The Fed tax in all its glory

 The Fed tax in all its glory.  That long slog down in velocity. That is the growth of shadow banking, unseen. It is a tax collecting burden foisted upon retail banks.   Velocity zero cannot be measured.

My plan is simple. Two parts. The fed board of governors is given a 15 year lease on the right to coin under Due Process, which should meet the conditions for a no arbitrage S/L. Non profit, means bounded variance on currency risk.  In turn, treasury can delete debt outstanding at the rate of a half point per quarter.  And McConnell/Shumer agree the state capitals get 3 billion each, to be negotiated yearly. Reduces volatility, takes the best point of the 70s, like revenue sharing and default; and reuses them in the proper order, and optioned out 15 years. It is 2% direct inflation, courtesy of Treasury.

Think about the ridiculous proposals we hvae been hearing from everywhere.  My 2% opportunistic default seems conservative after covid. But it removes a third of the debt burden from the Antificants. The pension bailout alone will exceed 2%. So the New Fed can easily risk two percent and sty away from the other squabbles all together.

The Fed gets market share, it can be the gold standard for banking under Due Process.  That clause means congesting pricing everywhere. It frees the banking sector from being targeted with a Fed tax, for 15 years, more or less. And the Fed leads a tech boom with digital bearer cash and digital contract management. How many hundreds of mathematicians can agree and execute? Many hundreds.

The Fed can give us all the minimal Swift protocol, secured by the hand held autonomous bots. They limit is to small cash limits, short expiration dates, and short chained contract management. Swift is a great ledger system, i can close the loops, and the trusted miner system woks well enough. Just enforce Due Process on the system, we all be better off.

It will take an act of Congress to moot the deal, and Congress can do that.  But until Congress does vote to revise, Treasury is bound to obey the contract on default, say mean and variance of debt nulled be even over one year. By paying off the small states, this deal will hold and the senators be earning their salary.

The new deflation will hit, soon. The productivity gains will be well over 3% just by adopting fair traded cash management.  It won't take long for a tech wave to sweep through and the Fed sees exponential growth in banking for a year, maybe. Releasing that Fed tax is a very good idea.

It is a lease of a government function, for a finite period, revokable, in return for value.  This gets us past thee Supremes and one of those amendments making debt sacred.  A plan designed by someone with no tribal priors except commercial property taxes.

The Atificants get to move to small states and run boutique farms for goats and eggs. The Hippys of lore done that.  I am very conservative, we just do a much better 70s. No radical new philosophy, just radical Coase.