| Subject: | [socialcredit] Latest Rant from Warren Mosler | | Date: | Sunday, December 12, 2004 16:07:45 (-0800) | | From: | william_b_ryan <william_b_ryan @.....com>
|
Referencing
http://www.mosler.org/docs/docs/liberal_agenda.htm
[Mosler] In fact, the first macro equation we learn -
and the one that the government accountants must
balance to or find their math error - is as follows:
Government Deficit = Non Government Surplus
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[Reply] Simply not true. Whether or not the
government runs a deficit is irrelevant to whether or
not the non-government sector runs a surplus. It
reflects a profound lack of understanding the basic
concepts of double entry accounting. During normal
times both the government and non-government business
sectors run deficits in terms of cash flow in respect
to final consumers, if the economy is expanding.
Mosler achieves this preposterous premise to his
argument by conflating the central bank with the
government rather than the non-government sector
through consolidating their respective balance
sheets. You might note that "government" in the
Mosler scheme excludes state, municipal and local
governments.
-
[Mosler] In fact, non-government savings of $US
financial assets can ONLY increase if the government
runs deficits, and they increase by that EXACT
amount.
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[Reply] This preposterous assertion is achieved by
conflating the consuming sector with the "non-
government" business sector after he has already
conflated the central bank with government. It also
depends on the conflation of "financial assets" with
monetary balances. Monetary balances reflect only
one form of financial assets in double entry
accounting.
-
[Mosler] I would suggest having the US Government
reaffirm its legal obligation to issue and clear any
and all social security checks in a timely manner,
regardless of the status of the trust funds.
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[Reply] I agree.
-
[Mosler] So in this sense taxes are the very source
of value for a floating exchange rate currency. The
currency can be considered tax driven. Without
taxes, the currency would have no value, much like
Confederate $.
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[Reply] Taxes are merely the analogue to "sales" by
the non-government sector. They are the name for the
same thing in a different context. If we take money
in the hands of consumers to be tickets redeemable
for goods, services and taxes, as assessed, it is the
fact they are redeemable that gives them "value." He
conflates "currency" with bank credit deposits. Bank
credit deposits (the medium of most transactions) are
not tax driven any more than sales driven.
-
[Mosler] The economy is screaming for more net
financial assets that, as previously explained, only
government deficit spending can provide.
------------------------------
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[Reply] In the central banking system it is
conventionally provided by the net purchasing of
securities by the central bank as compared to their
redemption. The securities do not have to be federal
government securities. Prior to the reforms of the
early 1930s, the central bank purchased all kinds of
securities. The effect is that reserves (interbank
clearing balances required to accommodate an
expanding economy) are injected top down through a
select group of Wall Street dealers. The fact they
are presently exclusively U. S. government securities
is quite irrelevant to the discussion. Most U. S.
securities are sold to institutions foreign and
domestic other than the central bank. It is the Wall
Street "trickle down" theory that Mr. Mosler defends.
There is nothing - neither legally nor practically -
preventing the central bank from injecting reserves
through dividend payments directly to final consumers
in supplement to their earned personal income. Mr.
Mosler demonstrates a singular lack of imagination.
-
[Mosler] The economic fundamental is that exports are
a real cost and imports are a real benefit.
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[Reply] If, though a consolidated trading office that
purchases and sells in the domestic market and
barters in the international market, we as a nation
were trading goods for goods, this would be true.
But we are net exporting money for goods, money that
was costed into domestic production that will never
be sold for its accounted for costs of production.
So, a perennial trade deficit in terms of money
necessarily means the spiraling down of domestic
production with progressive dis-industrialization of
the nation. That's a real cost if there ever was
one. It also requires the effective enslavement of
the workforce of our exporting trading partner, in
that they are required to produce real goods in
exchange for money they will never personally
receive. That is certainly a real cost to our
trading partner.
-
[Mosler] The current trade gap is a reflection of non
resident desires to net save $US financial assets.
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[Reply] Not a nebulous "desire to net save," but to
close their domestic gap between "prices" and
"purchasing power" deriving from the continuing
displacement of labor, which could easily be closed
without net exporting goods for money that augments
clearing balances in their domestic economy. See
related materials archived at
http://www.geocities.com/socredus/compendium
Participate in the discussion at
socialcredit@elistas.com by sending a message to that
address to the attention of the list moderator.
-
[Mosler] The only way the foreign sector can do this
is to net export to the US and keep the $US either as
cash or securities.
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[Reply] Again, a singular lack of imagination from
Mr. Mosler. That's the way they do it now but it's
not the only or best way. They could "print" money
and distribute it as dividends to consumers in their
domestic economy, and keep the goods or their
equivalent for domestic consumption. And we get to
keep our industrial base.
-
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