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Ask the average American to see if they have access to unlimited cash. I just don't understand why people use words so cavalierly. Are they dropping pallets of money in the street? No, so why use these exaggerations? The money availability is very specific. Low interest rates are a sigh of tight money. That is why the rate drops because there is little competition to borrow. A car that doesn't sell must drop the price. That it why Friedman called low interest easy money a myth....that never seems to die.
No, pallets of electronic money is being dropped directly into bank vaults. At least if it got dropped on the streets, the average American would get some benefit. Am I wrong to believe that that money will probably make it out into circulation through lending, government contracts, etc. at some point; and that while that is waiting to happen, only the banks are benefiting (ok, I'm sure there are a choice few others)?
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Originally Posted by gwynedd1
So which is it going to be, consumer credit or deficits that will drive the inflation?
Here, I'll throw the huge softball you're hoping for: I'd guess that deficits (e.g. military spending, infrastructure improvements, etc. etc etc.) will be the work-horse of creating the bulk of it. Consumer credit will just do a nice job of blowing some bubbles and triggering others to pop, thus pushing it higher and higher.
No, pallets of electronic money is being dropped directly into bank vaults.
Not my definition of money. If its not chasing good and services, its not money by my definition.
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At least if it got dropped on the streets, the average American would get some benefit. Am I wrong to believe that that money will probably make it out into circulation through lending, government contracts, etc. at some point; and that while that is waiting to happen, only the banks are benefiting (ok, I'm sure there are a choice few others)?
That is exactly what my, and the post Keynesian, position is. That is to say I agree with their financial model on how money and debt behaves.
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Here, I'll throw the huge softball you're hoping for: I'd guess that deficits (e.g. military spending, infrastructure improvements, etc. etc etc.) will be the work-horse of creating the bulk of it. Consumer credit will just do a nice job of blowing some bubbles and triggering others to pop, thus pushing it higher and higher.
When there is government spending I do prefer it to be on appropriate public infrastructure, like roads, bridges, parks , water and sewer. However what I would prefer is to shift taxation onto government privileges like unimproved land value or other legislatively created equity like bandwidth, domains, easy access minerals and so on. That way people are paid for doing work, and the government can still provision itself.
I do tend to differ from some LVT proponents in that I am much more concerned with distribution than I am with revenues. I do not want to tax raw land values to zero, but I do want to keep credit from flowing into them. I just want raw land ownership to have progressive taxation, meaning the first 100k ground rent should be low tax , but large estates should be the main tax base. I also prefer equity in land over debt leveraged and debtor owned land. A land owner will often invest in the local area to raise value, but banks waiting for interest payments do not give a rat's ass. Cash starved, speculator owned, debtor large estates are the worst of everything.
Its like a home owner knowing the roof if going to collapse and cause even more damage, but can do nothing about it. Think Wall Street with a portfolio of MBRs is going to fund a bridge repair project for a state to help its portfolio in the long run?
If you want a strong dollar just tax it all in until there is one dollar. It will be very strong then because the marginal utility of the last dollar would be to the moon. Why not make everything scarce to make it rise in value then?
Why do you mock/describe a strong dollar/scarcity to the extreme? You need some [spending] scarcity to emulate VALUE. The bottom-line: the USA's spending/non-saving culture is pissing/transferring TOO MUCH wealth/security to the wealthy! Responsible/correct taxation facilitates less superficial spending--the bread & butter for the 0.1%--& more rational, calculated spending. This permits money to live up to the pledge, "In God We Trust."
BTW gwynedd1, you're starting to sound like your buddy Richard Koo again. Do you remember when he said it doesn't matter what the Govt spends money on, just as long as they spend it. He even said that military wars shorten/are favorable during balance-sheet recessions; 1 stated reason is the populace becomes accepting of copious spending when fear/patriotic irrationality sets in. //www.city-data.com/forum/econo...heet+recession.
Why do you mock/describe a strong dollar/scarcity to the extreme? You need some [spending] scarcity to emulate VALUE. The bottom-line: the USA's spending/non-saving culture is pissing/transferring TOO MUCH wealth/security to the wealthy! Responsible/correct taxation facilitates less superficial spending--the bread & butter for the 0.1%--& more rational, calculated spending. This permits money to live up to the pledge, "In God We Trust."
Yes and its primarily by bank credit which creates the vast majority of the money supply. And since the trash for cash swap much of the public debt was caused by bank credit . We printed money for unexpandable ground rents , aka no economic output whatsoever nada, nil , zip, but not a peep from the brain washed populace or the money grubbing bankster apologists who have supported the public largess enough to profit from it and just enough to make it a credible scape goat. Bank print da money. Why not go after them? I just don't get it. I am fundamentally stumped as to what the mystery is. Bank credit, no work, land squatters, labor and industrial taxes, bail outs. What's so complicated? Whats the mystery of money with no supply here?
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BTW gwynedd1, you're starting to sound like your buddy Richard Koo again. Do you remember when he said it doesn't matter what the Govt spends money on, just as long as they spend it. He even said that military wars shorten/are favorable during balance-sheet recessions; 1 stated reason is the populace becomes accepting of copious spending when fear/patriotic irrationality sets in. //www.city-data.com/forum/econo...heet+recession.
If by now you confuse spending with deficits the problem is entirely with your ability to comprehend fundamentals.
Its real simple. Government securities are assets with spending power. I am trying to shift those assets to labor and industry and away from social spending government and FIRE sector( a redundancy since the FIRE sector is two of its powers). Industry will see to the correct public infrastructure itself.
how many time do I have to say it? Spending isn''t deficits, and yes I prefer cheap money over useless high cost asset bloating bank credit which provides no direct funding for industry. It directly funds sloth and avarice.
