Book-1 Chapter 1: – Debt-Based Currency

Excerpt from Dr. K’s lecture on debt-based currency.

“In the earliest times, money itself was something of value. Precious stones or rare metals WERE money. Then much later, paper currency was used to represent something of value, gold or silver. But now…” he held up a dollar bill, “this is a note. It marks a DEBT incurred by the country that has gotten it from a central bank. In this country the Federal Reserve created this piece of paper and stamped it as having a value of one dollar. On another piece of paper, same size and weight, a little different art work, it says one hundred dollars. But is it really one hundred times more valuable? Or is it just another piece of paper?”

“The banks think it’s worth more.”, came down from the back rows.

“That is because they own it. We are just passing it around in the madness we call a monetary based economy. To me a roll of one hundred ones, is just as fat as a roll of one hundred dollar bills, in my pocket. Same number of paper bills, that’s all. But this…”, he raised Julie’s campus card above his head.
“This could be credited and debited with my time credits, without my country borrowing from a central bank.” He walked over to Julie and returned it to her. She was, like many others, sitting on the edge of her seat, entranced by what Dr. Kantos was saying. So much so, that she spoke out, as he handed that card to her, without thinking.

“No more BANKS!”, she said.

“Exactly!”, he winked at her and turned back to step up on the platform. “Julie is right. In a time based economy, there would be no such thing as a bank or any such distribution institution. That is, after all, what a bank really is – a distributor. They, not the government, take the paper bills and issue them to the public. Ever wonder why you don’t go to a government building to get your money? Why aren’t there U.S. Treasury ATM’s on every corner, instead of ‘The First National Bank of Bayonne’? The reason is the Federal Reserve Act of 1913. It gave the distribution rights to the banks, exclusively, through the newly created Federal Reserve Board. But that was 1913! Long before computers, the Internet, cell phones, wireless networks and everything else that we have today. The Fed now stands in the way of us realizing the full potential of our technologies. Now that we have a simple and secure technology to store and circulate time credits, why do we need paper and an arcane system that supports it? Think about it.”

“How can it work without cash?”, someone asked.

“Think people, think… you have your smart card, like you use now on campus. You go to work and your employer credits the hours you labored directly onto your card. Your employer keeps accounts of all your work time, same as they do today. When you buy something you use your smart card and the credits go from your card over to the store. They in turn, use those credits to buy products to stock their shelves from manufacturers. Much of our transactions today are cashless already. They are just so many bits and bytes of computer data moved back and forth. There is no need to retain paper or coin, for our current economy to function. It could all be done with plastic, right?”

“But how does anyone make a profit?”

“Fair question. The difference between the amount of time credits that are paid in to a company, for its goods and services and the amount they pay out to employees and suppliers is their gain or profit, same as now, except without the bank as a middleman. The ‘transaction’, if you will, of your labor given over to your employer, creates the value in the system, not the printing press of a central bank.”

“What about school teachers? They don’t work for a company that makes a profit.”, asked one of the students in the front row.

“Right, but as I said, people still own property in this time based economy. So they would pay property taxes as they do today, which would allow local communities to pay their teachers, just as they do today. But, unlike today, the value of a teacher’s compensation would be equal to that of the most highly skilled neurologist.” The room erupted with applause.

“Money, long ago created for the convenience of mankind, and its sidekick debt, has evolved into a means of restraint, as strong as any chains that shackle a slave. Removing money and its debt creation would be the greatest liberating act to happen since abolition. And today, with the technology available to us, it is no longer just a dream, it can be made a reality. It only needs to be put to the test, to be tried and refined. It needs people and business to make use of it, on a large scale, for any kinks to be worked out. Then let the results speak for themselves. Let people choose between the money and debt system of the past, or a universal Time Banking system.”

The assembled group broke into applause. Dr. Kantos motioned with his hands to quiet them down. When they did he continued. “I do these lectures now because I feel that for the first time, since the idea of Time Banking was originally put forth, the world may be ready to embrace it. One hundred years ago, the idea of using a plastic card to buy something, would have been thought crazy. A five hundred years ago the idea of buying goods with a piece of colored paper, would have been a crazy idea. And thousands of years before that, people were carrying shells or pearls around to buy goods. It is again time to change the medium we base our economy on. This time we have the chance to really get it right, for everyone.”

Again the students clapped their approval. They rose to their feet and continued the applause as Dr. Kantos walked to the left of the platform and stopped next to the door. He faced the group and leaned back against the wall. Professor Watson, who was standing by the door, came forward to address the group. Thanking Dr. Kantos he expressed his hope that some of the ‘bright young minds’ in the room would take up his challenge and make Time Banking a reality in the not too distant future. To that end, he said he was distributing project outlines for them to take, as they left the hall. Any students would be given extra credits for their participation in any of the Time Banking related projects contained in the handout.

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