The Soft Bigotry Of Low Expectations [View article]
Yes, the idea of using money as a way to facilitate demand creation is hard to beat, while creating wealth requires translating enough value out of the stream flow back to productive enterprises that will ensure continued quality if life and standard of living.
The Soft Bigotry Of Low Expectations [View article]
"once there are taxes to pay, the money the King will accept is very likely to be the money that people use for trade."
There is it seems a lot of ambiguity in the reality behind that statement.
At the highest level, a sovereign with the ability to create currency is no longer in actual need of money, though as is pointed out has the power to impose taxes.
Taxation then as a fundraising activity is unnecessary, though there is a need for resources and the power to command authority over them.
So one could view money as an instrument of power, a tool that provides for access to resources and a means to impose necessary order for a stable and efficient economy, rather than the spontaneous flood of private paper and collateral that may allow for a basic hand to mouth existence, but ineffective in creating large scale infrastructure, long term research, or a stable advanced society.
Hard money tradition still remains with the idea that taxes must be collected to pay the bills, while in fact taxes are potentially more useful as a means to exert power as necessary to implement policy and as a deterrent to activities counter to the intended purpose.
So we should consider moving away from a fear driven agenda to reduce expenditures and focus a debate on how best to use the power of the state to allocate resources to public purposes.
The other use is the dreaded tax, which could better be framed as a penalty clause, a regulatory tool to discourage undesired activities, e.g., parking excessive reserves in lieu of investment in the national economy.
In this way the gov't has both a carrot and a sticks that can be used as incentives to move forward with certain defined national objectives, vs the current method of loading up the wagon and pushing on a string until the guys with the invisible hands come along to pull us forward.
Next thing you know the wagon is empty and we're still waiting at the station.
A Surprising And Promising Trend In The U.S. Economy: Sharply Declining Oil Imports [View article]
Certainly there are two sides to the story, however to not consider the value of the soil in the calculations at all is to default to zero, an error of omission that invites controversy.
The Soft Bigotry Of Low Expectations [View article]
"the great usefulness of money for trade does not trump the fact that it is a government construct"
Honestly, I'm not convinced that it matters much, but it seems clear to me that it is a government construct only until its not.
Case in point. Not too many years ago, California froze the budget and for a period of time was unable to, among other things issue income tax refunds. Fine. Immediately, a secondary market appeared, ready and willing to issue credit for to folks based on the fact that money owed to them by California.
In the years after the Revolution, roughly 1815-1830 no-one had any money, so the local store keeps simply kept a record of how much credit was owed to who and by whom in exchange for good placed on account in the local storeroom.
So I just don't see that the government is necessary to create money. But its a heck of a lot better deal to have one that can.
Go ahead, debase the currency. I was going to buy some bacon and eggs this week anyway, maybe I can get credit on account for those nice little pastries and desserts that Martha makes, everyone in the village just loves them, and it sure beats working in the stables, albeit maybe not so good for the owner of the Twinkie's Factory.
The world suffers from a leadership vacuum which will be all too evident at this weekend's G-20, William Pesek writes. "There’s a sense that the world’s problems are too formidable to fix... What we need is an adult or two in the room to make sure leaders tackle the big challenges of our day. Good luck finding any." [View news story]
Europe's Pain Is America's Gain, Not Bane [View article]
"The Spanish example, amongst other issues no doubt, shows that the ability to live off of gained wealth isn't necessarily sustainable."
That's is one possible conclusion, though I thought of it more of an example that it is possible to build up enough wealth to coast for a hundred years or more.
The Roman Empire did pretty well for itself for at least 300 years or so, and I believe the Ming Dynasty had a very good run as well.
I guess I'd prefer to see the cup to continue running over, and not to assume that all good things must end badly and to execute a smooth hand off at some point to the successors.
The Soft Bigotry Of Low Expectations [View article]
"Regarding the value of money, at root the only thing that gives it any value in the first place is that we need it to pay tax."
Mind you, this is not an ideological response, but for me the value of money is that in the unlikely event my plastic credits do not generate a sales receipt within 12 seconds I can dig out an old tired Portrait of a President and expedite my exit.
Otherwise, I may be forced to engage in tedious barter with a Sales Clerks Supervisor who as an employee of a public company and unless a sole proprietor is likely not authorized to accept commodities goods or promises of services in lieu of cash, though if he were a good horse trader his asset base would perhaps increase, albeit slowly and inefficiently.
Europe's Pain Is America's Gain, Not Bane [View article]
Nice post, hoop.
There is in fact some historical precedent for what you have described.
The best example that comes to mind is Spain in the hundred years or so after colonizing much of America and living off the profits of their conquests.
