John Vertegaal wrote: > [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 [with a bunch of ">" interspersed in the text]. 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...]<
It's strange. I don't understand why web communications two or even more modes of communication with different rules. When I copy a bunch of text from Harper's Weekly, for example, sometimes it has a bunch of regular paragraph marks within each paragraph, sometimes there are a bunch of line-feeds instead, and sometimes they only appear at the end of each paragraph. This confusion seems to be the result of decentralized decision-making leading to the absence of standards. Above and below, I got rid of all of the breaks at the ends of the lines. Did that make it more readable? I wrote: >> It's not the social security trust fund that's "powerful." Rather, it's the >> US federal government, which has the power to tax people enough to pay the >> interest on that part of its outstanding debt held by that fund and to pay >> for those bonds when they are sold.<< John: > 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. < Yes, I wasn't saying that accumulated funds are true "depletable wealth," if by that you mean real resources (capital goods, iron ore, or whatever). Rather the accumulated funds (i.e., the OASI trust fund's pile of government bonds) represents claims on the government's ability to tax, just as the savings bonds that your grandmother gives you are claims on the power to tax -- and the stock you might own in Apple Computer is based on their ability to grab a piece of society's surplus-value. > 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.< I don't understand this, especially its most important assumption. The government adds a lot to private sector output. What would the the "private" sector do if the it were truly private, i.e., on its own, and the government didn't enforce its contracts, protect its property rights, avoid major plagues, etc.? In addition, during the aftermath of a recession (e.g., now), the government borrowing can help the private sector by financing increased government expenditure and/or tax cuts, stimulating aggregate demand and allowing business to utilize their productive capacity more fully. Government helps build roads and other infrastructure without which business would be stifled. Etc. > Thus taxing progressively (like in the 60s) to meet ongoing needs is always > the most efficient. < efficiency is a completely different issue. me: >> Currently,not only is the federal government powerful enough [to , but it's >> legally obligated to do so.<< John: > This too has no bearing on my contention that all government borrowing is a > mug's game.< But it does say that the OASI trust fund has a real meaning. In any event, your contention is wrong. John continues: > ...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. Labor-power is "natural"?? It seems to me that what John is saying is that saving now (putting money into the OASI trust fund or the stock market or whatever) does not automatically cause real income that will be received in the future. That is, it only creates paper _claims_ on future income. That's right. In addition to paper claims, what's needed to pay dividends to stockholders, interest to creditors, benefits to social security recipients, etc. right now is the production of actual goods and services at the same time, beyond that needed to pay the wages of current labor-power, the depreciation of capital equipment, and the cost of raw materials. That is, the paper claims don't always correspond to an actual accrual of real benefits (goods and services). If, for example, the claim by property owners on profits, interest, and rent (flows of property income) exceeds the actual surplus-product, then _either_ they have to squeeze the working people (raising the surplus-product) or cut the amount of replacement investment _or_ there's inflation. Similarly, if there are not enough actual goods and services being produced (after they are distributed to property income, wage income, and the like) to pay social security benefits, inflation results. In both case, inflation does not automatically result if the economy is starting with a low rate of resource utilization and that rate can be increased. > 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. < The "Chicago schoolers" tend to see money as only a veil, something that can be safely ignored in most situations (with the exception being the issue of inflation). As Keynes pointed out, that's a mistake. > 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. < I don't understand this at all. -- Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own way and let people talk.) -- Karl, paraphrasing Dante. _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
