Some Cities are Combining Basic Incomes with Local Currenices (bloomberg.com) 88
Bloomberg looks at some interesting local currency programs that have been implemented around the world. And in at least one case money "is literally being made from trees" — the wooden dollars being printed in a small city in the northwest U.S. and distributed to the needy in monthly stipends.
"We preach localism and investing in our local community," says mayor Wayne Fournier, "and the idea with this scheme is that we'll stand together as a community and provide relief to individuals that need it while fueling consumption." Since the launch in May, cities from Arizona to Montana and California have been in contact with Tenino for advice about starting their own local currencies. "We have no idea what is going to happen next in 2020," adds Fournier. "But cities like ours need to come up with niche ways to be sustainable without relying on the larger world..."
As in Tenino, the Brazilian city of Maric, in Rio de Janeiro state, combines a local currency with a basic income program. Around 80,000 residents, nearly half of the population, receive 130 reais ($35) each per month, without any conditions about how they can spend the money. Launched in 2014, the money is distributed in "Mumbuca," the city's local currency, which is not accepted in the rest of Brazil. "This can become a model on how a city can efficiently disburse social benefits during the pandemic, supporting poor families while they stay at home and also small business during the crisis," says Eduardo Diniz, professor of banking and technology at the São Paulo School of Business Administration, who has been researching public policies using community currencies since 2014...
Inspired by blockchain technology, England's northern city of Hull created the world's first digital-only local currency in 2018, providing discounts of up to 50% on goods and services for those that did voluntary work with local organizations.
A similar Dutch project, Samen Doen, rewards those who carry out socially beneficial activities such as caring for the elderly.
"We preach localism and investing in our local community," says mayor Wayne Fournier, "and the idea with this scheme is that we'll stand together as a community and provide relief to individuals that need it while fueling consumption." Since the launch in May, cities from Arizona to Montana and California have been in contact with Tenino for advice about starting their own local currencies. "We have no idea what is going to happen next in 2020," adds Fournier. "But cities like ours need to come up with niche ways to be sustainable without relying on the larger world..."
As in Tenino, the Brazilian city of Maric, in Rio de Janeiro state, combines a local currency with a basic income program. Around 80,000 residents, nearly half of the population, receive 130 reais ($35) each per month, without any conditions about how they can spend the money. Launched in 2014, the money is distributed in "Mumbuca," the city's local currency, which is not accepted in the rest of Brazil. "This can become a model on how a city can efficiently disburse social benefits during the pandemic, supporting poor families while they stay at home and also small business during the crisis," says Eduardo Diniz, professor of banking and technology at the São Paulo School of Business Administration, who has been researching public policies using community currencies since 2014...
Inspired by blockchain technology, England's northern city of Hull created the world's first digital-only local currency in 2018, providing discounts of up to 50% on goods and services for those that did voluntary work with local organizations.
A similar Dutch project, Samen Doen, rewards those who carry out socially beneficial activities such as caring for the elderly.
Until they're taxed... (Score:3)
It's okay to award points for credit card purchases, or even doing charity work. But once work is more than $600... it's IRS Time!
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All income is taxable.
The $600 limit is the threshold for when the payer has to report the income (with a 1099), not when it becomes taxable.
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Income not reportable is called "de minimus" by the IRS. They don't want to hear about the little things.
It's sort of like noncollectable use tax we discussed here before Amazon got an office in every state, it costs more to collect than it gains.
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Tribalism (Score:3, Insightful)
Local currency?! Thatâ(TM)ll be locally oppressive. And besides that, stop devolving into tribalism you fools! Itâ(TM)ll bring about WWIII. Travel more and figure out how to get along in the world. Itâ(TM)s not that hard. Once you understand how and why a snake behaves the way it does you can adjust it and wonâ(TM)t fear it. Same with humans.
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We discussed this a few months ago - it was a way to distort spending habits and artificially prop-up local retailers. As I recall it was a northern California city that paid locals with local paper money that could be used to buy meals at the local diner, patronize the local wine bars, and rent to local property owners.
It was a sham, it would simply wind up with local businesses being paid in local money and locals would still use their actual US currencies to buy things from Amazon, WalMart, Target, etc.
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Oh, and as I understand it, landlords could pay their local taxes with the stuff, and it could be exchanged for US Currency, at some conversion factor.
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How do they deal with counterfeiting?
What equipment is needed to make the tokens?
