Mish — Greenspan and Gold

Tett: Do you think that gold is currently a good investment? 

Greenspan: Yes... Remember what we're looking at. Gold is a currency. It is still, by all evidence, a premier currency. No fiat currency, including the dollar, can match it.

Mish's Global Economic Trend Analysis
Reader Question on Greenspan and Gold: "No Fiat Currency Can Match It"
Mike Mish Shedlock

George Soros must be senile or coming down with Alzheimer's because he forgot how he broke the Bank of England

Soros must be getting senile or he has Alzhemer's or something because he's clearly forgotten how he nearly "broke the Bank of England."

He is commenting here on how, if Scotland were to break away from Britain, it would be a bad idea to have its own currency because the currency would be vulnerable to attack.

Too bad the total opposite is true.

A free-floating, non-convertible Scottish currency might be vulnerable to speculative attack, but it wouldn't get very far because it would have ZERO power to destabilize Scotland's economy. The country's monetary and fiscal policy would be totally unaffected by changes in the exchange rate and therefore, speculators could push and push and push, but they'd be pushing against who? Against themselves, that's who. That's becaue the central bank or Treasury would not be forced to take the other side of that trade in order to defend some arbitrary exchange rate. So the spec attack could hardly last very long.

Believe me, I know. I spent years as a floor trader. When us guys (speculators) on the floor wanted to push the  market around it was always far more effective if we knew there were outsiders who were on the other side of that trade and vulnerable to margin calls or stops or whatever. If we just sold (or bought) against each other, the move would go nowhere fast.

Soros made a billion dollars by betting that England would pull out of the ERM in 1992. Why? Because the Bank of England was taking the other side of his and other speculators' sales. Eventually, the BOE could not defend the exchange rate anymore and it pulled out causing a HUGE readjustment in the pound. Soros covered his shorts when that happened and the rest is history.

He seems to have forgotten all this.

Seriously, does he not see the pitfalls of borrowing in someone else's currency? George...look at the countries in the Eurozone...hello??? Now look at Japan or the U.S. or Britain. See any difference?

George is lost, but the media and probably Scottish proponents of independence will follow his advice for sure. That's bad news for the Scots.

Yearly Democracy Vitamin Supplements: Review 1 Marriner Eccles, and Call [One Another] After Cogitating

   (Commentary posted by Roger Erickson)




"VitaFiat" - there's no lethal dose, so even more can't hurt. (Cures mental constipation too.)

How Marriner Eccles saved America

Truly astounding reading.

"In 38 pages of testimony, he shocked the senators [of 1933] by not only precisely listing the failures of the economy, but laying out a five-point plan for fixing it."

[You have to wonder. If there were a 2nd Coming, of Marriner Eccles, would US Senators of today not only decline to invite him to testify, they'd impeach and lynch him? Sadly, I'd have to guess yes. Maybe next year WE will be smart enough to select some more learned and intelligent Congresspeople, in BOTH houses? America, Uncle Sam needs YOU ... to select smarter, less sociopathic Congresspeople.]

1933 US Senate Testimony of Marriner Eccles

1938 Marriner Eccles Address Responding to Criticisms Leveled by Orval Adams of the American Banking Association

The Marriner S. Eccles Document Collection at the St. Louis Fed Archives

ps: Eccles was a product of his times, and of course not infallible per all future challenges. He started out thinking in - at least flexible - gold std perspectives, yet nevertheless guided the USA into a currency regime where "money" is backed NOT by static assets limiting policy agility, but instead where a "fiat" currency is instead backed by the underlying dynamic asset of Public Initiative, which, by definition, can always be as agile as policy demands.

Very Useful Historical Analysis of Blunders On Europe's Path To A Shared, Fiat Currency System - By Bill Mitchell

(Commentary posted by Roger Erickson)



Options for Europe – Part 2

Great history review here by Bill. Much of the historical thinking he reviews held equally well for economic policy deliberations in the USA as well, and still does.

That history drives home the point that we should never let theoretical economists anywhere near national policy?

And we should also never let any single lobby, in this case banking, dominate policy?

Policy agility requires consensus? Otherwise, you end up with a constrained policy space. If populations could keep that simple idea in mind when approaching group policy, theoretical economists would be kept in check.

