Re: [TNF] Re: Voice of the people

[Gunnar Tómasson <gunnar.tomasson@xxxxxxxxxxx>]

Gary:

Briefly re. the following:

> Why does it matter that the money used be recognized as
> debt? To balance a balance sheet? How different is money as state credit
from a
> bank funding loans by the mere issuing of a check (i.e. considering the
central
> bank, the Treasury and the banking system as one)?

Comment:

The balance-sheet framework is to Monetary Analysis what Newton's
action-reaction axiom is to Classical Mechanics - a pre-requisite for
coherent reasoning.

Gunnar






----- Original Message -----
From: "Gary Santos" <evs@xxxxxxxxxxxx>
To: "Gunnar Tómasson" <gunnar.tomasson@xxxxxxxxxxx>; "Henry C.K. Liu"
<hliu@xxxxxxxxxxxxxx>; <TheNewForum@xxxxxxxxxxxxxxx>;
<pkt@xxxxxxxxxxxxxxxx>; <a-list@xxxxxxxxxxxxxxxxxxx>;
<gang8@xxxxxxxxxxxxxxx>; "Arno Mong Daastoel" <am@xxxxxxxxxxx>
Sent: Tuesday, August 05, 2003 11:56 AM
Subject: Re: [TNF] Re: Voice of the people


