Since so much has already been written on the matter, I won’t spend much time recapping the major points of contention. My intent is to highlight a few questions that came to mind while reading but, in my opinion, were not adequately addressed. Hopefully the answers put forth will shed light on areas of the debate that remain dark.Bubbles & Busts
Furthering Understanding of the Permanent Floor
Joshua Wojnilower
UPDATE:
Does the Permanent Floor Affect the Inflationary Effects of the Platinum Coin?
Updated Woj's post with his later post, Does the Permanent Floor Affect the Inflationary Effects of the Platinum Coin?
ReplyDelete"Inflationary" only for Austrians. TPC just provides cash flow to meet current liabilities coming due, based on previous appropriations and commitments entered into based on them. No new "spending," just paying down payables. Nor does the increased liquidity affect banks ability or propensity to lend to the private sector, creating "new" money. While paying the bills adds $NFA, this barely covers maintaining effective demand, let alone cause a continuous rise in the price level.
Tom,
ReplyDeleteThanks for posting both links and all your support on this site.
To clarify, by "inflationary" I simply mean that deficit spending portends to a higher price level than would be the case without the spending. This was not meant to suggest it would lead to a continuous rise in the price level or even any rise at all.
While I do adhere to Austrian thinking in some respects, their views on monetary operations/policy are generally not part of that category. In future writing I'll aim to use more appropriate terminology or at least clarify my thoughts. Thank you for pointing out this misunderstanding and offering suggestions for improvement.
Here is the third post in the series:
ReplyDeleteThe Permanent Floor and Potential Federal Reserve 'Insolvency'
(http://bubblesandbusts.blogspot.com/2013/01/the-permanent-floor-and-potential.html)