Sunday, July 28, 2013

Tschäff Reisberg — Best of Frank Newman's Freedom from National Debt


Some short excepts.

This Episode of Life
Best of Frank Newman's Freedom from National Debt
Tschäff Reisberg

Frank N. Newman, CEO of major banks in the U.S. and China, and former Deputy Secretary of the U.S. Treasury, is the author of Six Myths that Hold Back America: And What America Can Learn from the Growth of China's Economy and Freedom from National Debt.

27 comments:

F. Beard said...
This comment has been removed by the author.
F. Beard said...

1) The guy's a banker.
2) He defends the National Debt.

Why should I read such obvious, self-serving fascist garbage?

And when will the MMT crowd, with the honorable exceptions of Bill Mitchell and Joe Firestone and perhaps others but NOT Warren Mosler, denounce sovereign borrowing?

andy blatchford said...

F Warren would do away with all bonds apart from short term to control interest rates.

F. Beard said...

Why? To curb price inflation? Why should that work when speculators profit off the spread between what they can borrow at and expected prices rises? Unless interest rates are raised so high as to damage the economy?

And why does the government subsidize debt-creation anyway so that it must then bribe the banks not to lend? When money* can be issued as shares in Equity and not just as Liabilities?

*Folks, please spare me the lecture that credit is not money. It sure spends like money, thanks to heavy government privilege!

andy blatchford said...

F you claimed Warren defends sovereign borrowing...that is clearly not what he says.Quite rightly says that it is not a constraint. That is not defending it as you mean.
AndyCFC

F. Beard said...

Short-term borrowing by the monetary sovereign is still borrowing. It is still a bribe to the banking system to not lend. And the bribes are needed because with all the government privileges the banks enjoy, short term interest rates would be driven close to zero without them.

andy blatchford said...

Of course they would be driven to zero without them. It's the whole point. But is not the same as your claim mate. Come on much more fun smacking around the idiots on the Telegraph than arguing minor points here.

F. Beard said...

Warren and much of the MMT crowd want to save banking from itself when the goal should be to euthanize it instead.

It really comes down to stealing (government-subsidized debt creation) or sharing (either through honest interest rates or the use of common stock as money).

Yes, I recognized your name but beating up Telegraph readers got to be too easy but it was fun for a while. :)

Anonymous said...

"*Folks, please spare me the lecture that credit is not money."

So, you really do think that a payday loan and a SS check are the same thing?

Anonymous said...

Tom -

Have a look, might be worth a post:

http://www.ips-dc.org/reports/pension-deficit-disorder

F. Beard said...

So, you really do think that a payday loan and a SS check are the same thing? MoveThroughIt

No, the former is credit and the latter is fiat. But they are both symbolic purchasing power which is the general population's and my definition of money.

Here's a question for you. Must money always be debt?

Tom Hickey said...

@ MoveThroughIt

Thanks. Promoted to a post.

Brian Romanchuk said...

"Must money always be debt?"
My reading of Chartalism is that the answer to this is "essentially yes". The State generally regulates a unit of account, and this unit of account is used for denominating private sector transactions. These transactions mainly involve the use of debt. For example, very few businesses pay for purchases with stacks of dollar bills, they transact via accounts payable and receivable.

State money is generally only used as final settlement of these private sector debts. Even if you relabel state money as something other than debt, this cannot change the fact that it is integrated directly with private sector "money", which consists of debt instruments.

Anonymous said...

"Must money always be debt?"

In the case of the SS check, the issuer can't be indebted in it's own currency (it would have no meaning).

F. Beard said...

Well, let me rephrase. Must private money always be debt?

And the answer is no since common stock can fulfill all the functions of private money except the unit of account which must be fiat so long as we have government taxation.

F. Beard said...

In the case of the SS check, the issuer can't be indebted in it's own currency (it would have no meaning). MoveThroughIt

The "debt" is that government must accept its fiat in payment of taxes.