> Gunnar,
>
> "Why should such State taxation/confiscation by monetary means be
conducive to
> full employment?"
>
> It all depends on the economic rate of return of the spending. (Gunnar,
being an
> economist, you know where this is headed.) If the spending is invested in
roads
> and these roads open up more land to farm or make a mine feasible where
before
> they were not, the wisdom of the spending depends on how much the road
cost
> versus the marginal income that would be created by it. Whether the money
was
> funded by money as state credit or money as debt is immaterial. What makes
or
> breaks the theory is the practice. If money as credit is spent on cutting
edge
> research and this research gives rise to the "replicator" of Star Trek
fame, I
> submit, we would have no theoretical debate. Technology would have made
the
> question irrelevant. Why does it matter that the money used be recognized
as
> debt? To balance a balance sheet? How different is money as state credit
from a
> bank funding loans by the mere issuing of a check (i.e. considering the
central
> bank, the Treasury and the banking system as one)?
>
> I must state however that the most "realistic" proposal on how to go
forward
> comes from James Cumes in that his proposal entails a political solution
> although I still pose the same "where is the money to be spent" question
to the
> VOW program. My understanding or agreeing to the logical flow of creditary
> economics or to money as state credit only means that I understand it. At
least,
> I think I do. Where I'm going to put some of my money in, so far, are some
gold
> shares -- which I have modestly since I am also not sure where that
barbaric
> metal is headed.
>
> Gary
>
>
> ----- Original Message -----
> From: "Gunnar Tómasson" <gunnar.tomasson@xxxxxxxxxxx>
>
>
> Gary:
>
> Do I understand correctly that "money as state credit" and/or "debt-free
> money" is new "money" issued and used by the State to purchase Goods and
> Services?
>
> If so, then the "debt-free" aspect of "money as state credit" - that is,
> absence of any quid pro quo in the form of State Liability - can only mean
> one thing.
>
> Namely, State use of the monetary mechanism as instrument of tax
collection
> and/or property confiscation.
>
> Why should such State taxation/confiscation by monetary means be conducive
> to full employment?
>
> Gunnar
>
>
>
>
> ----- Original Message -----
> From: "Gary Santos" <evs@xxxxxxxxxxxx>
> To: "Gunnar Tómasson" <gunnar.tomasson@xxxxxxxxxxx>; "Henry C.K. Liu"
> <hliu@xxxxxxxxxxxxxx>; <TheNewForum@xxxxxxxxxxxxxxx>;
> <pkt@xxxxxxxxxxxxxxxx>; <a-list@xxxxxxxxxxxxxxxxxxx>;
> <gang8@xxxxxxxxxxxxxxx>; "Arno Mong Daastoel" <am@xxxxxxxxxxx>
> Sent: Tuesday, August 05, 2003 3:35 AM
> Subject: Re: [TNF] Re: Voice of the people
>
>
> > Gunnar,
> >
> > "What does "money as state credit" mean?"
> >
> > It is not a immutable, universal truth. It is an axiom that leads to an
> > economic system much like the set of principles that constitute, for a
> lack
> > of a better analogy, the Washington Consensus. The principles of
creditary
> > economics, I have come to view, in much the same way. Its insight on the
> > nature of labor and credit has been quite insightful.
> >
> > As I written John, listening to Gang8, PKT and the New Forum and please
> > correct me if I am wrong as that would please me, everyone espouses
> deficits
> > in one form or another as a tentative solution. It is the concepts
behind
> > the spending that differ -- the most unfortunate one was the one on
money
> as
> > credit or debt as the debate built a fence between two fine, decent men.
> >
> > But, which ever conceptual framework one starts with, one will
eventually
> > have to ask oneself whether the spending will result in future returns.
It
> > is a question of sustainability and one can not judge the merits of the
> > anxiom without knowing where it will lead. Hence, my question of "how"
and
> > what is to be spent on, a question I also ask myself.
> >
> > "Money as state credit" presents a bold if precipitous solution. "Money
as
> > debt" cautions us that lunches and dinners still have to be paid. When I
> > hold a dollar bill in my hand, it is like having from each of you an
IOU.
> It
> > is an IOU that can have diminishing exchange value, e.g. if Sen. Paul's
> bill
> > prospers (which I doubt as it will be suicide) even as loans
automatically
> > fund the deposits that create them.
> >
> > Whether God will finally arbiter whether money is credit or money is a
> debt
> > is doubtful. He will probably laugh, dismiss us summarily and say, "Find
> me
> > and I will tell you."
> >
> > Your cyber friend,
> >