Coordinate narrow factions - ignorant by definition - through appropriate checks and balances? James Madison's anthropomorphic, 1776 summary of system science still awaits application of appropriately adjusted methods, for constantly changing situations.

To explore group options, we need far less discussion of theory, and far faster evaluation of new, more indirect methods?

For every intractable cultural task, there is a solution, and that solution will always involve invention of methods allowing yet another level of indirect, cultural adaptations?

Members of diverse system-science fields have been saying that for decades. Centuries, in some cases. Call it statistical process control, or ecology, or autocatalysis, or evolution. Call it what you want - even political economics - ... just DO something to adapt group methods at the same pace that change occurs? For Desired Outcomes to stay the same, EVERYTHING has to change? Constantly? To adapt to changing situations, we need citizens with situational awareness and the audacity to change anything that needs to change.

Can we please start retaining that simple fact throughout K-12 education? That's how we can damp the frequency of Ayn Rand acolytes (and sanity-lite's) like Paul Ryan, or 99% of our Congresspeople. They reflect our electorate, after all, which reflects the mal-adaptive operation of our K-12 school curriculum.

We as a people are what we let our Congress practice. And our Congress is what our citizens practice during training and education.

Garth Brazelton — Crowding Out And Its Relation To Bullshit

A topic I've been hearing from some of my conservative friends is a refrain often found in mainstream macroeconomic textbooks - crowding out. Crowding out is the theoretical idea that there is a fixed pot of gold from which to finance investment, so if the government all of a sudden wants to draw from that pool, it must mean it has to take funds from the private sector (because there's only so much gold to go around).

More on loanable funds versus endogenous money.

Reviving Economics
Crowding Out And Its Relation To Bullshit
Garth Brazelton

"Outlays of off-budget Federal entities are excluded by law from budget totals."

(Commentary posted by Roger Erickson)

The following, extended discussion should drive home Robert Eisner's 1993 point that "Everyone talks about the federal debt, but few, literally, know what they are talking about."

Warren Mosler made an interesting observation, one that triggered questions about all our current confusion.

"So I see the reports of C and I loans going up about $20 billion but nothing on commercial paper dropping about $30 billion? I still don’t see the domestic credit driven ‘borrowing to spend’ stepping up to replace the proactive govt cuts."

Since finance is NOT my field, I'm trying to follow this. Please tell me if the following is on-track.

Corporate profits remain at record highs, and - anticipating a bottom - they're building space & inventory? Yet ongoing cash transactions (sales/salaries?) are NOT growing, so corporations are NOT factoring as much in this environment, of course. Does that still leave gross uncertainty? Yes. None of that says much about - with certainty - the state of Jane and Joe Sixpack, who are largely locked outside the current economic metrics used to assess and craft policy. The usual uncertainty abounds.

Soooo .... unless Congress is a whole lot smarter than we are, we have a problem with our net, policy assessment process? Recent events surely indicate that that's a true statement? :(

What's the worst that could be happening? Maybe most of the former Middle Class is sinking into a welfare class, increasingly living only on subsistence "Transfer Payments" that are officially considered as "off" the Treasury budget? This last issue is critical. Is the mis-match between Treasury-reported inflows/outflows of national fiat indicators solely due to lagging data, or because many transfer payments, especially SocialSecurity and Medicare, are considered off-budget?

If the above all true, then we have a looming glitch!

If we cut SS & Medicare at all, the real impact and aftermath will be far larger than the perceived, expected (and promised, "fiat") benefits from reducing our ongoing, purely fiat "deficit" and "debt." Sure, that might be the nail in the coffin for the GOP as we know it, but it also might be too late for the US Middle Class.

Who says knowing operational details isn't important?

Our current, Marie Antoinette economics may be producing a "Let them eat Transfer Payments" economy? Everyone will have bad (fast) food, iphones, cable tv & live in a ghetto ... with no motivation, poor education, no jobs & shrinking future prospects?

What could go wrong?

To follow all this, now I just want to know how many Transfer Payments are officially considered on-budget vs "Off-Budget", and how many people - including economists & policy staff - know those simple, operating details?

Is this important? It certainly could be. "Transfer receipts accounted for almost 15 percent of total personal income at the national level in 2007." How fast is that growing? Anyone know?

Does the avg economist know how much of this is on or off-budget? Take this summary as a random example. No mention of what's on-budget vs off-budget.

This orthodox expectation that all Transfer Payments are ON-BUDGET seems to be nearly universal?

