Making It Work

[John Gelles <jjgelles@xxxxxxxx>]

                       TRICKING THE SYSTEM

                Expanding Output and Consumption
           In the Absence of Initial Monetized Demand

                Making Soft Money Powerful Enough
                  To Substitute for Hard Money

     Dear Bernie Tuchman (and economists against soft land-
                          ings in slow growth, environment-
                          ally neglected territory),

          In your posts on priming the world's money pump,
     you have approached "real" deficits in monetized demand
     (i.e., deficits in expenditure and asset accounts for
     environmental, social and developmental needs), with
     certain proposals:  You ask for multinational recogni-
     tion of the problem in terms you define.  This alone
     ought to discourage you -- we do not even have such
     recognition by three living people here in America!

          But there is hope.  There are two of us, (you and
     I), who are close to agreement:  Let's try to frame the
     problem in very short essays.  Maybe we will get help,
     if we write in full view of a critical PKT audience.

          I see the need to increase US gross domestic
     product by not less than one percent per month to
     provide output enough to clean the environment, renew
     the infrastructure, train the workforce, employ
     everybody, and end poverty in sixty months.

          These tasks will not otherwise be done if we wait
     for the current rate of public and private expenditure
     to generate the profits and taxes required to get them
     done in the ordinary course of the business cycle.

          Not only that, but if the past is any guide to the
     future, ordinary business cycles are not driven to do
     them at all.  They are driven to produce not enough
     cheap goods for most consumers, (not enough to raise
     all our children out of poverty), and too much high
     priced novelty for profitable sale over an extended
     period of years.

          In the absence of war to inject money at govern-
     ment contract and worker payroll level, there is no
     evidence that the business cycle can pay for the things
     we really need.

          But, if the things we really need were treated
     like weapons systems in time of war, we would have
     two results:  We would get the things we need, and
     workers would make money to get a lot of what they
     want.

          The task then is to trick the system into doing in
     peace what it does automatically in war.  Obviously,
     that is not easy -- because the system actually changes
     in wartime: It takes on some of the color of a command
     economy.

          Stop. Can we get any agreement to this point?  The
     next step will be to tease out the fiat money component
     of a war economy, and consider how it can be "tricked"
     into coming alive without wage and price control and
     without wartime unity, command and control.

          But, before going further -- how far apart are the
     two (or more) of us already?  Do we have any agreement
     on what to put into public and private budgets if we had
     unlimited amounts of hard money?  Do we have any agree-
     ment on a strategy to change as little as possible of
     current law and custom -- yet get the maximum change
     from conditions we now deplore to conditions everyone
     would applaud?

    .--------------------.-----------------------------------------------.
    : John J Gelles      | 1. Special fed debt to finance required loans :
    : 5706 Loma Vista Rd | 2. Macroloans for infrastructure/ecology, etc.:
    : Ventura, CA 93003  | 3. Microloans for zero-unemployment           :
    : (805) 642-6675     | 4. Automation to carry loans & fight inflation:
    : jjgelles@xxxxxxxx  | 5. Rescue-loans/subsidies to fight deflation  :
    : -------------------| 6. Consumption/turnover taxes vice income tax :
    :How to get from here| 7. Laws in reserve for inflation emergency    :
    :to there in 8 neces-| 8. Traceable vice untraceable money/accounts  :
    :sary steps: Comment?|         URL   http://www.rain.org/~jjgelles/  :
    `--------------------^-----------------------------------------------'