UNDERSTOOD, BUT CONSIDER THE PROVERBIAL OLD WOMAN IN A
ONE ROOM SHACK WITH 50 CATS WHO DIES WITH $50,000,000
IN THE BANK. APART FROM A BUNCH OF CAT FOOD, SHE
WASN'T CONSUMING AN INORDINATE AMOUNT, AND
SO HER NOMINAL WEALTH WASN'T A 'PROBLEM' FOR SOCIETY.
IT'S NOT LIKE 'THOSE FUNDS COULD HAVE GONE ELSEWHERE'
ETC. WITH TODAY'S FLOATING EXCHANGE RATE REGIME.
NOW CONSIDER THE GUY WITH NOTHING, WHO'S AN 'OPERATOR'
THAT MANAGES TO OBTAIN FINANCE TO BUILD A 400 FT SUPER
YACHT. HE HAS NO WEALTH, NO INCOME, ETC., BUT HAS
ARRANGED TO HAVE HALF THE RAIN FOREST CUT DOWN, BIDS
UP PRICES OF LABOR AS WELL AS THOSE RESOURCES ARE ALSO
DIVERTED FROM OTHER USE, ETC. SOCIETY PAYS A LARGE
REAL COST FOR THAT GUY.
POINT IS, I TEND TO 'CARE' MORE ON DISTRIBUTION OF
CONSUMPTION RATHER THAN DISTRIBUTION OF NOMINAL
WEALTH. AND THE TAX STRUCTURE CAN BE EASILY DIRECTED
ALONG THOSE LINES. CONSUMPTION TAXES CAN BE LEVIED ON
THINGS WE DON'T WANT CONSUMED, AND THE SUCCESS OF THE
TAX MEASURED BY HOW LITTLE IT COLLECTS, ETC.
SEE 'SOFT CURRENCY ECONOMICS' AT MOSLER.ORG
WARREN
--- "Niggle, Christopher"
<Christopher_Niggle@xxxxxxxxxxxx> wrote:
Warren: I agree with the Lerner-Keynes-chartalist
views on fiscal policy to
a certain extent: one very important consideration
in designing a tax system
should be its effect on aggregate demand. But tax
systems also influence
the post-tax income distribution, and there is much
historical evidence (and
common sense argument and ethical considerations as
well) in support of the
proposition that too much income inequality is bad
for society. Hence,
reducing the progressivity of our tax structure with
the kind of tax changes
implemented under the Bush regime is probably a bad
thing in spite of the
mild stimulus it might effect with respect to
aggregated demand. And
reductions in tax revenue support the desire of
right wing small government
nuts to reduce social services and investment in
public capital.
I think Keynes made the same argument many times;
the "arbitrary and
excessive inequality" he disapproved of was bad
because it reduced aggregate
demand but also for ethical and political reasons.
At a certain point, more
inequality encourages more inequality...which is
inconsistent with a humane
and civil society.
Chris
-----Original Message-----
From: Warren Mosler
To: pkt@xxxxxxxxxxxxxxxx
Sent: 5/30/03 10:34 AM
Subject: Re: Krugman on the Deflation quagmire
Importance: Low
AGREE, AND WHILE THEY ARE AT IT, OFFER A NATIONAL
SERVICE JOB TO ANYONE WILLING AND ABLE TO WORK.
AND DON'T 'PAY FOR IT' WITH A TAX INCREASE OR
SPENDING
CUT!!! IF THE POPULATION DOESN'T WANT MORE
PRIVATE GOODS, BUT WANTS TO WORK, LET THEM AT LEAST
PRODUCE PUBLIC GOODS...
ALSO NOTE:
The Bush Administration has also recommended two
solutions. First, tax cuts
to the rich, which, as Krugman suggests, is likely
to be insufficient since it
provides additional funds to those"least likely to
spend".
THIS IS ABSOLUTELY TRUE, BUT BEGS THE QUESTION, WHY
TAX SOMEONE IF IT WON'T REDUCE HIS SPENDING? THE
VERY POINT OF TAXATION IS TO CREATE SELLERS OF REAL
GOODS AND SERVICES, ETC. SO THE AXE SWINGS BOTH
WAYS.
TAXING SOMEONE WHO WASN'T GOING TO SPEND THE FUNDS
DOES NOTHING FOR GOVERNMENT OR THE ECONOMY THE SAME
AS
CUTTING TAXES FOR SOMEONE WHO WON'T INCREASE
SPENDING
DOES THE SAME NOTHING.
WARREN
=====
Warren Mosler, www.mosler.org
c/o James River Capital Corp
5007 Chandler's Wharf, Suite 201/202
Christiansted, USVI 00820
340-719-8813 office phone
340-719-8804 Fax
Primary email contact: mosler@xxxxxxxxxxxxxx
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=====
Warren Mosler, www.mosler.org
c/o James River Capital Corp
5007 Chandler's Wharf, Suite 201/202
Christiansted, USVI 00820
340-719-8813 office phone
340-719-8804 Fax
Primary email contact: mosler@xxxxxxxxxxxxxx
__________________________________
Do you Yahoo!?
Yahoo! Calendar - Free online calendar with sync to Outlook(TM).
http://calendar.yahoo.com