Re: Putting Chartalism In Its Place?

["William B. Ryan" <w_b_ryan@xxxxxxxxx>]

***>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. <***

But we are most definitely not in the era of fiat
money in the sense that all money has its origin in
spending by government.  In the modern era, the
amount of money that enters circulation that way is
negligible or non-existent.  Even in the nineteenth
century only a small percentage of the money supply
entered circulation that way.  Most money is
creditary in the sense that it is loaned into
existence and spent by private enterprise and
government in the first instance, or to facilitate
consumption.  What government itself spends is derived
from the combination of taxation or borrowing, not
printing and spending.  Nothing is therefore
"recaptured" through taxation.  The "efflux" of
lending by the banks to enterprise and government is
recaptured in "reflux" through amortization.


--------- Original Message ---------

DATE: Sat, 13 Sep 2003 09:12:37
From: William F Hummel <wfhummel@xxxxxxxxxxx>
To: pkt@xxxxxxxxxxxxxxxx
Cc: "Gang8" <gang8@xxxxxxxxxxxxxxx>

>Gunnar wrote:
[snipped]


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