Public Cash MoneyCS — The Citizens Standard · Chapter 2: THE ISSUANCE ARCHITECTURE.
One Growth-Matched Money Budget, Four Constitutional Channels, Two Circuits — Why Inflation and Citizen Ownership Become Settings, Not Outcomes
Chapter 1 documented the Distribution Bug: no rule assigns the value of new money. This chapter states the rule. Numbers below use the launch calibration — US GDP $30.8T, M2 $22.4T, 341.8 million citizens, 2 percent real growth — and every one of them is reproducible from the replication packages.
Neo-Solon · citizensstandard.org · 2026 · Open source. Peer review actively welcomed.
Abstract
The Citizens Standard issues, at most, one growth-matched budget of new money per year — at launch, roughly $447 billion, which is 2 percent real growth applied to a $22.4 trillion money stock. That budget is split across four constitutional channels and routed between two monetary circuits: a transactional circuit that sets the price level, and an asset circuit that builds citizen ownership. Once the split is understood, inflation stops being a target the authority chases and becomes an output read directly off the channel settings — including the setting that produces exactly zero. This chapter specifies the channels, derives the price-stability condition, and shows the small set of named configurations — the Modes — that a society can constitutionally choose among, from a mildly deflationary hard-money corner to a pure citizen dividend.
1. The Budget: One Line, Constitutionally Capped
New issuance in a given year is at most g · M, where g is measured real output growth and M is the money stock. At launch: 0.02 × $22.4T ≈ $447 billion. In a flat or contracting year, the growth component is zero. That is the entire quantity rule. There is no committee that can exceed it, because exceeding it requires amending a constitution, not persuading a chairman.
This answers Chapter 1’s first question — how much — with a rule. The rest of the architecture answers the second: to whom.
2. The Four Channels
K1 — the citizenship deposit. Every new citizen receives, at birth or naturalization, a deposit of 2.5 percent of GDP per capita — about $2,250 at launch, roughly $9 billion per year in aggregate — into a locked personal account (Chapter 3). K1 fires on citizenship, not on growth: it flows even in a recession, which makes it a small automatic stabilizer.
K2 — the growth channel. The residual of the budget after K1, deposited annually and equally into every living citizen’s locked account. K2 is where the value of growth-matched issuance is assigned — to everyone, identically, as property.
K3 — the routing dial. K3 creates no money. It routes: a share κ_d of the post-K1 budget is paid out as a spendable dividend instead of being locked. Moving the dial changes the form citizens receive — current income versus owned capital — never the total.
KI — the only channel above the line. KI issues additional money beyond the growth budget, and is therefore the only deliberately inflationary channel. It exists so that a society that chooses a small positive inflation rate can have it — as an explicit, constitutional setting, not as drift.
3. The Two Circuits — Why a Large Budget Need Not Move Prices
Newly issued money does not all act on prices. It lands in one of two circuits. The transactional circuit (Mᵀ) is money actually turning over against current goods and services; by the quantity identity, it — and only it — sets the goods price level. The asset circuit (Mᵃ) is money locked in the citizen accounts: it builds ownership and touches goods prices only through a small measured leak.
Mᵀ is measured, not assumed: today’s best estimate places it near 51 percent of M2, with a pre-registered confidence band of 0.46–0.57 and three independent constructions behind it (Empirical Lab). The leak from locked balances into spending is calibrated at 20 percent of each year’s inflow — deliberately above the measured wealth-effect literature, which places it at 1–7 cents per dollar, so that every price-stability result below is stress-tested against more leakage than the evidence supports, not less.
4. The Price-Stability Locus
Prices are flat when the money reaching the transactional circuit grows at exactly the real rate: injection = g · Mᵀ. At launch that is 0.02 × ($22.4T × 0.5135) ≈ $229.7 billion. Issue more into Mᵀ and prices drift up; less, and they drift down. This one line — the locus — is the entire inflation mechanism, and every configuration below can be checked against it by hand.
The flagship configuration routes 60 percent of the post-K1 budget into locked accounts and pays 40 percent as a dividend. Money reaching Mᵀ is then the dividend ($175B) plus the 20 percent leak of everything locked ($54.7B) — $229.7 billion. Exactly the locus. Drift: 0.00 percent. The 60/40 split is not an aesthetic choice; the arithmetic closes.
5. The Modes — Inflation as a Constitutional Choice
| Mode | Configuration | Per-citizen result (launch) | Price level |
|---|---|---|---|
| 0 | All channels off | — | Falls with real growth (hard-money corner) |
| A | 17.5% of the growth budget, all locked | ≈ $203/yr into the floor | ≈ −1.9%/yr |
| B | Full budget, 60% locked / 40% dividend | $769/yr floor + $513/yr cash | 0.0% |
| D | Full budget, 100% dividend, no floor | $672/yr (≈ $56/month) cash | 0.0% |
| C | Mode A + KI active | ≈ $108/month cash | ≈ +2.0% |
Two things to notice. Modes B and D reach exact price stability by opposite routings — B locks most and pays some, D locks nothing and pays all — because both place ≈$230B on the locus. And Mode 0 answers the reflexive “printing press” objection directly: zero is one of the settings. This is not a machine stuck on “more”; it is a machine whose dial a constitution holds.
For an economy whose transactional share sits away from one-half, a solved variant (Mode Ω) sets the split so derived inflation is zero for any measured structure. The regime — mild deflation, exact stability, or a chosen dividend-funded inflation — is selected by citizens constitutionally. The framework fixes only what an impartial chooser would fix: that the value of issuance belongs to everyone equally. The regime it leaves to the polity, on the reasoning that people behind a veil would settle the first question and reasonably disagree on the second.
6. Empirical Footing
The two-circuit claim is the load-bearing one, and it is tested, not asserted. In high-money-growth regimes, the transaction-active aggregate carries four to five times the goods-inflation information of total M2 (next-12-month CPI R² 0.19 vs 0.04) and drives M2’s coefficient to zero when both are entered together. The 2020–21 episode showed the mechanism in payments data directly: the money supply surged while payments activity did not — new money parked in idle balances first, exactly as the circuit decomposition predicts (Chapter 1, Section 4). And the 20 percent leak calibration is bounded by sensitivity analysis: varying it across 10–40 percent moves realized inflation by under three-quarters of a point, and the routing dial κ_d recentres the result exactly at any measured value.
7. What This Chapter Does Not Claim
It does not claim the transactional share is a constant — the rule is specified on measured Mᵀ, re-estimated like any aggregate, and a six-point measurement error moves realized inflation by only about a quarter point. It does not claim the leak is precisely 20 percent — it claims the results survive it being anywhere the literature puts it, and worse. And it does not yet say what the locked accounts are or what they become over a lifetime. That is Chapter 3.
To confute this chapter: show that the quantity identity prices goods off total money rather than transaction-active money (the data above say otherwise), or find an arithmetic error in the locus. The derivations are in the open replication packages, executable end to end.
One budget. Four channels. Two circuits. One line of algebra between any setting and its inflation rate.
Coming in Chapter 3 — The Citizen Floor: what the locked account becomes over a working life, why the honest answer requires solving for the return the program itself pushes down, and what a floor of several hundred thousand real dollars per citizen does to r − g.