Where The Money Is vs Where The Brains Are

(Commentary by Roger Erickson)

Today, the Washington Post print edition had a editorial board essay called "Where The Money Is." The online edition has a different title.

The essay basically poses the stale question of where the USA will get enough "money" [fiat currency] - and then makes an astounding assertion.

The big money is in two places: tax breaks for the middle class and entitlements. The former category includes the deduction for state and local taxes (eliminating that would save nearly $1 trillion over 10 years) and the mortgage interest deduction (another trillion dollars).

As for entitlements, using the alternative, and more realistic, inflation measure known as “chained CPI” would save $162 billion over 10 years; changing cost-sharing rules for Medicare and limiting Medigap insurance would raise another $114 billion.

They are suggesting that we can obtain more fiat currency by eliminating tax breaks for the Middle Class. And, they are also suggesting that we can obtain even more fiat by halting several forms of public investment in our social infrastructure. ?? Where on earth do we FIND these people? What would Marriner Eccles say if he could hear these dimwits now?

Weepin' MiddleClass on a Recession! No, no, and no!

Let me put it this way.

One does not "raise" fiat by removing it. Perhaps a course in basic logic is in order? Or random sanity checks for editors at all newspapers? Beardsley Ruml must be turning over in his grave.

The big fiat currency source is always in further expression of yet-unleashed public initiative. Is that clear enough?

The big fiat currency sink? That's in stupid policy decisions, to reduce, rather than increase, public initiative. Per the dictionary definition of fiat, fiat currency, and Public Initiative. It's BEEN this way since 1933, Dudes, not even just since 1971. How could newspaper editors not know this? They are either very ignorant, or very dishonest. Let's hope it's purely the former.

What's the danger of purposely increasing or decreasing net Public Initiative? In monetary terms, there are usually two, broad tolerance limits for every fiscal policy decision.

One tolerance limit is excessive inflation. Please wake the economy up when that occurs? Until then? ... WashPo editors imply that our productivity and REAL net national capabilities can sleep on it? No wonder the circulation of their newspaper is declining.

The other tolerance limit is net deflation. Gosh, we DO seem to be close to that, and haven't we seen this before? There are countless people with to-do lists, all starved for access to fiat liquidity units, sitting around, not easily employable by one another. Cashless barter IS rather inefficient.

How about waking the US economy up right now? By resuscitating our former Middle Class. How? By letting our electorate freely express their own, damn, fiat, via unlimited access to their own, fiat currency units! That is the whole point of HAVING a fiat currency system. How on Earth did we end up, 80 years after permanently establishing a fiat currency system, with banks once again denying the public access to their own liquidity units? It's mind boggling. We are literally gagging Public Policy with a gold spoon. For no good reason, unless you consider national suicide as good.

The key to progress is asking the right question. So here it is. Where are the brains? The answer is known! They are unpredictably distributed throughout our population! That, after all, is the whole, historic, evolutionary PURPOSE of sexual recombination. The places where we know the brains aren't, are in Congress, or on the Editorial board of the Washington Post. Why? Because of where the relevant information ISN'T - namely in the heads of a large part of our UN-informed electorate! Thanks, of course, in no small part to the maladaptive efforts of the Editorial board of the Washington Post - and others like them.

"Yer doin' a Heckuva Job, Edi's."  And right about now, the last thing the former US Middle Class needs is to be intimidated ... by people with no brains, and not enough initiative or morals to NOT be Innocent Frauds.