Re: tax driven currency

["John Gelles" <jjgelles@xxxxxxxx>]

	Mathew Forstater writes:

"Let's be clear about one thing. Any who want to argue against the
idea of "tax driven currency" should at least acknowledge that they
are arguing against an idea that has a long history in economics from
at least 1776 to 1998, including strong support from Post Keynesians
(but not only Post Keynesians), and including Keynes.  This doesn't
mean one can't argue against it.  But it shouldn't be summarily
dismissed."


	Speaking for myself, it is easy to accept all arguments
	that the connection, between taxes and money's
	purchasing power, supports the "tax driven money"
	mechanisms described by Mosler, Forstater and others.

	But these are mechanisms we are trying to improve
	and reform.  By inviting (or allowing) high taxes on
	those most able to resist, they have left us with
	inadequate purchasing power to clear our markets
	(of what we can and ought to produce), and with
	avoidable poverty, pollution and unemployment.

		They have left us with effective political
		opposition to Keynesian solutions.

	On the other hand, to view money as "tax
	constrained", in the sense that money should be a
	carrot held out to producers to get the ball rolling.
	Once production lags too far behind demand, and
	inflation looms as a threat to the carrot effect, such
	money must be hardened -- made dearer -- by
	capital levy, income tax, turnover tax, or "forced
	and voluntary saving".  Of these, the last
	alternative, "forced and voluntary saving", is best.

	If, after "forced and voluntary saving" has defeated
	inflation, (with the help of turnover tax if necessary),
	and a mixed economy has put government in
	competition with giant private corporations, we
	can turn sand, oil and digital copies into so much
	output that savings can be released for some non-
	inflationary spending, we will have done the
	Keynesian thing.

	The Keynesian thing, after all, is prosperous, green
	full employment, and all	the real good things in life.
	I is not endless dispute over how to describe money
	and banking as we know them (or as they ought to
	be.)


        John Gelles: Vote for an Individual Estate Account (IEA)
        jjgelles@xxxxxxxx                http://www.rain.org/~jjgelles/
        Modern nations cannot afford poverty, it costs too much.
        Its price is the money  the poor don't spend  that the rest
        would earn if they did.  If those with the least spent what
        it takes for a decent life, the rest would all have more for
        a grander one. That is  the nature of  production and free
        enterprise  protected  from monopoly  by law, and  from
        deflation and inflation by  individual indexed savings held
        in tax free accounts to create a controlled flow of money.
       [All the above equals an Individual Estate Account (IEA)]