One thing about the financial crash of the last year and a half isn't exactly a secret -- trillions of dollars in wealth have been effectively destroyed, deflated out of existence in crashing hedge fund portfolios, business bankruptcies and abrupt margin calls as banks desperately recall funds loaned to other banks. And on and on.
Some of this lost money had a dubious foundation in the first place -- witness the world's credit default swaps. And some of it represents very substantial money that has been poured down very real rat holes -- witness suburban and exurban McMansion sprawl in America, particularly in, say, the deserts around Las Vegas.
But some of it was real.
And as we approach the G-20 meeting, President Obama may just count up how much money has been destroyed worldwide over the last year-and-a-half (not counting completely "delusional wealth" such as credit default swaps), pick a significant fraction of those funds, propose that the G-20 (and any other countries that wish to participate) lock all their currencies together for five years, and then spend the next two years incrementally re-printing all of that chosen sum of money in the hands of these national governments -- with the binding agreement that it all has to be spent on just a handful of things...
...say, energy (renewable energy, mass transit, conservation), the environment (see above, and global-warming mitigation and recycling/reuse), water, food, repayment of national debts and guaranteeing bank accounts (as per the FDIC). (Or make your own list. But consider that paying off debts may also help to tamp down potential inflation, as would creating and conserving the actual resources that would be purchased by this recreated currency.)
The agreement would likely also contain a provision demanding that a certain amount of these funds go automatically to paying off part of a country's national debt, with a larger percentage being paid out by countries with the worst debt problems. (This would, of course, help prevent a crash of European banks reeling from Central-European debt issues.)
Central banks would have to agree to lock their rates together at some agreed upon level for the five-year duration (though a fine-tuned monetary policy could be replaced for the duration by the funds provided by this initiative). And of course, any government that violated the terms of the agreement could be kicked out of the collective effort, and thus lose access to these internationally legitimized funds.
Sure, most of this money was lost by the wealthy and the ultra-wealthy, making this action the biggest transfer of wealth from the rich to ruling governments in the history of the world... but it would change the fate of that money from "deflationary destruction" to "vast tax, mostly on the rich." Whatever you might think of that tactic, it's clearly on the table at this point (if our government has considered it), and that's just one of the surprises the U.S. government could pull out of its pocket.
So, any thoughts?
I'm putting this resurrection of funds out there simply as a possibility that has not been widely discussed. I know that the Administration theoretically has access to this idea, because I mentioned it on their public-feedback website, but that only means that someone in their digital "mail room" has read it, nothing more. =)
(If anyone is looking for it in the database, search on the phrase "an unexpected door," and check just before that cheap, ultra-high-yield renewable-power system the same source sent you a copy of on Inauguration Day. Speaking of which, you might want to weigh that option as well. =) )
And while we're at it, does anyone else have any other ideas, "radical" or otherwise, that might reverse a major part of the economic catastrophe we're presently navigating?