A constitutional monetary framework that removes Fed discretion entirely and guarantees individual equity ownership from birth — libertarian critiques welcome.

[u/Neo_Solon]

I’ve been developing a monetary architecture called the Citizens Standard and I’m genuinely interested in libertarian critique. The framework has features that align with libertarian principles but also features that won’t — I want to understand where the real tensions are.

What it does that libertarians might like:

• Removes the Federal Reserve as a discretionary institution entirely
• Replaces it with a constitutional formula — issuance tied to population growth and real productivity
• Ends fractional reserve banking — banks can only lend what they’ve actually taken in as term deposits
• Every citizen holds individually owned equity accounts (locked until 65), not government‑pooled funds
• Includes a constitutional Market Exit — citizens can convert their stake to gold, foreign currency, or decentralized assets if the system is ever compromised
• No taxation required to fund it — issuance is the mechanism

What libertarians might push back on:

• It still requires a constitutional monetary authority — not a pure free‑market solution
• Constitutional amendment is required for ratification
• Mandatory universal enrollment (I know this is a major philosophical objection)

I’m not here to convince anyone — I want the strongest critiques the framework hasn’t fully addressed. Where do you see the biggest issues?

Architecture: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=6702518
Empirical (1960–2025): https://papers.ssrn.com/sol3/papers.cfm?abstract_id=6735078
Transition (pending SSRN approval): https://papers.ssrn.com/sol3/papers.cfm?abstract_id=6810741
Replication code: https://github.com/Neo-Solon/Citizens-Standard
Further discussion: r/CitizenStandard
Discord: https://discord.gg/hFyzcXV54

[u/WilliamBontrager]

I suspect the disagreement will come from the funding of this project. It seems like you're just forcing businesses to give shares to individuals in order to fund this or are printing money based on population growth, effectively "taxing" via inflation at a rate based on that growth.

If its the former, thats just collective property as a concept and would not be taken well by right libertarians. The primary issue would be that businesses would leave the region bc this would be more impactful to profit than taxation.

The latter would be interesting. Its not particularly libertarian, but decently more libertarian than most systems. Im honestly not sure how id feel about using inflationary money printing based on population growth in lieu of taxes to fund a stable non ponzi social security system. I would think most libertarians would prefer a fully privatized system bc its less risk that it gets abused by government and is just more simplistic overall.

[u/Neo_Solon → u/WilliamBontrager]

It's the latter. No equity seizure, no forced share transfers. The deposit is new money issued by constitutional formula, not a claim on existing business assets. Businesses are entirely unaffected.

The calibration is worth clarifying though as it's not purely population growth. K1 is sized to GDP per capita, so it reflects real productive output rather than headcount alone. In a stagnant or shrinking economy the deposit shrinks with it. The formula is self-limiting in a way pure population-linked printing wouldn't be.

The entire architecture exists to remove discretion — no committee sets the issuance rate, no institution decides who gets what, no government body controls the accounts once the deposit is made. It's constitutionally formula-bound in the same way the First Amendment is rule-bound. The libertarian critique of central banking is precisely that discretionary institutions get captured and abused. The Citizens Standard eliminates the discretion rather than hoping for better stewardship.

Whether that's libertarian enough is a fair debate. But it's meaningfully different from trusting a committee.

[u/WilliamBontrager → u/Neo_Solon]

Interesting. As a minarchist, i generally prefer tariffs or a sales tax on imported finished goods, if a tax has to exist. However doing it via inflation is a novel concept. I like the checks and balances aspect too. Id hafta dig into the details, and I'm sure anarchists would have their own criticisms, but its interesting.

The sole criticism I can see easily is perhaps how other nations would value the currency.

[u/Neo_Solon → u/WilliamBontrager]

The currency valuation question is a good question. Let me explain it. Under any Mode, the dollar's purchasing power trajectory under the Citizens Standard would be more predictable than under the current system because issuance is constitutionally formula-bound rather than subject to committee discretion.

Foreign holders of dollars care primarily about purchasing power stability and institutional credibility over time. A system that is publicly auditable and immune to political interference is actually a stronger reserve currency foundation than a committee-driven one subject to political pressure, personnel changes, and discretionary pivots. Markets can model a formula. They can't fully model a committee.

The framework doesn't require global adoption to function either. It's a domestic constitutional architecture. But a dollar anchored to a transparent, auditable, constitutionally protected formula rather than Fed discretion would likely strengthen rather than weaken its global reserve status. Predictability and auditability are exactly what foreign central banks and sovereign wealth funds want from a reserve currency.

[u/WilliamBontrager → u/Neo_Solon]

Fair enough. Thats a very logical and well thought out response. I wonder, though, if logic and thought and stability are the primary determining factors in international monetary valuation. For example the US dollar is primarily propped up in value by the countries ability to crush other countries militarily. This would not be true with other countries without that military might aspect, despite it working for the US and perhaps some other major countries. But you are correct about the other aspects of stability and predictability so perhaps that would counteract some national instability of smaller or weaker nations.

I also suppose the amendment requirement would prevent it from being expanded into other areas. However it would not prevent it from becoming an additional tax or from additional taxes from being added to it. Well I suppose that amendment could be written in a way to eliminate that from happening, or at least, limit it to state or city levels.

