How Much Media Of Exchange Should Be Issued? Who Should Determine The Amount?
First of all, only bona fide media of exchange should be issued. There should be no counterfeit or inflationary media of exchange issued. When we speak of media of exchange here, we are referring to the following bona fide media of exchange:
- United States tax credit certificates, or United States notes and coins issued as tax credit certificates.
- Tax credit certificates issued by a state or by local governmental bodies.
- Certificates of credit issued by non-governmental corporations and private persons.
These three groups have the right to issue as much of the media of exchange as is necessary for each of their just needs. Because all three types of media of exchange are bona fide, they can serve as payment for the purchasing of all goods and services, including the payment of all taxes. It will not be necessary for each dollars worth of goods and services offered for sale to be matched by a dollars worth of the media of exchange. Each dollars worth of the media of exchange will generally be sufficient for the payment of several dollars worth of goods and services.
So when the federal government needs money to pay for its necessary goods and services, it should issue as many United States tax credit certificates, or notes and/or coins, issued as tax credit certificates, as it needs. Of course it has to levy a tax equal to the amount of the certificates it issues. In the event there are not enough United States tax credit certificates, notes, or coins to meet all the needs of the state and local governmental bodies, [p. 79] the local governmental bodies should issue tax credit certificates to the amount necessary to meet their needs. Again they too must levy a tax equal to the amount of tax credit certificates issued.
If the above governmental bodies issue all the tax credit certificates necessary to meet their needs, there probably would be enough of the media of exchange in circulation for all other purposes. But in the event there were not enough, then private corporations and private persons could and should issue as many certificates of credit as are necessary for the sale of all the wanted goods and services that are produced.
(The wanted goods and services are those for which some people are willing to work, or those for which some people are willing to exchange other goods or services.)
Note: The amount of the media of exchange to be issued is determined by the need of those who are offering goods and services for sale. The United States government decides for itself how much bona fide money it needs. The state and local governmental bodies decide for themselves how many tax credit certificates they should issue. Likewise, private corporations and persons decide for themselves the amount of certificates of credit they need to issue.
The governmental bodies will not issue too much of the medium of exchange because they have to levy a tax equal in value to the amount they issue. Private corporations and persons will not issue too many certificates of credit because they can issue certificates of credit only for the goods and services they are offering for sale.
Generally speaking, we can say that as the production of goods and services is increased, the amount of the bona fide medium of exchange will be increased; and as the production of goods and services is decreased the amount of the bona fide medium of exchange will be decreased. Thus the effect will be that the medium of exchange will have a relatively stable buying power. [p. 80]