What if some real portions of our nation's collective fiat are NOT officially ON-BUDGET?

That would throw a wrench in a lot of calculations about the dire consequences of our deficit in fiat?

So what is/isn't on-budget?

Here's the killer statement

"Outlays of off-budget Federal entities are excluded by law from budget totals. However, they are shown separately and combined with the on-budget outlays to display total Federal outlays."

Search for the last entry of "off-budget" in the document at that link.

This rings a bell. I'm now thinking that this dichotomy goes all the way back to Hoover"s & FDR'S shared view on "ordinary" and "extraordinary" budgets, and their emergency conclusions that one should be balanced, that the other allowed to float.

Subsequently, was that the key, politically expedient reason for moving more Automatic Stabilizer expenditures "Off-Fiat-Budget" over the decades since? Is that basically how an electorate now allows it's policymakers to invest it's dynamic fiat (aka, public initiative) in it's offspring, instead of getting paralyzed by static-asset budgets?

Where does that leave our politics? Now it's only a question of which fiat figures, net, on-budget or off-budget, various audience members are using as they argue .... instead of coordinate?

You really couldn't make this up. Policy staff at the highest levels of our policy apparatus aren't even defining the terms of the operations they are arguing over! Same for orthodox economists.

If they'd simply define their terms, they'd finally see through the fiat fog, and then perhaps, along the way, their entirely fiat argument would evaporate. Maybe THEN our electorate might go on to exploring our other, REAL options? Faster/bigger/better?

Cascading Middle Class Cultural Shock - Why The USS Stupid is "That Close" to Going Down

Commentary by Roger Erickson

Republicans are not worried about the "debt" ceiling.

Why is it that "cascading" effects on the "banking system" can be appreciated, but a even more dire, "cascading" effect on the US Middle Class isn't taken seriously?

Given so much semantic confusion, let's try to sort out a simple message for newcomers.

What kind of electorate and "leaders" think that zero increase in public initiative is a good thing?

Yet that is exactly what our politicians all agree upon.

Public initiative means fiat
 which means selective actions,
  which are denominated with fiat currency when and as needed.

So, a "balanced" fiat currency budget means no increase in currency supply for a nation that can't stop it's organic growth.

That means everyone that actually needs more currency, probably won't be able to get enough of it. That's a heckuva monkey wrench to throw into the wheels of national commerce!

What kind of country wants LESS for it's citizens?

Apparently, we're about to find out.

Many argue - and assume - that we can cut out all the waste, and not cut anything essential.

That's true, in theory.

Yet in practice, if we actually COULD do that, we WOULDN'T be having this discussion in the first place! 

So if we negotiate cutting everything "fairly," whether essential or not ... it could get VERY ugly, very quickly. And, we'll still have the same confused people, before, during and after the whole, arbitrary exercise. Physiological shock can trigger an uncontrollable shutdown spiral and bodily demise. Cultural and market shock can do the same to our economy. This is NOT the sort of thing we want to try on a whim.

Warnings are that the USS Stupid is going down!

Blindly Downsizing, Or Optimally Re-Directing Continuous National Growth? What's It Gonna Be?

Commentary by Roger Erickson

Business Board: DOD Should Establish Downsizing Team To Cut Costs

Oversimplistic, and missing the bigger point?

"To deal with tough economic times, the Pentagon should establish a new semi-independent team to develop a detailed downsizing plan for how to aggressively cut costs, according to a Defense Business Board task force."

Should? Did they say SHOULD?

Why not go for NOT-BROKE? Form a public-initiative group to focus on expanding and optimally directing fiat, not on arbitrarily shrinking both net cultural goals AND net public-initiative?

Hey, Kyle Bass, how's that Japan thing working out for you?

Remember back in December when hedge fund manager, Kyle Bass, was predicting a catastrophic financial collapse in Japan because of all its debt? He equated Japan to a "bug in search of a windshield?"

I immediately pounced all over that here and here, explaining why Bass's arguments were completely ignorant. They showed a total lack of understanding of fiat currency systems.

Bass purportedly bet big against Japanese government bonds (maybe he just put his clients' money in that trade) however, since then, JGBs have surged, causing the yield to collapse all the way down close to 0.5%, and that's despite Japan's debt being nearly 300% of GDP!