> > Gary
> >
> >
> > ----- Original Message -----
> > From: "Gunnar Tómasson" <gunnar.tomasson@xxxxxxxxxxx>
> > To: "Gary Santos" <evs@xxxxxxxxxxxx>; "Henry C.K. Liu"
> > <hliu@xxxxxxxxxxxxxx>; <TheNewForum@xxxxxxxxxxxxxxx>;
> > <pkt@xxxxxxxxxxxxxxxx>; <a-list@xxxxxxxxxxxxxxxxxxx>
> > Sent: Tuesday, August 05, 2003 9:48 AM
> > Subject: Re: [TNF] Re: Voice of the people
> >
> >
> > Gary:
> >
> > Re. the following:
> >
> > "With money as state credit, capital formation through
> > > savings is unnecessary, which makes capitalism unnecessary." Again,
> > > obviously.
> >
> > Question:
> >
> > What does "money as state credit" mean?
> >
> > Gunnar
> >
> >
> > ----- Original Message -----
> > From: "Gary Santos" <evs@xxxxxxxxxxxx>
> > To: "Henry C.K. Liu" <hliu@xxxxxxxxxxxxxx>;
<TheNewForum@xxxxxxxxxxxxxxx>;
> > <pkt@xxxxxxxxxxxxxxxx>; <a-list@xxxxxxxxxxxxxxxxxxx>
> > Sent: Monday, August 04, 2003 2:00 AM
> > Subject: Re: [TNF] Re: Voice of the people
> >
> >
> > > Henry,
> > >
> > > Then I agree and understand what you mean -- that those who can save,
by
> > > definition, leave the money idle -- necessarily, in government debt.
> And,
> > if
> > > these savings are not mobilized, consumption suffers, obviously. And,
> with
> > > your statement that, "With money as state credit, capital formation
> > through
> > > savings is unnecessary, which makes capitalism unnecessary." Again,
> > > obviously. But, how are credits to be spent? Politicians and
> corporations
> > > will just waste and concentrate money. I am not a socialist but at the
> > same
> > > time the present system leaves much to be desired.
> > >
> > > Gary
> > >
> > >
> > >
> > > ----- Original Message -----
> > > From: "Henry C.K. Liu" <hliu@xxxxxxxxxxxxxx>
> > > To: "Gary Santos" <evs@xxxxxxxxxxxx>
> > > Cc: <TheNewForum@xxxxxxxxxxxxxxx>; <pkt@xxxxxxxxxxxxxxxx>;
> > > <a-list@xxxxxxxxxxxxxxxxxxx>
> > > Sent: Monday, August 04, 2003 12:56 PM
> > > Subject: Re: [TNF] Re: Voice of the people
> > >
> > >
> > > It goes without saying that income disparity is the main source of
> > > savings. Low income earners do not save. They spend 100% of their
income
> > >   and still cannot make ends meet.
> > >
> > > Hnery C.K. Liu
> > >
> > > Gary Santos wrote:
> > >
> > > > ----- Original Message -----
> > > > From: "Henry C.K. Liu" <hliu@xxxxxxxxxxxxxx>
> > > > " Savings drains consumption and are regressive because economic
> growth
> > > implies
> > > > inevitable overcapacity. Savings drains consumption and exacerbates
> > > > overcapacity - the major curse of economic progress and growth.
> Savings
> > > are the
> > > > prime cause of economic depression.  With money as state credit,
> capital
> > > > formation through savings is unnecessary, which makes capitalism
> > > unnecessary."
> > > > --------------------------------
> > > > I would rather attribute overcapacity to income distribution within
a
> > > country
> > > > and internationally than to savings primarily. It is the increasing
> > > disparity in
> > > > wealth that exacerbates overcapacity even making it inevitable.
> Whether
> > > money as
> > > > state credit is a solution is another question.
> > > >
> > > > Gary
> > > >
> > > >
> > > >
> > > > John Gelles wrote:
> > > >
> > > >>Sanders, below is the voice of informed reason. But it
> > > >>is not the voice of PKT or of the rest of the American
> > > >>people.
> > > >>
> > > >>    No voice is raised that gets to the heart of the matter:
> > > >>    How do you subsidize manufacturing and insist on a
> > > >>    prosperous work force without examining exactly what
> > > >>    it takes to pay for a property-owning free enterprise
> > > >>    monetary system of production to work?
> > > >>
> > > >>    It takes money.
> > > >>
> > > >>Money circulating in the commercial economy is not
> > > >>enough. Certainly taxing money out of that system
> > > >>only makes things worse.
> > > >>
> > > >>The commercial for profit system concentrates wealth.
> > > >>Then the tax system aggravates that concentration and
> > > >>creates a concentration of political power to complement
> > > >>concentrated wealth.
> > > >>
> > > >>    If we would keep freedom of enterprise and break the
> > > >>    back of over-concentration of wealth and power we
> > > >>    must free the nation's spending power from its direct
> > > >>    dependence on the commercial private sector.
> > > >>
> > > >>    All our reforms are throttled because we pretend we
> > > >>    don't have the money -- we never claim to lack the
> > > >>    people or industrial capacity to put through the reform.
> > > >>
> > > >>Socialism is dead. But the answer to its death, that also
