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> what is the incentive for someone to build wealth? This must be our biggest point of departure. Why should wealth be an end goal? I think wealth is mostly just a subsidiary for other tangible economic goals. If your goal is greater consumption and increased quality of life, we'd accomplish that through increased take home pay to offset the absence of realized capital gains. (Investment could be recognized as just a mechanism to expand future take home pay.) If your goal is control of assets like a company or an apartment building that ownership would still exist and you wouldn't need to see a constant return that beats your interest rate in order to maintain the business (just reaching breakeven becomes a viable business model). > if collateral values can be efficiently and accurately established. There's the rub. We can never eliminate inaccurate estimation of collaterals because individual careers are successful if they can hype something and then time an exit before a bubble bursts. In aggregate that will always manifest as booms and busts. It's the nature of markets. I wouldn't want to prevent the natural cycle for product hype, but I don't think our money supply should be in a positive feedback loop with it. > Each entity's ability to create new money should be roughly equal to its ability to create economic value. Why though? Again this is mistaking the goal of new money which is just to facilitate the accounting for improving human well-being. Why should more accounting power go to those who already have more well-being bringing assets to begin with? I see the UBI/MMT model as actually being the most fair and decentralized mechanism of determining a utilitarian value for new goods. Analysts would be attempting to gauge what portion of next year's evenly distributed UBI their new invention or business could bring in. The greatest advantage in my mind is that this would reshape the economy to fulfilling every citizen's basic needs before luxury wants. To see how the banking system doesn't accomplish this, note that those with incorrectly assessed homes have the power to generate new money that gives them inordinate buying power. As an example, those owning overpriced homes can remortgage for multiple new cars using _just the error in the assessment_ while those without a home can't generate cash for a used car. This disconnect is why we have an excess of luxury goods and a lack of things like entry level housing. Our economy is largely shaped around who gets the new money. (Btw, I still don't see a fundamental difference between the collateral based and the fractional reserve system. Both were based on banks lending under the assumption that they understand the risk and can cover the debts in time. They're just doing that with a different asset than the cash in their vault.)