These guys will never get it, so don't expect them to, however, the real problem is that the stupid media and much of the financial community and our own leaders believe their crap even though everything they have ever predicted never comes true.

P.S. The yen did go down for a while, but now it's going back up.

Who Created the Myth of Geithner's Success?

commentary by Roger Erickson

Not to mention Greenspan's, or Orszak's, or Rubin's, or Summers'?  Who's controlling the fraud promoting all these Control Frauds to higher levels of control over us?

How Petraeus Created the Myth of His Success
By Gareth Porter, Truthout, Truthout Report

Great coverage. Can someone please get Gareth to do a similar review of Timmy Geithner? Maybe of the rest of the GGORBS too?

Bill Black's exposés of Geithner haven't been accepted widely enough to matter - yet.  Only a matter of more sunlight.  If we can have supposedly fiat currency, why not fight for fiat transparency too?

Bad Juju?

Grasping Reality with Both Invisible Hands
The Obama Tax Cuts: Now It Is Time To Think About Funding Them…
Brad DeLong

The New York Times | The Conscience of a Liberal
Debt in a Time of Zero
Paul Krugman

Economonitor | Great Leap Forward
Why Does Brad DeLong Worry About Paying For Tax Cuts?
L. Randall Wray

New Economic Perspectives
Brad DeLong Has Me Worried
Stephanie Kelton

Clint Ballinger — Modern Monetary Theory & Full Reserve Banking: Connected by Fiat

The fourth of a series of posts on MMT, ‘The Chicago Plan Revisited’, and related issues...

There are actually two concerns most advocates of Full Reserves have:

1. Solvency – there are few solvency issues with full reserves; not surprisingly a major concern in the 1930s for Simons, Fisher, The Chicago Plan etc.

2. (Endogenous) money creation

The second is much the more important, but the two are often confusingly conflated.
Partly this is because the significance of the fact that the loanable funds model is wrong and there is no money multiplier is not always fully appreciated by Full Reservers.
Banks do not make loans based on reserves or loanable funds but based on demand, perceived profitability, and the capital they hold. The government covers reserve requirements later. Raising reserve requirements can raise costs but does not stop money creation. Even the focus on sight deposits (i.e., PositiveMoney) misses the point – not only do reserve requirements not stop money creation, neither does stopping lending based on sight deposits. Banks loans pull money from the central bank, with the limit being the ratio of capital to risk-weighted assets.

So, unless Full Reservers are only worried about bank solvency, which is doubtful, they are really addressing concerns that have their root in endogenous money.

Clint Ballinger
Modern Monetary Theory & Full Reserve Banking: Connected by Fiat

Do We Borrow Money From China? (asked for the umpteenth time)

commentary by Roger Erickson

On the surface, this unfortunately common question is so illogical that it immediately supplies it's own - negative - answer, yet it remains a disturbingly frequent assumption - not even questioned - precisely because so many people question so few of the everyday assumptions they are conditioned to utilize.

Why is the assumption illogical from the outset?

1) Nearly every one of the ~196 countries in the world uses it's own, fiat currency; fiat meaning created "at will."

2) Given that we can create as much fiat currency as we want, to satisfy the liquidity needs of all people wishing to denominate real transactions using $US, why would we ever need to borrow OUR fiat currency from someone else?

3) Since we grant the US Treasury the monopoly right to issue $US, how, operationally, could China lend us our own $US anyway?

4) Given that China issues only it's own fiat currency, Yuan (also called renmimbi), what good would it do even if they did try to lend ours, theirs or anyone else's fiat currency to us?

5) Even if China could and did want to lend us fiat currency, what is it that would they lend to us? THEIR fiat currency?

Case closed. Yet if this expose alone is not sufficient, please try the following historical treatises, in the following order.

fiat currency in ancient Greece (nomisma) and China (Jiaozi)
http://en.wikipedia.org/wiki/Nomisma
http://en.wikipedia.org/wiki/Jiaozi_(currency)

Colonial fiat currencies preceding the formation of America
http://www.dictionaryofeconomics.com/article?id=pde2008_M000418&edition=current&q=farley%20grubb&topicid=&result_number=3

Farley Grubb - Public Purpose lecture
http://www.modernmoneyandpublicpurpose.com/seminar-5-constitutional-history.html

Benjamin Franklin and the Birth of a Paper Money Economy
http://www.philadelphiafed.org/publications/economic-education/ben-franklin-and-paper-money-economy.pdf

