Redefining Situational Awareness in Terms of Decision-making, liquidity & In/de-flation - NOT fiat deficits, fiat budgets, and fiat debts.

Or, recognizing the impact of Innocent Sophistry as well as Innocent Fraud.

It's common to observe economists misreading context & misusing math identities. Consequently, they spend inordinant amounts of time arguing over broken semantics which they themselves introduced! Its always a waste of time arguing with a person who redefines terms as needed in order to continue a discussion which they want to prolong for alternative reasons. For lay clarity and peasant common sense, let's back up and try to define the terms being used.

Why do we as a people, and a currency issuer, track currency supply? To manage cultural liquidity, so that we can always quickly conduct whatever real transaction-chains our group goals demand, no matter how complex & interdependent, dynamic or transient those transaction chains become.

One way to at least partially track social liquidity is to manage a supposedly adequate currency supply. There will be more caveats to follow, but let's keep things simple to start.

Note, first off, that currency liquidity does NOT account for all the liquidity expressed in our diverse social contracts. Most social credits, in the form of supposedly calculable risks plus complete uncertainties are NOT tracked by accountants. Nor can they be, by present methods. After all, people willingly die in defense or pursuit of some transactions, from family to liberty to mistakes.  Nevertheless, lets forge on, addressing the automatically growing currency supply used by a constantly growing population and increasingly dynamic economy.

Net issued fiat currency supply = net currency_user currency_income + currency_savings - taxes

Adding taxes to both sides, and abbreviating defined terms, we get the following.

Current Federal Spending + Taxes = private income + private savings (Keeping everything entirely in currency denominations, so far.)

What could be more simple? It dictates it's own context, and accurately tracks changes in currency supply, as ONE representation of liquidity.

[Note, however, that this equation does NOTHING to address the adequate distribution of liquidity, which is what maintains the group-agility of any team, and certainly the agility of organized electorates. The only way to unleash the unpredictably emerging and hence unpredictably distributed capabilities of a sexually-recombinant population is to discover and manage a threshold, adequate level of distributed liquidity. More on that later.]

Let's now introduce one of the most common semantic bottlenecks, caused by a failure to define terms. At this point, some people cause gridlock simply by noting that "net savings stock" doesn't always equate entirely to financial/currency savings on the right side of the equation. Mon Dieu! No one ever said it did. This objection is pure sophistry, of course, even if purely accidental or unknowning. May we add Innocent Sophistry to the lexicon, as a necessary feature of Innocent Fraud?

If sophists, innocent or not, want to expand the context, and extend discussion to things OTHER than the currency supply in isolation, that's fine, but it entails tracking the context-specific variance of semantics, which must be consistently shared to be useful.

Let's say sophists want to put REAL wealth items [RWI] on the right side of the equation (i.e., things waiting for liquidity transactions, from housing stock to education). This is a valid point, of course, because our tax code does indeed generate currency-based tax demands based upon holdings or use of real items. Yet in that same, expanded context, it is also true that our national dynamics generates currency production based upon real, expressed goals of the populace.

Therefore, to be useful, the sophists at this point must honestly account for the chosen change in depth of context (i.e., the various automatic stabilizers; areas where REAL practices automatically affect both sources & sinks of the fiat currency used to maintain the net and distribution of group liquidity). Logic dictates that the sophists have to introduce these changed on the left side of the equation which go along with the proposed context-changes on the right side of the equation.
For example, if taxes on real stock is introduced on the right, then the left must include analogous intangibles such as return on national coordination & capabilities [RoC]: things like, say, unemployment benefits, market regulations, winning wars, going to the moon, etc, etc ... nothing very important, by the way. :(

Then the semantically challenged sophists could have the following (if they insist on delving deeper into full group context):

(RoC) + issued currency + taxes = (net RWI) + (net currency-user currency income) + (net currency savings)

I'll express it as follows, for Joe/Jane Sixpack.

PublicPolicy + net-issued-currencyOutstanding = taxable private holdings + $incomes + $savings.

Admittedly, things get VERY complicated past this point, since the diverse implications & details of both Federal spending (CIA? NSA? etc) and the seemingly infinite consequences of our complex tax policies both become difficult to track.

Are there ways to conceptually simplifiy our increasingly complex situation? Sure. For example, if you rename net currency savings stock as "private short term liquidity," you get the supposedly shocking triviality that agile increases in net or group short-term liquidity has to come from either issuing more currency [more public spending] OR by draining private savings. That is, of course, what countless people from John Law to Warren Mosler have been saying all along - even if not using semantics that all people initially interpret the same way. Every useful discussion requires accurate definition of shared terms.

Meanwhile, we STILL haven't moved even close to our real goal, which is maintaining ADAPTIVE DISTRIBUTION of liquidity aka, national agility. In fact, we seem to be actively working to prevent ourselves from addressing that simple issue. If you're even a bit cynical, then you have to smell a rat. That, or else increasing numbers of people who are either incredibly slow on the uptake - or who are never even exposed to the proper terms needed for this discussion. Unfortunately, we always have a mix of the three, with no clearly definable border between any of them.  Both Napoleon and PT Barnum felt the weight of evidence was on the side of the ill-informed masses.

Completely aside from the sophists, logic dictates that real options and transaction liquidity tools really shouldn't be mixed. Currency is only a social tool, and it is only occasionally used by real members of a culture, as they explore their constantly expanding group options.

This ain't rocket science. It's the simple dynamics of network operations, with network components trying to keep communication & liquidity toolsets as lean as possible, but no leaner.  Much of our task in using both words and currency boils down to our agility in accurately defining terms as we move between micro-contexts where we use them in different ways.  We can do this!

Why not just tell 4th graders that group success follows stages of preparation?
* Ensure group ability to explore group options,
* by protecting & improving the quality [including tempo] of distributed decision-making, and
* maintain group tempo by the very act of distributing decision making, and
* distribute ability of distributed decision making by distributing liquidity, and * continually re-prioritize decentralized decision patterns, by distributing feedback in the form of full-group-outcomes.

That's how species rigorously search & select for unpredictable, emerging abilities. They use sexual recombination.

Cultures also practice recombination, on yet another level, via cultural recombination, something that builds on, not discards, sexual recombination.

The last thing any rational electorate wants to do is restrict the distribution of transaction liquidity, and freedom to let the unpredictable fruits of sexual recombination be expressed well enough to be selected by the culture that spawns them. Cultural recombination means distributing adequate liquidity to the results of sexual recombination. What parts of recombinant network dynamics can't we teach to kids before they reach puberty?

Methinks capitalism as we teach it to ourselves is mal-defined, and woefully out of date.

Real value to nation or species or any subunit thereof, always tracks contribution to group capabilities. The next genius-quality attribute born deserves all the liquidity that their marginal contribution to our descendents success deserves. There's literally no adaptive value in sequestering pools of faux liquidity in reduced-access states (aka, the 1%). Rather than being transfixed about currency issuance or excessive private savings, we desperately need to redefine our situational awareness in terms of quality/tempo of distributed decision-making, liquidity management, and inflation/deflation.

Until we take that step, we'll contintinue to flounder about like a fish on the railroad tracks, vigorously doing nothing relevant to avoid the next train.  Sophistry is a terrible thing to let a group mind get lost in.