An economics, investment, trading and policy blog with a focus on Modern Monetary Theory (MMT). We seek the truth, avoid the mainstream and are virulently anti-neoliberalism.
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Friday, November 21, 2014
Randy Wray — Founder of PayPal Says Taxes Drive Money
Well if this was true, then why do these people have all of this:
http://www.treasury.gov/ticdata/Publish/mfh.txt
Up over $400B in the last year.
None of these people have to pay taxes in USD. Yet they zealously seek to obtain them...
Are they secretly hoping that the US will come up with a tax in USDs on them? So they will have plenty to comply with?
Its not surprising that Theil thinks this way because this is the libertarian view of state currency. "there is someone with a gun... blah, blah.... "
Personally, I dont use USDs because "someone may show up with a gun"... I use them because they are the currency of my nation that I pledge allegiance to...
If "money" was mass measures of gold or silver like it was at some point in some societies, are we trying to say that the reason gold and silver were "driven" or desired was because some taxing authority wanted taxes paid in mass measures of these metals?
so Columbus raped and pillaged the Caribbean in hopes of finding some Spanish gold dubloons magically in some lands no one even knew were there before?
"What "drives" gold and silver?" is perhaps a better question...
"the same thing happened with our currency, where the real value of money became separate from the virtual in August of '71 when we went off the gold standard. And so, you know, whatever you think of the gold standard, it had the virtue of connecting the real with the virtual."
So to Theil, our "money" has been disconnected from the "real"... ie "govt authority" to him is NOT real... gold though IS real...
This is textbook libertarianism 101... and we should not be surprised to hear this coming from him or any other heavy libertarian...
"taxes drive money" is basically the libertarian view also... as it is implying that the basic reason people use the "money" is that taxes are due in it...
There are non-libertarian reasons why some (non-libertarian) people would want use a nations "money"...
Matt, true MMTers would never say that the value of a particular state currency comes only from the tax obligation.
The productive capacity of the issuing nation is an equally important factor. Sure, Iraq can drive Dinar usage in-country, but what do they have for sale domestically, only in Dinar, that the rest of the world wants?
Rich foreigners want lots of US dollars because we have the largest (and maybe shadiest) financial system where there wealth can grow, with a legal system that is guaranteed to protect the wealthy and their contracts etc.
Thinking about just how important the contracts and legal enforcement aspects are WRT the desirability of a state currency by foreigners and how that relates to idiot libertarian types.
Libertarians decry Govt and the necessity of Govt for the smooth functioning of their holy markets, yet they ignore the importance of the legal system.
But another important aspect is that the US Govt doesnt meddle much with private sector wealth. If you had billions of dollars worth of money invested in Russia, you would probably have to be cognizant of the fact that your wealth could be in danger if you go against the regime politically and in publicly. In the US, even if you scam millions of people, as long as your wealthy enough, there is almost zero chance of the Govt confiscating your assets or putting you in jail. I imagine this is one of the larger reasons why wealthy Chinese try to get a good amount of the wealth out of the country and around the capital control rules they have in place.
Auburn to me sometimes its like these foreigners are creating a big "slush fund" that their elites can use to play with.... but I also see other uses they have for them such as when a foreign multi national can/will increase total "sales" via US subsidiaries.
But my larger point is that we shouldn't get carried away with this "man with a gun" metaphor as it is only applicable for libertarians and not everybody is so libertarian having to be coerced into anything that is remotely considered of a public purpose. Rsp
"Growing up, Thiel displayed all the traits of the brilliant, slightly nerdish loner."
(Yeah how would you like to be gay and growing up in Christendom? Might make one feel 'alone'? ya think?)
"‘Most of the social issues the left has won, and for the most part I’m happy about that. I think gay marriage will be legal everywhere within the US in 10 years."
"And he has poured millions of dollars into what he calls ‘the immortality project’. ‘I would like to live longer, and I would like other people to live longer.’ His belief is such that he has signed up with Alcor, the leading company in the field of cryogenics, to be deep-frozen at the time of his death"
So what if here he was a gay kid growing up in Christendom (he is somehow still practicing...) and he is hearing how because he is gay, upon his death, he will be sent to Hell to be eternally tormented over an eternal fire...
so then he rebels against this dogma coming out of church authority (at some level he knows its not true...) and somehow this spills over for him into his secular views about authority in general, to include his views against our human authority administered via civil government and voila he becomes libertarian...
And he is still somehow caught up in the Hell Doctrine (he is still somehow practicing) and doesnt want to die as he may end up in Hell for being gay... so he is investing in firms trying to extend life to put off death as long as possible...
Christendumb strikes again!!!
Creating an assembly line loading people up all aboard the libertarian express....
Well if this was true, then why do these people have all of this:
ReplyDeletehttp://www.treasury.gov/ticdata/Publish/mfh.txt
Up over $400B in the last year.
