The Norburn Monetary Reform Act of 2025 🏦
By Matt Shipley, edited by Jeff Darville
These sources describe a proposal called the Norburn Monetary Reform Act of 2025, which aims to change the U.S. monetary system radically. The core idea is to centralize money creation under a new government authority, replacing the current fractional reserve banking system and Federal Reserve functions. The plan uses real-time economic data and a Money Stability Index to guide money supply decisions and restrict government borrowing during normal times. A key aspect is the proposed use of an open-access digital ledger, potentially blockchain-based, to ensure transparency and accountability in money creation and distribution. The sources also evaluate the clarity and feasibility of the proposal and discuss its potential impacts on the economy, including the stock market and investing.
Based on the provided sources and our conversation history, the Norburn Monetary Reform Act proposes several fundamental changes to the structure and operations of the U.S. monetary system:
Centralization of Money Creation: The Act suggests a radical restructuring that centralizes the creation and distribution of money under a new public authority, referred to as the "U.S. Treasury Department of Money" (DoM) or "Monetary Authority" (MA)1 .... This entity would replace the current monetary creation functions of the Federal Reserve5 . The creation of new money ("ex nihilo" or from nothing) would be performed solely by this public authority.
Abolition of Fractional Reserve Banking: A core principle of the Norburn Act is the prohibition of fractional reserve lending by commercial banks8 .... Banks would no longer be able to create money based on deposits9 . Instead, they could only lend funds they have borrowed from the MA/DoM or raised from private capital (e.g., equity investors)7 .... This contrasts sharply with the deeply rooted principles of the current U.S. and global financial systems8.
Purpose-Driven Money Issuance: The MA/DoM would create money for specific purposes: funding federal government operations, lending to commercial banks for public and private sector borrowing, and purchasing public-purpose municipal bonds7 .... This mechanism uses direct and transparent methods to introduce cash into the economy, such as funding government contracts, providing loans to banks for reloan, and lending to municipalities for infrastructure12.
Rules-Based Monetary Policy and Money Supply Control: The Act introduces a rules-based approach to managing the money supply, guided by a Money Stability Index (MSI)7 .... The MSI is a composite index incorporating real-time economic indicators (like GDP Nowcasts, Inflation Expectations, Labor Market Pulse, Business Sentiment)11 .... Money supply growth would be targeted to approximate real GDP growth plus inflation targets, with refinements based on the MSI reading7 .... This replaces discretionary monetary policy with a more objective system15 .... A modified Taylor Rule is used to determine the base interest rate, incorporating factors like financial stability and exchange rates11.
Shift in Government and Municipal Funding: Federal government funding needs would be met by direct transfers from the MA/DoM to Treasury operating accounts, treated as sovereign credit11 .... Municipal and state governments could receive funding via direct bond purchases or loan programs from the MA/DoM, potentially at stable, capped interest rates11.
Structured Public Lending Channel: Commercial banks would serve as intermediaries, borrowing funds dollar-for-dollar from the MA/DoM to reloan to households and businesses10 .... Banks must meet credit standards and maintain risk reserves, but they do not create the loan principal themselves33.
Restrictions on Civil Government Borrowing: Civil governments (state, county, city, town) would face significant borrowing discipline, generally restricted from borrowing more annually than they can repay through anticipated tax revenues19 .... Exceptions are limited to congressionally declared wars or national emergencies19 .... This aims to prevent chronic deficit spending and preserve borrowing capacity for true crises36.
Public Benefit from Money Creation Revenue: Interest collected by the MA/DoM from lending would flow into the U.S. General Fund33 or a special "Money Creation Surplus Fund" intended for debt reduction and infrastructure investments10 .... This contrasts with the current system, where commercial banks profit from creating money through lending.
Enhanced Transparency and Oversight: The Act mandates significant public transparency, including an open-access digital ledger (potentially blockchain-based) to track monetary creation, issuance, loans, and repayments in real-time14 .... A citizen dashboard would provide simplified access to monetary flows and economic indicators43 .... New independent oversight bodies, like an Office of Public Money Oversight (OPMO) within the GAO, are proposed50.
Independent Governance Structure: The MA/DoM would be governed by a Board of Governors appointed for staggered, long terms (e.g., 10 or 14 years) and confirmed by the Senate4 .... Governors are required to have expertise in economics, banking, or public finance9 .... This structure aims to ensure independence and prevent political abuse24.
Integrated and Real-Time Data: The system would rely on a Centralized and Integrated Data Platform (CIDP) to synthesize economic statistics from various sources (DOL, IRS, state agencies, universities, private vendors) in a potentially real-time manner55 .... This data feeds into the MSI using advanced techniques like "nowcasting" to handle asynchronous data streams11 .... Specific labor market metrics like U6 unemployment, Job Quits Rate, LFPR, hourly earnings growth, and Job Openings are highlighted for use in the MSI18.
In essence, the Norburn Act fundamentally shifts the monetary system from one based on privately created, debt-driven bank credit and an independent central bank with complex market operations to one where a public authority directly creates and manages the money supply according to rules based on real economic conditions, with enhanced transparency and restrictions on government borrowing.
The following videos are meant to explain and promote the bill. The quality is not a reflection of the final product, but instead a work in progress. If you would like to volunteer to assist with editing and production, message me directly. Thank you.
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