How to Finance the National Dividend? by Richard C. Cook

by Richard C. Cook
Featured Writer
Dandelion Salad
August 07, 2009

Response to a Reader:

The question is always the same–how to finance the National Dividend, which would be somewhere in the range of $2-$3.5T U.S., depending on whether it is taxed and if there is an allowance for children.

To be brief, blunt, and brutal–the government would print it and give it away. When people stop swooning, you explain to them that of course all Western governments–esp. the U.S.–do this anyway by rolling over central bank debt.

Yes, they do pay it off– through inflation. But much of the inflation is due to interest paid to the banking system for the privilege of solvency.

If the idea of printing it and giving it away is politically unacceptable, then you can have the government sell “dividend bonds” to the central bank, which bonds are kept in a vault somewhere, with the bank distributing the dividend. Or it can be done through the Treasury.

The only difference from current practice is that with the National Dividend, you give the money directly to the people rather than routing it through the government or the banks; today the government spends much of it on the horror of the military-industrial complex; banks skim the cream through interest on lending.

With a National Dividend paid directly to the people, this money immediately goes into circulation at the local level and produces many more jobs and much more economic growth than through the other routes. So it becomes, in practice, self-financing. It also pays down debt, reduces net interest payments, and results in more savings than at present.

What I call “The Cook Plan” calls for the dividend to be paid via vouchers which are then deposited in a network of community savings banks to capitalize low-interest lending at the local level for individuals, students, small businesses, and family farms.

This program would shift money creation from bank lending to local income, thereby overcoming the constant tendency for jobs to disappear due to technological innovation.

From the standpoint of economic theory, the dividend monetizes national savings which occur chiefly through corporate retained earnings. Today that savings is largely eaten up by interest. So the banks get rich while everyone else becomes poor.

Total debt in the U.S. today is around $60 trillion. If interest is 4% that’s $2.4T out of a $14T GDP. $2.4T is a figure curiously almost identical to my proposed National Dividend.

Richard C. Cook is a former federal analyst who writes on public policy issues. His book “We Hold These Truths: the Hope of Monetary Reform” is now available at His website is


Credit As A Public Utility: The Solution to the Economic Crisis by Richard C. Cook (videos)

The Cook Plan (video)

Bailout for the People: “The Cook Plan” by Richard C. Cook

6 thoughts on “How to Finance the National Dividend? by Richard C. Cook

  1. Non-credit money can finance the National Dividend.
    Non-credit money is the necessary additional quantity of money in circulation (dM) as percentage (k) of existing quantity of money in circulation (M).
    dM = kM ; k = (supply – demand)/demand ;
    If non-credit money is emitted according to the cited formula, inflation cannot exist. Also, taxes are annulled for the amount of non-credit money. The consumers pay less and producers get more than today, in the order of credit money. All get the gift from non-credit money. The source of non-credit money is the growth of economic rationality.

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