Monday, November 23, 2009

"There ain't going to be no money for nothing if we pour it all into Afghanistan"

Set aside the atrocious English for a moment as well as the over-arching debate on whether or not our presence in Afghanistan is even worth it, that was House Appropriations Chairman David Obey speaking with ABC News.

His comment highlights--once again--a total lack of understanding of our monetary system by our policy makers. They mistakenly believe the government is either "out of money" (as President Obama said) or very close to being out of money.

Their misunderstanding lies in a belief that taxes fund spending. This is a gold standard concept and is, therefore, inapplicable under the current paradigm where the government credits bank accounts electronically and its "money" floats freely and is non-convertible into any commodity such as gold exchangeable for another currency at a fixed rate of exchange.

Under the current system there is absolutely no constraint to how much crediting of bank accounts the government can do; the only constraint being political. And it is becoming quite clear that our political leaders are about to put limits on how much the government can spend, even though we have 10% of the workforce unemployed and our industrial capacity is being utilized at an anemic, 68% rate.


TomatoBasil said...
This comment has been removed by the author.
Matt Franko said...

We ain't got no informed leadership in the Congress! LOL!

googleheim said...

It's funny how 1 year later some people are finally talking about how the government will have to pull the money out of the system to prevent outrageous inflation.

If they understand that money can be pulled out, drained, stripped .. whatever why cannot they understand that money injection is spending which is energy and becomes investment and savings ??

That the creation of the "monies" is not backed up nor paid for by taxes ( also interest rates are not set by any external forces than what the fed decides ) then why cannot they understand the complete loop ?

googleheim said...

Now I see through all the gobbly-gook a little bit.

The politicians don't care if the tax payers are on the hook or not.

Same for military.

Military spending accounts for much more than tax revenues by what factor, how many times more over ?

Iraq and Afghanistan are a waste of credits to the banks.

Who has stepped forward and asked how much money has been printed for the military ?

googleheim said...

As a function of deficit hawking terrorism :

The feedstock of nuclear isotopes that help maintain our dosimetry isotopes for nuclear medicine scans ( PET imaging, etc ) as well as maintaining the safety of our nuclear power is an isotope tc-99m

It is in short supply in the USA.

I bet if we would have had the superconductor supercollider particle accelerator in Texas ( but defeated by deficit terrorists ) we would not have this scarcity.

Therefore, again deficit terrorism eats away at the capacity of the USA to lead in fundemental science research as well as to spin off products necessary for our medical system.

Lower taxes, increase spending, and force the multinationals to bring their dollars home.

Matt Franko said...

I'd recommend that you run for Congress but you are too intelligent!

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Ridwan said...

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