Tuesday, January 29, 2013

The Semantic Twists Here Are Enough to Bury Us In Debt to Our Own Translators

commentary by Roger Erickson

"Japan's government approved on Tuesday a $1.02 trillion draft budget for the next fiscal year that aims to nudge tax revenues above new bond sales for the first time in four years, but still relies on borrowing to cover 46.3 percent of its spending.
Taken together with an 10.3 trillion yen extra stimulus plan signed off earlier this month and financed in more than half by new bond sales, it drives borrowing to new highs, pushing Japan's record high debt further into uncharted territory.

"We managed to make the annual budget slimmer than before," Finance Minister Taro Aso told reporters.

"Without the extra budget, the economy would fall into a severe situation in April-June," he added."


Are they saying that Lewis Carrol is not dead? That he's just left the planet? And he's running a virtual CB from the bottom of some rabbit hole?  This is idle comedy for kids, and shouldn't be seen in responsible policy circles.

Uh ... let's get this straight. Context first. We'll worry about the random data noises once they're relevant to a coherent context.

1) Japan is a sovereign fiat currency issuer? [Check!]

2) They decide on public purpose, then their parliament "appropriates," notes or declares into existence the dynamic liquidity units needed to coordinate all the dynamic transaction chains involved in achieving said public goals? [Check;
It's called organizing via dynamic affinity bonds & social credits. Even termites do it.]

3) Then parliament directs their currency-issuer office to create the liquidity units needed, and distribute them to contractees & other recipients via a publicly-licensed banking system - so they can all innovate while achieving or exceeding as well as aligning their distributed goals? [Check!]

4) Then the banking system & currency-issuer Agency start jumping through hoops & inventing arcane ways to enter net currency expansion into what they prefer to claim is an exact, static, double-entry bookkeeping system? [Whatever! - not worthy of designation as a "check;" not even termites make themselves jump through such hoops.]

5) Receiving no push back, the static bankers go on to tell the dynamic electorate that dynamic reality must conform to their static declarations in order for the static accounting to work? [Come again? Who's running reality? Dynamic realists, or the static Stasi? This check bounces too high to take seriously.]

6) Then bankers go on to say that the electorate must give the liquidity units back as taxes, so that the fiat currency issuer has enough fiat to give to the electorate. Capiche? [Hell no? What part of "appropriate" don't bank nerds understand? This particular hoop deserves a check-refusal, not a "check."]

7) Solution is easy. It's our reality but the bankers accounting problem. If you have to ask which takes precedence, then you can't afford it. Dynamic reality eventually tells static accountants to allow for a special category within double entry accounting, dynamic growth LAYERED ON TOP OF a static accounting model.

Is this our legacy? Will we maintain some real logic in our operations, or will our epitaph be: "We came, we saw, ... we ceded reality to criminally-stupid gnomes training us to jump through their hoops?"

Accountants may claim to not believe in quantum tunneling, but they sure exhibit Quant-Dumb funneling of dynamic value into static sinkholes.  Time for a big bang?  Why not?  There's no accounting for improbability.

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