Re: Mosler: seminar

[Trond Andresen <t.andresen@xxxxxxxxxx>]

Having been away for a couple of days, and after reading the Mosler paper
and most of the exchanges on it:

While agreeing to the proposition that the obligation to pay taxes is a
powerful incentive to get the public to accept the states's fiat money as a
credible medium of exchange and store of value, I would, however, like
someone to explain why the taxation incentive is *neccessary* for this to
happen?

To me it seems that there is a feedback loop from public confidence to more
confidence, so that the state only needs to set in motion a process of
getting the public to accept its money as the going currency in a society.
For instance, won't the fact that the judicial system assumes and declares
the state-issued currency to be acceptable remuneration in any conflict
before the courts (as opposed to any other type of IOU), be enough ensure
this? Remember, the persistent 100% accepance of state money is a stable,
self-reinforcing process.

Another question: If we remove the tax-driven aspect of fiat money from
Mosler's paper, in what way does this paper say anything new except
reiterating and emphasizing the (correct) view that the state's "reserves"
of domestic currency are infinite, and that it should behave accordingly?

Or have I possibly missed something?

Trond Andresen