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The Vollgeld/Monnaie Pleine/Sovereign Money initiative should be accepted by the Swiss People.
initiative should be accepted by the Swiss people.
Requiring banks to hold 100% reserves would make deposit accounts completely safe, eliminating the need for government to prop banks up in the event of a run.
Money creation under private control constitutes a "subsidy" to the banking sector.
Creation of money by private banks is inherently pro-cyclical, meaning that it tends to be created during booms, when more money creation is needed during busts.
Direct control over the money supply
(at least M1)
would simplify the task Swiss National Bank in controlling the trade-offs between inflation and employment and output.
100% reserve requirements would eliminate the multiplier effects of banks.
If we impose 100% reserve requirements on depository institutions, but stop there, we’ll just drive even more finance into shadow banking, and make the system even riskier.
The 2008 crisis included very few runs on deposits but a massive run on shadow banking, which produces assets that look very much like money, but aren't regulated as such, and will not be covered under the initiative.
Acceptance of the initiative would plunge the Swiss economy into a period of extreme uncertainty.
Post Keynesian economists have argued repeatedly on the
"foolishness" of such notions
, pointing out that
"it is all debt money, anyway."
Should begging for money be illegal?
There should be no welfare state.
Should People Only be Allowed to Vote if they Pass a Certain Test?