A new saving and payments system

But the government system would create a competing payments system that was less comprehensive, but simpler, cheaper, faster (how’s instantaneous for fast?) and, on account of that, as safe as money itself.

It would also lower the cost of borrowing for the states, or improve the budget bottom line for the Feds. Right now the Feds keep borrowing $50 billion from the bond market not because they need the money, but to keep the bond market functioning to improve the health and security of the capital market. The money the Feds borrow ends up in the Future fund earning higher returns than the interest on the money.

The same goes for what I’ve proposed, which would likewise improve the health and security of the financial system, further swell the Future Fund and build higher government surpluses over time.

Why hasn’t anyone done this before? Well, it would be seriously unpopular with the custodians of the current monopoly payments system - the banks.

Still, just as banking worked out a bright future for itself the last time this kind of thing happened - as state fiat money displaced bank issued notes as the preferred medium of exchange - it would ultimately move to thriving where it was adding most value.

The share of the economy devoted to financial services has roughly doubled even as unit costs have plummeted since the seventies. So I doubt there’ll be any shortage of productive work for private financiers.