On 8/13/2010 2:56 PM, Jim Devine wrote: > John Vertegaal wrote:> ... When economists of> all stripes are > transfixed by the "power" of investment funds that is> flowing from > a vulgar accumulation of money, all the while fully> realizing that > whenever growth is required, money can and will be freely> created > out of thin air, then not only have the inmates taken over the> > asylum and in effect are running it, but the power they confer on> > financial markets is just as bogus. It's not the social security > trust fund that's "powerful." Rather,it's the US federal government, > which has the power to tax peopleenough to pay the interest on that > part of its outstanding debt heldby that fund and to pay for those > bonds when they are sold. > [First off, I don't know if anyone else is affected the same way, but although I still do, I find it rather bothersome to read your missives delivered in the above mode. I think it's been happening since you heeded the call to turn off html. Having a couple of words joined on each line of text has probably a cause all its own though; I'm no expert either...]
Nothing in the above disagrees with my argument that accumulated funds aren't a depletable wealth. In the final analysis, it's all about taxation anyway. Since both interest and bond redemption payments by government only add claims to, without adding to, private sector output; the current convention is no more than a particular source of potential inflation. In other words through borrowing, government surreptitiously changes the value of the unit of account. Thus taxing progressively (like in the 60s) to meet ongoing needs is always the most efficient. > Currently,not only is the federal government powerful enough, but > it's legallyobligated to do so.-- Jim Devine > This too has no bearing on my contention that all government borrowing is a mug's game. ...I must concede that both raghu and Max raised valid objections to my critique on Dean Baker. I'll keep those in mind for whenever I think about criticizing him in the future. My point is that regardless of any "built-up" funds, a society can always afford to keep its retirees in the standard of living they had become accustomed to in their productive years. The only constraints are exogenously located natural resources, including labor power. Baker's argumentation regarding wealth always includes pecuniary aspects. Like all economists, he considers money as a part and parcel of the economy's territory. As a unit of account however, money is an attribute of the economy's _map_; and as such it isn't subject to any (net) territorial accumulation, at least not without having thereby its own value changed. Axiomatically holding (fiat) money to be territorial, to whatever degree, prevents the establishment of a coherent monetary theory; for the twain can never meet. John V _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
