Didn't anyone learn that oligarchy can't compete with open societies?
This is just sitting in the road, waiting to get run over.
(And no, China is NOT yet an open society, but some nation worldwide might easily create one. It's happened before, you know.)
The relevant points are VERY simple.
1) Fiat currency is directly backed by public initiative, and the two are irrevocably linked.
A fiat currency system means currency supply is dynamically linked to transaction rates, and all currency used/created/destroyed to denominate ongoing cash or credit/debit transactions is guaranteed, or "backed" by the issuing government. In short, fiat currency is ultimately backed by public initiative.
In credit-based transactions, short term currency is both created & destroyed as credit is given and debits repaid. Hence, the only source of extra currency supply for personal savings is currency created de novo by public issuer spending (Treasury) and NOT clawed back as taxes.
2) Hence, any attempt to arbitrarily limit growth of a fiat currency supply is an arbitrary limit placed on distributed public initiative.
2) Hence, any attempt to arbitrarily limit growth of a fiat currency supply is an arbitrary limit placed on distributed public initiative.
Have populations - growing or static - run out of insanely great ADDITIONAL things to invent & do? Until they do, they need a growing & distributed currency supply automatically able to denominate all distributed transactions that expression of distributed public initiative requires.
3) Discussion of where to direct public initiative will never cease - and can always be improved - but there is NEVER any point in arbitrarily limiting public initiative, since options worth exploring are exposed only by initial actions. That's the Traveling Entrepreneur Task.
3) Discussion of where to direct public initiative will never cease - and can always be improved - but there is NEVER any point in arbitrarily limiting public initiative, since options worth exploring are exposed only by initial actions. That's the Traveling Entrepreneur Task.
There's no going back, except by public suicide - which is illegal for individuals ... but not for whole republics? The only way for a nation to be all it can be is to get going & explore emerging options. Sitting home & foregoing initiative won't do it.
Every government official promoting public austerity is embracing assisted republic-suicide and thereby endorsing Kevorkian at scale. Spend the money to drown out their BS, then find something better to do than nothing.
5 comments:
I'm also thinking along these lines.
The struggle between those that think wealth should be consolidated vs. distributed continues.
Somewhere in the middle, those that believe wealth can be optimally distributed, meet.
Mosler meeting Wray is a prime example of two economic classes coming to an agreement on how to optimally set up a fiat currency system.
It seems the closing of the gold window has so far benefited the upper class. The fiat money tool has so far been used to undermine the other institutions supporting our society. There has been a great effort convincing the population to keep the fiat money tool 'independent' of government.
The middle ground is, so far, seen as fanatical. The men of words have been laying the groundwork either reform or revolutionary change. Those in the upper classes are moving towards reform in order to avoid losing everythg in revolutionary change. Weill and other insiders are calling for a breakup of the big banks.
Comes down to govt fiscal deficit (surplus) is identical to non-govt consolidated fiscal surplus (deficit).
Maximum economic performance is gained by running a 'full employment budget," that is, offsetting non-govt saving desire.
It follows then that:
The only time that balance budget is appropriate is when non-govt spends all its income.
The only time that a govt fiscal surplus is appropriate is when the non-govt consolidated fiscal balance is in deficit due to net exports at full employment, in order to control inflation.
When the the non-govt consolidated fiscal balance is in deficit due to domestic private dissaving at full employment, then the country is "living beyond its means." Since this is not sustainable, economic policy should address the underling reasons, e.g., with tax policy.
This is really simple to understand it terms of sectoral balances and functional finance. This is not theory or discretionary policy. It is just understanding how the system parameters operate, showing how to use them to create "good" policy, that is policy that is (effective and efficient and avoid "bad" policy, that is, policy that leads to either economic underperformance and unemployment or inflation.
What's difficult to get here? Everyone is better off when the economy is performing optimally and no imbalances are building.
Anonymous "It seems the closing of the gold window has so far benefited the upper class. The fiat money tool has so far been used to undermine the other institutions supporting our society. There has been a great effort convincing the population to keep the fiat money tool 'independent' of government."
Because of the way money flows, the govt fiscal deficit flows to firm profits. This has chiefly benefited corporate interests, in particular energy, pharma, defense, and FIRE. Tax policy needs to address that by addressing economic rent separately from productive gain.
Wray and Mosler meet.
Hudson and Mosler diverge?
Taxing economic rents is unnecessary as long as those rents are 'saved'.
According to Mosler, the fiat printing tool has the ability to overwhelm the leakages and the less than optimal allocation of economic rents. No need for new taxes, where taxes are really just a diversion. The diversion of additional taxes keeps the discussion from turning to optimal public policy.
Hudson and Mosler diverge?
To a degree. Warren agrees about a tax on land rent, but not other rent, since he doesn't see it as being necessary as long it enough is saved to avoid inflation.
Michael's argument is that concentration of income and wealth results in disproportionate political power, the consequence of which is neo-feudalism. There is also research showing that as the Gini coefficient rises above a certain level, social, political and economic problems emerge in the society.
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