MIT (Money, Investment and Taxation) - Fiscal Planning for Mars

louis · 2020-01-31 18:03:49

I've been giving some thought to how capital investment on Mars might work in the early colonial period. Here's a suggested outline that I think could work:

1. An independent Mars Government (MG) is established. The ruling Council of the Mars Government would include at the start representatives of Space X, the Mars Corporation and persons elected by long term residents of Mars (but the latter proportion would rise until it became 100% of the total, as the population rises, so that by the time there are 100,000 residents, all the Council members are elected). Initially the MG would be endowed by Space X and a Mars Corporation. Subsequently it would be financed through taxation, principally on financial transactions, retail sales on Mars, sale of energy (over which it would have a monopoly) and sale of licences e.g. for land occupation licences, filming and so on.

2. MG establishes Mars Central Bank (MCB).

3. MG is guarantor of MCB.

4. MG holds gold bullion to support its role as guarantor. USA holds about 8000 tons of gold with a population of around 300 million. The equivalent for a population of 10,000 people on Mars would be only 250 kgs of gold. That would be only about $10 million in value.

5. It is suggested that the Mars Government back the MCB to a much larger amount, in fact 100 tons of gold or $4 billion. The gold would both be purchased and held on Earth and also sourced on the surface of Mars. Gold mining on Mars would also be an MG monopoly.

6. The MCB is empowered to issue a Mars Currency - the “Ares” - and control the money supply. The Ares is an entirely digital currency.

7. The Ares is traded on a fixed exchange rate. It is fixed at 0.75 to the US Dollar initially but will rise by 0.01 per (Earth) year for 25 years until it reaches parity at which point it will remain at parity.

8. The MG establishes a Mars Investment Fund (MIF) and a Mars Settlement Fund (MSF).

9. The MIF issues bonds at 5% pa interest per annum maturing after 25 years. It uses the money raised via bonds to offer loans to the MG and other bodies to support economic development on Mars.

10. The MSF offers shares to investors and itself offers loans to the MG and other bodies to support settlement and economic development on Mars.

11. The Mars Development Plan - approved by the MG in co-ordination with the Mars Corporation and Space X - would call for $2 billion of Mars investment per annum. This would be ploughed into Spaceport development, energy facilities, roadtrails, hotels, Earth-like environments (e.g. dome and gorge leisure spaces, covered beaches and lakes), sports facilities, habitat construction, mining and industrial development, recycling and agricultural expansion. This investment would be provided principally by the MG, MIF and MSF acting in concert.

12. The MCB would itself purchases bonds from the MIF used created currency (similar to Quantitative Easing used after the 2008 financial crash).

I know some people will criticise the above as having the appearance of a Ponzi or pyramid scheme. I would answer that as follows:

(a) Mars is a huge piece of real estate. The population will be tiny compared with human population on Mars, so potential per capita wealth is vast. There is real value there, real economic potential in terms of growing food, making things, providing services and trading with Earth.

(b) Creating a Mars Goverment and a Mars currency will be vital to ensuring that people on Mars can attract capital.

(c) It is clear that Space X has the "ideological" commitment required to kickstart development.

(d) If we can create a secure investment environment at the beginning, investors on Earth will feel realtively safe in investing in the development of Mars.

(e) I think this approach could well create a boom economy - not of permanent settlers necessarily but more of contract workers going to Mars to work for several years as a lot of Europeans, Americans and Asians do going to work in the Middle East.

(f) Once an attractive environment has been created for humans on Mars, we will see permanent settlers arrive and the growth will become self-sustaining.

SpaceNut · 2020-01-31 19:42:49

Once something is there to support a single person you are now open to tribal decay long before you have even gotten to the first 1,000 people on mars. Even small towns near that 1,000 show the need for government for a supported community to stay cohesive towards the goals for why they went.
Once a person is done there work and are using there free time to invest in anything of value the bartering or whatever currency of trade will arise even in a small colony format of a 1,000 people. Sure the eventual currency might be backed by precious metals or gems but will that aid or detract from growth.
The question is will the colonist stay civil or will it become a dog eat dog early for survival....

louis · 2020-02-01 17:33:15

I would say this is all about putting the right starting conditions in place.

For me, the Mars Development Plan would provide a framework for directing the colonisation and terraformation effort.

I wouldn't wish to curtail individual economic activity and, indeed, in terms of attracting permanent settlers that might be vital - people might well come to Mars to set up their own businesses and see if they can succeed.

It seems that on Earth nearly all currencies are backed by precious metals or government securities. I think putting in place large gold reserves will provide a secure basis for economic growth. It's all about building confidence in Mars's governance, currency and plans for the future. If you can convince people the economy is going to grow rapidly, they will invest.

Again, in order to avoid a "Wild West" scenario, you need to have strong governance and a robust legal framework.

There are so many resources on Mars I see no reasons why a "dog eats dog" scenario would ever arise on Mars. The evidence from Earth was that for many millennia humans co-existed without anything like war taking place - maybe the odd skirmish. That was because homo sapiens was expanding across a planet with huge resources for a clever ape. It was only once human populations grew into the tens of millions that competition for resources became a significant factor - you couldn't simply "move on" and find new resources. You had to compete for them.

SpaceNut wrote:

Once something is there to support a single person you are now open to tribal decay long before you have even gotten to the first 1,000 people on mars. Even small towns near that 1,000 show the need for government for a supported community to stay cohesive towards the goals for why they went.
Once a person is done there work and are using there free time to invest in anything of value the bartering or whatever currency of trade will arise even in a small colony format of a 1,000 people. Sure the eventual currency might be backed by precious metals or gems but will that aid or detract from growth.
The question is will the colonist stay civil or will it become a dog eat dog early for survival....

SpaceNut · 2020-02-02 21:31:11

Here is a new poster "Ancient Mars" and topic in Keeping future mars colony from becoming slaves to Earth that stuggle does take place once we have a desire for more goods than we can pay for or get from what the martians are earning for wages.

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#1 2020-01-31 18:03:49

MIT (Money, Investment and Taxation) - Fiscal Planning for Mars

#2 2020-01-31 19:42:49

Re: MIT (Money, Investment and Taxation) - Fiscal Planning for Mars

#3 2020-02-01 17:33:15

Re: MIT (Money, Investment and Taxation) - Fiscal Planning for Mars

#4 2020-02-02 21:31:11

Re: MIT (Money, Investment and Taxation) - Fiscal Planning for Mars

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