Fixing the Leak: How We Can Actually Own What We Pay For (Part 1 of 2)

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Modern Monetary Theory proved that government money isn't scarce. Now we need a system to ensure that money serves the people who use it.

The Unanswered Question of Created Money

For years, Modern Monetary Theory has offered a radical but simple idea about how our economy works. It explains that a sovereign government does not need to collect taxes before it can spend, because the government actually creates the money itself. This changes everything, because it means we are not held back by a lack of funds for important goals like full employment, public housing, or climate action. However, accepting this idea immediately leads to a massive, unanswered question. If the government can simply create money, what happens to that money after it flows into the real economy?

Modern Monetary Theory argues that the only real limit to creating money is inflation. But inflation is not just about how much money is printed; it is about whether that money keeps circulating as useful purchasing power or gets trapped as private wealth. Right now, almost all new money enters our lives through bank loans. When a bank makes a loan, it creates a deposit, but it also charges interest and fees. This process acts like a giant hidden factory, quietly turning public purchasing power into private capital that belongs to the bank. Critics have rightly pointed out that Modern Monetary Theory explains how the water gets into the pipes, but it fails to explain how the banks end up owning all the reservoirs.

A Market Built for the People

This is where a brilliant new design called a Fair Points Market steps in to complete the puzzle. A Fair Points Market is not a charity or a political movement, but a practical financial structure that organizes who owns and benefits from everyday assets. Imagine a neighborhood solar energy grid built by the government. Instead of just handing out contracts or paying subsidies, the government invests in the grid and receives "Fair Points" in return. When you pay your monthly energy bill, your payment does not vanish into a distant corporate bank account. Instead, your payment earns you your own Fair Points, which represent a real, growing share of ownership in that local asset.

This system entirely changes the plumbing of our economy without requiring massive new laws or institutions. In a Fair Points Market, capital is generated in the open, and everyone who contributes to the system earns a stake based on their actual participation. Households, local communities, and even the government all earn points. Banks can still participate and earn points for the services they provide, but they lose the special privilege of manufacturing capital out of thin air just by shuffling bookkeeping entries. The wealth stays with the people who actually use and maintain the community.

Solving the Inflation Puzzle

Best of all, this system elegantly solves the great fear of inflation. As physical assets like buildings and energy grids naturally age and lose value over time, the money tied to them is gradually removed from circulation. This natural cycle balances the economy and controls prices automatically, completely removing the need for governments to force austerity, cause unemployment, or raise taxes just to slow things down. Just as Modern Monetary Theory proved that money does not need to be scarce, Fair Points Markets prove that ownership does not have to be limited to the wealthy. Together, they offer a complete, balanced system where money finally serves the public good.

Closing

We do not just need a better way to print money; we need a better way to share the wealth it creates. By combining the insights of Modern Monetary Theory with the practical mechanics of Fair Points Markets, we can build a world where paying your bills means building your future.

Key Takeaways

  • The Missing Link: Modern Monetary Theory shows governments can create money, but fails to explain how banks turn it into private wealth.
  • The Interest Trap: Banks currently manufacture their own capital by charging interest on the loans that bring money into society.
  • A Fair Solution: Fair Points Markets allow users to earn ownership shares in local assets simply by paying for the services they use.
  • Natural Balance: As assets naturally age, money safely leaves the system, which controls inflation without the need for painful taxes.
  • Shared Prosperity: This model perfectly completes the monetary system by ensuring that public money builds public wealth instead of private fortunes.

Fixing the Leak: How We Can Actually Own What We Pay For (Part 2 of 2)

Inspiration from From Spending to Stewardship: How Fair Points Markets Complete the MMT Framework by Kevin Cox

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