On Mon, Sep 14, 2009 at 1:40 PM, Jim Devine <[email protected]> wrote: > money libertarians use language differently. For example, in those > circles, it's common to hear about "inflation" during the 1920s in the > US. What? the path of the consumer price index was flat and drifting > downward. But by "inflation," they mean credit inflation, where the > money supplies grow relative to the monetary base. They sometimes like > the idea of Henry Simons and the early MF, who wanted to end the > ability of banks to "create money."
To give credit where it is due, I think the argument is more subtle than that. To monetarist-libertarians, deficit spending is inflationary because to them it makes no difference that the government (or other government chartered institutions) is printing debt securities instead of outright printing currency. I think there is something to that argument. What is a debt security but a promise to print currency *later*. After all, no one seriously thinks it will ever be politically feasible to pay off trillions in debt through taxation - which of course would be the honest way to pay for any government spending. -raghu. -- Never say, "Oops!"; always say, "Ah, interesting!" _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