I'd love to be able to stamp a bushel of wooden tokens to pay my taxes.
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It could be entirely digital, running on a ledger system. If volume is low enough, you can even do it by sending text messages to a trusted ledger keeper.
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As I recall it was a northern California city that paid locals with local paper money that could be used to buy meals at the local diner, patronize the local wine bars, and rent to local property owners.
Otherwise known as "coupons".
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No it's terrible policy airline miles only benefit the airline. This will cause a few city elites to exploit the citizens.
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Tenino? Elite? HAHAHAHAHAHAH!
The manager of the local Walmart probably makes more than the owner of most businesses in town. It's a small impoverished place, too far from both Tacoma and Portland to commute there to work, but too close to be more attractive to any industry. IIRC the closest thing to a tourist attraction is a large rock outcropping a few miles away, and the truck stop. It's likely that Target and Walmart pay a large proportion of the tax money being used for this program and neither one
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Tenino has 80,000 people .. it's hardly a small town .. I am sure it has elites. Every town has its one percent.
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What? Holy carp, I haven't been there in two decades, but that's an incredible amount of growth. Now I'm intrigued as to what the heck changed that place so much they were an empty ex-logging town with no visible assets not that long ago.
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Little to do aside of watching TV and crappy quality of WalMart condoms?
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80,000 is only the half of the population receiving the stimulus. There are about 160,000 residents total.
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The problem has always been how the economy changes all the time.
When was the last time you went to a Cobbler to get a pair of shoes, or get your shoes repaired? We have companies that can mass produce shoes at different sizes. While they can (not always) last longer than the old Cobbled shoes, when they are sufficient worn out, we throw them away and get new ones.
This has made the Profession of a Cobbler obsolete.
Back in the mid 1970's there was a strike from the Typesetters union, that lasted a long time
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Local currencies were often used in time of crisis: very successfully, all over the world and in all times in history.
You have no clue about the topic.
a) if I have no currecy I can not trade at all ...
b) see a)
You can afford to travel? (Score:2)
The kid just graduated, but COVID wrecked the economy (to be fair it was due for it's "every 10 years" crash right after the election anyway) and so her pay's crap and I'm going to have to help with their bills (or let them go into credit card debt and hope they get a promotion before bankruptcy).
You might be a European but here in America we abandoned
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I grew up and live a few miles from Tenino, WA. Maybe I can give you a better background on this.
The same "program" was done during the Great Depression in Tenino. It was made to take care of the local community, and it worked. Labeling this as tribalism is not correct, nor will it bring about WWIII. (over reaction Monday) It's really about coming together and taking care of a small town and the residence. Can this work on a large scale? No I don't think so. If this works, again, for the people of Ten
what's the conversion to Ningi's? (Score:2)
Currenices? (Score:4, Informative)
Currenices? I thought they were something in architecture.
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Currenices = currency x coronavirus
Decrease trade (Score:4, Interesting)
The reason for using a local currency is to prevent spending outside the local area in cases where this would have happened if the recipients received the money in the national currency. But why would someone spend the money outside the local area? The reason is quite simply that they would do that if they got more value for the money by doing that. This is in fact the main benefit of trading.
By dispersing the help in a local non-convertible currency you are thus ensuring a suboptimal use of resources. Sure, it may help keep the local economy propped up. But overall we will become poorer. Just imagine if all towns and cities did this. It would result in barriers to trade that would reduce the overall prosperity. At least if you believe that the market (that is us all) is better than the politicians at making economic decisions.
Re:Decrease trade (Score:4, Interesting)
Allowing the market to decide that people who live in Greece should borrow Euro's from Germany in order to buy German products has worked so well for the people of Greece.
Currency should be "local", for some value of local. At least as far as taxation, infrastructure & welfare management are concerned. Otherwise you end up with nasty monetary imbalances, with no economic tool to fix it. Right now Germany isn't building roads or paying for welfare in Greece, even though they are partly responsible for their economic woes.
Re:Decrease trade (Score:4, Insightful)
"Allowing the market to decide that people who live in Greece should borrow Euro's from Germany in order to buy German products has worked so well for the people of Greece."
Well, you can hardly blame Germany for the Greek government operating with huge budget deficits for the entire period it has been in the Euro even though it is and was obliged (for most of the period) to keep it under 3%. The blame for that rests solely on the Greeks.
The responsibility for obtaining private debt in Greece is of course also solely on the persons obtaining that debt. Or did anyone force them to buy German products?