You also seem rather unconvinced that the diminishing marginal utility of labor will have no impact on its total utility. Sports teams don't just play games. They have practice. What are those whop drop out doing now? When labor is paid less then they will work less.
Why do you mock/describe a strong dollar/scarcity to the extreme? You need some [spending] scarcity to emulate VALUE. The bottom-line: the USA's spending/non-saving culture is pissing/transferring TOO MUCH wealth/security to the wealthy! Responsible/correct taxation facilitates less superficial spending--the bread & butter for the 0.1%--& more rational, calculated spending. This permits money to live up to the pledge, "In God We Trust."
BTW gwynedd1, you're starting to sound like your buddy Richard Koo again. Do you remember when he said it doesn't matter what the Govt spends money on, just as long as they spend it. He even said that military wars shorten/are favorable during balance-sheet recessions; 1 stated reason is the populace becomes accepting of copious spending when fear/patriotic irrationality sets in. //www.city-data.com/forum/econo...heet+recession.
Perhaps I was being too nice. Why do you bring up and old thread while ignoring my answer? Do you like repeating yourself? I sure don't.
You said:
Gov’ts to supply economic stimuli for 10+ more years. I see this as Moral Hazard.
I said:
They don't even have to run stimulus, just a deficit.
Originally Posted by paraphrasing white paper?/article
He said for Gov’ts to not worry about what to spend stimulus money on—just spend it. Only during wartime should Gov’t focus stimulus spending—on war stuff obviously. He admits that you can’t get citizens to continue irresponsible spending for long periods of time during peacetime; so he implies that it's better to be @ war when you’re trying to fix balance sheet recessions.
Don't you see what this guy is saying!? He's saying: The plebs can't comprehend just run deficits. However, no problem deficit spending during WARTIME, the plebs fearful/patriotic affliction is very reliable.
Think about it gwynedd1; the USA has been trying to alleviate a balance sheet recession since 1998! Also, perpetual ZIRP—needed to just run deficits—is how to lose all your money in less than 5 seconds.
Don't you see what this guy is saying!? He's saying: The plebs can't comprehend just run deficits. However, no problem deficit spending during WARTIME, the plebs fearful/patriotic affliction is very reliable.
Think about it gwynedd1; the USA has been trying to alleviate a balance sheet recession since 1998! Also, perpetual ZIRP—needed to just run deficits—is how to lose all your money in less than 5 seconds.
I don't defend every single point of his. Lets stick with what I say.
So what is your solution? go into a depression or borrow consumer credit from banks? Maybe I should stuff your argument full of straw? Why the hell do you even bring up ZIRP. Its monetary policy and all I have been talking about is fiscal policy. More straw man BS. You think about getting my position right.
And don't even try to tell me I am increasing the printing press. I made it pretty clear bu,t ya can't help trying to paint me as some big government quack. You people are not even in my league when it comes to small government, libertarian principles. But ya'll pretend da guberment enforced land and banking monopolies just spontaneously appear. ya'll pretend big business isn't behind it. Cause if ya do I will shove it you know where. I am talking about ending the role of banks increasing the money supply and ending it permanently. If we are talking about full reserve banking, unless the deficit increases substantially, the money supply will shrink by 95%. That gonna work?
Give me your plan on a money supply. Lets make you defend your position. I'll bet I can tear it to shreds. I played defense, now its time to turn the ball over to me. Tell your loved one's you might not be coming back in one piece.
I know we disagree. The reason is because I follow the Georgist model of rising rents which will defeat your intent. Wages never rise when rents are allowed to rise.
I don't intend to let rents rise. You have to borrow money to have land value go up. Rents in the Georgist view are based on a land monopoly, 98% of the land owned by 2,000 people. In the modern system banks and their mortgages fill the old land owners place. So if you key the minimum wage to the total debt at full employment GDP ratio. The banks can loan out an infinite amount of money on the assets and not get a higher percentage of the workers income. Fixed rents
I don't intend to let rents rise. You have to borrow money to have land value go up. Rents in the Georgist view are based on a land monopoly, 98% of the land owned by 2,000 people.
That is the most ludicrous display of a definition of Georgism as I have ever seen. Its not even close. That is Physiocratic. The American 19th century progressive movement did not form under feudalism. Monopoly income arrives the minute one location is better then the next available location. If you have a fruit stand on corner #1 that gets 10 thousand people a day of foot traffic vs one that gets 9 thousand a day of foot traffic. There is a "rent", the difference between the two.
In fact Gerogism can be seen as to define the insidious nature of feudalism that seems to begin so innocently , but its the same national wealth sapping force. He is the anti-Marx( who thought the land gentry were dead).
Physiocratics spotted or defined the problem. Georgism
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In the modern system banks and their mortgages fill the old land owners place. So if you key the minimum wage to the total debt at full employment GDP ratio. The banks can loan out an infinite amount of money on the assets and not get a higher percentage of the workers income. Fixed rents
Now this if were we agree. Georgism alone cannot model what is happening today. Though it would certainly prevent it.
Physiocratics spotted or defined the problem.
Georgism discovered its insidious nature.
FIRE sector model shows that finance has co-opted it. They are far worse because land owners are at least local. They may be leaches but are more likely to recognize the stake they have. Not so with finacialization. In FIRE sector model the wealth and prosperity of a community can be turned into financial instruments and sold off around the world(MBS). Its worse than Marx or Henry George could have imagined. They were optimists.
Not my definition of money. If its not chasing good and services, its not money by my definition.
Would you consider the potential for it to convert to "money" to be a concern or unconstrained factor? I imagine that it would be within the best interests to consider that in an analysis of the health of our economic health.
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Moral Hazard dilutes/is detrimental to VALUE
