To understand how to stimulate the economy it is important to know what some of the restrictions that hinder it. I will try my best to shine some light on the two major problems and not the symptoms. The two major problems are a centralized monetary system and a centralized banking system. There is no way to have a sustainable economic recovery if these two systems alone are in place. The major flaw with a centralized monetary system is that there is no way that the organization behind it can tell if there is too little or too much currency in the system until it’s too late. If there is too much currency in circulation, prices go up and individuals on a fix budget will usually have to lower their standard of living or go into debt to maintain their current life style. If there is too little currency in circulation, prices go down and businesses profits shrink which in turn causes layoffs.

There is a similar major flaw with a centralized banking system. With a central banking system dictating the actions of all banks in a given nation, the centralized organization can control the money supply. Some ways they can do this is by raising or lowering interest rates or reserve requirements. It is impossible to have a free market if the medium of exchange and the supply of it is control by a central organization. What should be proposed to stimulate the economy is the decentralization of the monetary and the banking system. Some ways of doing this is to allow any individual or business the ability to practice the right of issuing their own currency once it’s backed by their goods and services and valued in silver or gold. Since it would be valued in silver or gold and backed by goods and services, its purchasing power would not be so easily manipulated by the issuer. Also with this anyone should have the right to reject any currency they did not issue themselves (even government currency).

The other thing that should be proposed to stimulate the economy is to allow any individual or business the ability to start up their own bank like entity. This bank like entity should be unregulated by government or the central banking system. The only government involvement in these two activities should be in the case of fraud, which then it should be handled by the court system. Also these two activities should be tax exempt. Private currency and decentralized banking should not be forced on everyone, but the people who wish to opt out of the centralized system most nations have in placed today, should have the opportunity to do so.

What I believe would happen is the private currency would allow businesses to use their production of goods and services to build up equity and be more independent of the banking sector. Also with these more stable and independent businesses, the decentralized banks would have to compete and come up with the best and safest services to attract capital. What needs to happen to stimulate the economy is not governments and central banks involvement; but to them to get out of the way and allow individuals and businesses the ability to opt out of the centralized monetary and banking system that is the root of the problem.