One of the facets of currency valuation controlled by the nation issuing the bills is domestic buying power. What problems can control of the buying power of a single dollar avoid? Let’s take a look…
PRINTING MORE MONEY
In America we have roughly $1.3 trillion in paper money and coins issued and in circulation. Until a digital means of anonymous money transport is created there may be a need to print more. Yet managing the massive amount of paper bills we already have is a daunting task.
Imagine a situation of needing ~$400 billion more in paper money. How could we effectively create that much excess currency without printing any more money? (Money is expensive. It turns out that each bill costs $.06 to produce!)
If industry captains come to the Treasury Department to meet with the President and his team of monetary experts they might decide to do what has happened in the past to stabilize oil prices in time of necessity – alter consumer prices. Yet that form of manipulation is often of no great advantage to the consumer short of avoiding an over-expenditure. This is due to the single-facet of fuel cost being changed from the perspective of the citizen who needs gas for their car without consideration of all the other facets of life that require money to purchase goods and services.
DOMESTIC BUYING POWER
What if instead of price manipulation the team decides to make a dollar worth more? If you can buy a loaf of bread for $1 today how about if they decide the same dollar can buy one-and-a-half loaves of bread tomorrow? Then alter prices, or product sizes, accordingly. Do this for every item and service offered for sale or lease. For every dollar held in investment and savings increase its value to 150% of the original. When completed, buying power of the dollar has been altered.
That’s a huge giveaway to the public worthy of a wealthy society. Everyone with a dollar in savings or verifiable credit receives a 50% buying power giveaway. That’s OK. Usually it is the people who get there first that get national handouts such as gold mining claims that convert to private ownership, land grants, municipal contracts in bulk, etc. An increase in buying power is simply a way to reward the nations savers with a handout that’s fair to all who have saved. If you alter salaries and other numbers associated with means of wealth accumulation at the same time the nation also dials back the explosion of large numbers associated with their economy that can create an environment of many haves, many have-nots and too few in the middle.
Immediately, there would be a spending spree. Having money on hand would result in people fulfilling their dreams of themselves or charitably to others using found money. The issue of printing ~$400 billion in paper money would be solved as well. There would be over $1.9 trillion in printed money as measured by pre-change buying power.
Finally, every dollar of debt we owe to anyone is easier for the treasury to afford. As long as the value remains stable that means the United States has just granted itself a 33.3% cut in the national debt relative to pre-buying power change dollar amounts. Even in a situation of granting an increase to debt holders the result is more hands holding more dollars and only one primary nation to spend them in.
Domestic Buying Power – one of many facets of currency controlled by the nation that issues its own currency on faith and credit.