They experienced an unprecedented standard of living with their accumulated wealth that impacted their culture in many ways, both positive and negative that carry forward to today; A review of Don Quixote offers some insight into the issues of the time which coincidentally provided the thematic background for "The Lone Ranger", a popular and yet mysterious version of role play which allowed the successful consumers of this century to digest the internal bipolar nature of conflicts of cultures of production vs consumption.
The Soft Bigotry Of Low Expectations [View article]
I'm glad someone is interested. I've noticed these sorts of studies though not so much recently. As I recall among the most comprehensive was one was done for the Dallas Fed back in the '03 timeframe. While there are still some comments about I am unable to trace to the original document at this time. Here is another one that I had not seen until now.
The Soft Bigotry Of Low Expectations [View article]
While the concern regarding the possible relationship of the number of dollars vs goods is valid within certain contexts, the reality today is a surplus of manufacturing capability relative to aggregate demand.
The problem we have now is the opposite of demand exceeding supply; we, have plenty of fuel in the tank but not enough getting through the carburetor.
Contrary to the conventional wisdom, there is a case that low interest rates are associated with strength of currency and thus a low risk premium, IOW cash is its own reward in today's low inflation environment.
Europe's Pain Is America's Gain, Not Bane [View article]
Neal, your point is well taken regarding the potential macroeconomic effects of Interest Rates and Commodity Prices.
However, Main Street continues to feel the squeeze of reduced buying power and as another author here termed it, "The Inflation is in the Poverty", and many feel strongly that they are increasingly being left on the sidelines while others prosper.
I get it regarding the macro benefits, but too many are simply missing out at the micro level.
While I strongly believe it would be foolish to destroy the tremendously productive economic engine we have created, we have failed to educate our leaders, let alone the public the importance of creatively addressing the paucity of aggregate demand at the street level that continues to plague us.
For too many fellow citizen's, its ever increasingly become a "water, water everywhere, but not a drop to drink" scenario.
Any thoughts would be appreciated on how best to address this from a basis of reason, and the prospects for positive results over the horizon with respect to this ongoing dilemma would be appreciated, as the traditional "jobs" are not coming back in a way that will be adequate, at least that is the conclusion that I find most compelling.
The next economic boom, writes Daniel Gross, will be created by the efficiencies unleashed by America's transition from an Ownership Society to a Rentership Society. It's not just housing - citizens are getting used to the flexibility of renting across a whole range of goods. "The U.S. economy needs the dynamism that renting enables as much as - if not more than - it needs the stability that ownership engenders." [View news story]
Regarding De Toqueville, while many are familiar with "Democracy in America", don't miss "Ancien Regime", his assessment of his home country, France, the next domino to fall to Revolution.
The next economic boom, writes Daniel Gross, will be created by the efficiencies unleashed by America's transition from an Ownership Society to a Rentership Society. It's not just housing - citizens are getting used to the flexibility of renting across a whole range of goods. "The U.S. economy needs the dynamism that renting enables as much as - if not more than - it needs the stability that ownership engenders." [View news story]
The Soft Bigotry Of Low Expectations [View article]
The Soft Bigotry Of Low Expectations [View article]
There is it seems a lot of ambiguity in the reality behind that statement.
At the highest level, a sovereign with the ability to create currency is no longer in actual need of money, though as is pointed out has the power to impose taxes.
Taxation then as a fundraising activity is unnecessary, though there is a need for resources and the power to command authority over them.
So one could view money as an instrument of power, a tool that provides for access to resources and a means to impose necessary order for a stable and efficient economy, rather than the spontaneous flood of private paper and collateral that may allow for a basic hand to mouth existence, but ineffective in creating large scale infrastructure, long term research, or a stable advanced society.
Hard money tradition still remains with the idea that taxes must be collected to pay the bills, while in fact taxes are potentially more useful as a means to exert power as necessary to implement policy and as a deterrent to activities counter to the intended purpose.
So we should consider moving away from a fear driven agenda to reduce expenditures and focus a debate on how best to use the power of the state to allocate resources to public purposes.
The other use is the dreaded tax, which could better be framed as a penalty clause, a regulatory tool to discourage undesired activities, e.g., parking excessive reserves in lieu of investment in the national economy.
In this way the gov't has both a carrot and a sticks that can be used as incentives to move forward with certain defined national objectives, vs the current method of loading up the wagon and pushing on a string until the guys with the invisible hands come along to pull us forward.
Next thing you know the wagon is empty and we're still waiting at the station.
A Surprising And Promising Trend In The U.S. Economy: Sharply Declining Oil Imports [View article]
http://1.usa.gov/LATDfe
A Surprising And Promising Trend In The U.S. Economy: Sharply Declining Oil Imports [View article]
The Soft Bigotry Of Low Expectations [View article]
Honestly, I'm not convinced that it matters much, but it seems clear to me that it is a government construct only until its not.
