[Reposted from The Center of the Universe]
Comments welcome, and feel free to repost:
SO PLEASE DON’T TAKE AWAY OUR SAVINGS!
Yes, it’s called the national debt, but US Treasury securities are nothing more than savings accounts at the Federal Reserve Bank.
The Federal debt IS the world’s dollars savings- to the penny!
The US deficit clock is also the world dollar savings clock- to the penny!
And therefore, deficit reduction takes away our savings.
SO PLEASE DON’T TAKE AWAY OUR SAVINGS!
Furthermore:
There is NO SUCH THING as a long term Federal deficit problem.
The US Government CAN’T run out of dollars.
US Government spending is NOT dependent on foreign lenders.
The US Government can’t EVER have a funding crisis like Greece-
there is no such thing for ANY issuer of its own currency.
US Government interest rates are under the control of our Federal Reserve Bank, and not market forces.
The risk of too much spending when we get to full employment
is higher prices, and NOT insolvency or a funding crisis.
Therefore, given our sky high unemployment, and depressed economy,
An informed Congress would be in heated debate over whether to increase federal spending, or decrease taxes.
I went to a right wing web site last week and all they talked about was getting rid of the fed and moving to a gold standard.
ReplyDeleteI have two questions. First, is there any modern economy that doesn't have a central bank and could one even operate?
Second, could the US possibly go back to a gold standard and maintain our standard of living?
not sure about the first question. for the second one remember what gold-back money does. it limits government borrowing by imposing a political constraint that ties the convertibility of money to gold. what are the implications - you can't run deficits indefinitely with china because their aren't enough gold reserves to cover supply of currency in circulation. how would are standard of living change? well, we wouldn't be able to import cheap products. but we would build our manufacturing base back up. is this good? i would rather outsource low margin manufacturing elsewhere and focus on high value design, development and manufacturing. a fiat currency would work beautiful if the currency supply was managed correctly - ie. optimize deficts and subsidize R&D with public spending to develop next generation technology for the private sector to buy, commercialize, and then sell. For example microdrives was developed from military technology. Who found a commercial application that made them a mint? Apple.
ReplyDelete@ GLH
ReplyDelete1. No.
2. No.