"You may want to always provide a explanation which is as simple - but as correct - as possible for why there is essentially no such thing as "deficit" with our fiat economy for the broad population. Then, use that concept to point out why the fiat economy is essential to national well-being. For me such commentaries are strongest when they point out whatever is not perfect. In this case, what (far less important) downside effects occur, and when they occur, as a result of our fiat economy 'printing' it's own currency on-demand."
This is progress. One more down. Minimum of another 15 million US citizens to go! (~10% of adult population)
This reader makes a good point. I will try to always add an opening cue for new audiences. Here's a stab. It may already be thinking too far ahead. If so, please offer your own version of a system primer:
"See Jane. See Dick. See Jane provision the country, using decimal notation for tracking all transaction chains, no matter how complex. See Dick try to run off with all the decimal notation, i.e., the 'fiat.' "
The simple issue is that most of this whole, embarrassing debate results from twisted semantics. A "deficit" formally means less of something than was previously present. Can one have a virtual deficit in a dimensionless, virtual concept - regardless of whether or not you write virtual symbols for those dimensionless concepts in double-entry accounting logs? Of course. It all depends on the semantics chosen for the context being discussed. What happens of people try to mix metaphors across non-overlapping contexts? Then you have sophism. Note that sophism isn't a problem unless a conversation occurs between any combination of the unscrupulous and/or slow witted.
Sophism 300BC: "Is that YOUR dog?" [Yes.] "Is THAT dog a mother?" [Yes.] "Therefore THAT dog is YOUR mother. Ha. Ha." [??]
Sophism 2013 AD: "Does our growing population and economy need more virtual units to track the increasing number of transactions uses this year, vs last year?" [Yes.] "So we have a deficit in calculating units to be used this year, vs last year?" [Yes.] "Those charged with making up that 'deficit' therefore have a 'debt'." [Well ... Ok.] "You're a citizen. Therefore, YOU have a debt to pay. Pay up!" [Huh? .. well ... ok. Here. ... Hey! Whaddya mean, I no longer have a job, or pension, or civil rights?]
Endless numbers of anthropologists & historians have explained this ... in countless ways. Even Wallace & Darwin. Here's the gist of the story.
In reality, all adaptive systems are always on a fiat currency system, i.e., no limit to self-bookkeeping. Just use the noise thrown off by the system components currently in operation. Our only internal system restraint is avoiding the confusion of either inflation or deflation. An electorate may pretend otherwise, but it was always just a pretension. Fiat = guaranteed denomination of any & all public initiative. It's just system bookkeeping. Can you imagine any cell-biology system that wasn't resource restrained, voluntarily running out of ATP? That's like a nation which isn't resource constrained running out of hammers - or a blonde running out of signals to breathe in and breathe out. No reason for it to occur ... other than internal disorganization.
Hence, a balanced fiat currency budget means balanced public fiat, which means balanced public initiative? So, what the heck does that mean? It means no NET public initiative this year that exceeds what's clawed back from last year's public initiative? What sense does that make? None whatsoever. Just sophism.
Stop coordinating so we can focus on infighting? The only avenue for local advancement which that policy leaves is class warfare!
Class warfare is just jostling within the ranks - which just brings us back to another definition of inflation vs deflation. Cultural inflation = too little internal adaptive pressure. Cultural deflation = too much internal adaptive pressure. Either can weaken the resiliency of a culture, and voluntarily limit it's adaptive rate.
Once infighting breaks out, guess which "class" of people always promotes balanced fiat? You guessed it. Whomever gets a leg up in any family/clan/class struggle naturally seeks to stick it to their former adversary - and keep 'em down - by under-funding and over-taxing everyone in their erstwhile competitor class. Minimal jostling for position keeps distributed adaptive rate at rates dictated by context. The knack is to know how to not go too far. A culture under-provisioning an entire class of it's own citizens is exactly like a person shooting their own foot, or brain. If you have an asset, it's better to maximally employ it rather than waste it. In any complex system, the highest return - by far - is the return-on-coordination. The alternatives are all different degrees of playing with failure.
USUALLY, these internal-competition cycles are broken only when some worse crisis forces the infighters to instead team up, coordinate, and optimally provision the entire country. Any lack of outside adaptive pressure, however, allows the knuckledraggers to again lobby for Ludditism and "balanced fiat." If that gets out of hand, the whole system usually falls behind some other culture maintaining a higher adaptive rate.
ps: "Balanced Fiat" has become a CFC euphemism for class warfare. Where CFC means "control-fraud correct" .. i.e., endless semantic Sophism
In reality, all adaptive systems are always on a fiat currency system, i.e., no limit to self-bookkeeping. Just use the noise thrown off by the system components currently in operation. Our only internal system restraint is avoiding the confusion of either inflation or deflation. An electorate may pretend otherwise, but it was always just a pretension. Fiat = guaranteed denomination of any & all public initiative. It's just system bookkeeping. Can you imagine any cell-biology system that wasn't resource restrained, voluntarily running out of ATP? That's like a nation which isn't resource constrained running out of hammers - or a blonde running out of signals to breathe in and breathe out. No reason for it to occur ... other than internal disorganization.
Hence, a balanced fiat currency budget means balanced public fiat, which means balanced public initiative? So, what the heck does that mean? It means no NET public initiative this year that exceeds what's clawed back from last year's public initiative? What sense does that make? None whatsoever. Just sophism.
Stop coordinating so we can focus on infighting? The only avenue for local advancement which that policy leaves is class warfare!
Class warfare is just jostling within the ranks - which just brings us back to another definition of inflation vs deflation. Cultural inflation = too little internal adaptive pressure. Cultural deflation = too much internal adaptive pressure. Either can weaken the resiliency of a culture, and voluntarily limit it's adaptive rate.
Once infighting breaks out, guess which "class" of people always promotes balanced fiat? You guessed it. Whomever gets a leg up in any family/clan/class struggle naturally seeks to stick it to their former adversary - and keep 'em down - by under-funding and over-taxing everyone in their erstwhile competitor class. Minimal jostling for position keeps distributed adaptive rate at rates dictated by context. The knack is to know how to not go too far. A culture under-provisioning an entire class of it's own citizens is exactly like a person shooting their own foot, or brain. If you have an asset, it's better to maximally employ it rather than waste it. In any complex system, the highest return - by far - is the return-on-coordination. The alternatives are all different degrees of playing with failure.
USUALLY, these internal-competition cycles are broken only when some worse crisis forces the infighters to instead team up, coordinate, and optimally provision the entire country. Any lack of outside adaptive pressure, however, allows the knuckledraggers to again lobby for Ludditism and "balanced fiat." If that gets out of hand, the whole system usually falls behind some other culture maintaining a higher adaptive rate.
ps: "Balanced Fiat" has become a CFC euphemism for class warfare. Where CFC means "control-fraud correct" .. i.e., endless semantic Sophism
Republicans with sequester to lower the deficit.
ReplyDeleteDemocrats lowering the deficit.
Fed raising rates ??
Dollar getting weaker ??
The whole premise to lowering the deficit and sequestering is supposed to contain the interest rates and make them lower
while strengthening the dollar.
This is all backwards ... why are the MMTer's not commenting on this ?
Mike Norman invariant #3 : the fed can set rates anywhere it wants without any market force telling or influencing ...
???