Case in point. Not too many years ago, California froze the budget and for a period of time was unable to, among other things issue income tax refunds. Fine. Immediately, a secondary market appeared, ready and willing to issue credit for to folks based on the fact that money owed to them by California.
In the years after the Revolution, roughly 1815-1830 no-one had any money, so the local store keeps simply kept a record of how much credit was owed to who and by whom in exchange for good placed on account in the local storeroom.
So I just don't see that the government is necessary to create money. But its a heck of a lot better deal to have one that can.
Go ahead, debase the currency. I was going to buy some bacon and eggs this week anyway, maybe I can get credit on account for those nice little pastries and desserts that Martha makes, everyone in the village just loves them, and it sure beats working in the stables, albeit maybe not so good for the owner of the Twinkie's Factory.
The world suffers from a leadership vacuum which will be all too evident at this weekend's G-20, William Pesek writes. "There’s a sense that the world’s problems are too formidable to fix... What we need is an adult or two in the room to make sure leaders tackle the big challenges of our day. Good luck finding any." [View news story]
Europe's Pain Is America's Gain, Not Bane [View article]
That's is one possible conclusion, though I thought of it more of an example that it is possible to build up enough wealth to coast for a hundred years or more.
The Roman Empire did pretty well for itself for at least 300 years or so, and I believe the Ming Dynasty had a very good run as well.
I guess I'd prefer to see the cup to continue running over, and not to assume that all good things must end badly and to execute a smooth hand off at some point to the successors.
The Soft Bigotry Of Low Expectations [View article]
Mind you, this is not an ideological response, but for me the value of money is that in the unlikely event my plastic credits do not generate a sales receipt within 12 seconds I can dig out an old tired Portrait of a President and expedite my exit.
Otherwise, I may be forced to engage in tedious barter with a Sales Clerks Supervisor who as an employee of a public company and unless a sole proprietor is likely not authorized to accept commodities goods or promises of services in lieu of cash, though if he were a good horse trader his asset base would perhaps increase, albeit slowly and inefficiently.
Europe's Pain Is America's Gain, Not Bane [View article]
There is in fact some historical precedent for what you have described.
The best example that comes to mind is Spain in the hundred years or so after colonizing much of America and living off the profits of their conquests.
They experienced an unprecedented standard of living with their accumulated wealth that impacted their culture in many ways, both positive and negative that carry forward to today; A review of Don Quixote offers some insight into the issues of the time which coincidentally provided the thematic background for "The Lone Ranger", a popular and yet mysterious version of role play which allowed the successful consumers of this century to digest the internal bipolar nature of conflicts of cultures of production vs consumption.
The Soft Bigotry Of Low Expectations [View article]
http://bit.ly/JryfdF
The Soft Bigotry Of Low Expectations [View article]
The problem we have now is the opposite of demand exceeding supply; we, have plenty of fuel in the tank but not enough getting through the carburetor.
Contrary to the conventional wisdom, there is a case that low interest rates are associated with strength of currency and thus a low risk premium, IOW cash is its own reward in today's low inflation environment.
http://bit.ly/Ko7btH
Europe's Pain Is America's Gain, Not Bane [View article]
However, Main Street continues to feel the squeeze of reduced buying power and as another author here termed it, "The Inflation is in the Poverty", and many feel strongly that they are increasingly being left on the sidelines while others prosper.
I get it regarding the macro benefits, but too many are simply missing out at the micro level.
While I strongly believe it would be foolish to destroy the tremendously productive economic engine we have created, we have failed to educate our leaders, let alone the public the importance of creatively addressing the paucity of aggregate demand at the street level that continues to plague us.
For too many fellow citizen's, its ever increasingly become a "water, water everywhere, but not a drop to drink" scenario.
Any thoughts would be appreciated on how best to address this from a basis of reason, and the prospects for positive results over the horizon with respect to this ongoing dilemma would be appreciated, as the traditional "jobs" are not coming back in a way that will be adequate, at least that is the conclusion that I find most compelling.
Not So Golden Years: How An Aging Society Can Impact The Markets [View article]
Sure, but some would still prefer measures to delay the inevitable.
The next economic boom, writes Daniel Gross, will be created by the efficiencies unleashed by America's transition from an Ownership Society to a Rentership Society. It's not just housing - citizens are getting used to the flexibility of renting across a whole range of goods. "The U.S. economy needs the dynamism that renting enables as much as - if not more than - it needs the stability that ownership engenders." [View news story]
The next economic boom, writes Daniel Gross, will be created by the efficiencies unleashed by America's transition from an Ownership Society to a Rentership Society. It's not just housing - citizens are getting used to the flexibility of renting across a whole range of goods. "The U.S. economy needs the dynamism that renting enables as much as - if not more than - it needs the stability that ownership engenders." [View news story]