Re: [TNF] Re: [A-List] FW: znet/weisbrot on deflation - critique?

["Gary Santos" <evs@xxxxxxxxxxxx>]

> The US dollar is good for paying US taxes and is declared with the Force
of law to be legal tender, good for payment of all debts, public and
private.  It is backed by the political authority of the state, which also
owns all of the nation except that which has been assigned to the private
sector.<
>> Your argument is based on indirectly implying that the government is
somehow obligated to exchange its assets for the dollars in circulation,
although as knowledgeable as you are, you should be fully aware that this is
not the case.<<
----------------------------
Thomas,

The point of "money as credit" is that it is backed by the people of the
United States, their land and natural resources and by their productive
capabilities. After all, buying US real assets is the other thing one can do
with dollars aside from buying US$ financial assets.

Government is not obligated to the exchange, as you point out. In fact,
government regulates through laws on resource exploitation. But, this is not
relevant to the concept of money as credit. If state credit is spent with
wisdom, prudence and foresight, any excesses are made up for by the future
economic returns derived by this spending. Money enters the "free market"
this way.

Meanwhile, taxes are the means that the state controls the amount of future
money in circulation. State credit is spent. Taxes control the amount, in
the long term, that is finally in circulation. Taxes sucks money from the
system.

Gary Santos

----- Original Message -----
From: "thchi" <thchi@xxxxxxxxxxxxxxxxxxxxx>
To: <TheNewForum@xxxxxxxxxxxxxxx>
Sent: Sunday, July 13, 2003 6:09 PM
Subject: [TNF] Re: [A-List] FW: znet/weisbrot on deflation - critique?


> Hi Henry!
>
> > Thomas, I know you are an open-minded gold bug, but still a gold
> >bug, ;-)
>
> I generally accept the gold bugs' criticism of fiat currenty, but in
> reality I am more of a "crude oil" bug (after being mined, gold is
> stored in vaults, while crude oil is destroyed through
> consumption).
>
> > The US dollar is good for paying US taxes and is declared with the
> >force of law to be legal tender, good for payment of all debts,
> >public and private.  It is backed by the political authority of the
> >state, which also owns all of the nation except that which has been
> >assigned to the
> > private sector.
>
> Let's keep it simple.
>
> We have 2 facts that are relevant to this discussion:
>
> 1. The US government controls the supply of dollars.
> 2. The US government owns various assets.
>
> However, there is no direct relationship whatsoever between these
> two facts!!
>
> The government has NOT made ANY promises to turn over ANY of its
> assets for the dollars that it has issued.
>
> Your argument is based on indirectly implying that the government is
> somehow obligated to exchange its assets for the dollars in
> circulation, although as knowledgeable as you are, you should be
> fully aware that this is not the case.
>
> Although we disagree on this issue, I know that we both seek the
> truth, and therefore I hope this disagreement does not cause any ill
> feelings.
>
> Warm regards,
>
> Thomas
>
>
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