Social Interest, demurrage and interest

Interest is traditionally engineered to favor the rich: the more wealth a person/company has, the less they’ll pay for loans and the more they’ll earn for lending. Social interest via UBI means the opposite - the poor earn interest (new GoodDollars) which is funded by the rich.

In GoodDollar, the plan is to administer a 10% annual inflation that is actually “hidden” demurrage on money holding. This is actually a flat tax on wealth in the GoodDollar ecosystem. Combined with the UBI, it is actually progressive.

This monetary inflation wouldn’t necessarily cause price inflation if the economy grows in parallel. Technically, to tax wealth, we could have gone for levying a 10% tax on wallet balances - but instead, we plan to mint more coins, which is perceived differently behavior-wise.


The differentiation between monetary inflation and price inflation is key here.

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