1716 - national fiat currency formally re-invented - John Law
http://en.wikipedia.org/wiki/John_Law_(economist)

Government Equity and Money: John Law’s System
http://www.heraldica.org/econ/law.pdf
"The problem is [that] those who studied and reported on John Law didn't understand how a currency actually works, and reported accordingly." Warren Mosler

A Modest Enquiry into the Nature and Necessity of a Paper-Currency - Ben Franklin (1729)
http://etext.lib.virginia.edu/users/brock/webdoc6.html

Bishop George Berkeley's 1735 QUERIST
http://www.ecn.bris.ac.uk/het/berkeley/index.htm

"A prince, who should enact that a certain proportion of his taxes should be paid in a paper money of a certain kind, might thereby give a certain value to this paper money." (Smith, 1776, p. 312)

THE NATURAL RATE OF INTEREST IS ZERO
http://www.cfeps.org/pubs/wp/wp37.html

Abe Lincoln's Greenback Dollar
http://en.wikipedia.org/wiki/Greenback_(money)

Marriner Eccle's 1933 Testimony to the US Senate
http://fraser.stlouisfed.org/docs/meltzer/ecctes33.pdf

1946 - Taxes for Revenue Are Obsolete
By Beardsley Ruml, Chairman of the Federal Reserve Bank of Newhttp://mises.org/journals/aa/AA1946_VIII_1.pdf p.35
also see http://www.curiousevidence.com/(S(tarpfp5v5brjr5mwjwwhpllo))/samples.aspx?id=21

We Need a Bigger Budget "Deficit" by Nobel Laureate William Vickrey, 1993
http://wfhummel.cnchost.com/vickrey.html

7 Deadly Innocent Frauds of Economic Policy - Warren Mosler
http://moslereconomics.com/2009/12/10/7-deadly-innocent-frauds/

Soft Currency Economics - Warren Mosler
see also http://www.gate.net/~mosler/frame001.htm

Operational details of Reserve Accounting. Do taxes and bonds really finance public spending? Of course not! What does a national “budget deficit” mean, and what are the operating consequences? Math proof:
http://128.118.178.162/eps/mac/papers/9808/9808008.pdf

Fiat Currency Issuer "deficits" = Fiat Currency User "savings"

[to the penny]

"The laws of double-entry bookkeeping dictate that the public sector’s deficit is always and everywhere equal to the private sector’s surplus. Thus, policies that aim to cut the RED INK in the public sector’s position are no different from policies that aim to cut BLACK INK from the private sector."

Robert Eisner's Common Sense Commitment to Full Employment and Activist Fiscal Policy
http://cas.umkc.edu/econ/economics/faculty/Forstater/papers/Forstater1999/RobertEisnersCommonSenseCommitment.pdf

PBS Frontline video “The Warning”: http://www.pbs.org/wgbh/pages/frontline/warning/view/

MMT and my videos getting under Peter Schiff's skin!

This idiot still doesn't know what he's talking about. It's not about the fiat (money, unit of account, etc) it's about having the labor and resources to produce the real assets (goods and services). That is the only true constraint to ever increasing, uninterrupted prosperity for all.

Schiff has no argument, so he goes with the, "If it were that easy there'd be no poverty, hunger."

Exactly. It is that easy. Just moronic ideology from people like Schiff keeping it from happening.

He's a total retard.

Izabella Kaminska — The Fed’s 1.6 trillion ‘somethings’

Izabella and Chris Cook explain tax credits. Old but goodie.

Read it at The Financial Times | FT Alphville
The Fed’s 1.6 trillion ‘somethings’ (July 26, 2011)
Izabella Kaminska
(h/t y in the comments)

Important if you haven't seen it before.

More ignorant than a bunch of monkeys!

Critics say tax cuts for companies with fewer than 500 employees would add $46 billion to the deficit and do little to create jobs.

That sentence sums up a confluence of ignorance and sophistry not seen since the Scopes "monkey" trial. How is this nonsense?  Let us count the ways.

First off, how can one be a critic, by spouting total nonsense not backed by any logic whatsoever?  These supposed critics cannot even DEFINE THE TERMS they are using in their supposed critiques!  Just call "Bullshit!" and cancel your subscription if you're paying to receive such nonsense.

