Re: Putting Chartalism In Its Place?

["John Gelles" <indexed-savings@xxxxxxxxxxxxx>]

"I agree with someone, that there seems to be either too
fine a point being made on this thread, or none at all."

Perhaps I agree with no one; but my point is as follows:

Defining money has its place; but defining "more" money
-- for policy purposes -- when a nation, with money, (that
knows what money is when it sees it) wants "more" to
accomplish some purpose in the everyday world.

Say the purpose is to pay wages for "more" jobs at a time
when either there has been a substantial loss of jobs or
there is chronic unemployment that parliament would end
if only it could:

a.  Is more money to be raised by increasing taxes and
    using the proceeds to subsidize jobs or to create jobs
    that produce things parliament wants government to
    buy for itself or the benefit of others?

b. Alternatively, is more money to be spent into circulation
    (or lent by government) as it simultaneously borrows the
    amount that is spent (or lent) from other lenders at short
    term interest rates, say one percent?

c. Alternatively, should a near copy of b., above, be tried
    -- changed to eliminate borrowing the amounts that are
    spent or lent?  In this alternative, endless spending will
    be "constructively" borrowed from and endless rise
    in inflation-protected savings account balances
    correlated to the "more" money. These balances will
    be prevented from overinflation in the long run by
    philanthropic gifts in a near perfect modern economy.

Now the discussion on this thread, that may be missing a
practical point (or not), can be invoked to say that all three
solutions will work:

Solution a. is fine for modest amounts of "more" money.
It is consistent with the idea that taxes make sense in a
monetary system of production. But it may raise questions
IF, after it is implemented, there is still chronic under or
un- employment.

Solution b. is fine for larger amounts of "more" money --
when there is money around to be borrowed, and taxes are
less than popular. Again, what good will it be AFTER it has
been tried for a long time and chronic unemployment persists?

Solution c. sounds perfect:  It will wipe out unemployment--
as long as hyperinflation is avoided-- and it will be the optimal
solution-- IF the minimum standard of living AND the median
standard of living keep rising!

        Solution c. is the Stiglitz solution -- reduced from a
global to a national scale. Thus, Stiglitz, Tomasson and I
may be in a minority when wondering about the limits of
Chartalism as a theory that empowers policy makers to
experiment with "more" money as an addition to existing
money -- in pursuit of higher total output and higher
minimum and median standards of living.

Bill Mitchell may also be in this minority (or out)?

Yesterday, Henry Liu took us to the Asian Times and his
long theory of theories -- including links to the conference
in Ankara. From these links I visited the Bank of Israel and
its economics research papers.
         http://www.bankisrael.gov.il/publeng/6-2eng.htm
        These papers include the equations and graphs of
equations that tackle the above questions. They tend to
recognize the institutional habits that affect interest rates,
inflation rates, measurements of money stocks and flows,
and simulations that agree that there is aome real wealth to
be gained by nations with luck and the courage to spend
"more" money than, by some lights, they actually "have".

John Gelles