ABSTRACT
Western-type democracies under the leadership of the United States face problems that threaten their stability and that of the world. Regarding money, three major problems are the dominance of the U.S. dollar in international transactions, the excessive indebtedness in the United States and the world, and the complacency of the monetary authorities in accommodating these alarming trends. They are difficult to confront because (a) the U.S. government is unlikely to slow down deficit spending; (b) under the present institutional arrangements, the Fed is substantively subservient to the U.S. government; and (c) should a new crisis erupt, the Fed cannot expect the kind of cooperation countries with key reserve currencies like China and the European Union offered in combating the turmoil that emerged in 2008. Therefore, it is high time for the United States to think ahead of the next big financial crisis, which may prove far more destructive, and prepare to reform its central banking radically. To contribute in this direction, in this chapter, we explain our plan for seeking enlightenment from the monetary arrangements in Athens during classical times by drawing on the voluminous literature that has accumulated particularly in the past three to four decades.