Second, why do newspaper journalists & editors take nonsensical "critics" as credible sources?  What happened to checking logic, not just statements?

Third, what is a federal "deficit" for a government issuing a sovereign currency that is fiat, non-convertible upon demand to any reference commodity at any fixed rate, and whose exchange rate (Fx) with other currencies also floats?  Answer: a fiat currency "deficit" is defined as a growing population with steadily increasing transaction rates using more currency this year than last year.  Does anyone care if we use more fiat this year than last?  Do any of these "Deficit" terrorists even know how a fiat currency-supply has been regulated, ever since 1933, or even before that?

Here's how fiat currency works.  
  An elected Congress sets public policy, then appropriates or gives permission to spend new, net currency into existance, through federal government spending.  [The currency supply is not "backed" by anything except public initiative of the USA.]


  That $US currency filters through the economy, through increasingly complex transaction chains.  Much of the currency supply is pre-dedicated to ongoing commitments, and is in constant motion.  Whatever isn't, is credited to private individuals as financial assets, call them "private reserves".


  To place some tolerance limits on what people may do with too many financial assets (e.g. sex, drugs, rock&roll), local/state/federal elected officials enact a taxation policy, to scavenge some proportion of $US private savings back, and thereby keep pressure on citizens to make carefully selected spending strategies, vs cavalier ones (which "might" trigger inflation).


  The Federal Reserve tries to maintain a semblence of double-entry accounting accuracy, by matching currency creation with parallel "banking reserves" in the accounts which licensed banks are required to hold at the Fed (ps: note that "banking reserves" mean something entirely different than "private reserves" or savings, and cannot readily enter the real economy). The Fed then requires banks to compete for access to those unique, "bank reserves" [created mostly by Gov spending] by allowing them to charge inter-bank interest rates for distributing "bank reserves."  Post 1933, the Fed had a dual problem, to manage upper & lower bounds on that inter-bank interest rate, which requires somehow draining the constantly-accumulating "bank-reserves" in it's own accounts [all while still holding to double-entry accounting notation].  To solve those two tasks, our policy was to have the US Treasury sell "Treasury Bonds" at chosen volumes and rates, in order to both drain banking-reserves and set a floor on inter-bank interest rates.   If the US Treasury stopped selling T-bonds, and used some other method to dictate interest rates & drain banking-reserves, absolutely nothing would change in the real economy, no one would notice, and our fictitious "fiat deficit" would be revealed for what it is, a deficit in fiat (i.e., total nonsense).


 Fiat currency creation is NOT debt (unless we accept semantics saying "more fiat" = "fiat deficit" and "fiat debt"), fiat taxes do NOT fund fiat currency creation, but there is a need to put a floor on minimal fiscal spending.  Fiat fiscal policy should automatically adjust to keep our Output Gap low & our unemployment rate low, so that the USA can be all that it can be.


 All this was fairly described by Ben Franklin, in 1727, again by Abe Lincoln in 1861, yet again by Marriner Eccles in 1933 & later, and most recently reviewed in exquisite depth by Warren Mosler.  How is it that our current electorate and politicians - not to mention our embarrasingly inept "expert" press & critics - do not KNOW these simple facts?

Fourth, what DOES create jobs?  Ask any businessperson, and they'll answer "if I get more customers who buy things, I'll hire extra help."  Who buys things?  People with income.  Who has more income?  People who are taxed less, and retain more of their currency earnings.  What would create more jobs?  Lowering personal taxes on consumers, so they can express choices, select products, and drive markets.  Does lowering Federal taxes on small businesses also help?  A little, since those business owners will have more income to make purchases with, and they may even increase salaries for existing workers, or hire one more person. You'd better hope, however, that a small decrease in Federal tax on small business isn't immediately more than offset by increases in local & state income taxes, since our current policies are also starving those institutions of access to adequate amounts of fiat currency.

Conclusion: Lower taxes for small firms is completely irrelevant to any discussion of our currency supply, and it can help boost employment.  The article doesn't even discuss how much tax relief, where, would trigger a statistically significant increase in employment, or how soon.

Matt Yglesias — Modern Monetary Theory In The 17th Century

Matt Yglesias calls attention of the early use of paper money by colonists and its being tax-driven.

Read it at Slate (short)
Modern Monetary Theory In The 17th Century
By Matthew Yglesias

(h/t Alice Marshall)