Arguments of our opponents - and our rebuttals
In summary - our opponents are running a fear campaign: the main
argument they are using is that the sovereign money initiative is an
unnecessary experiment. This shows they have found no valid technical
arguments against it. There is now a " No to sovereign money" website.
This "No" campaign has kicked-off with posters going up all over the
place - they clearly have much more funding than we do.
Detailed arguments from different organisations:
1) From the government and parliament:
In a Swiss people's initiative which comes to referendum, the Swiss
Federal Council and parliaments can give their recommendations. The
Council of States voted 42 to zero against the sovereign money
initiative, with one abstention. The National Council voted 169 to 9
against, with one abstention. The Federal Council also recommends voting
against the initiative. The main arguments together with our answers
(in italics) in brief, are:
- A sovereign money system cannot guarantee financial stability - the aim of the initiative is to make people's money safe (we can't prevent a global financial crisis affecting Switzerland)
- It hasn't been tried in any other country -
it's not new, it's what happened when banks were prevented from
printing their own banknotes and the Swiss National Bank was founded
- It would be a radical change from the well-functioning system we have now -
the system we have now is not functioning, debt is mushrooming and all
experts agree it is not "if" we have another financial crisis, but
"when"
- It would weaken the Swiss financial sector, to the disadvantage of banks' customers - having a totally secure money will be an advantage for Swiss wealth management and banks' customers
- It would give too much power to the Swiss National Bank which would put it under political pressure - Do
we really want the power of money creation to be in the hands of
private profit-motivated businesses? The SNB already copes with
political pressure - it must act in the best interests of Switzerland
- Measures have already been taken to strengthen financial stability - We know big banks are already planning to get round the new Basel rules
There are several mistakes in the official booklet sent to all voters, the main one being that under the sovereign money system all money
must enter the economy debt-free. This is incorrect: as well as new
money being spent into the economy debt-free, money can be lent into the
economy as banks may borrow money from the Swiss National Bank. (This
means a 'credit crunch' could only occur if the SNB chose not to lend
money to banks at reasonable rates). A legal process against the state
for providing incorrect information is underway.
Resources:
- Official booklet sent to voters (German, French, Italian)
- Federal Council's report on the sovereign money initiative (summary in English, full report in German, French, Italian)
- and our reply (German)
2) From the Swiss National Bank
Thomas Jordan, Chair of the SNB, has come out strongly against the
sovereign money initiative saying "sovereign money is an unnecessary and
dangerous experiment, which would inflict great damage on our country".
However, he appears not to have understood the sovereign money
initiative as he wrongly claims that it would force the SNB into
following a policy of targeting the money supply rather than interest
rates. There is nothing to stop the SNB from targeting interest rates
under the sovereign money system which it can do by setting the interest
rates at which it is willing to lend to banks.
3) From the Swiss Bankers Association
The Swiss Bankers Association commissioned Prof Bacchetta to write a study against
the sovereign money initiative. This has the guise of being a
scientific report, but is absolutely full of fundamental errors and
devious statistical handling (e.g. choosing the optimum time period for
interest rates to give the worst possible outcome of the effect of
sovereign money on the economy, the result being 0.4% less growth). This
has been strongly critiqued in a 85-page report by Christian Gomez, and also in a report by Ralph Musgrave.
4) Political Parties
All political parties are against the initiative except for the Green
Party who are neither supportive nor against and give a "free vote". The
parties who are against have come together in the "Vollgeld-Nein" ( No to sovereign money) group, who are focusing on the fear campaign of "risky, expensive and damaging".
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