Re: two currencies and Korean war

[<mosler@xxxxxxxx>]

pkt@xxxxxxxxxxxxxxxx wrote:
>







Agree - indeed, the whole chartalist story strikes me as curious.

???  Is there some other 'non curious story' that applies?
 
Going back to basics, it seems to me
that a newly-organized State can spend its newly-created money in
either of two ways: (1) to purchase factor services for subsequent
transformation into final output, or (2) to purchase final output.
 
It can't spend it at all unless that stuff is offered for sale
in exchange for units of that new curreny.

As Minsky once said (Wray quote) 'anyone can issue money, the
trick is to get someone to accept it.'



In the first case, the State's action is indistinguishable
from that of non-State Entrepreneurs; in the second case, it serves as a means
of 'taxation' via the diversion of part of final output to the State for its use
and/or disposition.
 
'Real' taxes are in that sense collected when the state spends,
not when it collects revenue.  (see 'Soft Currency Economics)

In the first case, the issue of 'acceptability' of State
Money (IOU's) is on par with that of non-State Money (IOU's) used by non-State
Entrepreneurs.

Again, it's up to the 'seller' as to what currency he will accept.
That seller's point of view is the key.

www.mosler.org
 
It is only in the second case that the 'acceptability' of the
State's Money becomes problematic - a 'problem' which the State can resolve
through imposition of Taxes in the amount of State-Money used to divert part of
the economy's final output from use and/or disposition by non-State suppliers of
factor inputs to the State itself.
 
In other words, the 'taxation' aspect enables the State to
take fiscal action by monetary means - it has nothing
to do with monetary theory as such.
 
Gunnar
 
 
 
 
----- Original Message -----
From: "Alan G. Isaac" <<A TARGET="Link"
href="mailto:aisaac@xxxxxxxxxxxx";>aisaac@xxxxxxxxxxxx</A>>
To: <<A TARGET="Link"
href="mailto:pkt@xxxxxxxxxxxxxxxx";>pkt@xxxxxxxxxxxxxxxx</A>>
Sent: Monday, December 31, 2001 9:23 AM
Subject: Re: two currencies and Korean war
> > On Sun, 30 Dec 2001, pdavidso wrote:
> > > I have
suggested the following (black swan) illustration to tax-based money
> >
> chartalists several times -- but to little avail.
> >
> > A great
story.  And a bull's-eye as well.
> >
> > Cheers,
> > Alan
Isaac
> >
> >