Re: 'Stability' Of Equilibrium w/Zero-Cost Money

["Harry Veeder" <eo200@xxxxxxxxxxxxxxxxxxx>]

----------
>From: "Gunnar Tomasson" <tomasson@xxxxxxxx>
>To: "Harry Veeder" <eo200@xxxxxxxxxxxxxxxxxxx>
>Cc: "POST KEYNESIAN THOUGHT" <pkt@xxxxxxxxxxxxxxxx>
>Subject: Re: 'Stability' Of Equilibrium w/Zero-Cost Money
>Date: Thu, Sep 21, 2000, 8:03 pm
>

>You write:
>
>1.  More money is routinely created then debt, through the mechanism
>of interest....
>
>2.  Money = Debt + Interest on Debt.
>
>3.  (Interest is the cost of issuing debt).
>
>4.  If the CB is the people's bank and government borrows from the people's
>bank then government interest payments on government debt should be
>distributed among the people, and not into the CB!
>
>Comments:
>
>1 - 2.  Again, I don't get it.  For the World Financial System, the Money =
>Debt equation is short-hand for System Liabilities = System Assets.

World's Financial Book of Accounts has never balanced.
There is more to system assets then the issue of loans and the
ownership of debt. Everyone intuitively knows that the fiancial
system is comprised of natural and human assets that come from outside
the financial system.



>3.  In the context, Zero-Cost Money relates to Credit Creation as such and
>not to Non-Zero administrative expenses incurred by the World Financial
>System.
>
>4.  The question does not arise so long as 'interest' payment by government
>= CB administrative expenses incurred on account of government borrowing
>from CB.
>

Would you say the current adminstration expenses of running the CB
are as great as the interest charges on the debt? I don't think so.

Interest is more than a fee for services. It represents something
much deeper. I believe it respesents the fact that asset creation
is not fully endogenous to the system of finance.

Harry Veeder

>
>
>----- Original Message -----
>From: "Harry Veeder" <eo200@xxxxxxxxxxxxxxxxxxx>
>To: "Gunnar Tomasson" <tomasson@xxxxxxxx>; "Harry Veeder"
><eo200@xxxxxxxxxxxxxxxxxxx>
>Cc: "POST KEYNESIAN THOUGHT" <pkt@xxxxxxxxxxxxxxxx>
>Sent: Thursday, September 21, 2000 2:32 PM
>Subject: Re: 'Stability' Of Equilibrium w/Zero-Cost Money
>
>
>> On second thought, I was wrong but that doesn't mean I agree with your
>> synopsis.
>> More money is routinely created then debt, through the mechanism
>> of interest....
>>
>> Money = Debt + Interest on Debt.
>>
>> (Interest is the cost of issuing debt).
>>
>> If the CB is the people's bank and government borrows from
>> the people's bank then government interest payments on
>> government debt should be distributed among the people,
>> and not into the CB!
>>
>> What do you think?
>>
>> Harry Veeder
>>