"Currency should be "local", for some value of local. At least as far as taxation, infrastructure & welfare management are concerned. Otherwise you end up with nasty monetary imbalances, with no economic tool to fix it. Right now Germany isn't building roads or paying for welfare in Greece, even though they are partly responsible for their economic woes."
As mentioned above I don't agree that Germany is in any way responsible for Greece's problems. But that said I agree that Greece should not have been part of the Euro. They and the rest of the monetary union would have been better of if they had keept the drachma. That would have prevented them from excessive lending since the market would have adjusted interest rates to the risk. And they could have used inflation as a means of taxation to keep public coffers full since they do not have an effective taxation system (not saying that taxation through inflation is good; but given the alternatives it may be for some countries).
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The responsibility for obtaining private debt in Greece is of course also solely on the persons obtaining that debt.
Is it though? This is the crux of the problem. Without a floating currency, there is no mechanism to rebalance the value of money in both economies.
even though it is and was obliged (for most of the period) to keep it under 3%
So you limit government deficits to 3%, yet impose no trade deficit limits. When you account for where each unit of currency is flowing, and how those flows are changing over time. Economic growth, government deficit, trade deficit, .... The only way to balance the accounting books is for Greece to create money. Which you explicitly ban the government from doing
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"So you limit government deficits to 3%, yet impose no trade deficit limits. When you account for where each unit of currency is flowing, and how those flows are changing over time. Economic growth, government deficit, trade deficit, .... The only way to balance the accounting books is for Greece to create money."
Greece can cut public spending. And they can encourage private savings. But you are right: Once you have digged yourself into a deep debt and you have given up on the option to break your promises
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Either keep the individual currencies, or run an actual federal government that redistributes wealth between the countries.
That is actually what the EU is doing. Dumpass^H^H^H^H^H^H^H
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Otherwise you end up with nasty monetary imbalances, with no economic tool to fix it.
What do you mean by no tools? What do you do when your bank account balance is getting low? Why can't Greece do the same?
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Right now Germany isn't building roads or paying for welfare in Greece, even though they are partly responsible for their economic woes.
Nope we are not.
Seriously, visit Greece - and then find one single thing that is not entirely the greeks fault.
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"The problem with this is that the people who benefit from distant trade are disproportionately those who are already wealthy. The working class benefit the most from localism."
I disagree entirely with the above assertion. The only reason that the working class is not dirt poor is distant trade. If you were to buy locally products like for example gasoline, electronics, cars and machine tools you can be pretty sure that you will pay several times what you pay now and get poorer quality.
Re:Decrease trade (Score:4, Interesting)
>Just imagine if all towns and cities did this.
Keeping it local makes sense if the objective is to stimulate the local economy, which it is. If all the towns and cities had the same stimulus, making a local currency to do that would probably be more trouble than it's worth.
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a suboptimal use of resources
Don't let the perfect be the enemy of the possible. If you wait until society agrees to the optimal use of resources you may enounter the heat death universe first.
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"If you wait until society agrees to the optimal use of resources you may enounter the heat death universe first."
I agree entirely. Government of any form is not in any way able to provide anything that is even close to optimal use of resources. That has been tested and failed beyond any reasonable doubt. The only mechanism that has worked reasonably well is to let everyone decide by themselves how to expend their capital.
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Oh, good grief, another Libertardian.. When has your religion ever led to anything but monopoly and oppression by the wealthiest?
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What religion? Why do you believe I am a libertarian? Is it in your opinion only possible to believe in public spending if you at the same time believe it to provide the most optimal use of resources?
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Why do I believe you're a Libertardian?
Government of any form is not in any way able to provide anything that is even close to optimal use of resources. That has been tested and failed beyond any reasonable doubt. The only mechanism that has worked reasonably well is to let everyone decide by themselves how to expend their capital.
I'm going to ask for a citation for that last sentence, because as a semi-serious student of history I have never seen that outcome in any society. Anywhere. Ever. Loosen the leash on the rich and powerful and they will dominate the society for their own good, "optimal use of resources" be damned. This has been the case since Ur was new. The only advances that humanity have ever made were done as a society, and the more advanced the civilization the larger the soci
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y dispersing the help in a local non-convertible currency you are thus ensuring a suboptimal use of resources.
Perhaps, but you can see why local businesses paying taxes would prefer the money be spent at local businesses.
