Posted by: buzina | November 3, 2009

Boosting Economy (e-€uro)

Now that Germany has a new Government which is not composed of the two larger blocks (CDU & SPD), I would have hoped for an increase in momentum of political progress. unfortunately Chancellor Merkel and Vice Westerwelle continue their old faults in believing their voters to be extremely dumb.

They have a firm majority and have a strong backing for implementing change due to the current economical downturn and what do they do? They promise to reduce tax rates in the believe that the increases in debt will be paid back by increased incomes which would increase total tax turnout. All real estimations on this effect will tell you, that it will not return the full 100%, but will basically stop at approx. 60% of the loss. So we happily increase our national debt, which has just been hit extremely hard by the financial crisis. And for what? For reducing taxes, which is not at the heart of our problems.

So what would my proposal be? Boost productivity by setting hard to reach missions that a whole country (of even a continent) could rally behind. The current innovations (internet, eco-tech, bio-tech and nano-tech) should allow a country like Germany to produce a turnaround. One of the projects to improve on would be about money. Why do we still have these small printed papers (easily reproduced by modern technology) and strange round pieces of metal? These are too hard to transfer, keeping transaction costs way to high.

So Germany (along with the european economic and monetary union) should create the e-Euro. The e-Euro (e€) should allow the following:

  • Quick transaction with marginal transaction costs (less than 1%) for businesses
  • No base fee for transactions, enabling small transactions (transfer 2 cents would cost no more than 0,02 cents)
  • Free transaction between individuals (when I give you a 10 € bill, there are no transaction costs)
  • Allowing anonymous online transactions up to a defined limit (a limit will be necessary for law enforcement requirements, cashing large sums at a bank will also trigger inquiries these days).
  • Make sure that the required infrastructure is in the hands of the european central bank (normal banks should not control cash, nor should they be able to track its usage)

The provision of a monetary system is one of the core tasks of a country. So it should provide a modern version of it. If micro payments can be made affordable, many new business models become viable. For example you would allow news to again become a paid for resource. News right now is expected to be available for free, along with some advertising. Many of us would pay a small fee for more in-depth news, either per article (1 article = 5 cent) or per time frame (e.g. 1 hour = 50 cent). With all current payment models available, this is not a suitable payment option due to the high transaction costs.

The ask a question sites could be a source of income for people, when a small sum could be paid for a proper answer to a question. Bands would be able to host their own music download website if you could easily transfer money to them. Charities would not have to rely on an overly expensive, un-democratic and often unfair payment system (like paypal) but could accept money directly from their donators.

My mission will probably not generate the same passion as

I believe that this nation should commit itself to achieving the goal, before this decade is out, of landing a man on the Moon and returning him back safely to the earth.

did, but maybe it could jumpstart our society into a more productive and innovative culture.


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