However*, if the monetary sovereign NEVER borrows, NEVER runs a budget surplus and sometimes runs a budget deficit then debt-free fiat will accumulate in the economy to the sum of those budget deficits. Why? Because that fiat can never be extinguished as tax payments.

*Ignoring the central bank since such an abomination should not exist in the first place.

Anonymous said...

"The "debt" is that government must accept its fiat in payment of taxes."

It functions to remove fiat from the private sector, but cannot add to the fiat currency issuer's net position. Unlimited + 1 Trillion in taxes is still unlimited.

Ralph Musgrave said...

In his 2nd last paragraph (link below) Warren says, “I would cease all issuance of Treasury securities.”

http://www.huffingtonpost.com/warren-mosler/proposals-for-the-banking_b_432105.html

Milton Friedman said the same. See paragraph starting “Under the proposal..” (p.250) here:

http://nb.vse.cz/~BARTONP/mae911/friedman.pdf

F. Beard said...

Ok, thanks Ralph. Here's part of that paragraph:

I would cease all issuance of Treasury securities. Instead any deficit spending would accumulate as excess reserve balances at the Fed. Warren Mosler from http://www.huffingtonpost.com/warren-mosler/proposals-for-the-banking_b_432105.html

However, now I see Warren not only supports government deposit insurance, he wants to make it unlimited.

Like I said elsewhere some wish to save the banks from themselves when the goal should be to euthanize them.

F. Beard said...

Unlimited + 1 Trillion in taxes is still unlimited. MoveThroughIt

I completely agree.

Anonymous said...

Removing the FDIC cap lets the Fed control interest rates. Treasury securities accomplish the same thing, but are seen as "debt". Use IOR and blow the FDIC cap on demand accounts, the fictional "debt" goes bye-bye, along with the Congressional debt dance soap opera.

F. Beard said...

Use IOR MoveThroughIt

It's still bribing the banks - to not lend.

F. Beard said...

and blow the FDIC cap on demand accounts, MoveThroughIt

The monetary sovereign (e.g. US Treasury) ITSELF is the only proper provider of a risk-free storage and transaction service for its fiat. And that service should make no loans nor pay any interest.

Government deposit insurance is fascist since it subsidizes private risk-taking at public expense.

F. Beard said...

Oh btw, IOR implies that the Fed is now the monetary sovereign since sovereign debt is not needed to cover pure money creation (the interest paid on reserves) by the Fed and there are no corresponding private assets either.

A nation of, by and for the banks. And you don't want to euthanize them, Warren?

Anonymous said...


"It's still bribing the banks - to not lend."

More bribing the depositors not to spend, as I understand it. That is, if we need to offer any interest at all.

Banks will lend in any case.

F. Beard said...

Banks will lend in any case. OpenID MoveThroughIt

I should have said "It's still bribing the banks - to not lend to each other."

Unless, of course, reserves can be in two places at once but even the bankers realize that SOME honesty is needed in the system - at least between themselves. Or maybe not.

Calgacus said...

Short-term borrowing by the monetary sovereign is still borrowing.

No, Beard, it is NOT. The word "borrowing" is used in "borrowing by the monetary sovereign" in a completely different way from how "borrowing" is used anywhere else.

If "borrowing" were used for "making cheese", would it be more than a bad pun if someone asked where banks got the milk they used to make their loans?

Governments spending money is the closest parallel to "borrowing", not the asset-swap which is called "government borrowing". Governments simply, logically, CANNOT borrow their own money. The idea is at best a koan with only metaphoric meaning, like the sound of no hands clapping. And whether governments do reserve-drains by issuing (very) low interest bonds or not is an exceedinly unimportant matter, except psychologically.

People shouldn't lecture you on credit not being money, because it is not true. Money is credit, is definable in terms of credit, NOT vice versa. And credit is money (in the widest sense - if you've been given credit, your creditor will accept your credit back.) Fiat money, social security checks, dollar bills etc is "Nothing But" government credit = debt. Nothing more.