No one seems to be talking about the larger point here though: the big problem with UBI is always "where does the money come from?" This approach neatly solves that problem. Will UBI lead to hyperinflation? This is a very cool way to do the experiment with fake money. If the wooden dollar collapses, no harm done. If it somehow works, then everyone wins.
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Will UBI lead to hyperinflation?
Depends on how it's implemented. $1000 a month? Probably not. $1,000,000 a month and doubling every month? Most definitely.
Inflation can be caused either by a growth in money supply or a contraction in productivity. Let's look at money supply first.
In its simplest form, UBI comes from the government printing money. Since the government will always print the same amount each year, it will cause the same amount of inflation each year due to the increased money supply. If the currency inflates too much, the pu
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Depends on how it's implemented. $1000 a month? Probably not.
If the Fed created $300 B/month it "probably" wouldn't lead to hyperinflation? The ongoing Project Zimbabwe isn't 1/10th of that, and it's quite worrying.
You can speculate about new tax plans, but the simple fact is: the higher you make marginal rates, the more people cheat, legally or otherwise. The US has tried marginal rates as high as 90% over the past century, but regardless of the scheme federal tax revenue has never been sustained above 20% of GDP. Higher tax rates just make people cheat more, or
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If the Fed created $300 B/month it "probably" wouldn't lead to hyperinflation? The ongoing Project Zimbabwe isn't 1/10th of that, and it's quite worrying.
$300 B is only 1.5% the annual GDP of the US, and that's paying people $1200 in 3 months and $2400 a month in additional unemployment benefits, which is almost triple any basic income proposal anyone's seriously put forth.
And why aren't you looking at the $2 trillion the FED created? Or the rest of the $1.8 trillion that went to businesses? How much inflation is that causing? Helping people in need is a drop in the bucket compared to the corporate bailouts that Republicans love so much.
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Corporate bailouts are the one thing both parties are united on. Remember, the biggest bailout in world history happen under Obama, though it was started under Bush. Either could have stopped it, but point of the establishment is looting the treasury.
When the Fed created $2T a few years back as part of QE they had a very clever plan, where banks were incented to remove about $2 T from the money supply, so it balanced out. Risky, daring, but it worked. But that was then. Now we're in what the investment
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Most people are not happy sharing rooms and having no options to eat out, travel or go shopping.
I've got relatives who are perfectly happy leeching off anyone around them, smoking, and doing nothing. They would live their whole lives that way, if they didn't have to work.
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That's a problem only because their relatives let them leech. I'll bet if you look at their total spending, including everything other people paid for, such as rent, utilities and insurance, it might come out over $1000, especially if they've got expensive habits like smoking. Give everyone UBI, and they'll have no more excuses to leech off anyone.
On the other hand, if they're allowed to leech because they're doing housework or looking after the kids but just not getting paid for it, then there's no problem
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Seriously, do you guys here on /. have mental problems?
Since when does a local currency prevent me from ordinary trade in the ordinary currency? Locally or non local?
Paid Volunteers? (Score:2)
Inspired by blockchain technology, England's northern city of Hull created the world's first digital-only local currency in 2018, providing discounts of up to 50% on goods and services for those that did voluntary work with local organizations.
"Voluntary work with local organizations" earns you a 50% discount when you use their "local" digital currency?
Kinda stretching definition of "volunteering", aren't they?
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Not at all, you don't need to take the discount and I'm sure a lot of people don't. On the other hand the discount may well allow people to volunteer by letting them work fewer hours.
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Well, in the western world, most worker are considered to work voluntarily for their boss.
But I have no idea how that is with you and your boss.
Where's the Ovaltine Comment? (Score:1)
This idea isn't totally insane. (Score:1)
I'm gonna start my own currency (Score:2)
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The phrase "Put your money where your mouth is" might just become a totally new meaning.
The only test that matters for local currencies (Score:5, Insightful)
many problems; an alternative (Score:2)
"and the idea with this scheme is that we'll stand together as a community and provide relief to individuals that need it while fueling consumption." In other words this is not a 'basic income', but a handout to the poor. Upstanding citizens who are responsible and stable in their finances won't be going around town trying to peddle this 'currency' for goods.
First, consider the stigma. You have $35 in funny money and you are poor. Wherever you hope to use this money, you will be admitting that you are a los
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The stigma is any different if they pay with food stamps? If not, why use them? If you want to argue on the base of "funny money is stigma", there's bigger fish to fry. Besides, I'm fairly sure that the local businesspeople are far more interested in seeing that "funny money" than watching it go abroad.