None of these people have to pay taxes in USD. Yet they zealously seek to obtain them...
Are they secretly hoping that the US will come up with a tax in USDs on them? So they will have plenty to comply with?
Its not surprising that Theil thinks this way because this is the libertarian view of state currency. "there is someone with a gun... blah, blah.... "
Personally, I dont use USDs because "someone may show up with a gun"... I use them because they are the currency of my nation that I pledge allegiance to...
If "money" was mass measures of gold or silver like it was at some point in some societies, are we trying to say that the reason gold and silver were "driven" or desired was because some taxing authority wanted taxes paid in mass measures of these metals?
so Columbus raped and pillaged the Caribbean in hopes of finding some Spanish gold dubloons magically in some lands no one even knew were there before?
"What "drives" gold and silver?" is perhaps a better question...
Theil:
ReplyDelete"the same thing happened with our currency, where the real value of money became separate from the virtual in August of '71 when we went off the gold standard. And so, you know, whatever you think of the gold standard, it had the virtue of connecting the real with the virtual."
So to Theil, our "money" has been disconnected from the "real"... ie "govt authority" to him is NOT real... gold though IS real...
This is textbook libertarianism 101... and we should not be surprised to hear this coming from him or any other heavy libertarian...
"taxes drive money" is basically the libertarian view also... as it is implying that the basic reason people use the "money" is that taxes are due in it...
There are non-libertarian reasons why some (non-libertarian) people would want use a nations "money"...
Matt, true MMTers would never say that the value of a particular state currency comes only from the tax obligation.
ReplyDeleteThe productive capacity of the issuing nation is an equally important factor. Sure, Iraq can drive Dinar usage in-country, but what do they have for sale domestically, only in Dinar, that the rest of the world wants?
Rich foreigners want lots of US dollars because we have the largest (and maybe shadiest) financial system where there wealth can grow, with a legal system that is guaranteed to protect the wealthy and their contracts etc.
Thinking about just how important the contracts and legal enforcement aspects are WRT the desirability of a state currency by foreigners and how that relates to idiot libertarian types.
ReplyDeleteLibertarians decry Govt and the necessity of Govt for the smooth functioning of their holy markets, yet they ignore the importance of the legal system.
But another important aspect is that the US Govt doesnt meddle much with private sector wealth. If you had billions of dollars worth of money invested in Russia, you would probably have to be cognizant of the fact that your wealth could be in danger if you go against the regime politically and in publicly. In the US, even if you scam millions of people, as long as your wealthy enough, there is almost zero chance of the Govt confiscating your assets or putting you in jail. I imagine this is one of the larger reasons why wealthy Chinese try to get a good amount of the wealth out of the country and around the capital control rules they have in place.
Auburn to me sometimes its like these foreigners are creating a big "slush fund" that their elites can use to play with.... but I also see other uses they have for them such as when a foreign multi national can/will increase total "sales" via US subsidiaries.
ReplyDeleteBut my larger point is that we shouldn't get carried away with this "man with a gun" metaphor as it is only applicable for libertarians and not everybody is so libertarian having to be coerced into anything that is remotely considered of a public purpose. Rsp
Interesting article on Thiel:
ReplyDeletehttp://www.telegraph.co.uk/technology/11098971/Peter-Thiel-the-billionaire-tech-entrepreneur-on-a-mission-to-cheat-death.html
Excerpts:
"He is a gay practising Christian,"
"Growing up, Thiel displayed all the traits of the brilliant, slightly nerdish loner."
(Yeah how would you like to be gay and growing up in Christendom? Might make one feel 'alone'? ya think?)
"‘Most of the social issues the left has won, and for the most part I’m happy about that. I think gay marriage will be legal everywhere within the US in 10 years."
"And he has poured millions of dollars into what he calls ‘the immortality project’. ‘I would like to live longer, and I would like other people to live longer.’ His belief is such that he has signed up with Alcor, the leading company in the field of cryogenics, to be deep-frozen at the time of his death"
So what if here he was a gay kid growing up in Christendom (he is somehow still practicing...) and he is hearing how because he is gay, upon his death, he will be sent to Hell to be eternally tormented over an eternal fire...
so then he rebels against this dogma coming out of church authority (at some level he knows its not true...) and somehow this spills over for him into his secular views about authority in general, to include his views against our human authority administered via civil government and voila he becomes libertarian...
And he is still somehow caught up in the Hell Doctrine (he is still somehow practicing) and doesnt want to die as he may end up in Hell for being gay... so he is investing in firms trying to extend life to put off death as long as possible...
Christendumb strikes again!!!
Creating an assembly line loading people up all aboard the libertarian express....
@ Auburn
ReplyDeleteOr one could see the allegedly "free" countries as even more corrupt. :o