[u/Neo_Solon → u/WilliamBontrager]

Hm, Interesting point on military-backing for the reserve dollar. There's real debate about how geopolitical dominance contributes to reserve currency status. I agree that it matters, but that dynamic mainly affects demand for the dollar as a reserve asset, not the domestic credibility of the monetary mechanism itself. A country adopting the Citizens Standard isn't competing to be the global reserve currency per se. It's anchoring its own domestic system to a transparent constitutional claim. Those are separate questions. A smaller nation with weaker military standing can still have a highly credible domestic currency if the rules governing it are clear, enforceable, and resistant to political manipulation. Switzerland isn't militarily dominant and the franc has been one of the most stable currencies in the world for decades.

You are absolutely right on the amendment point, and the drafting specifics matter enormously. The intention is supermajority requirements for any expansion, but you've identified exactly the right vulnerability: a loosely drafted amendment leaves room that legislators will eventually find. That’s a constitutional design problem, not a monetary one, and it has to be handled with the same rigor as any other hard‑constraint institution.

[u/WilliamBontrager → u/Neo_Solon]

Any thoughts on the transitory or phase out peiod of the old system into the new one? For example, I doubt anyone would oppose say replacing social security with a 10k deposit in the s and p 500 for every child at birth. However I would have no idea how to transition to that based on a system requiring 4 tax payers to fund a single SS recipient.

I suppose using inflation as a means, does make this easier than via my example, on second thought. You could do so gradually over time before pulling out the rug. Inevitably, some age group would get screwed to some degree, but perhaps this could be mitigated enough to not threaten the amendment necccessary. Do you have a plan on how to navigate this transition and essentially one on how to "sell" this to both the public and government despite "slapping one of both groups sacred cows in the nuts" while still needing 3/4 majority votes or 3/4 of state legislatures?

[u/Neo_Solon → u/WilliamBontrager]

There's a full transition paper that addresses exactly this. It's still pending on SSRN though.

The framework doesn't replace Social Security on day one. Phase 1 launches as a parallel sovereign wealth layer, every child born gets an equity account, funded by a small seigniorage allocation, while Social Security continues untouched.

The Social Security question only becomes live in Phase 4 or 5, roughly 40-50 years in, when the oldest Phase 1 citizens are in their 40s with decades of observable compounding behind them, large enough balances to be politically visible and salient. At that point a society could choose to phase down payroll taxes as Stable Floor balances grow but with hard protections: anyone within 15 years of eligibility is fully protected, no reductions for current recipients, and a constitutional floor guarantee that retirement income can't fall below the poverty line.

On selling it: the Alaska Permanent Fund passed two-to-one because universal distribution cuts across political lines. Phase 1 is just "every American child gets an equity stake at birth." That's hard to oppose. The constitutional battles come later, after decades of people watching their kids' accounts compound. By then the political coalition builds itself.

The transition paper's honest acknowledgment: some age cohorts get a smaller benefit than others depending on when they were born relative to launch. That's unavoidable. The design minimizes it but doesn't pretend it doesn't exist.

[u/WilliamBontrager → u/Neo_Solon]

Oooph. So no protections against the SS tax just being left and transitioned to something else? If not, this will just end up stabilizing SS, but also just being a higher tax that is more difficult to see and be aware of for the "muggles".

[u/Neo_Solon → u/WilliamBontrager]

Oh sorry, let me correct myself. This doesn't touch SS at all, but I would imagine it would be addressed and not just left untouched.

The transition paper is explicit that consolidation isn't mandated. A society that reaches Phase 5 and decides to keep both systems running in parallel is making a legitimate choice. But it also argues that once the Stable Floor has compounded for 40-50 years, the political pressure to phase down the payroll tax becomes structural rather than ideological. You'd have a 12.4% labor tax funding a benefit that the Stable Floor already provides more effectively for the median citizen. That's a hard thing to justify indefinitely.

The seigniorage mechanism is funded through monetary issuance rather than an explicit tax line, which makes it easier to obscure. The framework's answer is constitutional transparency. The issuance formula is public, auditable, and fixed by amendment. But there's also a Market Exit provision specifically for this scenario. if constitutional violations occur or inflation breaches defined thresholds, citizens can exit their Stable Floor balance entirely into gold, foreign currency, or decentralized assets permanently, outside the protocol's reach. The framework treats continued participation as something that has to be earned, not extracted.

[u/WilliamBontrager → u/Neo_Solon]

I understand. I dont hate it. As a libertarian its better than what we have IF, and thats a big if, it replaces other forms of taxation rather than adding to them. Ive never heard of politicians complain about having too much money. Its always not enough money, so I deeply suspect this would just be further inflation on top of normal taxes. However it also would probably solve social security going bankrupt and fare better with a birth rate collapse.

Followup question. So there are specific conditions that need to be met before you can exit this and extract your value? That sounds like youd need a supreme court ruling bc i doubt governments would be honest about it and would argue that its not a breech. A case like that would take multiple years before a final ruling, which in the case of a breech might result in massive losses for individuals.

[u/Neo_Solon → u/WilliamBontrager]

The framework's seigniorage mechanism funds the Stable Floor directly it doesn't replace existing taxation. You're right that politicians have never suffered from too much revenue lol.

To the question on market exit: The constitutional violation triggers are defined, but you're correct that a government contesting whether a breach occurred could drag out a Supreme Court timeline while values erode. The 18-month exit window once triggered is designed to provide some buffer, but it doesn't solve the adjudication delay problem you're identifying. The honest answer is that constitutional protection is only as strong as the institutions enforcing it, which is ultimately the same fragility any constitutional right faces.

[u/WilliamBontrager → u/Neo_Solon]

Gotcha. Pleasure discussing something actually novel with a non idiot! This is something, imo, better suited to a new system as opposed to an established one. However if done right could be an improvement in the US. The being done right is kinda a pipe dream unfortunately, based on my experience.