The coming deficit

["John Gelles" <johng@xxxxxxxxxx>]

        The USA is at war with Islamic terrorists (who kill
        because the Ottoman Empire is dead and gone?).
        USA  is also upset by the Enron scandal. And it is
        poised to run a huge deficit trying to recover from
        a burst tech stock bubble, as well as, win the war.

        VOW writers wonder where democracy has gone.
        If democracy were strong, they reason, the global
        economy would be prosperous--unemployment,
        poverty and environmental rape by corporations
        could all be prevented. Ordinary people would
        know how to shape government institutions to do
        the tasks at hand.

        Yet, there is an obvious problem:  the scholars on
        VOW have trouble outlining the changes needed
        to reach VOW's objectives--ordinary people will
        have as much or more trouble doing the same
        thing.

        I don't say that these changes are beyond the power
        of the human mind to comprehend. But, a little thing
        like deficits has Greenspan and the Congress speaking
        doubletalk. They want to aim at a very low (or zero)
        national debt. Yet they also want stop the recession
        by reducing tax revenues and raising necessary
        defense spending. They support Keynesian counter-
        cyclical use of government budgeting and, simul-
        taneously, support Rubinesque bond-trader belief
        that lowering the national debt will lower long term
        interest rates and so stimulate economic growth.

        One way to lower the national debt and still spend
        our way to full employment and full defense budgets
        is to switch to taxless-debtless-fiat money (TDFM)
        (as Gelles alone suggests).

        If we did have more democracy we would still not
        use TDFM--because knowledgeable democrats on
        VOW and PKT think its nuts.

        So, I ask the questions: (1) What would a democracy
        do about deficits and national debt? (2) How would
        a democracy finance full employment?  (3) How
        would a democracy finance defense against Islamic
        terrorists and local terrorists who play with anthrax?

        Should we go for TDFM or not? Are all the brains
        at the gang-of-eight and PKT at work on a way
        to reach full employment and full defense--in our
        lifetime?  Assume, for this question, that we are
        all thirty--and include some wisdom for social
        security, like should there be payroll taxes, and
        should pensions be much higher so as to absorb
        output that automation will make possible?