Making Money Sustainable

National and global money supplies grow constantly in order to ensure that ever increasing interest payments can be met. Doing away with interest would mean that we need only enough money to facilitate the exchange of goods and services. Money supply and economies would grow until all the needs of the people and businesses within them are met and then remain stable. The exponential growth rate would be replaced by a biological growth rate.

Keeping money in circulation

Those who take money out of circulation are rewarded with interest. A more effective way to encourage money to circulate would be to charge a fee to those holding onto their money. In this way money is made to rust like metal or rot like perishable goods.

The cost of a circulation fee would be tiny in comparison to the current cost of interest in every item we buy or service we pay for. The effect would be to make money work for the economy as a whole, rather than just for those who have accumulated it.

Where do we start?

Changing the global money system is not an immediate option. Establishing complementary means of exchange is. They already exist in a small way as green dollar schemes, barter schemes and the like. The next step is the creation of regional currency-based systems that are both interest free and incur a circulation fee.

Complementary regional currencies

Each region of the country has its own economy. Some of what we buy is grown or made locally, while the bulk of the labour is local. Some of the services we pay for (like our dentist's or hairdresser's time) have no connection to national or global business. In any regional economy there may be between 20% and 35% local autonomy. These goods and services could be paid for using a regional currency working in parallel with the national dollar.

The estimated savings for an average New Zealand household using interest free regional currencies for 30% of their expenditure would be $2,750 a year. The estimated value to a regional economy might be as high as $100 million a year.

Potential benefits of regional interest free money

• Increased local control of the economy
• Reduced unemployment
• Increased investment in local infrastructure
• Higher standard of living for people
• Reduced dependence on foreign owned banking systems
• Reduced levels of personal, corporate and council debt
• Encourage new business into the region