply, because some new money were created and increased the money supply, while the nominal amount of money i have in my pocket remained the same in number, but diminished in %.

This is how inflation works. Prices increase because the intrinsic value of a good remains unchanged, meaning it costs the same share of the total purchasing power as before, but as the total supply of money increases, that share of the total purchasing power means more in nominal amount of money. At the same time, i remain with the same nominal amount of money, therefore my share of the purchasing power decreases, so i can buy less with the same amount of money.

Now let’s imagine a different system of money. Let’s say we have a fixed amount of money, for example 100 trillion. No new money can be created and no money can be destroyed. Let’s also assume these money are smart, meaning that whatever rules we set for how they get distributed, those rules will be automatically enacted.

Let’s set the following rules. The money is divided into 3 equal parts, each of 33.3 trillion.
1st part is to be distributed monthly as UBI.
2nd part is to be distributed monthly for public spending
3rd part is to be distributed continuously according to the principles of free market (i.e. how current money works)

At a population of 8 billion this would mean that each month the system will redistribute 416$ to each individual on the planet as UBI. The incentive is such that all these 33.3 trillion will be spent on the free market by the end of each month.

The 2nd portion effectively represents taxation. These 33.3 trillion will go to government accounts for public spending every month. The specific taxation scheme can be any of the usual ones, fixed, progressive etc. As above, the incentive is such that all these 33.3 trillion will be spent on the free market by the end of each month.

The 3rd portion will be distributed and accumulated by the well known principles of free-market capitalist competition among the profit-seeking individuals and corporations. This is the portion the people who want to get rich will battle for. Their wealth will accumulate in time and we will still have the richest person on earth and so on.

What are the benefits of such a system?


- every person will have enough money every month to cover their living expenses, since everyone will own at least a fair fixed share of the total amount of money. The free-market will provide that that share is enough for basic necessities.
Governments will have money for public spending each month.
There will be NO public debt
There will be no inflation, the money you have will always represent the same share of the total money supply
There will be no need for institutions like IRS, since all taxation will be done directly on the money, or like FED.
Corporations won’t be able to become more powerful than states
The richest 1% won’t be able to own 99% of the wealth like now, but at most they’ll own 33% of it
Everyone will be free to seek their happiness