Re: tax driven currency

["John Gelles" <jjgelles@xxxxxxxx>]

	The essence of money is, as Paul Davidson points
	out, its force as legal tender to pay debt, mostly
	owed for goods and services (and sometimes owed
	for taxes).

	Be that as it may, Mosler only found the power to
	tax, as an adjunct to the power to run deficits that
	may increase a national debt (payable in fiat money),
	when he searched for a logical reason to claim that
	government could employ the unemployed -- if
	the legislature so insisted.

	From this perspective, Mosler, Davidson, the late
	William Vickrey, Robert Eisner, and perhaps millions
	of Keynesian voters (including me), are all in
	agreement with Mosler and Forstater.

	Yet I insist that money is also tax constrained.

	Mosler, Forstater and Davidson do not pick up on
	this angle.  And Mosler and Forstater have not yet
	paid it any attention in the Seminar.

	So I will substitute for M & F, and write what they
	should have written days ago:

	"John Gelles' concept of  `tax constrained'  money
	is novel and rather speculative.  He insists that the
	Keynesian application of saving in place of taxes,
	as a control against inflation, (and especially against
	accelerating inflation), would arouse less political
	resistance than anti-Keynesian voters offer today.

	"Gelles offers a naive view that the added volume
	of the output pie (that a monetary stimulus can
	bring to market) may largely be directed to the
	needs of society rather than to the greed of those
	who presently live a more lavish lifestyle than they
	should.

	"To enforce such a directed stream of output to
	the satisfaction of national needs, imitating the
	way such stream (as weapons) was directed
	to winning a world war, may well require the
	same patriotic motivation noticeably absent in
	time of peace.

	"So while we appreciate John's desire to play
	the  `individual estate account'  and the  `civil right
	to work'  cards at every opportunity, we do not
	share his enthusiasm for the wisdom of the rich
	and their allies in Congress.

	"Rather than trying to gain their support with zero-
	income tax, we prefer to convince the body politic
	to tax the rich and the rest of us in order to bring
	about a rational, green, democratic capitalism.

	"We prefer to leave matters of necessary
	automation and related supply side
	considerations unstated.  In our opinion,
	a market economy will do all that is necessary
	on its own -- once we spend the money and
	raise the taxes to end unemployment."


	Speaking now as John and not as M & F,
	I say thank you to them for the above opinion.
	You have left us where we have been since the
	end of World War II.  You have made no effort
	to join the rich and rest of us in a war on poverty
	in peace time.  Such a war, since history suggests
	it cannot rely on taxes and super patriotism, must
	instead rely on something else.  Savings and some
	patriotism may be the answer.

	You all don't get it. And we are much the worse
	off on account of  your closed minds.  By "you",
	I must include Bill Mitchell and at least 400 of
	the 500 members of this forum. Maybe a hundred
	currently open minds agree more with me than you.
	With this ingratiating appeal that number may soon
	skyrocket.


        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)]