Whether you pay more depends entirely on whether these prices are actually higher. So far I could not identify anything in the article that supports this. Even if, if my choice is to have 50 bucks and pay 30
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The stigma happens only in your country because you like to divide yourselves into winners and losers.
In local communities that is much less likely to happen. After all most "losers" are great musicians, physiotherapeuts, martial arts teacher etc. p.p. No one is looking down on anyone who uses local currency in my town: Karlsruhe, Germany.
Shop Local - Stop Globalism (Score:5, Insightful)
It is interesting how Globalism was stunted by the Corona virus and its consequences.
It is economics 101: Small businesses create jobs, while large businesses increase productivity by destroying jobs.
Too much emphasis on productivity is not good, since it creates unemployment and poverty. Efficient businesses are efficient at moving money from the consumer to the capitalist owner's bank account. Spending money locally, helps to lift people out of poverty, because it is inefficient and less productive and the money takes longer to get to a capitalist's pocket.
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Where did you learn Economics 101? Just want to know so that I can avoid that institution. In reality small businesses are not the main job creators:
https://thereader.mitpress.mit... [mit.edu]
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It's fitting you don't have any pithy ideas to contradict him: His "since it creates unemployment" summary is correct.
Ten men can produce 1,000 nails, or 10,000 nails depending on division of labour techniques. If demand is currently for 10,000 nails, then 90 men are now unemployed. If the whole supply chain is not able to grow (ie. sell more hob-nail boots) then those 90 will be permanently unemployed. A modern city has a million supply chains but the problem remains: Productivity can increase while
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It's sad that our society would rather waste resources doing things inefficiently than simply redistributing some of the earnings from large, highly productive businesses.
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Globalism never really existed, it was just money from the lower classes going up and employment in the West going East.
I Miss The Days... (Score:1)
When people would just go out and get a freaking job. Plus when they wanted more stuff, well, they went out and got a better job or they didn't get more/newer stuff. Now, everyone whines and cries when they don't get what they want because they are too damn lazy to go get a job.
Re: I Miss The Days... (Score:2)
We got >90% of the jobs automated, with machines bought from money, you fuckers stole (=profit) from the work we did for you. And when we plan on getting our chunk of that now free wealth too, because you are such greedy fucks you don't even lower prices to non-usury levels so working more than a few hours a week would not be necessary, you add insult to injury, by attacking us for not making you even more money at those shit wages.
Hey fatcat, why don't YOU get a job, so you can actually earn your income
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Angry little person, aren't you. So, lets go through your fact-sheet shall we...and assuming you are referencing the United States.
Regarding automation, so you are suggesting that we don't automate like the rest of the modern society does and stay in the 1950's paradigm of the world. Yeah, that will work just fine as the rest of the moves forward, and we stick our heads in the sand.
Regarding "...stole (=profit)" statement, so I am guessing you never received a paycheck in all the time you worked your job, b
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That stupidity is all on you.
Nope, it is on the crony capitalist system you are so fond off.
Can't be so hard to grasp if 90% of the population are wage slaves, that none of them really has a chance to "shift into a better paid job" or participate in the "wealth gained" by the owners of the "means of production".
But stay blind, being blind as you is a bliss. I hope when the revolution enflames in your country you are not amoung the first that are put against a wall.
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Well, if it was easy to:
a) get a job
b) get a new job
c) get a better paid job
Certainly people would do that.
But your mantra about to lazy: shows that you are an idiot
So ... shaming included. Like with food stamps. (Score:2)
No autonomy. But the money equivalent of putting a Jew star on people at the checkout.
A "you're poor" star, that is designed to make people no want the whole thing.
Like yet another UBI "study", deliberately designed idiotically, for the sole purpose of making UBI look bad so it gets buried.
I owe my soul to the company store (Score:2)
Town giftcards and instore credit (Score:1)
Oh boy. (Score:2)
But think of the trees... (Score:2)
“Thank you. Since we decided a few weeks ago to adopt the leaf as legal tender, we have, of course, all become immensely rich. [...]
"But we have also," continued the management consultant, "run into a small inflation problem on account of the high level of leaf availability, which means that, I gather, the current going rate has something like three deciduous forests buying on ship's peanut." [...]
"So in order to obviate this problem," he continued, "and effectively revalue the leaf, we are abo