Re: elr and mosler/censorship

[Warren Mosler <mosler@xxxxxxxx>]

At 02:31 AM 3/8/97 -0600, you wrote:
>At 04:07 PM 3/6/97 -0700, you wrote:
>>on elr
>>after warren's post, i finally saw what mason was getting at; it was
>>then corrected by bill m. mason wondered if "we" were arguing that
>>only govt can provide for net private sector saving.
>
>  Well, actually, I'm sitting under the roof of a substantial
>  part of my "savings".  The suggestion that I'm a naughty boy
>  for not saving enough - cause roofs don't count - bothers me.
>  Must I collect government paper to be a "true saver"?

Sorry to imply that, Mason.   I was just defining terms, for the
purpose of the feaps/unemployment discussion.  ($) H(nfa)
is net savings of $ denominated financial assets.  If the desired
H(nfa) exceeds actual H(nfa), the evidence is unemployment.
This does not mean it is unamerican to not desire $ net financial
assets.  It does mean (by definition) that if you do desire them
$ we will know it because you will be looking for work that
pays $, or trying to sell something in exchange for $.  And,
without govt intervention (gov includes the fed),  you can only
get your desired H(nfa) if someone else wants to reduce his.
Note that loans, for example, create 'gross' $ but not net $.

Warren

>
>  I understand that money is not neutral.  That said, I sense
>  perhaps wrongly, that real objects - especially those not
>  "on the market" are not given much recognition in economic
>  theory.  An example: in Social Security worries, the huge
>  pile of things and inventions we are leaving to our grandchildren.
>  This huge pile, lacking market evaluation, seems to be ignored.
>  This being ignored in the books makes re-educating grandpa
>  difficult.

Yes.  Personally I tend to focus on those real things, not ignore
them.  FEAPS is presented as an understanding of a modern
currency.  I even suspect that an elr makes money 'neutral
again.'

Why the $?  First, it compells the transfer of real goods and services
from the private sector to the public sector.   This is necessarily
'disruptive' to the real economy.  Current policy of targeting a budget
(deficit) generally leaves a residual 'tension'- excess capacity and
unemployment- to maintain price stability.  The elr removes this tension
by letting the deficit float, so the private sector (including foreign govts),
can get the level of H(nfa) it is 'comfortable' with.

Warren



>
>       Mason
>
>  Can I teach grandpa about "volume measures"?
>
Sure.

>

Warren B. Mosler
Director of Economic Analysis
III Finance

See:

"Soft Currency Economics"
=========================
http://inca.gate.net/~mosler/softecon.html