> > > >>answers the contradictions within capitalist accounting
> > > >>for earnings and wages, was proposed by Keynes --
> > > >>
> > > >>        It is government spending.
> > > >>
> > > >>Lerner continued the thought by noting that the limit to
> > > >>government spending was production -- not taxation of
> > > >> existing earnings or wealth.
> > > >>
> > > >>Keynes, Lerner, Liu and Sanders sounded the alarm.
> > > >>Does PKT respond?   Please don't tell me it's
> > > >>re-distribution of income -- when GROWTH of that
> > > >>income and the production it must represent is by far
> > > >>the highest priority; and opposition to green growth,
> > > >>fueled by a rational monetary system of production
> > > >>does not exist.  I hope you all know that a nation once
> > > >>nailed to a cross of gold is today nailed to a stalemate
> > > >>between opposing sides on whom to tax--as long as
> > > >>you don't tax me.
> > > >>
> > > >>    John Gelles
> > > >>
> > > >>
> > > >>----- Original Message -----
> > > >>From: "Henry C.K. Liu" <hliu@xxxxxxxxxxxxxx>
> > > >>To: <pkt@xxxxxxxxxxxxxxxx>; <a-list@xxxxxxxxxxxxxxxxxxx>;
> > > >
> > > > <TheNewForum@xxxxxxxxxxxxxxx>
> > > >
> > > >>Sent: Friday, August 01, 2003 5:03 PM
> > > >>Subject: Voice of the people
> > > >>
> > > >>
> > > >>Statement of Congressman Sanders on 7/16/2003 regarding:
> > > >>Congressman Sanders' Questioning of Federal Reserve
> > > >>Chairman Greenspan
> > > >>
> > > >>The following is the transcript of Rep. Sanders' question-
> > > >>and-answer period with Federal Reserve Chairman Alan
> > > >>Greenspan during Tuesday's Financial Services hearing.
> > > >>
> > > >>SANDERS: Thank you, Madam Chair.
> > > >>
> > > >>And, Mr. Greenspan, nice to see you again.
> > > >>
> > > >>Mr. Greenspan, I have long been concerned that you are
> > > >>way out of touch with the needs of the middle class and
> > > >>working families of our country, that you see your major
> > > >>function in your position as the need to represent the
> > > >>wealthy and large corporations.
> > > >>
> > > >>And I must tell you that your testimony today only
> > > >>confirms all of my suspicions, and I urge you -- and
> > > >>I mean this seriously, because you're an honest person,
> > > >>I think you just don't know what's going on in the real
> > > >>world...
> > > >>
> > > >>I would urge you come with me to Vermont, meet
> > > >>real people. The country club and the cocktail parties
> > > >>are not real America. The millionaires and billionaires
> > > >>are the exception to the rule.
> > > >>
> > > >>You talk about an improving economy while we have
> > > >>lost 3 million private sector jobs in the last two years,
> > > >>long-term unemployment is more than tripled,
> > > >>unemployment is higher than it's been since 1994.
> > > >>
> > > >>We have a $4 trillion national debt,
> > > >>
> > > >>        [HERE WE SEE THE GREAT DILEMMA:
> > > >>          SANDERS TALKS FO NATIONAL DEBT
> > > >>          AS THOUGH THE MONEY WE NEED
> > > >>          TO ADDRESS OUR PROBLEMS CAN
> > > >>          COME FROM REDUCED NATIONAL
> > > >>          SPENDING. OR AS THOUGH TAXES TO
> > > >>          FURTHER DRAIN THE PRIVATE SECTOR
> > > >>          MAKE AS MUCH SENSE AS KEYNSIAN-
> > > >>          LERNER TAX POLICY WOULD. SANDERS
> > > >>          MAKES THE WHOLE POLITICAL CASE
> > > >>          FOR REFORM FALL IN THE FACE OF
> > > >>          AGE OLD SUSPICIONS THAT TAXES
> > > >>          ARE NO FRIEND TO ANY VOTER.]
> > > >>
> > > >>1.4 million Americans have lost their health
> > > >>insurance, millions of seniors can't afford
> > > >>prescription drugs, middle-class families can't send
> > > >>their kids to college because they don't have the
> > > >>money to do that, bankruptcy cases have increased
> > > >>by a record-breaking 23 percent, business investment
> > > >>is at its lowest level in more than 50 years,
> > > >>
> > > >>        [BUSH's TAX CUTS ARE INTENDED TO
> > > >>          HELP RAISE INVESTMENT. THEY FAIL
> > > >>          IN THAT THEY DO NOT CUT TAXES
> > > >>          ENOUGH FOR THE CONSUMERS WHO
> > > >>          MUST SUPPORT INVESTMENT WITH
> > > >>          CONSUMPTION. BUT BUSH's TAX CUTS
> > > >>          DO HELP HALF THE PROBLEM -- THEY
> > > >>          HELP MAKE POSSIBLE THE RISK TAKING
> > > >>          UP FRONT INVESTMENT THAT IS MADE
> > > >>          AHEAD OF THE TIME A BANKER CAN
> > > >>          DISCOUNT EXPECTED FUTURE CASH
> > > >>          FLOWS. SANDERS OUGHT TO HAVE
> > > >>          THIS IN MIND -- EVEN IF HE LEAVES
> > > >>          IT OUT OF THIS DIALOG.  DOES HE?
> > > >>          DO WE ON PKT?]
> > > >>
> > > >>CEOs make more than 500 times of what their
