Francis Koster: Credit system will be useful in downturn

Published 12:00 am Sunday, March 29, 2020

By Francis Koster

The coronavirus is going to impact our local economy for several years.

Just because the federal government has taken some steps this week to protect the nation’s economy does not mean those steps were big enough or that the job is done. Economists have said the coronavirus is starting a devastating collapse of our economy that will last several years. Unemployment will soar and families will have difficulty paying for food, utilities and housing. Even the most optimistic politicians are calling the CARES Act, the formal name of the stimulus package, a “short-term rescue effort”.

Locally owned small business-like hair salons, local restaurants, bookstores, convenience stores with gas stations and hardware stores have already lost so much business that they may never re-open.

How do we rebuild?

Think back to when our economy was largely agricultural. Farmers would come together at harvest time and agree to help each other out.  Bringing their own tractors to the job, those in agreement would help one farmer harvest wheat.

Then, the collaborative team would move down the road and harvest corn and then on to another location for yet another task. By prior agreement, no money changed hands; all the participants in the agreement put in work and equipment. And all got something in return that felt fair.

Today, using cell phones and the internet, there is a proven, innovative, locally implementable solution that we can use while working from home or elsewhere (using ‘physical distance,’ of course).

The transactions could be paid in a form of a credit, similar to frequent flyer points. Once earned, they could be spent to acquire other goods or services from other agreeable members of the organization. Let’s call them Carolina Dollars for now.

Imagine a parent who needs a math tutor for their child. Once we launch a website, they go online to the “Carolina Dollars” Skills Inventory and identify/email a well-rated fellow “credit union” member who is a suitable teacher. After completing the assignment, the teacher gets a “frequent flyer points” payment to their Carolina Dollars account at the “credit union.” The teacher in turn can reach out to someone to cut their grass and pay them using the Carolina Dollars from their account. And the lawn cutting person can pay a barber. And on and on.

These kinds of community co-ops have been in existence around the world and in the United States for decades. They were strongest after the Great Depression and again after the Recession of 2001-2009.

The impact of the coronavirus can be as short as two months, with huge death rates, or as long as two years with the same number of deaths if slowed by “social distancing,” ending only when reliable treatment of the infected is available and delivered or an effective vaccination becomes available to all. We appear to be at least a year or more away from that.

Under either of these situations, money could be hard to come by.

We must begin now to head off greater economic misery.

Francis Koster is a local activist who has been studying, teaching and implementing local solutions to national problems for over 50 years. Contact him at Sign up for his email list and learn about the planning for the form of credit he’s described at