Friday, October 26, 2018

Jon N. Hall — The 'Limitless' Capacity of Government to Create Money

"Weimar," "Zimbabwe" get replaced by "Venezuela in this puerile pseudo-criticism of MMT.

What Jon Hall does get, is that a nation's currency is "the people's money." Unfortunately, he doesn't understand the implications of that for accomplishing public purpose through the political process in a democratic republic. Worse, he doesn't seem to care about understanding it other than superficially in terms of his cognitive-affective bias.

The American Thinker
The 'Limitless' Capacity of Government to Create Money
Jon N. Hall


Andrew Anderson said...

How can fiat be the people's money when, except for coins and bills, the people may not use fiat?

Bob Roddis said...

"Public purpose" just means a big-ass project for which there is no voluntary consensus. Or which "progressives" think there is or will be no voluntary consensus. If there were a consensus, people could and would just do the project without government coercion. MMT destroys the English language. Again and again. Some definitions:

1. Real consensus: People voluntarily agree to support a project and voluntarily agree to fund it.

2. Taxpayer half-assed consensus: A voting majority agrees to tax the public at large (even the losers of the vote) to fund a project that lacks a true consensus as in #1. But there is actually a voting majority and the project is actually funded with tax collections.

3. MMT no "consensus": The predators who have grabbed control of the system of government violence realize that there is no #1 or #2 type consensus for their plans. Therefore, they fund it through fiat funny money emissions, stealing purchasing power from the powerless without them realizing what is actually happening. An embezzlement scam, of sorts.

Andrew Anderson said...

The actual money used by the non-bank private sector is bank deposits and according to this graph 60-87% of those deposits are bank credit, i.e. created by bank loans, but not for the general welfare but for the private benefit of the banks themselves and the most so-called credit worthy, typically the rich.

So bank deposits cannot be called the "people's money" either since historically only 13-40% of bank deposits were created by sovereign spending with the rest created by the banks.

So it appears we have no "people's money", Tom.

Andrew Anderson said...

However, we COULD have a "people's money" if the people,i.e.citizens, were allowed accounts of their own at the Central Bank alongside those of the Banks.

And if all other privileges for the banks were abolished too, we'd have an additional, risk-free, always liquid payment system to the one that must work through the banks.

Andrew Anderson said...

So here's the problem from an MMT price inflation perspective:

For every $1 of sovereign spending, the government privileged usury cartel can create $1.5 to $6.6 in dollar liabilities and those dollar liabilities compete in the same price inflation space as sovereign spending.

In other words, government privileges for the banks reduce the amount of sovereign spending for the general welfare for a given amount of price inflation by 60 to 87%* !!

Shorter, if we wish to MAXIMIZE sovereign spending for the general welfare, government privileges for the banks must be abolished.

*Of course truly private banks with truly voluntary depositor might safely create some deposits/liabilities so some competition with sovereign spending is inevitable ANYWAY but it's safe to say that removing government privileges from the banks would greatly reduce their ability to compete with sovereign spending for goods and services for a given amount of price inflation space.