Monday, August 26, 2013

Saving Fiat In Order To Have Fiat?

Commentary by Roger Erickson

That's the same as forgoing public initiative, in order to get some? [See excerpt below, from Warren Mosler's 1993 essay.]

How was such a preposterous proposition EVER taken seriously? Only because people will do anything in their power to avoid thinking?

The lunacy of applying gold-std thinking to a fiat currency regime was pretty much implied - and even explicitly explained AND DEMONSTRATED - by Marriner Eccles post 1933.  Not to mention Beardsley Ruml in 1946, and Abba Lerner and Michael Kalecki - 1940-1950. Actually, even by John Law, ~1700 and Benjamin Franklin, 1723!

What does the Middle Class have to do? Storm the Bastille-Ivory-Towers? Must ideology be guillotined, to draw even semi-equal attention to operational reality?

All credit to Warren Mosler for many further clarifications about fiat currency operations (see below), but he just wasn't born with a silver spoon in his mouth. Nor has he (like Greenspan, Geithner, Larry Summers & Obama) sold his soul to Charles Keating & Robert Rubin et al, and his country down the river.

Also, wider dissemination of Warren's clear, operational views would be helped by cross-discipline translation of specific, semantic terms into consistent forms that Jane and Joe Sixpack can easily follow.

  Savings today:      largely means hoarding of fiat currency.
  Investment today: largely means investment of fiat currency.
  Personal income today: local acquisition of fiat currency by currency users.
  Federal spending today: Currency creation by a fiat currency issuer.
  Federal income today:   Federal claw-back of previously issued fiat currency.
  Fiat: has always been another word for initiative, individual or public.
  Fiat currency: one expression of public initiative, or public fiat.

Once the semantics are defined, of course it's clear that investing fiat (public initiative) does not depend upon prior saving of public initiative (fiat). In fact, that proposed sequence constitutes a nonsensical oxymoron. Our simple task is to right-size our national currency supply AND ITS DISTRIBUTION, by both avoiding either inflation or deflation AND simultaneously, constantly improving the quality of distributed decision-making. 

PT Barnum wouldn't be proud of the intelligence or morals of our current electorate and the the politicians they select - but he would applaud the brazen audacity with which they bamboozle themselves through lack of thinking.

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From: Warren Mosler

Taken from 'Soft Currency Economics', Originally Published 1993.

That was 20 years ago and the same error persists!!! :(

How the Government Spends and Borrows as Much as it Does Without Causing Hyperinflation

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Plus, also see Freedom from National Debt, recommended by Warren Mosler



1 comment:

Michael Norman said...

Like Picasso had to save paintings (or collect previously sold ones back) in order to have paintings to sell or, like the Ford has to save Mustangs in order to sell Mustangs.