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Sunday, October 30, 2016

Getting Radical Might Be the Most Practical Way to Fix Inequality — Lynn Parramore interviews Adair Turner

Why we need more radical policies so that we don’t just repeat the debt-fueled booms all over again
Evonomics
Getting Radical Might Be the Most Practical Way to Fix Inequality
Lynn Parramore interviews Adair Turner

12 comments:

  1. Instability mostly comes from the interface between the fact that the banks (or shadow banks) can create credit, money, and purchasing power in infinite quantities if we don’t constrain them,

    Constrain?! It's government priviledges* for depository institutions that ENABLE them!

    and the fact that credit is primarily created to fund the purchase of urban real estate and land, which is somewhat fixed in supply.

    The Hebrews had a solution; debt forgiveness every 7 years (Deuteronomy 15) and a return of family farms every 50 years (Leviticus 25).

    We are long overdue for Jubilee in the West.

    *e.g. government-provided deposit insurance instead of inherently risk-free accounts for all citizens, their businesses, etc. at the central bank itself.

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  2. Andrew Anderson is right to say that it's "government priviledges" that enable private banks to print money. Indeed, there's an even more specific bit of legislation that allows private banks to print money, but not other types of corporation: the so called "Client Money Rules". See: http://www.sciencedirect.com/science/article/pii/S1057521914001434

    I'm not sure whether those rules are specific to the UK or whether other countries enforce them.

    However, I don't agree with Andrew's support for debt forgiveness every 7 years. If that was implemented, every lender would just charge an ASTRONOMIC rate of interest so as to compensate for the forgiveness.

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  3. If that was implemented, every lender would just charge an ASTRONOMIC rate of interest so as to compensate for the forgiveness. Ralph Musgrave

    The assumption there is that we should need to borrow in the first place. We shouldn't.

    Also, interest rates in fiat could be driven low by equal fiat distributions to all citizens - by default into their individual citizen accounts at the central bank or equivalent*.

    *E.g. A Postal Checking Service that made no loans.

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  4. Andrew, The idea that we will ever have a system where there is no borrowing is plain unrealistic. E.g. some people want to borrow a million dollars to start or expand a business. Others don't. Some people want to live in the most expensive house they can afford. Others don't.

    If you want to distribute enough money to everyone so that anyone has a million dollars to invest in a business, then you'd need to distribute a million dollars to everyone. Inflation would go thru the roof!!

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  5. "The Hebrews had a solution;"

    Looks like it worked really well for them...

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  6. The idea that we will ever have a system where there is no borrowing is plain unrealistic. Ralph

    I never said that.


    E.g. some people want to borrow a million dollars to start or expand a business.

    Fine. Let them borrow it honestly then and not use what is, in essence, the public's credit but for private gain.

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  7. Looks like it worked really well for them... Franko

    Take it up with God since those are HIS ideas.

    Also, with WWIII not that unlikely, I wouldn't say the present system is working really well.

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  8. "Take it up with God since those are HIS ideas."

    So was the flood...

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  9. AA-,

    Not everything in His operation here is supposed to work out well all of the time...

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  10. Not everything in His operation here is supposed to work out well all of the time...

    From our limited perspective.

    For my thoughts are not your thoughts,
    nor are your ways my ways, says the Lord.

    For as the heavens are higher than the earth,
    so are my ways higher than your ways
    and my thoughts than your thoughts.


    Isaiah 55:8-9 (NRSV)

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  11. Oh just for the record,

    instead of jubilee's let's just have and land value tax so mortgage based private debt doesn't push up land values up in boom and busts.

    in lieu of taxes on income and sales,employment and profits.

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  12. I do like land taxes since they are inescapable. A case could be made that all taxes should be inescapable to avoid violating equal protection under the law.

    Of course a huge PRIVATE tax on the population is the government privileged usury cartel. That one should be abolished.

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