Seigniorage as a source for a basic income guarantee

A basic income guarantee should be financed from a source to which all persons have equal rights. One such source is seigniorage, the profit from printing paper money. This article reports real seigniorage, measured in 2009 dollars, for the U.S. for the past 50 years. It averaged about $175 per year per person over the age of 20. Thus seigniorage would not have been a major source for a basic income guarantee. But three caveats are in order. First, a practice of giving every adult an equal share of money would have meant a lifetime, interest-free loan of about $4,000 per adult. Second, the Federal Reserve's response to the crisis at the end of 2008 would have meant an additional loan of about $3,400 per adult for the duration of the crisis. Third, a monetary system without fractional reserve banking would probably entail much greater seigniorage. Copyright © 2010 The Berkeley Electronic Press. All rights reserved.