Re: Putting Chartalism In Its Place?

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

***] PRECISION OF LOGIC shows that the state does not
seek a "claim on value" because it has unlimited
spending power through its own credit emission,
backed by its to power to tax.  It levies taxes
simply to maintain the value of its credit previously
issued in the form of fiat money. [***

Except in the case of the United States there is no
"credit previously issued in the form of fiat money"
that was not lent into circulation by the Federal
Reserve or the commercial banks.  The Treasury covers
the checks it writes in their totality from the
combination of tax collections and Treasury auctions
into the securities market.  Treasury's checking
account at the Fed is not an overdraft account.  The
value of the credit lent by the Fed and commercial
banks to government and private enterprise derives
from its acceptability in payment for the goods and
services delivered into final consumption by
government and private enterprise.  It is withdrawn
from circulation through amortization, not taxation.


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

DATE: Tue, 16 Sep 2003 09:01:01
From: William F Hummel <wfhummel@xxxxxxxxxxx>
To: pkt@xxxxxxxxxxxxxxxx
Cc:

>Correcting my typo in the previous message:
>
>Gunnar writes:
>>
>>The "store of value" view of money is a carryover from Commodity Money days.
>>
>>In the modern context, money is NOT a "STORE of value" - it has NO intrinsic
>>value.
>>
>>Instead, modern money serves as "CLAIM on value".
>>
>>The State levies taxes to obtain "claims on value" generated in the
>>non-State sector.
>>
>>So does PRECISION OF LANGUAGE put Chartalism in its place!
>>
>In a word, no!  PRECISION OF LANGUAGE got lost somewhere.
>To argue that a claim cannot be a store of value is to argue that only
>a physical object can be a store of value.  That would imply the very
>expression "store of value" is meaningless.
>
>PRECISION OF LOGIC shows that the state does not seek a "claim on
>value" because it has unlimited spending power through its own credit
>emission, backed by its to power to tax.  It levies taxes simply to
>maintain the value of its credit previously issued in the form of fiat
>money.
>
>William
>
>
>



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