Re: Holy Writ

["John Gelles" <johng@xxxxxxxxxx>]

        If the general theory of employment, interest and money
        is useful, it is to advise sovereign nations how to cure an
        economic depression or runaway inflation.

        In either situation, i.e., acute deflation or inflation, such
        nation must focus on full employment and the output of
        necessities that employment makes possible.

        Where deflation has made output an ineffective item
        with which to obtain money to reduce debt and buy
        other forms of output, the nation should spend fiat money
        on essential projects and investments to very soon there-
        after increase the flow of money, allow purchasing by
        others in the private sector at higher prices, and other-
        wise cure the sickness that results when money is in
        too short supply for the times.

        Where inflation has made money an ineffective item
        with which to buy any form of necessary good or
        service, the nation should absorb its fiat money by
        inviting savings in inflation-protected "mattresses".

        These savings would remove as much money from
        circulation as money-holders thought was right.
        As inflation was reigned in, price would fall and
        savers would spend again.

        Although the above use of the general theory will
        work, it is not by itself a prescription for output.

        Output of necessary goods and services may
        require organization, training, natural resources,
        computation, engineering, intelligence, good
        behavior, etc., as supporting sub-systems to
        make a monetary system production work.

        If it does not work, a more direct system of
        production, not unlike a military draft, may be
        required.

        So, holy writ or not, the general theory is not
        enough to solve the problem of scarcity and
        lack of know-how that plagues the human race.

        Even if everyone had a good job, and things
        seemed perfect for once, a sudden outbreak
        of disease, fire, flood, or war could force the
        leaders of a nation back to the drawing board
        to develop an effective program to overcome
        adversity.

            John Gelles

----- On reading Rosser's message: -----
From: J. Barkley Rosser, Jr. <rosserjb@xxxxxxx>
To: Post Keynesian Thought <pkt@xxxxxxxxxxxxxxxx>
Sent: Wednesday, November 28, 2001 1:43 PM
Subject: Holy Writ


     I guess it's time people faced facts.  The GT
is Holy Writ.  So, get over it!    :-)
    Barkley Rosser