> > > >>workers make,
> > > >>
> > > >>        [HERE PKT, SANDERS AND I ARE ALL IN
> > > >>          AGREEMENT: WORKER AND CONSUMER
> > > >>          REPRESENTATION ON CORPORATE
> > > >>          POLICY BOARDS OUGHT TO BE PART OF
> > > >>          A REFORM AGENDA THAT ROLLED BACK
> > > >>          TOP MANAGEMENT'S COMPENSATION TO
> > > >>          A MULTIPLE OF WORKERS EARNINGS THAT
> > > >>          CAN PASS A NATIONAL REFERENDUM--
> > > >>          SOMETHING AROUND TEN OUGHT TO BE
> > > >>          THE LIMIT IN FACT IF NOT THE LAW.]
> > > >>
> > > >>the middle class is shrinking, we have the greatest gap
> > > >>between the rich and the poor of any industrialized
> > > >>nation, and this is an economy that is improving.
> > > >>I'd hate to see what would happen if our economy was
> > > >>sinking.
> > > >>
> > > >>Now, today you may not have known this -- I suspect
> > > >>that you don't -- but you have insulted tens of millions
> > > >>of American workers.
> > > >>
> > > >>        You have defended over the years, among other
> > > >>        things, the abolition of the minimum wage --
> > > >>        ... and giving huge tax breaks to billionaires.
> > > >>
> > > >>        But today you have reached a new low, I think,
> > > >>        by suggesting that manufacturing in America
> > > >>        doesn't matter. It doesn't matter where the
> > > >>        product is produced.
> > > >>
> > > >>        We've lost 2 million manufacturing jobs in the
> > > >>        last two years alone; 10 percent of our work force.
> > > >>        Wal-Mart has replaced General Motors as the
> > > >>        [LARGEST] employer in America, paying people
> > > >>        starvation wages rather than living wages, and all
> > > >>        of that does not matter to you -- doesn't matter.
> > > >>
> > > >>        If it's produced in China where workers are making
> > > >>        30 cents an hour, or produced in Vermont where
> > > >>        workers can make 20 bucks an hour, it doesn't
> > > >>        matter.
> > > >>
> > > >>You have told the American people that you support a
> > > >>trade policy which is selling them out, which is only
> > > >>working for the CEOs who can take our plants to China,
> > > >>Mexico and India.
> > > >>
> > > >>You insulted Mr. Castle. Mr. Castle, a few moments ago
> > > >>-- a good Republican -- told you that we're seeing not
> > > >>only the decline of manufacturing jobs, but white-collar
> > > >>information technology jobs.
> > > >>
> > > >>Forrester Research says that over the next 15 years, 3.3
> > > >>million U.S. service industry jobs and $136 billion in
> > > >>wages will move offshore to India, Russia, China and
> > > >>the Philippines.
> > > >>
> > > >>Does any of this matter to you? ...[Have you no] nconcern
> > > >>for the middle class and working families of this country?
> > > >>That's my question.
> > > >>
> > > >>GREENSPAN: Congressman, we have the highest standard
> > > >>of living in the world.
> > > >>
> > > >>SANDERS: No, we do not. You go to Scandinavia, and you
> > > >>will find that people have a much higher standard of living,
> > > >>in terms of education, health care and decent paying jobs.
> > > >>Wrong, Mister.
> > > >>
> > > >>GREENSPAN: May I answer your question?
> > > >>
> > > >>SANDERS: You sure may.
> > > >>
> > > >>GREENSPAN: Thank you.
> > > >>
> > > >>For a major industrial country, we have created the most
> > > >>advanced technologies, the highest standard of living for
> > > >>a country of our size. Our economic growth is crucial to
> > > >>us. The incomes, the purchasing power of our employees,
> > > >>our workers, our people are, by far, more important than
> > > >>what it is we produce.
> > > >>
> > > >>        [HERE, OF COURSE, GREENSPAN IS NUTS.
> > > >>          AND ANYONE WHO WILL SAY THIS CRAZY
> > > >>          STUFF OUT LOUD PLAYS INTO THE HANDS
> > > >>          OF REFORMERS -- IT IS THE BEST AMMUNI-
> > > >>         TION I'VE SEEN IN MANY A YEAR.]
> > > >>
> > > >>I submit to you -- may I?
> > > >>
> > > >>SANDERS: (inaudible)
> > > >>
> > > >>GREENSPAN: The major focus of monetary policy is to
> > > >>create an environment in this country which enables capital
> > > >>investment and innovation to advance. We are at the cutting
> > > >>edge of technologies.... We are doing an extraordinary job
> > > >>over the years.
> > > >>
> > > >>And people flock to the United States. Our immigration
> > > >>rates are very high. And why? Because they think this is a
> > > >>wonderful country to come to.
> > > >>
> > > >>SANDERS: That is an incredible answer.
> > > >>
> > > >>
> > > >>
> > > >
> > > >
> > > >
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