Re: Putting Chartalism In Its Place?

[Gunnar Tómasson <gunnar.tomasson@xxxxxxxxxxx>]

William:

Re. the following:

> >Get REAL!]
>
> Get real indeed!  Who cares about a hypothetical planet in which there
> is no production?

Comment:

All time-consuming production of goods and services is predicated on
Credit - in one form or another.

That is to say, Credit - "money" - precedes, and is pre-condition, for
Government Taxation.

In turn, this does not square with Chartalist Doctrine.

But it does accord with REAL-world circumstances.

Gunnar



----- Original Message -----
From: "William F Hummel" <wfhummel@xxxxxxxxxxx>
To: <pkt@xxxxxxxxxxxxxxxx>
Cc: "Gang8" <gang8@xxxxxxxxxxxxxxx>
Sent: Saturday, September 13, 2003 12:12 PM
Subject: Re: Putting Chartalism In Its Place?


> Gunnar wrote:
>
> >The following exchange of today's date on Gang8 may be of interest.
> >
> >Gunnar
> >
> The conversation below is like two ships passing in the night.
> >
> >Fellow Gang8 member's statement:
> >
> >I of course agree...that what gives money its value is its acceptance in
taxes.
> >
> >[My comment:  What does it mean to say that money has value because of
"taxes"?
> >Consider a Kingdom without PRODUCTION - where is Money's Value?]
>
> A kingdom without production obviously has no need for money.
> >
> >Fellow Gang8 member's statement:
> >
> >      My question was, What if the US abolishes taxes, as Mr. Bush seems
intent on doing, ultimately.
>
> >      Your answer was,..., if this happens then money will lose its
value!
> >
> >[My comment: If Bush were to nuke America's production capacity, US money
would become valueless in a New York second.
>
> One could make the same argument about nuking the people themselves.
> >
> >BUT, if Bush were to reduce taxes to ZERO, everybody would be happy.
> >
> >WHY?
> >
> >Because they would be left holding more of their money's "value" than
before.
> >
> >SO?
> >
> >Get REAL!]
>
> Get real indeed!  Who cares about a hypothetical planet in which there
> is no production?
> >
> >Gunnar (in feisty mood on a hard day's night!)
>
> In the era of fiat money, there must be a way to control its abundance
> to ensure that it remains a viable store of value.  That means what is
> issued must also be recaptured, except for what is needed to support
> growth.  The only mechanism to accomplish that in the real world is
> compulsory taxes and borrowing, or some equivalent thereto.
>
>
>