Okay. Rajiv says everybody should have a bank account at the Fed, and the Fed should distribute its profits equally across all those bank accounts.
How much is that, per person?
| Graph #1: "Interest on Federal Reserve Notes" from the 2012 Annual Report of the Federal Reserve, Table 11. The blue line shows the years 1996-98 when Interest on Federal Reserve Notes fell briefly to zero and "Statutory Transfers" made up the difference. These transfers were "made under section 7 of the Federal Reserve Act for 1996 and 1997". View or Download Table 11 from the 2012 Annual Report (PDF, 3 pages) |
Well, at least it's more than $3.19 apiece.
Seriously, though... The purpose of the Fed profit redistribution is not to serve as a Basic Income Guarantee. The purpose is to correct a monetary imbalance -- the imbalance between circulating money and private debt. That's what makes the idea so interesting.
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For 25 years before the crisis, the per capita share of Fed profits held at around $75 per person per year. Still today it is only around $300 per year, With that amount of money in mind, re-read Sethi:
It can provide a buffer to those facing financial distress, allowing payments to be made on mortgages or auto loans in the face of an unexpected loss of income. And as children transition into adulthood, they will find themselves with accumulated deposits that could be used to finance educational expenditures or a down payment on a home.
Seems unrealistic.
And yet Rajiv Sethi is aware of the imbalance between circulating money and private debt, and understands that this imbalance is the matter which most requires our attention.
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