Local Currency Vouchers in Japan
>Date: Wed Mar 3 02:58:06 1999
>From: fudzail@tv3.com.my (Fudzail)
>Subject: ECONOMIC REVITALISATION PLAN FOR DATUK BANDAR KL
>To: Urban-Net@onelist.com, nz_alumni@egroups.com
>The Electronic Telegraph
>ISSUE 1376 Tuesday 2 March 1999
>Sex on the dole given red light by Japan
>By Juliet Hindell in Tokyo
>GOVERNMENT shopping vouchers aimed at sparking a consumer boom in
>Japan may be spent on the pleasures of the flesh as establishments in
>some red-light districts are preparing to accept them instead of cash.
>Sex shops, strip joints and massage parlours around Tokyo have
>registered with the authorities so customers can pay with the coupons.
>As part of its economic revitalisation plan, the government is giving
>coupons worth about stlg100 to families with children under 15 and to
>the elderly who are bedridden or on low incomes. The conditions beg
>the question who will be spending their coupons in the red light
>districts. But some areas of Tokyo are making sure that the coupons
>are only spent in more conventional ways. Taitou ward has banned the
>use of coupons in its historic red-light district, Yoshiwara, once a
>haunt of geishas. "The coupons are supposed to lighten the economic
>burden for residents," an official said. "Sex shops and the sex
>industry are not suitable places to use them."
>The vouchers are being distributed over the next few months and the
>scheme will cost the government stlg4 billion. Many economists doubt
>the measure will cause a consumer boom but it could help create a
>feel-good factor as people spend their windfalls on some special
>extras.
JCT: This is a perfect example of a government local currency.
The sex issue is a red herring which does fortunately point out the
value of this interest-free currency to everyone in the city.
Though they do mention how the government vouchers are issued
into circulation, they don't mention the manner in which they would be
retired from circulation which would make them valuable to everyone in
town.
Considering how the LETSystems have been trying to find a way to
make local currencies attractive to more people in their community,
this could serve as a prime example.
The red herring nature of the complaint is that old and poor
people shouldn't be using the vouchers for sexual services. But who
says that they haven't been traded to younger or richer people. And
since governments don't police how people spend their usual government
welfare or social service checks, why should they be policing how
people spend their just-as-good vouchers?
The point is that these vouchers have a value because the last
person to take them has somewhere to spend them. Nothing but the
payment of taxes or government services could induce such wholesale
acceptance which makes this local currency much like the small
denomination bonds issued by Argentinian provinces. See:
http://turmelpress.com/np2.htm
Furthermore, just as the increase in currency in a society
suffering Inflation shift B brought that inflation down, I'd predict
that just like in Argentina, there might be complaints about these
vouchers exacerbating inflation but I'd bet that just like in
Argentina, not only will it promote the shopping boom experienced in
Argentina but there will be the reduction in foreclosure due to
greater debt repayment which will actually reduce inflation. See:
http://turmelpress.com/bankmath.htm
So here's a toast to the Japanese government that saw the
advantage of adding local currency to circulation without adding to
the debt service burden, a sacrilege to most economists, but a boon to
their citizens.
-------------------------------
Date: Sat Mar 13 03:00:54 1999
From: johnturmel@yahoo.com (John Turmel)
Subject: [lets] TURMEL: Local Currency Vouchers in Japan #2
>Article #104593 (104604 is last):
>From: gchand4059@aol.com (GChand4059)
>Newsgroups: sci.econ
>Subject: Re: TURMEL: Local Currency Vouchers in Japan
>Date: Thu Mar 11 15:37:14 1999
>Turmel wrote:
>>So here's a toast to the Japanese government that saw the advantage
>Also, I read that Japan has a zero interest rate. What do you think
>of that?
JCT: If they're doing it right, it would be wonderful. But I'd bet
that the bankers would rather use the argument that since no one is
going to pay them any interest, why should they create new money? If
this is what they are doing, then of course, they will aggravate any
financial problems now going on. If they only lend it for financial
speculation without any real production, that too could end up being
good for nothing.
But if they issue a massive amount of new currency into
circulation as the Argentinian provinces did with their interest-free
bond currency based on service rendered, then I would expect the same
great results pursuant to the reduction in unemployment and Shift B
inflation.
This does remind me of another story about interest-free money in
Japan. I once read that after the Second World War, sailors from the
conquering navy went on shore leave with all their "Monopoly" money.
The residents, thinking it was real money, accepted it as such and had
an economic boom.
Much like the story of someone at a market who accepted a check
for $100, traded to another merchant to pay for his purchase, who
traded to a third merchant to pay for his purchase, who traded it to a
fourth merchant to pay for his purchase, etc., and then they all found
on on the next day that the check was no good.
Of course, if the original voucher is issued backed up by a value
that can be recuperated at the end of the cycle, then the trades made
with any receipt for collateral should be as valid as those made with
real money, Non-sufficient-funds money or even Monopoly money.
Anyway, the vouchers can only do good no matter if the bankers
scuttle any useful interest-free loans.
-------------------------------
Send a comment to John Turmel
Home