Building A Bridge In Utopia

This idea springs from what I understand of "Modern Monetary Theory", which amounts to one idea - namely that there is no risk for "printing money" as long as the result is solid, valuable infrastructure. To be sure, I understand almost nothing of this idea - take this as notes on the first glimpse of the concept to be revised or torn up.

Utopian system - Government directly creates the money it needs

• Government (G) identifies the need for a bit of infrastructure - a bridge
• G puts the project out for bids, contractor C wins - price is P
• Note that there is ample room for competition, innovation and "creative destruction" at this point
• G prints up $P (imagine small denominations, $1 million)
• C builds the bridge, G pays C $P
• All workers, vendors, sub-contractors, suppliers have been paid
• G has its bridge. 
• Nobody owes anything to anybody
• C has accumulated "goodwill" capital 
• Similar benefits have been won by vendors and workers etc. over and above the money. Workers have gained skills, various "intellectual capital" has been won by P and his sub-contractors
• There has been no need for taxes to pay for the bridge
• "New" money is now circulating in the economy to "grease the wheels" of the marketplace for everything from shoelaces to condo towers.
• The money supply has increased as have the capital assets of G
• The GDP seems to have increased by $P, which reflects a fair measure of the output of the Utopian economy related to this project. The usual measures of productivity seem to apply.

Implementation of this scheme would involve a central bank being a branch of government (as in Canada) and not a wholly private monopoly (as in the US). Greenspan makes a good point for such a potent machine not to be under the direct control of politicians, who will inevitably use it to print money for political purposes, resulting in the frequently observed catastrophes (runaway inflation) in countries where politicians do have direct control of the printing presses. Intuitively, the difference seems to be that money needs to be created for projects that address real needs and where appropriate resources of all kinds are actually available to meet these needs. Simply handing out money does not create resources to meet the needs. Another key aspect is the "bidding process" where needs are matched to resources by means of a rational method which assumes (among other things) stable prices, a measure of trust and lack of corruption.

The current system - finance capitalism

• Everything as above except
• G borrows $P from F, the finance system. Details don't matter. A basic rule of finance in F is that every dollar created makes an equal and opposite debt that requires "servicing" - the "tax" that the lender applies to reflect the "future value" of the funds created. 
• In the end, inside F, there is a new debt that requires "servicing" by G
• "Servicing" must ultimately come from the taxpayer
• Taxes must ultimately be raised or other government programs reduced to service the debt
• Measures of productivity and GDP are reduced due to the cost of financing
• Long term, the debt of G (the citizens) to F (anonymous international creditors) grows and grows

Conclusion: Government should create ("print") whatever money it needs for infrastructure.

Questions:

• Can the same logic be applied to government services? At first glance, this seems feasible if we simply apply the "bridge" model one day at a time.
• If so, can we expand the logic to apply to essential government services such as medical care? If so, the question is no longer can we afford universal medicare, but do we have the actual resources to supply it?
• Is there any need to take away the old system from the private sector? That is, private citizens may still need to go to F to finance a home, etc.
• Can this or a similar model be applied to Universal Basic Income? In this case, perhaps the "bridge" can be replaced by a happy, healthy, productive, live human citizen which surely must be regarded as valuable to G. Many cautions apply, including the catastrophe of handing out vouchers to Russian citizens that resulted in the infamous system of the Russian Oligarchs.